Tuesday, March 18, 2008

Gulf Arab States Should Scrap Dollar Currency Pegs, Faber Says

From Bloomberg:

Marc Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom report, said Persian Gulf economies should revalue their currencies after the dollar slumped to record lows.

Saudi Arabia, the United Arab Emirates and three other Gulf states should link their currencies ``to a basket, and not the weakest currency in the world,'' Faber told a Middle East investment conference in Abu Dhabi today. ``They should have de- pegged their currencies a long time ago,'' he said.

Faber, who advised investors to buy gold at the start of its six-year rally, this month said Federal Reserve moves to cut interest rates to avert a U.S. economic slowdown will ``destroy the U.S. dollar.''

The dollar sank below 99 yen, the weakest in 12 years, last week and slumped to a record low versus the euro after JPMorgan Chase & Co. and the Fed bailed out Bear Stearns Cos., as credit market losses widen....MORE