Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

[grapejelly]

storey here

Rather interesting, no?

Is this as big a story as it seems to be?

KUWAIT, May 20 (Reuters) - Kuwait unshackled its dinar from the tumbling U.S. dollar on Sunday and switched the exchange rate mechanism to a basket of currencies, throwing plans for currency union with other Gulf Arab oil producers into disarray.

Kuwait's central bank, which battled speculators for weeks to defend the peg, said the dollar's slide against other currencies had forced it to break ranks with fellow Gulf states to contain inflation from the rising cost of some imports.

The move stunned Gulf currency markets and volumes dried up. The impact would be clearer on Monday when international markets open, said Steve Brice, chief middle east economist at Standard Chartered Bank in Dubai.

Oman and Bahrain, the two smallest Gulf economies, and Saudi Arabia, the largest Arab economy, said they planned to stand by their pegs. There was no comment from the central bank of the United Arab Emirates, whose currency is likely to take centre stage on Monday as prospects for a single currency evaporate.

Kuwait was still committed to monetary union, the central bank governor said in a statement, after changing the dinar's rate to $0.228806, an appreciation of about 0.37 percent.

"The massive decline in the dollar's exchange rate against main currencies ... has contributed to the increase in local inflation rates and this step is part of the central bank's efforts to curb inflationary pressure," Sheikh Salem Abdul-Aziz al-Sabah said in a statement carried by state news agency KUNA. Continued...

[Mega]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

To Mis quote any good US war film.................."If you got them, smoke them". Sh*t looks like i missed the Gold rush.......I wish one of you guys would tell me how to buy Gold?
Mike

[grapejelly]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

To Mis quote any good US war film.................."If you got them, smoke them". Sh*t looks like i missed the Gold rush.......I wish one of you guys would tell me how to buy Gold?
Mike

go to www.apmex.com, buy gold and have them ship it to you.

[Mega]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

My Mum been to see me today..........She wants to buy Gold!
Have to see if there is any VAT or can i "By Pass" any VAT.................Need a UK GOlD Buying guide..............Any thoughts guys?
Mike

[FRED]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

storey here

Rather interesting, no?

Is this as big a story as it seems to be?

Glad I didn't buy into the whole Gold Dinar thing.

[FRED]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

This just in...

China to take stake in Blackstone

Kate Linebaugh And Andrew Batson, Wall Street Journal
20 May 2007

China agreed to take a $3 billion stake in U.S. private-equity giant Blackstone, which marks an unusually aggressive start to the country's long-anticipated campaign to diversify how it invests massive foreign-exchange reserves.

Guess Paulson's last trip to China went pretty well.

[Spartacus]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

What, are you suggesting?

Blackstone == Goldman?

http://www.newsvisual.com/newsvisual...g_goldman.html

This just in...

China to take stake in Blackstone

Kate Linebaugh And Andrew Batson, Wall Street Journal
20 May 2007

China agreed to take a $3 billion stake in U.S. private-equity giant Blackstone, which marks an unusually aggressive start to the country's long-anticipated campaign to diversify how it invests massive foreign-exchange reserves.

Guess Paulson's last trip to China went pretty well.

[Mega]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

I am but a poor Layman (from Liverpool) but i think ALL those $$$$ are heading home! The Fed is going to have lots and lots of Paper about the place!
Mike

[Mega]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

$3 Billion?..............They have like $1.2 TRillion.............I think they some way to go!

May be they like to buy "BT"......Nice Telecom stock.
Mike

[bill]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

This just in...

China to take stake in Blackstone

Kate Linebaugh And Andrew Batson, Wall Street Journal

20 May 2007

China agreed to take a $3 billion stake in U.S. private-equity giant Blackstone, which marks an unusually aggressive start to the country's long-anticipated campaign to diversify how it invests massive foreign-exchange reserves.


Guess Paulson's last trip to China went pretty well.

Looks like the PE flippers have had this one lined up for some time. The Chinese must have given Paulson the shopping list to hand out to the PE Firms last year.

http://www.itulip.com/forums/showthr...10152#poststop

As I said about Paulson:
http://www.itulip.com/forums/showthr...=9933#post9933

[jk]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

Looks like the PE flippers have had this one lined up for some time. The Chinese must have given Paulson the shopping list to hand out to the PE Firms last year.

http://www.itulip.com/forums/showthr...10152#poststop

As I said about Paulson:
http://www.itulip.com/forums/showthr...=9933#post9933

bill, your scenario of the pe operators flipping their assets to the chinese [overtly or in some disguised fashion] instead of having ipos looks more and more likely.

[grapejelly]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

bill, your scenario of the pe operators flipping their assets to the chinese [overtly or in some disguised fashion] instead of having ipos looks more and more likely.

so are the Chinese the "greater fools" then?

[bill]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

I guess when you have a built in buyer to flip to you load up on more inventory.


http://www.bloomberg.com/apps/news?p...ki8&refer=home

May 20 (Bloomberg) -- Alltel Corp., the mobile-phone services provider, will be acquired by TPG Inc. and Goldman Sachs Group Inc.'s leveraged-buyout unit for $27.5 billion.

Will GS use this new GSTrUE for the Chinese? Any Ideas?

http://www.itulip.com/forums/showthr...0460#post10460
What is this new “GS Tradable Unregistered Equity OTC Market” or “GSTrUE” (Dark Pools) and how will it function?

[zoog]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

Will GS use this new GSTrUE for the Chinese?

and

GSTrUE, will be accessible only to institutions and sophisticated investors... By offering shares on GSTrUE... sidestep the regulatory oversight that accompanies public share offerings.

What would be the purpose of using such a so-called "Dark Pool" for Chinese investment? To avoid alarming the US sheeple by keeping these deals out of the public eye? To avoid complications if regulators might otherwise balk at large foreign purchases? Considering how much the Chinese have invested (in traditional, public markets) already, the secrecy doesn't seem warranted to me. I must not understand all the implications.

...a private market constructed by Goldman Sachs rather than on a public exchange...

This seems like a way to allow high-rolling traders and investors to invest with the full force of their insider information, without fear of getting caught. (Not that there seems to be much fear in the first place.) But in such a closed system, I don't see how they could generate significant gains with so few players, unless the companies traded are also traded on the public markets. If I put on my conspiracy theorist hat, I could speculate that the GSTrUE is a tax-evasion scheme, or at least a tax-deferral scheme. Perhaps the GSTrUE would tally up but not report short-term gains, then report them annually as long-term gains. Perhaps they could sell to the Chinese and not have to report any capital gains at all.

[oddlots]

Re: Petrodollar cracks: Kuwait drops dollar peg -- is Saudi et al far behind?

This private market indeed the whole PE phenomenon strikes me as a ploy to avoid regulation and particularly Sarbannes-Oxley (yet another example of how regulation's effectiveness is limited to creating unintended consequences.) I read this eye opening interview with Michael Hudson recently about the development of the eurodallar market and off-shore banking that I think convincingly shows that the government is entirely complicit in making sure that regulation is not allowed to hamper US financial competitiveness even to the extreme detriment of the US tax base:

http://www.counterpunch.org/schaefer03252004.html

It may seem slightly off topic here, but the creation of GS's less-private equity market strikes me as a move similar to the rise of off-shore banking: a move to maintain US financial competitiveness in the face of regulation and at almost any cost. More generally, however, it just flesh's out the suspicion that the needs of capital will be served by the government no matter what. It is mind boggling how thoroughly labour gets done in this era.