The decision that came out of a meeting of GCC heads of state in the Saudi financial capital last week lacked the razzamatazz of, say, the naming of a venue for the Olympic Games, but these are bankers, after all, and this was Saudi Arabia. Perhaps we can discern some of the style of the new bank from its origins. It will be low-key, dry as dust and very Saudi.
The UAE expressed its “reservations” about the decision, no doubt reflecting its disappointment that Abu Dhabi – which thought it had a good chance of playing host – did not get the nod. But in reality it was always going to be Saudi Arabia. The Kingdom is by far the biggest economic and financial player in the region; its near-$600 billion of GDP is more than all the other states combined, and its population of close to 30 million similarly dwarfs its neighbours by a factor of two to one. No contest, really.
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No, the question is HOW will the Gulf Central Bank be run?
ReplyDeleteWhat will it do with its gold (hiding in oil) reserves?
How will the GCB manage these reserves?
To model, like the US of A,
or to market, like Euroland and … China?
The answer to that question may depend on its location.
But China, which is buying gold (hiding in oil), is now saying that the replacement of the dollar as the world’s reserve currency is scholarly exploration. (1)
And women investors are advised to seek gold as a safe haven in tough times. (2)
So perhaps Frank Kane got it right, after all, in the article above:
Forget where it is; who will run the GCB?
Perhaps they should “man” the GCB with many women to run it.
Ivo Cerckel
(1)
Dollar Drops to Six-Week Low as Job Market Pares Safety Demand
By Oliver Biggadike and Ye Xie
Last Updated: May 9, 2009 08:00 EDT
http://www.bloomberg.com/apps/news?pid=20601103&sid=avZdjxcxGsgs&refer=us
SNIP
Central banks will keep using the dollar as the world’s reserve currency, Reuters cited Chinese ambassador to the U.S. Zhou Wenzhong as saying yesterday. He described views that the dollar could be replaced with a basket of other currencies as a “scholarly exploration,” according to Reuters.
(2)
Women investors advised to seek gold as a safe haven in tough times
By Abdel Hai Mohamed on Sunday, May 10, 2009
http://www.business24-7.ae/articles/2009/5/pages/09052009/05102009_f27fc06d378a41fcb10fde7e5989bde9.aspx
SNIP
The Abu Dhabi Business Women Council has called on women investors to invest in gold as a safe haven at the moment.
Yes, I believe Frank did sum the situation up correctly and I will be interested to see concensual decision making!
ReplyDeleteMy experience of Advisors, re: Gold, is that having made the "headline", they then fail to follow up, when strategy changes. One tip I have recently read is that it is not the yellow stuff that should be accumulated, but the shares of Gold Miners!