several of the gulf states are scheduled to adopt a common currency next year, and it could be backed, in whole or in part, by gold. the khaleeji is not just for state-to-state transactions, but will be used to buy and sell oil, and as legal tender in those countries. it will be similar to the euro, but the real question is whether it will be backed by gold. a few months back the saudis purchased $3.5 billion worth of gold, so it is a possibility.

if the gulf states establish a gold-backed currency, this would end the american petrodollar monopoly, as well as its status as the world's reserve currency. it's hard to see why anyone would prefer a fiat currency when a gold-backed currency is available. i'm sure the amercian government will fight this every step of the way, but if it comes to pass, the us dollar will go much lower, and gold will go much, much higher:

Since the Euro, give or take, has been such a runaway success, stand by for another single currency. Coming your way some time, the khaleeji.

The Khaleeji is a proposed single currency for member states of the GCC ( Cooperation Council for the Arab States of the Gulf.) The plan is that it will be legal tender in Saudi Arabia, Bahrain, Kuwait, Qatar, and the United Arab Emirates, with a proposed start date some time in 2010. Oman and Yemen are other states that may become involved.

http://www.forexperform.com/2009/02/...