An article yesterday in the UK’s Independent newspaper by Robert Fisk claimed that “In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading.” It set off an immediate firestorm of response and attacks on Fisk’s credibility (one financial analyst I respect called it “a punk piece by a tireless controversialist”) which made for some interesting reading today. Assuming that the rumor hit around noon EST yesterday, then the dollar fell from 76.7 to 76.3 on the report–a negligible move in light of the action of the last week.

Until someone actually names names and provides some authenticated details, it’s impossible to know how true Fisk’s allegations may be. I have heard noises along these lines for at least five years running, and so far have not found any convincing evidence that such moves are an impending reality, so at this point I am not rendering an opinion. I will say that it does seem likely and rational that eventually the dollar will be at least partially displaced as a global reserve currency and/or the currency of choice for the  global oil trade.

In the meantime, it’s worthwhile to remain alert for developments in this story with real credibility. Here is a sampling of responses to the Fisk article I rounded up today, most of which rebut it.

The always on-point Izabella Kaminska at the Financial Times Alphaville blog did a roundup of her own: “The world and the dollar react to Robert Fisk”

Aaron Task and Henry Blodget, Tech Ticker: “Dollar Living on Its Reputation and Borrowed Time”

Mish: “Why Would Anyone Want to Hold Dollars?”

Zero Hedge: “Will a Basket of Currencies Replace the Dollar?”

Bloomberg: “Saudi Bank Governor Denies Talks to Replace Dollar”

Seeking Alpha: “Is There Really a Global ‘Cabal’ Aiming to Dump the Dollar?”

Reuters: “Iran says profited from non-dlr oil sales increase”

Reuters: “Gulf region to stay with dollar for oil: UAE central bank source”

There is also a good deal of background reading on the subject available, such as this academic paper from 2007: “Oil market structure, network effects and the choice of currency for oil invoicing,” which uses a “network effect model to identify the conditions under which a parallel invoicing in different currencies would be possible” and “includes a simulation designed to illustrate the dynamics of the currency choice of oil invoicing.”