Very dangerous situation for the dollar: escape from the US dollar currency up; fall to $US1.50 against the euro by the first quarter of 2008 possible

The escape from the US dollar had begin. Kuwait became the first of the oil sheikdoms to break its dollar peg in May, a move that has begun to rein in rampant money supply growth. A fall in the dollar to $US1.50 against the euro is not out of the question at all by the first quarter of 2008. According to Ambrose Evans-Pritchard, writing in The Sydney Morning Herald, (22/9/2007, p.44), said Saudi Arabia had refused – for the first time – to cut interest rates in lockstep with the US Federal Reserve, signalling that the Gulf kingdom was preparing to break the dol­lar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East”.