Ugly Currencies

“If you listen to the Chinese, they have one interpretation of what is going on. If you listen to the Americans, they have another” Pravin Gordhan, South Africa's Finance Minister (FT. LINK)





This is what happens when the debtor (U.S) and the creditor (China) disagree on the financial policies (devaluation of the Dollar) of debtor.

I think we are set for a long period of weak dollar and strong Yuan. Eventually, China can not resist the weight of the U.S and the E.U combined on this issue. But it will not happen at once as the they wish. but perhaps gradual revaluation of the Yuan.

and what does that mean for the G.C.C? More expensive Chinese products as the GCC countries keep their peg to the dollar.

Interesting that No one GCC Minister has brought this subject up ....yet at least!!

Another Surplus = Another Disappointment?

Yesterday Kuwait's government announced it's 11th year - YES 11 Years - of budget surplus. This year it was 22.4 Billion USD. This expected now in Kuwait, however two very important questions arise:

1) What will happen to the surplus? am dyeing to see some development to the old infrastructure of Kuwait . I mean spending this 22B $, in much needed projects (hospitals, streets, airport) would really do wonders

2) Just when are we going to have any visionary leadership that will lift Kuwait from this "oil income ..... formed almost 94 percent of public revenues" lock

many other important questions remain: who specifically will benefit? can an incompetent government handle the responsibilities of big plans?, and what would be an alternative export aside from good ole Oil?

http://zawya.com/Story.cfm/sidANA20100829T090202ZMQJ09/Kuwait%20Posts%20%2422.4%20Billion%20Budget%20Surplus