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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

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To: Muthusamy SELVARAJU who wrote (5215)	4/3/2006 10:10:18 PM
From: elmatador	Read Replies (1) of 218605

BEWARE! No "Middle East countries are buying/keeping USDs" Not only not keeping! They're spending all and the future oil revenues too!!! Suppose they are getting, today, USD1.000 with oil at USD65. You think that before they were getting USD300. Now that they are getting that USD700 surplus, they don't know what to do with it and start putting elsewhere? That's not happening! They were getting USD300 and spending USD500. Accumulated deficit since their economies solely depend on oil revenues and growing populations had to be kept quiet else they want democracy and freedom. They spent money (and created deficit)to keep populations quiet!! Then they have this oil bonanza. They cover that deficit, and make the population very happy doling out a goodies to them and they keep quiet. Look what happened with Saudi Arabia in the aftermath of the Desert Storm (first Bush war to free Kuwait). The Arabs had to pay the cost of that war. (USD50bn for the US to liberate them.) For the first time -the younger generations- had to tight their belts. The Arabs got really pissed with this since the money going to the US -as payment for the liberation- was the goodies they were used to. All this bad feeling towards the US, which gave raise to Bin Laden is result of those years when the Saudis had to tight their belts because the US had to be paid to save them for Saddam. Back to the subject of spending oil money: Now that the liberation debt was paid and the oil revenues are up again, they're are back to the old spending habits. They are spending all the money they are getting plus the oil revenue that's still on the ground. Imagine if the investment in oil sources that were out of stream: (Iraq, Libya) kick start production. Imagine if Iran is pacified. Imagine if the Russians sort out ownership of their energy assets, get lots of investments from the Chinese... Then if you are an Arab country (not the big reserves Saudi or Iran) you will be left with less oil that will be sold cheaper in the future. The Arabs think: lets sell high now and spend while oil is high. This is not useless culture! No! This is important if you are investing in oil sands!

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