Headline, April11, 2014


!!! CASH RESERVES !!! "'

IN REAL LIFE,  -big dogs eat first. And they eat as much as they like. Much more than a bellyful:

The rest eat scrap, and left overs. But in no time the  "Bones of Contention emerge."  And Survival instincts, take over! 

For the moment,   -suffice to say-  and let me just fire the  'second salvo' : "The World's Financial Architecture is getting breathlessly impractical".  And nothing will change in the present architecture:

Unless the right people are persuaded in the right places. The world Is heading into a Liar Trap!  Which everybody warns me is a Taboo subject.

The developing world economics is more disarming than the UN peace keeping force. Hahaha !.... And the Finance Ministers battling to secure :

"" !!! Walk-on-the-water reputation ""  Go ask them?

So, in 2007,  and in a whoosh, it was said, that J Sainsbury was being bought by the Qatari government!?

Gazprom,  -the Kremlin controlled  energy giant, began to consider : acquiring stakes in the UK  utilities. Kuwait's SWF bought a large chunk of Daimler-Benz and GEA, the German Engineering firm.

All that,  and the biggest SWF ever   -the then and recently launched China Investment Corporation   -has yet to really get going-,   though the Beijing government very soon gobbled up a slice of  Barclay's.   

The significance of this trend   -the gradual takeover of Western companies bu Eastern governments    -is very, very, difficult to overstate:

You can almost hear the   "tectonic plates of history"  grinding,  as the West's economic dominance recedes and the real wealth shifts back East after an interlude of long, long  300 years.

The process is inevitable.  But that won't make it smooth. Over the next many years, say four years,  the amount of money held by the  SWFs  is all set to quadruple.........to a mind boggling pound  8 trillion.

With that,  you could buy  ExxonMobil   at least 15 times over...........that is assuming the White House would let you!!

And that's the point. For, in America in particular,  the protectionist drums are beating. Western governments are set to clash with the  SWFs  over which companies they can buy and where.

A dangerous  backlash is possible,  with politicians raising trade barriers indiscriminately,........damaging commerce across the globe.

In the medium term, at least, the wealth funds' growing dominance,  and their switch out of cash and Western government debt, will hasten the instability and fall in the dollar.

That's probably a good thing for America, helping to rebalance the country's huge trade deficit.

Beyond that, though,  it is difficult to see Western politicians finding much to cheer about in the humiliating   -nay, frightening-  process of seeing their commercial assets bought up by rival governments.

And yet,  if well-managed and reciprocated,  the process could be very positive.  Apart from companies in certain strategic sectors   -such as defence and maybe energy   -these transactions should be allowed to happen.

Western governments must not roll over,   even in the name of free markets.

Deals should be cut    -allowing SWFs to proceed, but only if Western goods and capital are given access to fast growing Eastern markets.

Change is scary!   Globalisation is scary!  

And as the awesome buying power of the SWFs  become understood by the Western political  mainstream, these fears will become widespread  and very, very real.

""But change is inevitable. As is globalisation"".

That's why the West needs to see the rise of the SWFs as an opportunity, not a threat 

So, allow me to sum up this post on an abstract note and leave the world thinking:

My basic thinking is that our sense of   who we are   is bound up in institutions. From the monarchy and parliament, the World Bank, the IMF............

And the value these institutions implicitly embody. But now as the world gets more and more and more diverse, and comes closer and closer interlinked and intertwined , we need to get   -and be more implicit of what those values are:

Therein lies the future. The world has  great challenges ahead. Lets see if it measures up!

With respectful dedication to the Students, Professors and Teachers of the World. See Ya all on  !WOW!   -the World Students Society Computers-Internet-Wireless:

"' Shinning Example "'

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless


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