Danger of a Pull-Out -- of the Dollar
While we're being run out of Iraq, we're running out of money and heading for a recession.
Bad news out of Saudi Arabia: The archaic but wealthy kingdom is so scared of our imminent recession that it's abandoning our shaky dollar.
Ambrose Evans-Pritchard of the Telegraph (U.K.) explains this morning:
This stuff is really complicated, and I'm oversimplifying, and many rich schnooks are the ones making the decisions. (Read this good overview of Wall Street's subprime greed by David Ignatius in Beirut's Daily Star.)
The fact is that, no matter how much money the hedge funds and private-equity people are raking in, a recession looms in the U.S. The rest of the planet is a coalition of the unwilling to be dragged down with us.
This attack by the Saudis on our economy may prove to be more damaging to the U.S. in the long run than the mostly Saudi hijackers' attack on the World Trade Center, which, though horrible and deadly, was an attack on only the symbol of our economy. There was no justification for the 9/11 attack. But this economic attack is justified, because of the greedy schmucks and costly war that have helped send our economy spinning out of control.
Here's the rub: Our rich are getting richer, but foreign investors and governments own most of our debt. As the dollar collapses, they are pulling their money out — can't a brother get a dime?! World investors are looking elsewhere; many have a yen for Japan's strong economy.
We're Number Something-Other-Than-1!
Just one example of how relatively poor we are and how this crisis has been building for a long time: In April, Saudi Prince Alwaleed bin Talal demanded that Citigroup make "Draconian" cuts in its budget, and 17,000 people lost their jobs. Who cares what some Saudi prince says? Well, he's the huge bank's biggest individual shareholder.
Here's more from the Telegraph on the recent move by Saudi royals:
Our money woes are killing us:
Are the Democrats really sure they want to take over the White House? They will inherit an economy heading south and an unwinnable, tragic war.
We can't afford to keep fighting in Iraq, but we can't afford not to as long as we can't get some sort of international alliance to help calm things down over there.
Mercenaries like Blackwater may have to do all the fighting for us, but we won't be able to pay for them. As for our own soldiers: When we finally bring them home, there may be a full-blown recession and no jobs for them.
This is all tied to our mortgage-market crisis, which is caused by our money men playing dangerous games with the dough you homeowners send to the bank every month.
Here's even more from the Telegraph that warns of an even deeper crisis with the mortgage mess:
That's easy for him to say. He's got a new book to peddle.
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in New York, delivered to your inbox.