Kuwait Dinar No Longer Pegged to Dollar

PCG reported the following news item:

Kuwait decided to stop pegging its currency to the U.S. dollar and joined a growing list of nations that set the price of their currency to a basket of currencies. As Jim Jubak of MSN Finance quipped, you know your currency has become a 98-pound weakling when Kuwait can kick sand on it. Indeed, global U.S. dollar demand is in decline.

Sheikh Salem Abdulaziz Al-Sabah, governor of the Central Bank of Kuwait, said the fall of the exchange rate of the U.S. dollar has “contributed to local inflation” and had “negative effects” on the economy. He said the move away from the dollar was in Kuwait’s “national interest”…

Demand for the U.S. dollar is dwindling, and its desirability as a world reserve currency is fading.

In turn, the downturn in the demand for U.S. dollars could be a wider reflection of dwindling confidence in the U.S. economy and a shift in focus toward the European Union economy, which has begun to gather steam. Kuwait’s shift from the dollar, while not being seismic in scale, confirms that the U.S. dollar is on the way out. Other nations appear set to increasingly dump the dollar for the fast-growing alternative: the euro.

Of course, the fact that the USA liberated Kuwait so that it could actually exist as a nation is insufficient for Kuwait not to make this change. Slowly, the steps are falling into place for the USA to decline economically and for the Arab World to form the King of the South.