TELEGRAPH
September 12, 2008.
Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
“This is a very dangerous situation for the dollar,” said Hans Redeker, currency chief at BNP Paribas.
“Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States,” he said.
The Saudi central bank said today that it would take “appropriate measures” to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.
As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.
Source:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml
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TELEGRAPH
June 19, 2008.
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.
A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
Such a slide on world bourses would amount to one of the worst bear markets over the last century.
Source:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml
The American National Debt has continued to increase an average of
$1.93 billion per day since September 28, 2007.
The national dept will exceed 10 trillion dollars within 2008.
In the 1990s $2.8 trillion of new debt was created; more than created in the nation’s entire history prior to 1990.
In the 4 years 1997-2001 total federal debt increased $438 billion,
a period when politicians bragged about a $557 billion surplus.
That’s a $1 Trillion creditability gap.
(Some might suggest Enron and others learned reporting gimmickry from government practices)
An additional $2.8 trillion of debt was added in 2002-2007.
Source:
http://home.att.net/~mwhodges/debt.htm
Duration : 0:6:46
Leverett, senior fellow at The New America Foundation, argued that control of commodities and scarce energy reserves will be the defining paradigm in the global economy for years to come. Increased energy demand throughout the developing world and a tight supply have created a structural shift in global energy markets that has rendered past boom-bust cycles obsolete for the foreseeable future. One notable structural shift constraining supply is that 80% of oil reserves are owned by governments as opposed to multinational private corporations. As a result, market forces do not play a role in inducing additional productive capacity.
http://good.is/
“The Age of Oil — 100-plus years of astonishing economic growth made possible by cheap, abundant oil — could be ending without our really being aware of it. Oil is a finite commodity. At some point even the vast reservoirs of Saudi Arabia will run dry. But before that happens there will come a day when oil production ‘peaks,’ when demand overtakes supply (and never looks back), resulting in large and possibly catastrophic price increases that could make today’s $60-a-barrel oil look like chump change…
Probably the worst race organisation the World Superbike Championship has ever seen. The marshals at the Nurburgring just stand and watch as top riders fall on oil.
See full film here: