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To: Sarmad Y. Hermiz who wrote (346)	4/26/2002 11:33:06 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 13403

RE: "If they get even a whiff of suspicion that their assets might be frozen or confiscated (because they help palestinians)..." There is no way "their assets might be frozen or confiscated". They pump their oil, keep the price reasonable, and get away with a lot worse than sending aid to Palestinians.

To: Sarmad Y. Hermiz who wrote (346)	4/27/2002 3:19:58 AM
From: Jacob Snyder	Read Replies (1) \| Respond to of 13403

Hi. Welcome to our newish board. You're right. Foreigners have, for a long time, treated U.S. assets as a Safe Haven, and poured capital in, to fund our deficits and keep our asset prices high. If the Saudis (or the Japanese, or the Germans, or.....) ever decide to take their capital home, for any reason, then we'll see PEs contract in the stock market, and higher interest rates needed to find buyers for Treasuries. And a lot less capital available to fund NewTechConcepts. This Safe Haven status, together with low interest rates and low inflation, are probably the main reasons why the Bubble has not deflated, and asset prices remain so high. Hard, very hard, to predict when this changes. As I understand it (and my understanding may be way off), wealthy Saudis have a love/hate relationship with the U.S. On the one hand, they have most of their assets in the U.S., usually educate their children here, often have second homes here, and spend a lot of time in the U.S. On the other hand, the U.S. and Saudi Arabia have profoundly different cultures, more different than just about any other two nations on earth. On a political/military level, there is a mutual dependance, each side requiring something the other has. One major part of that interdependance, is all the U.S. assets that Saudis hold. I think our government realises it would be a very bad thing, if Saudis moved all their assets to Europe (the logical choice). Misunderstanding, and brinksmanship (on both sides) might make the Saudis worried enough to start moving assets out. But this would be noticed quickly, and I think our government would then do whatever is necessary to reassure Saudis. I think the relationship between the governing elites in the U.S. and Saudi Arabia is so necessary, to both sides, that they will find a way to finesse issues like the Palestinian guerrilla war against Israel. After all, they've finessed it for decades. So, I don't see those assets being confiscated, or moved out. My main worry is an Iranian-style revolution in Saudi Arabia. Everything I've said about Saudi Arabia applies only to the wealthy elite. I can see an anti-American revolution happening, easily, but I can't think of any way to predict it ahead of time. So I just add it to the list of inescapable risks of being in the market.