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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: oldirtybastard who wrote (343901)	9/19/2007 4:16:37 AM
From: stan_hughes	Respond to of 436258

The Saudis are a candidate that I should have included on the list of possibles, to be sure -- my bad, perhaps in the frustration of the moment -- I suppose I left them out completely because the Saudis and the other oil states have even less to gain than the Asians do in being the US Treasury perma-patsy. Unlike the Chinese for example (who have willingly been taking USD in order to peddle their manufactured goods under what amounts to a giant vendor-financing scheme), whenever the oil states accept USD, they are trading away their finite and rather singular hard energy wealth in exchange for progressively worthless paper. The oil states are all well aware of this dynamic, and they are also long on record as being fundamentally against it as a matter of national policy, even though they know they still have to deal in USD to some degree to economically function. They hold USD but have historically managed to diversify into other asset classes to avoid any unhealthy concentrations. So while the oil states have been historical purchasers of a proportion of US debt because of trade necessities, I don't see why there would be much of an appetite for them to increase their US debt purchases here. Those oil states that still accept payments in USD will be hard enough pressed as it is to keep up their national accounts with a falling USD eroding their real revenues, much less adding even more shrinking Clownbucks to their pile via any stepped-up purchase of Treasuries. My opinions aside, let's look at the facts -- while Japan maintains its status as the biggest US financier, the US has been burying its newly rolled over debt (which evidently the Chinese didn't want) in Brazil and the UK mostly for the past 12 months -- treasury.gov -- and you really have to wonder how much longer they're going to be able to continue the UK stash play in light of the UK's own recent problems unless these two old friends have invented some new kind of scam to make everything disappear -- and that's something I prefer to not even think about at 4AM. So does Brazil have the economic capacity to be the new US banker? Somehow I doubt that too, BWTFDIK A nation's currency in circulation is conceptually equivalent to the number of outstanding shares in that nation as an enterprise -- in the USA case, they have just consciously decided to embark upon a massive dilution of their existing shareholders. Any experienced OTCBB trader can tell you how that situation always turns out .