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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: ild who wrote (8760)7/7/2004 1:41:34 AM
From: 8bits  Read Replies (1) of 116555
 
"Well, it is a real problem for US markets if Saudis still own many billions is US equities."

I tend to agree.

"With their relationship with US becoming worse they now must be taking funds out of USD."

Perhaps, but I find it interesting that OPEC (Which is heavily influenced by Saudi Arabia) has made statements trying to calm the oil markets and have sent letters to non OPEC nations advocating an increase in their production. Who would have thought they would do that 25 years ago?

Remember the House of Saud does not necessarily (and frequented doesn't) reflect the views of the majority of the Saudi populace.

It's own record who the largest foreign holders of US treasuries are: Japan, China, and Great Britain. (Although individual members of the Saudi family could invest in US treasuries and not attract as much attention...) So I'm thinking it plausible they put those extra dollars somewhere.

If it is accurate that the Saudi's hold that much equity then they potentially have enormous leverage with the US. I have heard rumors they are liquidating some investments here, but that may be prudent asset allocation (witness Buffett or Soros.. ) as opposed to getting peeved at the US administration.

"OTOH there are very few other financial instruments deep enough to park that big money without disruptions"

Generally I would say yes. Europe and the Euro come closest followed by Japan then Great Britain.

I have about 10% of my assets in gold and gold coins, 50% in oil related stocks, 5% in gold and base metal mine stocks, and the balance in cash and select stocks that I consider undervalued.

After reading many of the great posts on SI and the CWEI yahoo board about the oil market in the past year and a half I'm inclined to think that oil stocks will outperform most other forms of investment for the next 5 years.

I agree with you about the world being awash in dollars. Things aren't looking too good for the buck. Perhaps in 10 years we'll change the name to something more sexy (and reflective of it's stability) like the Peso.
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