Repricing Assets in Baskets

I got several response to the idea others (and I) bandied about the potential for
commodities etc., to be re-priced/denominated in an asset other than the dollar
over the last several weeks. Strangely enough, on Feb 8th, the OPEC Secretary
General was quoted in the Middle-East Economic Digest, "maybe we can price
in Euros".

That's the first time someone with power has even hinted of it being a possibility.
Granted there are niceties, political issues, relationships etc., but the simplistic
argument (I am a simpleton) I make and believe in is based on economics :

Say I'm a ruler of an oil rich state and have my currency pegged to the dollar,
which is a declining asset because the country does not have its fiscal ducks
in a row. If I'm lending to the US, and selling Oil denominated in dollars,
I'm basically eroding my own purchasing power, especially at a time when I have
inflationary pressures in my own backyard!

- How can I keep the peg, cut rates AND deal with inflationary pressures that
are several times the rates I have to import by keeping the peg?

- How can I afford to keep the peg intact AND price my natural resources in
an asset that is eroding my purchasing power over time?

Being politically and economically savvy, I would perhaps choose to move to a
pricing scheme that is a basket of international currencies. Strangely enough, me
doing this, in a way reduces my currency risk, no? And over time, I would choose
to re-weight the currencies in the basket I've chosen to re-price my black gold.

Funny thing is that this whole idea of basket weighting of commodities/currencies
and debt brings with it a more tight coupling of economies. People that have
bandied about the whole "decoupling" theory are talking through their hats, and
they probably don't even wear one! I don't believe in the "de-coupling"
argument - it's a fairy tale from my current vantage point.

Lots of things would change if such a thing were to happen - we can only speculate.
Perhaps, the whole idea and mechanics of the typical carry trade would change. For
certain, the ramifications if there is such a movement is HUGE for this (USA) country,
especially given our current state of affairs.

Now....back to my charts.