The End of the $?
November 29th, 2007Following on from my post on the Amero I came across this article which explores the fallout for the $ from the current financial crisis. The hard question the Chinese, Russians, Arabs and other holders of $ must be asking themselves is what to do with them.
Well I think we’ve been seeing the answer in action for some time now. Buy overseas assets not paper. In other words buy into industries, land, property but not continue to finance the US deficit by buying US treasury stock.
We’re starting to see the Arabs and Chinese buying up assets in many sectors, especially finance and resources. Makes sense doesn’t it?
Nothing confirms this more than the Abu Dhabi Investment Authority buying 5% of Citbank for $7.5bln…….structured as a convertible loan paying 11%….now that is a junk rate.
What a deal for the Arabs. And the irony of having to bail out a huge US financial behemoth.
No doubt there has been plenty of sucking wind going on in Washington and Wall Street.
It’s a simple game from here on in. It’s called “Show me the Money”.
Tags: banking, credit crunch, currencies, forex, markets, money