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To: Les H who wrote (190901)	9/6/2002 11:52:19 AM
From: Les H	Respond to of 436258

Don't blame the oil men for talking up the war thisislondon.co.uk world oil demand will explode from the current 76 million barrels a day to 120 million barrels by 2020 boston.com

To: Les H who wrote (190901)	9/6/2002 12:46:51 PM
From: Les H	Read Replies (4) \| Respond to of 436258

Global Economic Insight: A Capital Embargo From the Middle East? Joseph Quinlan/Rebecca McCaughrey News that investors in Saudi Arabia are poised to pull billions of dollars out of the U.S. has not gone over well. The chief fear is that if Middle East funds exit the U.S., the U.S. dollar and other U.S. financial assets will come under renewed pressure and compromise the U.S.'s ability to attract foreign capital. Fears may be overblown. The Middle East is a critical source of oil, not capital. OPEC's clout in global capital markets is minimized by the fact that oil-exporting nations accounted for just over 6% of global international reserves (ex-gold) in May. Asia is America's banker. Asia is the largest holder of international reserves, with Asia ex-Japan alone accounting for nearly 40% of world reserves in 2001. Japan accounted for another 19%. Thus, when it comes to funding the U.S. current account deficit and America's savings shortfall, it's more about recycling "tech-dollars" than petrodollars. Transferring Asia's savings from the U.S. to the Middle East? Should oil prices spike up on account of rising U.S.-Saudi tensions, among the biggest losers would be the energy-dependent nations of developing Asia — the same nations the U.S. is currently beholden to for capital. A higher import oil bill in Asia would transfer capital to the Middle East at the expense of the U.S. morganstanley.com