Paulson says Gulf (oil region) dollar peg a sovereign matter (says they are free to the drop dollar)

[UpInArms]

Source: Reuters

DOHA (Reuters) - Gulf oil producer Qatar is free to drop its peg to the U.S. dollar to tackle inflation, U.S. Treasury Secretary Henry Paulson said on Sunday.

He also said so-called sovereign wealth funds were mainly seeking investment returns rather than political goals on behalf of their governments.

Qatar needs to drop its peg to the dollar because the Gulf state's economy is surging while that of the United States is slowing, London-based MEED reported on late on Friday, citing the economic adviser to Qatari ruler.

"This is a sovereign decision," Paulson told reporters in the Qatari capital, Doha, after meeting the country's prime minister and central bank governor. "It has to do with the economic issues here."

<snip>

In the Gulf, Qatar, the United Arab Emirates and Saudi Arabia have faced the strongest pressure to revalue their currencies or drop their pegs altogether as their oil-based economies surge -- fuelling inflation -- while the peg forces them to follow the United States in dropping interest rates.

Read more: http://news.yahoo.com/s/nm/20080601/bs_nm/qatar_us_dc

[tabasco]

1. How noble of the Bush regime

to grant sovereignty to all the nations of the world.

[UpInArms]

2. it appears he deviated from his script a bit

here's what they said he would be talking about:

http://news.yahoo.com/s/ap/20080528/ap_on_bi_ge/paulson_mideast?_ylt=AmGbWq9aoOeb7l7OcCqfnuXv5rEF

"The key message that he will highlight is that record high oil prices are putting a significant burden on the global economy. They are also putting a significant burden on families and consumers, not just in the United States, but around the world," McCormick said in a briefing to preview Paulson's weekend trip.

McCormick said Paulson would be urging "all countries to open up their oil markets to investment that boosts yields, exploration and production." He said that message would not be aimed at any specific country but to all oil producing nations because a significant number of them are "walled off to private investment."

Paulson will not make any specific request for nations to boost their production during the current period of soaring oil prices, McCormick said. On a trip to the Middle East earlier this month, President Bush said that a modest oil production increase by Saudi Arabia "doesn't solve our problem" because the United States must take its own actions in the energy area.

Paulson's first stop will be in Saudi Arabia for talks on Saturday with government officials and private sector investors. He will also visit Qatar and Abu Dhabi and Dubai in the United Arab Emirates. He will deliver a major speech on the importance of open investment policies on Monday in Abu Dhabi.

While in Abu Dhabi, Paulson will have a series of meetings with officials from large government investment funds, known as sovereign wealth funds.

McCormick said that Paulson would stress that the United States is committed to maintaining open investment policies in this country and would stress the benefits other nations will receive from removing investment barriers in their nations.

[FarCenter]

3. It is not in their own best interests for countries to increase production

McCormick said Paulson would be urging "all countries to open up their oil markets to investment that boosts yields, exploration and production."

Oil left in the ground is appreciating faster than almost any asset you could buy with the money from pumping and selling it.

[rosesaylavee]

4. Thanks Bush.

What will we do when the dollar is worth nothing all over the globe and we have no more commodities with which to trade?

That's right, make no effort to maintain Qatar's peg. Good idea.

:sarcasm: