THE SPINE NOVEMBER 21, 2007
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Oil approached just short of $100 a barrel. That is, within pennies. The stock markets fell...drastically. When West Texas Crude hits $100 the markets will fall even more. The governments that are most delirious are the Chavez regime in Venezuela and the Islamic dictatorship of Iran. It is, after all, another blow to the United States. This is not something that Saudi Arabia desires. They want to maintain the link to the dollar and they have no interest in propelling these deeply radical states.
14 comments
Why can't the Saudis be team players and provide China's oil so that the Chinese won't turn to Iran?
- rozenson
November 22, 2007 at 12:27am
National leaders aren't necessarily any more rational thanyour average adjustable-rate crap mortgage borrower. The House of Saud props up the dollar with one arm and helps blow up the Twin Towers with its AQ-enabling other arm.
In any case while the Saudis may be the swing producers, 'tis China holds the treasuries. If our Chinese owners decide to shift a large amount of their $ holdings into euro-denominated assets, we're all going to be in trouble. cf bank run, global version
- teplukhin2you
November 22, 2007 at 3:19am
Why would the Saudis want to maintain the Dollar link? Apart from vague Global Security issues.
And surely (as is always the case) there would be an upside for the US if oil was traded in Euros?
Anybody got any answers?
- The Ignorant Populist
November 22, 2007 at 10:39am
Here Marty, a Thanksgiving present for you.
news.bbc.co.uk/.../7104030.stm
The communist, anti-semitic BBC have finally caught up with the Mearsheimer and Walt's book.
I think they give a fairly fair account of it. Even mentioning me in TNR...right well Benny in TNR with a cool pic of Cheney and the flags...oooohhh it's a conspiracy, look Cheney and the Israeli flag.
Of course I think it's a balanced approach, introducing the article and then giving the critics their points but then again I'm a...well you know.
Happy Thanksgiving.
(Do you say Happy Thanksgiving?)
- The Ignorant Populist
November 22, 2007 at 10:45am
"Why would the Saudis want to maintain the Dollar link? Apart from vague Global Security issues"
You answered your own question, Cleary-- just delete the word "vague." The security isue doesn't get more concrete or more terrifying than it is for the House of Saud. Even if our troops aren't physically inside the kingdom, we're their first line of defense.
More generally the main reason for the extraordinary increase in world growth, incomes, prosperity under global capitalism is the security guarantee provided by the US military. That's the main reason IMHO that the Chinese and other Asian central bankers aren't chasing higher returns. The Asians are ur-realists.
- teplukhin2you
November 22, 2007 at 10:56am
I knew you'd come out with that Teplukhin, that's why I tried to cut you off at the pass. Man, I've been on this site too long.
I'm not sure that sticks, on China anyway. Maybe, the Chinese don't want to dump their Dollars in a visible manner, which would decimate their value. I wouldn't be surprised if you see a v slow transfer over the coming years. Or maybe they see the strategic value that you highlight by holding the US by the balls.
Who knows.
- The Ignorant Populist
November 22, 2007 at 11:07am
I think your theory that the global economy is dependent on American Carrier Battle Groups is suspicous, if not jingoistic and even simplistic.
- The Ignorant Populist
November 22, 2007 at 11:10am
Regardless, I hope everyone is having a fine Thanksgiving. (What's the turkey like?)
The holiday is a celebration of illegal immigrants landing in the America's, right? Well, enjoy while your European brethern slave away trying to keep the wheels of commerce turning.
- The Ignorant Populist
November 22, 2007 at 11:29am
Maybe in 400 odd years you will be celebrating the border crossing of illegal Mexicans and this site will be in Spanish.
(Alll right, all right I'll leave you's in peace)
- The Ignorant Populist
November 22, 2007 at 11:39am
I sort of wish that we would be a little more proactive about the coming shortage of oil - developing substitutes and such - but ultimately the rise in oil prices will force us into finding replacements and that will ultimately strip the resources we now make available in spades to some of the more disgusting regimes in the world.
- poldpf
November 22, 2007 at 12:34pm
iggypop,
Happy Thanksgiving to you. Loved the comment about this holiday celebrating the arrival of a passel of illegal immigrants. So true. Betcha the Indians wouldn't have given them driver's licenses either...
Also, enjoyed the link to the BBC W & M article. Too bad the Mad Editor is too busy skulking around book stores throwing paperbacks on top of Carter's lastest book and bothering browers by saying, "Look! Look! Down 3 notches since last week...I win! I win!"
Happy Thanksgiving...
- thejauntyboulevardier
November 22, 2007 at 12:40pm
A complete aside, but the dollar stinks so much that, according to a story on NPR, cocaine dealers no longer want their cash in American currency. They prefer the Canadian dollar or the Euro. You know things are really bad when that happens.
- MOLLYSIMON
November 22, 2007 at 6:16pm
Actually, sounds like it's time to reverse course and start buying dollar futures. As soon as the Japanese retail investor starts shorting dollars, it's time to go long.
- teplukhin2you
November 22, 2007 at 7:00pm
Good lord. I was half-joking (though I recall vividly the Japanese retail investment sector piling into emergin markets in late '97, just before that market crashed, and into the internet sector three years later). And here's the NYT reporting that Japanese retail investors are exiting dollar investments. Time to go long the dollar, pronto.
And I thought it would take another 4-6 months. Wow.
www.nytimes.com/.../23yen.html
- teplukhin2you
November 23, 2007 at 11:44pm