120 $ falls on talk of changing Oil trading to basket of currencies

(1) Dollar hit by report to drop greenback for oil
(2) Talk of break in dollar-oil link unfounded: France
(3) Talk of changing oil trading from USD "more noise than substance"
(4) Gulf sources confirm that the talks are real - F William Engdahl
(5) Kremlin aide sees value in possible non-dollar oil payments
(6) Chinese Intelligence Activity - reply to Michael McDonnell
(7) Researcher refutes Microsoft's account of hijacked Hotmail passwords
(8) EFTPOS scam in Western Australia leaves customers (not Banks) out of pocket

(1) Dollar hit by report to drop greenback for oil

(AFP) – October 7, 2009

http://www.google.com/hostednews/afp/article/ALeqM5iuvF5PCzmw_F7pAfCGQAXP-1YzxA

NEW YORK — The dollar fell hard Tuesday after a new report said Gulf states might stop using the US currency for oil transactions, despite denials by countries cited.

A rate hike by Australia meanwhile helped lift commodity currencies and boost risk-taking, which also weighed on the greenback.

The turbulence in the markets lifted gold to a new record of 1,045 dollars per ounce, breaking the prior record of 1,033.90 dollars.

The euro rose to 1.4715 dollars from 1.4648 dollars late in New York on Monday.

Against the Japanese currency, the dollar fell to 88.82 yen from 89.51 yen on Monday.

Britain's Independent newspaper reported on its website on Tuesday that Gulf countries had held secret meetings with officials outside the region to discuss dropping the dollar for oil trade.

The countries would instead use a basket of currencies, including the yen, the paper said, citing Gulf Arab and Chinese banking sources in Hong Kong.

Despite quick denials, the market reaction "shows how negative sentiment is towards the dollar," said Michael Malpede at Easy Forex.

Barclay's Capital currency analyst Adarsh Sinha questioned the imminence of any move away from the dollar.

"An eventual move towards oil being traded in a wider range of currencies is possible, but in our view, The Independent article makes it sound far more imminent than it likely is," he said.

"In particular, the political consensus needed to achieve this would be very difficult, especially at a time when there is an apparent lack of consensus on more proximate issues for (Gulf) countries, such as the Gulf Monetary Union."

The report comes against the background of an agreement between China and Russia earlier this year to boost the use of their domestic currencies in bilateral trade at the dollar's expense. ...

Copyright © 2009 AFP.

(2) Talk of break in dollar-oil link unfounded: France

(AFP) – October 7, 2009

http://www.google.com/hostednews/afp/article/ALeqM5jtI0_SnmBvVMnE1DO_wxB5tKyv6A

PARIS — Talk that several countries including France are trying to organise a break in the dollar pricing of oil is unfounded speculation, the French economy ministry told AFP on Wednesday.

The report, which originated in the British newspaper The Independent was "pure speculation," the ministry said. "There is no basis behind these rumours."

The report had been a factor in depressing the dollar and pushing the price of gold to a record high point on Tuesday, traders said.

The Independent reported that Gulf states, together with China, Russia, Japan and France, were considering replacing the dollar as the pricing currency for oil by a so-called basket of currencies.

This would include the yen, the yuan, the euro, gold and a future common currency in the Gulf region.

The report was denied on Tuesday by Qatar, Kuwait and Russia.

Countries which import oil are in general benefiting at the moment because the dollar is weak. The reverse of this is that weakness of the dollar can weaken the buying power of earnings by oil exporting countries.

Many other raw materials are also traded mainly in dollars.

However, some countries in Asia and the Middle East have official arrangements which link their currencies to some extent to the dollar.

In a broader context, the long-term role of the dollar has been put in question by the global financial crisis, and China and Russia in particular have argued for change.

Many economists argue that one of the main causes of the crisis was a long-term build up of global imbalances in savings and export earnings. Financial markets had increasing difficultly in absorbing these imbalances, partly because of such management of exchange rates, they hold.

At the annual meetings of the International Monetary Fund and World Bank in Istanbul on Tuesday, the United Nations called for a new global reserve currency to end the "privilege" of dollar supremacy.

Copyright © 2009 AFP.

(3) Talk of changing oil trading from USD "more noise than substance"

By Rebecca Le May

October 07 2009, 4:49PM

http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2009/10/280/catf_091007_164900_2928.html

Oil industry commentators have hosed down suggestions Gulf Arab states plan to stop trading the commodity in US dollars in favour of a basket of currencies.

Such a move would deal a stunning blow to the greenback's dominance of world markets.

Observers say the plan has been toyed with for many years but failed to gain traction.

"These stories come and go," BT Financial Group chief economist Chris Caton told AAP.

