Newsgroup: it.economia
Titolo: Oil for dollars, and dollars for US deficit

http://nsx.altervista.org/modules.php?name=News&file=article&sid=921
by Richard Benson
 
 Asia Times Online, 9 April 2005
 
www.globalresearch.ca
 9 April 2005
The Asians remain shocked and in disbelief. Just when Japan, China, Taiwan and Hong Kong
had accumulated enough dollars to buy oil to keep them warm for many winters, it's all
over. In broad daylight, the Americans and the Organization of Petroleum Exporting
Countries (OPEC) cheered as the price of oil popped up from US$30 a barrel to more than
$50.
 
 
 Indeed, this jump in the price of oil increases the world's daily oil consumption bill of
84 million barrels a day to $4.2 billion, from $2.5 billion (or $1.5 trillion a year from
$900 billion). The world now has to shell out an additional $600 billion a year of "lucky
bucks" to oil-producing countries just to stay in motion.
 
 
 The bigger shock, however, is in the devaluation of dollar holdings of US Treasury debt.
The rise in oil prices guarantees that the value of the US dollar will be pushed down
even further, and stay down. Now that China is the No 2 oil importer and Japan is No 3 -
with the rest of Asia very thirsty for oil as well - you can understand why the Asians
must find a way to protect themselves.
 
 
 The US strategy for using oil to finance its deficit is, of course, brilliant. America's
elected officials knew that at some point those independent foreign central banks would
start getting edgy about buying more dollars to pay for the United States' war and
deficits. The $650 billion trade deficit is breathing down the dollar's neck. So which
central banks can the US continue to use as the fall guys to buy the dollar? Why not the
Persian Gulf oil states - but where would they get the dollars to buy US Treasuries?
Well, with the Chinese piling up dollars and growing like crazy, at some point the oil
market had to tighten. It was only a matter of time before the Chinese would start
bidding up the price of oil. The Asians, therefore, are hung out to dry when the price of
oil rises because they have to spend more of their dollars on oil.
 
 
 As the price of oil goes up, extra money floods into the Gulf kingdoms. With the US
secretary of defense putting troops all over the ground in the Middle East, and those
nimble aircraft carriers nearby and ready to deliver the "shock and awe of sudden
democracy" to the Gulf monarchs, it's a sure bet that America's OPEC buddies will stash
their newly found Asian lucky bucks into good old American Treasury notes.
 
 
 With such a simple policy to fund its deficit for another year, it's no wonder the United
States can get by without any brain power at the Treasury Department. In effect, the US
and its Gulf Arab allies just pulled off the biggest central-bank heist in the history of
the world. The price of oil just went up 60% or more, which really cuts down to size that
$3.4 trillion of net foreign holdings of US financial assets. As a loyal American, one
would like to cheer one's government's deft move to pick the pockets of our trading and
financing partners. Moreover, the US gets the Arabs to fund a large share of our deficit,
subsidize our interest rates, and help keep our taxes low for another year. Surely I can
afford to buy another gas-guzzling sport-ute, get a rifle, and wave a flag.
 
 
 The United States is extracting tribute on oil from the world. If the world wants Middle
Eastern oil, it can pay for it through the Saudi branch of the US Treasury. Why do the
heads of Saudi Arabia, Kuwait, Abu Dhabi, Bahrain, Qatar, etc, hold dollars? Because they
want to keep the money and the power. The ruling family of Saudi Arabia controls 25% of
the world oil reserves and is completely dependent on oil revenues for its survival. Tens
of thousands of Saudi princes live off lavish royal stipends. Think of Arabia as a family
firm. If the dollar goes down in value, the Saudi royal family still gets to keep
hundreds of billions of dollars. But, if they don't buy dollars, why would the US keep
them in power? It would simply not be in our interests to do so. Remember when Saddam
Hussein talked about pricing Iraq's oil in euros? "Shock and awe" quietly followed.
 
 
 This program of oil for dollars and dollars for the US Treasury deficit is the simple
tribute that we, as the superpower, can expect. The United States is well paid for
keeping the world's supply of black gold safe and available to all. Unlike the Vietnam
era - when the US was trying to finance guns and butter - getting others to pay now for
our guns allows us to milk the oil out of the sand and turn it into butter.
 
 
 The next question will be how the Asians respond to a 60% hike in the price of oil.
Please stay tuned.
 
 
 Notice in the chart below there are some big, smart, anonymous dollar holders (such as
hedge funds) located in the Caribbean. No one knows who they really are.
 
 
 
 
 
 Major foreign holders of US Treasury securities (in billions of dollars) 
 
 Japan 702 
 
 
 Mainland China 194 
 
 
 England 163 
 
 
 Caribbean 93 
 
 
 Korea 68 
 
 
 Taiwan 59 
 
 
 Hong Kong 59
 
 
 
 Total (including other countries with fewer holdings) 1,960
 
 Richard Benson is founder of Specialty Finance Group. He can be reached at
Asse...@aol.com
. This article is republished with permission from Benson's Economic and
Market Trends.
 
 
http://globalresearch.ca/articles/BEN504A.html
 
-- 
Nsx - News from Left 
http://nsx.altervista.org

 of oil popped up from US$30 a barrel to more than $50.
... bla bla bla
mi sembra un modo contorto di osservare che l'estremo oriente ha fatto i
soldi (i dollari) lavorando sodo e come ovvia conseguenza, ora possono
"permettersi" lussi occidentali come avere due auto in famiglia ... ed
usarle. Oltre ad un riscaldamento "pulito" (e non fumoso come quello a
legna). Ma in un mercato "rigido" come quello petrolifero, questa poderosa
domanda (praticamente stiamo raddoppiando i consumi mondiali), deve per
forza provocare un forte aumento del costo del petrolio. 
Quindi nessuna trama "americana", ma una semplice legge di domanda ed
offerta. Anzi e' un miracolo che sia solo raddoppiato. Le previsioni per il
2005/2006 sono di oltre $100 al barile.
In quanto al deficit americano: scusate, ma il paese che consuma piu'
petrolio pro-capite al mondo non vi sembra che debba risentire pesantemente
dell'aumento del petrolio ?
Sembra che a sinistra abbiano perso il rasoio di Occam (se mai c'e'
l'avevano).
Pekilan