Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill

It may be tricky and take time to dump billions of dollars in American assets, however, the Saudis could always trade oil in another currency overnight.  Similar threats lead to the removal of Saddam Hussein and Muammar Gaddafi.

Perhaps we’ll be seeing another “Arab spring” in Saudi Arabia soon.

 

WASHINGTON — Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.

The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation. Continue reading

China’s Dollar Peg to Wind Down

HSBC fears world recession with no lifeboats left

The world authorities have run out of ammunition as rates remain stuck at zero. They have no margin for error as economy falters

The world economy is disturbingly close to stall speed. The United Nations has cut its global growth forecast for this year to 2.8pc, the latest of the multinational bodies to retreat.

We are not yet in the danger zone but this pace is only slightly above the 2.5pc rate that used to be regarded as a recession for the international system as a whole.

It leaves a thin safety buffer against any economic shock – most potently if China abandons its crawling dollar peg and resorts to ‘beggar-thy-neighbour’ policies, transmitting a further deflationary shock across the global economy.

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Hong Kong could switch to yuan, dump US dollar peg: businessman Allan Zeman

Investors holding local stocks and bonds did not want to see the US dollar value of their investment tank alongside the currency, a problem that Hong Kong has long managed to avoid with its dollar peg.

“Stability is key to Hong Kong’s status as a financial centre,” said Kelvin Lau, a senior economist at Standard Chartered. “The peg anchors confidence. This has served Hong Kong’s industries well, particularly the financial services sector.” Continue reading