There's a lot of buzz about a British newspaper story that says other countries are plotting against the US with a plan to trade oil in currencies other than the dollar. So, is this the fall of Rome? Or much ado about nothing?

Well, first of all, despite appearances, the Independent doesn't tell us much we didn't already know. The story begins this way:

In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

It sounds ominous with a splash of international intrigue, but these countries have been talking about this for a while. That doesn't mean they will or can do it. From the Guardian:

David Buik, veteran City commentator, argued that moving oil trading away from the dollar would be "radical by any standards".

But, he said: "Let's be candid, it's not going to happen. Saudi Arabia is very dependent on the US for trade oil, defence and there is no way Saudi will stab the US in the back by pulling support away."

Reuters points out other problems:

Unless Gulf nations are prepared to remove restrictions on the free trade of their crude oil exports -- allowing them to become benchmarks for the rest of the world, as some analysts have argued would be useful -- it will be difficult for them to influence the basis currency for global oil.

Although commodity exchanges in both Japan and China offer local currency-based oil futures, they are ultimately linked back to regional benchmarks denominated in U.S. dollars.

The fact that China's yuan and many Gulf currencies are not fully convertible is also a significant obstacle to any effort to replace the dollar in global commodity pricing.

But perhaps the will power is there. Let's go back to the Independent:

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

The denials are pouring in. Denial number one, from Bloomberg:

Saudi Arabia hasn't held talks with China and other countries on dropping the dollar as the currency for pricing oil, Saudi Central Bank Governor Muhammad al-Jasser said, denying a report in the U.K.'s Independent newspaper.

The Independent report is "absolutely incorrect" and there has been "absolutely nothing" of that nature discussed between Saudi Arabia, the world's biggest oil exporter, and other countries...

Denials two and three, from The Guardian:

...Russian finance minister Dmitry Pankin and a Kuwaiti oil minister both denied discussing a move away from the dollar.

But is the Chinese banker correct that a thunder of denials means the US has something to worry about? And if so, how much of a fight will it put up?

The guy who wrote the Independent's piece, Middle East correspondent Robert Fisk, was interviewed on our Marketplace Morning Report today:

Host Bill Radke: Can America really fight this move or is this inevitable?

Fisk: I think it's inevitable. So many countries have been talking about it. So many countries have been complaining constantly, and sometimes with great frustration and irritation at the way in which the Americans control the financial system. And I think there's a good deal of frustration, which is mixed up with the political feeling that so many countries are tired of being dominated, now there's only one superpower.

What's your prediction here?