Debate was reignited after a report in Britain's The Independent newspaper on Tuesday which said Gulf Arabs had begun planning with China, Russia, Japan and France to move from dollar dealings for oil to a basket of currencies.

These currencies include the yen and Chinese yuan, euro, gold and a new currency planned for nations in the Gulf Co-operation Council, which includes Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

The report said "secret meetings" had been held by the finance ministers and central bank heads of these nations to work on the scheme, which could be implemented by 2018.

ANZ Bank head of commodity research Mark Pervan said the renewed talk was "more noise rather than substance (at this time)".

"If they manage to collaborate in non-dollar oil payments it will likely drag prices lower at the benefit of China, but strangely at the expense of the Middle East producers," Mr Pervan said.

Mr Caton was more circumspect, saying "simply changing the numeraire in which the oil is priced may well have less effect than commonly thought".

"It's clearly true that over time the US dollar will become progressively less important, and that this will cost the US a little," he said.

"But it is still likely to be the number one reserve currency for decades. After all, what's going to replace it?"

Oil has been priced in US dollars since the Bretton Woods agreements were signed in 1944, forming the basis of the modern international monetary order.

(4) Gulf sources confirm that the talks are real - F William Engdahl

From: Sadanand, Nanjundiah (Physics Earth Sciences) <sadanand@mail.ccsu.edu> Date: 09.10.2009 03:44 PM
Subject: Who is financing US wars?

Dollar exit for oil trade?

By F William Engdahl

Oct 9, 2009

http://www.atimes.com/atimes/Middle_East/KJ09Ak01.html

Arab oil-producing nations and some of the world's largest oil consumers including China and Japan are reliably reported to be planning a long-term exit from pricing their oil trade in US dollars. If true, it would spell the death knell for the dollar as the world's reserve currency and for the United States as global economic power.

Ever since Washington tore up the Bretton Woods treaty in August 1971 and went onto a "dollar paper reserve system" instead of a dollar backed by gold, the United States, as the world's most powerful military power, has been able to dictate financial terms to the world. Nations like Japan and later China, dependent on US export markets, would dutifully invest their trade surplus dollars into US government debt, in effect financing wars such as Iraq and Afghanistan, which they opposed. They saw no choice.

Arab oil-producing countries, under US military pressure, were forced to sell oil only in dollars, a direct prop to the dollar when the US economy was in terminal decline. That may be rapidly about to come to an end.

According to a leaked report from Arab Gulf oil producers, there have been a series of secret meetings in recent months between the major Arab oil producers, including Saudi Arabia, and reportedly also Russia, together with the leading oil consumer countries including two of the three largest oil import countries - China and Japan.

Their project is to quietly create the basis to end a 65-year-long "iron rule" of selling oil only in US dollars. Following the 400% oil price shock of 1973, which was blamed by US media on "greedy Arab sheikhs", the US Treasury made a secret trip to Riyadh to tell the Saudis in blunt terms that if they wanted US military defense against potential Israeli attack, that Organization of Petroleum Exporting Countries must privately agree never to sell oil in currencies other than the US dollar. [1] That "petrodollar" system allowed the US to run staggering trade deficits and remain the world reserve currency, the heart of its ability to dominate and control world financial markets, until the crisis of the subprime real estate securitization in August 2007.

The participants in the project reportedly envision using a basket of currencies reflecting producer-consumer trade relations, one backed by gold as a solid backbone. It would not initially be a new currency as some have surmised, but rather an arrangement that would eliminate the risks of pricing oil sales in fluctuating and likely depreciating dollars.

Iran announced recently that in the future it would sell its oil for euros not US dollars. According to these reports, the basket of currencies would include a mix of yen, euros, Chinese yuan and gold. Brazil would reportedly join as both a producer and a consumer country.

The secret plan was first reported by respected Middle East correspondent, Robert Fisk, in the British newspaper The Independent. [2] Fisk claims to have confirmed the existence of the plan from Arab as well as Hong Kong Chinese sources. I have confirmed from very senior and well-informed Gulf sources that the talks are real.

The oil-producing countries have been fed up for years about having to price their oil in dollars or face US reprisals. They are steadily losing as the dollar depreciates against other currencies and against gold. Following the US declaration of the "war on terror" by the George W Bush administration after September 11, 2001, most leading Arab oil-producing countries privately saw US policy as being aggressively aimed at them. The US invasion and occupation of Iraq in 2003 merely confirmed that, as well as subsequent US threats against Iran.

Initially, various governments involved in the leaked plan have publicly vehemently it. That in no way invalidates that such moves are afoot. They are well aware that the United States as a wounded tiger can be far more dangerous. The leak of the plans in the world media, whether every detail reported by Fisk is true or not, feeds what is an inevitable decline in the dollar as a reliable reserve currency for world commerce.

