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Postre: US: End of US World Dominance? on the Sovereign Wealth Funds (Bienvenido Macario, Philippines/US) (John Eipper, USA, 10/02/08 4:21 am)
Bienvenido Macario responds to the John Gray essay forwarded by Robert
Whealey on 1 October:
The US today has not been as dominant as it was in the '50s, '60s and
'70s, especially after Japan, Germany and former allies fully recovered
from World War II.
Before the oil prices started going up in 2006, it was at $30 per
barrel and $64 around August 2005. Here is the question: With the US
spending $700 Billion on oil imports a year, who will buy the non-oil
imports from China, Japan, South Korea?
Unless there is a new "export market of last resort," the title and
obligation that comes with being the only superpower, America's
suppliers of goods for the 2008 Christmas season are more in trouble
than Fannie & Freddie, investment and commercial banks or even the
The Sovereign Wealth Fund nations think that it is a good idea to
"accidentally" hoard trillions of US dollars and force America to
accept their terms of investments. And yes, they are demanding
certain terms before they will invest US dollars back in America.
This resulted in a technical "cash flow asphyxiation." The demand is
there, the supply is there, but no cash and now after more than one
year of credit crunch, officially there is no credit on Main Street as
The advantage of being a SWF nation is that you are not affected by
the Wall Street meltdown unlike Germany, UK, Japan, Hong Kong, Sweden,
Belgium, Iceland, Australia, etc. Have you heard S Korea, Singapore,
Dubai, Norway and others complain about US Congress's failure to pass
the rescue package?
JE comments: According to the Wikipedia entry on SWFs, the largest
holdings are the "Super Seven" funds: Abu Dhabi Investment Authority
(ADIA) ($875 billion); The Government Pension Fund of Norway ($350
billion); Government of Singapore Investment Corporation ($330
billion); Kuwait Investment Authority ($250 billion); China Investment
Corporation ($200 billion); Singapore's Temasek Holdings ($159.2
billion); and the Stabilisation Fund of the Russian Federation ($158
To address Bienvenido Macario's last question: do we ever hear Norway
complain about anything?
For information about the World Association of International Studies
(WAIS), and its online publication, the World Affairs Report, read its
homepage by simply double-clicking on: http://wais.stanford.edu/
John Eipper, Editor-in-Chief, Adrian College, MI 49221 USA