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2004-12-06 Home Front: Economy

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Posted by tipper 2004-12-06 6:00:49 PM|| || Front Page|| [1 views since 2007-05-07] Top

#1 Key graf: "Middle Eastern foreign exchange reserves are relatively small"

In other words, a lot of smoke, or shineola. And right now, buying from Europe in Euros is like buying a certain bridge in Brooklyn.

Posted by Chuck Simmins 2004-12-06 8:28:14 PM|| [http://blog.simmins.org] 2004-12-06 8:28:14 PM|| Front Page Top

#2 Opec imports from Europe rose 29 per cent between 2001 and 2003 while those from the US fell by 14 per cent

Meaningless statistics unless the base numbers are given. Prior to these changes, did Europe import as much oil as the US? A lot less? More?

It matters.

in spite of oil prices having risen 85 per cent since the fourth quarter of 2001, overall OPEC bank deposits have barely risen. "Oil reserves have not been channelled into the international banking system in the most recent cycle.

One school of thought is that Middle Eastern businesses and individuals increasingly prefer to invest at home, leading to sharp rises in real estate and equity prices in many countries.

Another argument is that many Opec governments are having to increase public spending to support rapidly growing populations.

Yup - they are facing real demographic strains.

Posted by too true 2004-12-06 8:42:33 PM|| 2004-12-06 8:42:33 PM|| Front Page Top

#3 This is part of an overall trend away from holding reserves in USD, which is in a large part the cause of the US trade deficit. Countries should hold their reserves in currencies that reflect their trade, otherwise the currencies of exporting countries are artificially depressed relative to those of the country whose currency you keep in your reserves (causing unsustainable trade surpluses for some countries and deficits for others), which is the problem currently for the USA (and unremarked by the world media Australia has an even worse problem - its trade deficit is 20% larger as % of GDP).

Posted by phil_b 2004-12-06 9:17:06 PM|| 2004-12-06 9:17:06 PM|| Front Page Top

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