What is not clear is what the potential response of Germany and France, the two pivot powers within the European Union, will be. If they decide to cast their lot with oil producing and consuming countries, they open their doors to vast new trade and investment potentials from the countries of Eurasia. If they cringe from that and decide to remain with the British pound and US dollar, they will inevitably sink along as the dollar Titanic sinks.

With that decline of the US dollar goes the lessening of the political power of the United States as the sole economic and financial superpower. We face very turbulent waters and gold not surprisingly is gaining on this uncertainty, climbing to more than US$1,050 an ounce from a low of about $990 on September 29.

Notes 1. See my book, Mit der Olwaffe zur Weltmacht (Kopp Verlag). 2. The demise of the dollar, The Independent, Ocober 6, 2009.

F William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order; and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). His newest book is Full Spectrum Dominance: Totalitarian Democracy in the New World Order (Third Millennium Press). He may be reached through his website, www.engdahl.oilgeopolitics.net.

(5) Kremlin aide sees value in possible non-dollar oil payments

http://en.rian.ru/business/20091008/156393390.html

13:11 08/10/2009

MOSCOW, October 8 (RIA Novosti) - A Kremlin aide said on Thursday it could be advantageous to switch to non-dollar oil payments, but that he had not heard of any discussions on the issue.

Britain's Independent newspaper reported on Tuesday that Russian officials had held "secret meetings" with Arab states, China and France on ending the use of the U.S. dollar in international oil trading.

"We have long been saying that there is some sense in creating the conditions for making ruble payments, including for oil, attractive," Arkady Dvorkovich said. "The subject is worth discussing, but I do not know if specific talks on the issue are underway."

According to The Independent, the countries are reportedly seeking to switch from the dollar to a basket of currencies including the euro, Japanese yen, Chinese yuan, gold, and a new unified currency of leading Arab oil producing countries.

"Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars," the paper said.

The Independent said the meetings have been confirmed by Chinese and Arab banking sources.

"These plans will change the face of international financial transactions," a Chinese banker told the paper. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

The dollar plummeted on Tuesday after the paper's article, while gold surged well above $1,000 an ounce in international trading.

(6) Chinese Intelligence Activity - reply to Michael McDonnell

From: Tony Ryan <tonyryan43@gmail.com>  Date: 08.10.2009 11:46 AM

> resurrected China is at war with no one ...
> "Tiananmen Square Massacre" that never happened.

Is Michael McDonnell in love with a Chinese girl?

How else can one explain the rosy lens of love through which he views Chinese hegemony and exploitation. First, for example, there are the African children they send down rabbit tunnels of mines, many of whom do not make it back. Cheap funerals though.

Then there are the tortured and executed falang gong, from whom it is said Communist bosses can procure free replacement organs. Very spiritual.

But my special concern if for the way the Chinese view Australian resources as their own; but for the trivial formality of peppercorn payment... for the time being.

Chinese I converse with in China make it clear to me how Australians are presented to the Chinese people. The latest I hear is that we Australians are using the Chinese as guinea pigs to test the new H1N1 virus vaccine, just in case it paralyzes or kills too many to pass off as flu deaths.

What I see is a national elite who saw the colonisation of NZ as marking the 4000th anniversary of the First Dynasty; and who see Australia as the lucrative second colony.

Like many Aussies, I am less romantic than Michael.

I see a people whose neurotic obsession with magical wild animal parts is driving hundreds of species to extinction. I see people who place aspect and favourable numbers as overriding empirical data and obvious evidence. I frequently encounter a racial superiority complex that we have not yet completely erased from the faces of the Poms and is most certainly no less unacceptable in Chinese. I retreat from the national mania for money, that sees the sentiment of family gifts exchanged amongst other peoples replaced with the ubiquitous red envelopes of currency; later jealously compared.

But most of all I detest the derisive "yang guizi", referring to Australians. It beats the hell out of me how they can see us as foreign devils in our own country... or have we got that wrong? perhaps they mean foreign devils in China III.

My attitude is simple. All migrants who do not speak English, and who are not prepared to respect Australian values, please go.

(7) Researcher refutes Microsoft's account of hijacked Hotmail passwords

Could botnets, keylogging be to blame for password leaks?

By Gregg Keizer

October 7, 2009 04:07 PM ET

http://www.computerworld.com/s/article/9139098/Researcher_refutes_Microsoft_s_account_of_hijacked_Hotmail_passwords?taxonomyId=82

Computerworld - One researcher isn't buying Microsoft's and Google's explanation that hijacked Hotmail and Gmail passwords were obtained in a massive phishing attack.

Mary Landesman, a senior security researcher at San Francisco-based ScanSafe, said it's more likely that the massive lists -- which include approximately 30,000 credentials from Hotmail, Gmail, Yahoo Mail and other sources -- were harvested by botnets that infected PCs with keylogging or data stealing Trojan horses.

