5 Dumbest Things on Wall Street: Oct. 9

The Independent Spikes Gold

NEW YORK (TheStreet) -- James Bond creator Ian Fleming has nothing on reporter Robert Fisk.

Fisk wrote in the British broadsheet The Independent this week that finance ministers and central bank governors from Russia, China, Japan and Brazil have been holding "secret meetings" to work on a scheme to replace the U.S. dollar as the currency in which oil is traded. The article, which caused gold to surge to record highs this week, said that a number of Gulf states, together with China, Russia, Japan and France, have set in motion a plan to swap out of the dollar and into a basket of currencies comprised of the yen, the yuan, the euro, gold and a future common currency in the Gulf region.

"The Americans, who are aware the meetings have taken place -- although they have not discovered the details -- are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs," wrote Fisk, who later postulated about a future "economic war between the U.S. and China over Middle East oil."

International cabals. Secret meetings. Economic war. Geez, this story contains more espionage than a shelf full of John LeCarre novels and a dozen James Bond movies. But is it true?

Apparently not, according to representatives from a number of countries cited by Fisk as conspirators. The report was denied on Tuesday by Qatar, Kuwait and Russia, and on Wednesday the French economy ministry labeled the report as "pure speculation."

"There is no basis behind these rumors," said the French ministry.

True or not, traders jumped on the story and refused to let go, bidding up the SPDR Gold ETF (GLD) , as well as gold miners like Newmont Mining (NEM) and Barrick Gold (ABX) .

"Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars," writes Fisk about Iran's recent decision to switch its currency reserves to euros from dollars. "A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq."

Sounds like Fisk has a plot for the sequel to Goldfinger. Even if the rest of the world isn't plotting anything.

Dumb-o-meter score: 95 -- Like 007's martini, the U.S. dollar is shaken as a result of this dumbness. And it is stirring up gold prices.



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