by John Galt
July 22, 2009
While we sit here stunned, confused, dazed and actually quite bored by the horrid abortion committed on the English language by America’s Messiah tonight, the world continues to function. In an obscure little online news site that I follow the following headline appears:
Central Bank cuts foreign assets to lowest in 5 years
Why is this story a “Dot” the proverbial internet phraseology for a significant event which should trigger concern but often is ignored because it is either too hard to comprehend or just too far away to worry about? Simple, this story originates from a ’strong’ U.S. ally, the United Arab Emirates.
And when you cut through the crap and start to read it in full, think.
The decline in foreign assets in March slashed their ratio to total assets to only 44 per cent from as high as 99 per cent at the end of 2007.
44%?
Uh, does this mean that U.S. Treasuries are not the hot commodity we thought they were?
Held-to-maturity foreign securities also slumped to Dh29.5bn from Dh98.8bn. The report also showed the Central Bank is investing about Dh55bn in held-to-maturity securities issued by the Ministry of Finance.
Hmmm, so they are investing internally and dumping foreign securities, which when translated roughly means “we don’t trust the U.S.” if you really think about it.
I simply make this posting on my blog to get people thinking; when a ’strong’ ally and member of the oil cartel that supplies petroleum products to the U.S. announces they are not holding as many foreign assets and yet they make up a very small part of the foreign ownership of our debt, you have to wonder if the bigger players are engaged in the same practice.
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