Landesman based her speculation on an accidental find in August of a cache of usernames and passwords, including those from Windows Live ID, the umbrella log-on service that Microsoft offers users to access Hotmail, Messenger and a slew of other online services.

That cache contained about 5,000 Windows Live ID username/password combinations, said Landesman, who found the trove while researching a new piece of malware. "From the organization [of that cache] and what the data looked like in raw form, I think it's more likely that this latest was the result of keylogging or data theft, not phishing," Landesman said.

She dismissed the idea that the passwords had been collected in a large-scale, industry-wide phishing attack, as Microsoft and Google both maintained.

"Another indicator is the sheer number of compromised accounts," Landesman said, referring to the two lists that have gone public. "Phishing is not generally a wildly successful scam, it doesn't have a big return. People are more savvy about phishing than we give them credit for."

Instead, it's more logical to assume that the passwords were acquired by botnet operators, who hijack PCs using security exploits, then later plant data-stealing malware on those machines. "That's a much more realistic source," said Landesman. "Regardless [of] what the final intent is of a botnet, one of the core capabilities of every botnet is the harvesting of e-mail credentials. If it looks like a horse, it's a horse, it's not a zebra."

Landesman's theory contradicts not only Microsoft and Google, but also the Anti-Phishing Working Group (APWG), an industry association dedicated to fighting online identity theft. On Monday, the APWG's chairman, Dave Jevans said a phishing attack that garnered thousands of passwords was do-able. "It's not outside the realm of possibility," he said then.

Also against the phishing explanation, argued Landesman, is the fact that the second list -- approximately 20,000 passwords -- contained usernames from not just Hotmail, but also Gmail, Yahoo Mail, Comcast, EarthLink and others. "That makes [the purported phishing campaign] a much broader attack across multiple services."

Her first thought when she read about the compromised Hotmail accounts was of the cache of credentials she'd found two months before. "Those public lists reminded me of the lists I found," she said. "It was definitely not a complete list, but seemed to be an advertisement for what this [hacker] had to offer."

The hacker was either inexperienced, or none too bright: The data was not password-protected, which is the norm for credential caches.

Landesman's theory is not just an academic exercise, she maintained.

"Everyone who suspects that their account has been compromised should change their password," she said, repeating advice by Microsoft, Google and other security experts. "But if, after changing their password, they have another reoccurrence where they see their account being used to e-mail spam, or they again can't access their account, then they need to suspect that there's a local infection on their PC."

(8) EFTPOS scam in Western Australia leaves customers (not Banks) out of pocket

{let those who do online banking beware of the Banks' assurances}

http://www.watoday.com.au/wa-news/eftpos-scam-nets-450000-so-far-20091008-go9e.html

EFTPOS scam nets $450,000 'so far'

CHLOE JOHNSONOctober 8, 2009 - 4:25PM

At least $450,000 has been stolen from West Australian bank accounts through an EFTPOS skimming scam - and there is more to come.

Police said this afternoon that 1400 accounts had been defrauded "so far", with financial institutions likely to take at least a week to unravel the full extent of the scam.

At least 2500 people are believed to have had money stolen and the instituitions continued to receive complaints.

Detective Senior Sergeant Don Heise, of the fraud squad, earlier told 6PR scammers were somehow attaching skimming devices on EFTPOS machines in retail stores and stripping shoppers of their money.

"Since late August, early September there were a lot of incidents across the metropolitan area where people's information had been obtained through skimming," Detective Heise said.

"It appears to be growing ... and there are numerous areas affected."

Although Detective Heise was unaware of how these scams were taking place he said they were looking at all possibilities including fraudulent employees, machine repairs and theft.

"We are not sure how it's being done but we are making checks with retailers and IT people," he said.

"We are looking at all avenues into how these things are put in place ... when they are sent away for repair or when they are returned, or when they (retailers) buy them. Whether they can be attached (in the store) and is it possible without employees seeing it."

EFTPOS machine skimming is different to ATM skimming, as a person's pin and card details are recorded when using EFTPOS machines in shops.

"By putting a pin into EFTPOS, the pin and information is recorded internally in the machine. It doesn't matter what you do to hide your pin it's being recorded."

He said more than 2500 people had already been scammed, but police feared there was more to come as people did not discover the crime until they looked at their bank statements.

"There is no way of visibly seeing if the EFTPOS machine has a device attached to it ... the only way to check if something is wrong is by looking at your bank account," Detective Heise said.

"People don't discover it straight away and those who have credit cards may take longer (to realise).

"We will see this coming for some time."

Detective Heise said people should continue using EFTPOS but should be cautious and check their bank accounts.

People who feel they have been scammed should advise their financial institution and cancel their cards.

with staff reporters