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    Repiglican Roast

    A spirited discussion of public policy and current issues

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    Location: The mouth of being

    I'm furious about my squandered nation.

    Sunday, June 01, 2008

    Professional Idiot Henry Paulson Spews.

    U.S. Treasury Secretary Henry Paulson speaks during a news conference in Jeddah May 31, 2008. Paulson said on Saturday the dollar peg for currencies in the Gulf Arab countries had served the region well and any changes to the peg would be a sovereign matter. (Suzan Baaghil/Reuters)

    Five of the six Gulf oil producers -- except for Kuwait -- peg their currencies to the dollar, which means that they must match U.S. Federal Reserve interest rate cuts even as their economies surge on record high oil prices.

    Some in the region argue that this and the dollar's decline in recent months is fuelling inflation, which might be better controlled by pegging to a basket of currencies.

    An economic adviser to Qatar's ruler has said the Gulf state needs to drop its peg to the dollar because its economy is surging while the U.S. economy is slowing, London-based MEED reported on late on Friday.

    "We have to delink," MEED quoted Ibrahim al-Ibrahim as saying. "It does not make sense to stay linked to a currency that is declining while our economy is growing ... at a time when our currency should be going up, it is going down."

    At 13.74 percent, Qatar's inflation was the highest recorded among Arab countries in the Gulf last year.

    But Paulson, in talks with officials including Saudi Arabia's King Abdullah, Qatar's prime minister and finance ministers from the two states, said earlier in Doha he has yet to hear a leader blame the peg as the chief cause of inflation.

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