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Sun 19 Oct, 2003 12:12 am
Saddam Hussein applied to the UN to receive payments in Euro Dollars in the Oil for Food and Medicine Program. America did not oppose that application to the surprise of many pundits. Privately some belive that single transaction sealed Saddams fate. The House of Saud has already warned that they would divest themselves of US investments.. a move applauded by Isamic fundamentalist's.
The balance of foreign debt held by the Japanese in US dollars has already resulted in the Japanese Central Bank defending US currency values (and their own intrest's thereof) with large purchases of US debt instruments dumped on to foreign markets.
All of this activity leads me to believe that a concerted effort is underway to precipitate and deepen US economic problems.
The SCADA systems that control the power grids were attacked world wide this summer in a dress rehearsal for a large scale multi pronged attack. This winter those of you who live in a cold climate would do well to be prepared. I believe Al Queda's weather experts will be looking for a storm or weather system to multiply the effects of any failure they can preciptiate. The world wide black outs were a test and a warning to the wise.
A stopped clock is right twice a day.
SM, Although you may think that the US debt instruments will deepen US eocnomic problems, you must also remember that the world economy is doing worse. The largest economies after the US are Japan and Germany. The only economy that's been showing any strong growth is China. All the other developed countries will struggle for a few more years before things improve. Nobody is ready to accept the Chinese yuan in the world markets as a global currency. Some countries use the US dollar as their currency, because they feel more secure with the US dollar over their own currency or any other available in the world including the Euro and the yen.
Layman's Views
Anybody with a tolerance for risk and a long term strategy could well see the Yuan as a reasonable long term bet. The flight from the Amercian dollar as a safe haven will probablly continue to the benefit of the Euro.
The Saudi's will quietly continue to divest themselves and their interests in a manner that best suits their political,economic and strategic purposes.
The Japanese may hold US debt, but who holds the Japanese? Japan is and will always be a net oil importer.
As a layman with no backround in macro economic theory , all of my arguments come from a limited understanding of the many forces in play.That being said the warning signs are there for anyone to see.
Sunray, Don't feel too bad about not having any background in macroeconomics. Sometimes, limited understanding is preferable to all the junk one must filter through to understand what is happening in this complex economic theories. The only thing that Japan has is the future economic productivity, and hopes that the US economy will once again grow faster than the rest of the developed economies. "Tolerance for risk and long term strategy" is not in my book of cards, because I'm a retired senior. If I were in my late twenties or early thirties, the yuan could be a reasonable long-term debt. However, the yuan is not transferrable in the world banks - as far as I know. As for the Euro, most of their economies are not doing well, and there's very little to support their currency. Germany has a ten percent unemployment rate, and both Germany and France's national debts are increasing every year as a result of the social programs. The other EU countries are very upset with this situation, because they are not living up to the EU requirement of debt limits.
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