Saudi Economists fear the threatened USD; Call for revalue of the Saudi Riyal
August 7th, 2011 09:52 am · Posted in NEWS (Iraq & World Currency)
World markets await record losses
Saudi economists emphasized that the world lost a dollar as a safe haven assuring dealt with over the decades as well as gold in the event of any economic turmoil, and after agencies cut credit ratings mark the public debt of the United States yesterday.
Economists said that the positive results achieved by the Saudi riyal and the national economy over the decades by its association with the dollar is no longer available today, calling for the rapid re-evaluation of the riyal exchange rate, and proceed immediately in the distribution of Saudi investments in more than a basket rather than in one basket is a basket of America “worn”.
Record losses
They pointed out in speaking to a business daily newspaper, that global markets await record losses on the impact of the growing risks of dealing with America’s debt.
United States lost its credit rating high AAA by credit rating agency “Standard & Poor’s” yesterday to modify the unprecedented development of the largest economy in the world, which deprived the United States from the higher grade for the first time in its history, citing the dangers of a political front of bets budget deficit . And announced, “Standard & Poor’s” in a statement, they lowered one degree sign U.S. public debt from AAA to the highest degree at all, to AA +.
Economists said that there re-evaluation of comprehensive risk proceeded investors from around the world to do it was the two procedures are essential, first out of the market and the second change and investment destinations, which is expected to result in a decline in global stock markets for at least 10% in the days and months ahead After losing in the last days of 4.5%, along with dollar weakness and a change in the centers of power between the world’s currencies, falling oil prices.
They added, “U.S. Treasury bonds are considered a reference for granted, they are standard for the cost of money and guarantee a tool commonly used in many transactions and a refuge for investors in troubled times.”
In this regard, said economic and Saudi banker – who preferred anonymity – that the circles of investment and economic development initiated by the reduction of classification, since the deliberations of the United States to raise the ceiling to take their reserves and to review the credit risk from America to Britain to China, Japan and most international economies.
And the Saudi banking that the dollar will suffer erosion of its market value in the long run, especially under the pressure of U.S. debt large, amounting to around $ 14 trillion, which is not likely ever to help austerity measures or reduction of expenditures on mitigation of its impact on the U.S. economy, which means that the empire of U.S. monetary collapse.
The dollar and gold
“The light of the dollar and gold for decades a source of security for investors and today with the growing weakness of the dollar and the inability of everyone to rely on gold, as well as initiate Europe in dealing with the crisis seriously, what could bring the euro to a good area, the change in the centers of power exchange, especially with the growing strength of Liwan, yen, pound sterling will address the next phase of the global economy. “
The Saudi banking that, at the local level, the positive results achieved by the Saudi riyal and the national economy over the decades by its association with the dollar is no longer available today, calling for a rapid re-evaluation of the riyal exchange rate, and proceed immediately in the distribution of Saudi investments in more than a basket rather than in one basket is a basket of America “worn”.
On his part, Fahad Al-Saif, head of investment banking at the bank HSBC, that the map of credit ratings in the world will see for the first time in its history, substantial changes, pointing out that the last action agency Standard & Poor’s no surprise that this action will raise the cost of capital for banks and investors who deal with bonds America.
He said, “there will be an additional cost of capital, especially when applying the Basel standards 3, this means that Saudi Arabia and the local economy and the Saudi banks-bearing bonds, the U.S. will have to pay the cost of additional capital.”
And the sword that the diversification of investment assets is now a duty and an option not a must, noting that China and Japan and developing countries had already started to diversify their assets away from dollar investment to reduce the size of the risk.
He added, “It has become necessary to the Saudi investor to diversify his investments, whether in currency or in the U.S. economy because the issue of America’s declaration of non-financial solvency have become an improbable, there was smuggling of capital, but the question Almtorah Where to? Europe experience, if the destination potential is the developing countries growing GDP growth rates which are good. “
On the other hand put Suhail pheasant, a financial analyst in the global markets, the issue of falling oil prices and collapse as the leading risks to the Saudi economy due to the turmoil that hit the U.S. economy, pointing out that during the past few days, the dollar lost 13% of its value because of the deliberations of America on the debt and reduce the classification.
And between the rider that what is happening now hit the world’s disorder, severe because the United States for the first time in its history no longer has the ability to continue to spend record as Europe began to reduce its expenses, which means that the global economy moving closer to a recession and there are indications that including the decline in U.S. gross domestic product and industrial and other indicators.
“The most dangerous point that America can no longer over-issued low-interest bonds, as in the past, funding will be more difficult and may have to raise interest rates and this is another problem.”
The financial analyst in the global markets that the first effects on the Saudi economy will be in oil prices and the possibility that the Kingdom recorded a deficit in the budget because of it, but he does not expect significant impacts on the exchange rate of the dollar or to reach the stage of America’s inability to pay its bonds.
The United States has maintained the highest rating Standard & Poor’s “AAA” since the founding of this agency in 1941. And remains in the other two largest rating agencies, Moody’s is the oldest (established in 1917) and Fitch Ritingz.
The Business Bank Goldman Sachs recently that the probability of impact on a large market, has examined the potential consequences. And is expected to sign forced to reduce U.S. investors to reassess the overall risk.
August 7th, 2011 09:52 am · Posted in NEWS (Iraq & World Currency)
World markets await record losses
Saudi economists emphasized that the world lost a dollar as a safe haven assuring dealt with over the decades as well as gold in the event of any economic turmoil, and after agencies cut credit ratings mark the public debt of the United States yesterday.
Economists said that the positive results achieved by the Saudi riyal and the national economy over the decades by its association with the dollar is no longer available today, calling for the rapid re-evaluation of the riyal exchange rate, and proceed immediately in the distribution of Saudi investments in more than a basket rather than in one basket is a basket of America “worn”.
Record losses
They pointed out in speaking to a business daily newspaper, that global markets await record losses on the impact of the growing risks of dealing with America’s debt.
United States lost its credit rating high AAA by credit rating agency “Standard & Poor’s” yesterday to modify the unprecedented development of the largest economy in the world, which deprived the United States from the higher grade for the first time in its history, citing the dangers of a political front of bets budget deficit . And announced, “Standard & Poor’s” in a statement, they lowered one degree sign U.S. public debt from AAA to the highest degree at all, to AA +.
Economists said that there re-evaluation of comprehensive risk proceeded investors from around the world to do it was the two procedures are essential, first out of the market and the second change and investment destinations, which is expected to result in a decline in global stock markets for at least 10% in the days and months ahead After losing in the last days of 4.5%, along with dollar weakness and a change in the centers of power between the world’s currencies, falling oil prices.
They added, “U.S. Treasury bonds are considered a reference for granted, they are standard for the cost of money and guarantee a tool commonly used in many transactions and a refuge for investors in troubled times.”
In this regard, said economic and Saudi banker – who preferred anonymity – that the circles of investment and economic development initiated by the reduction of classification, since the deliberations of the United States to raise the ceiling to take their reserves and to review the credit risk from America to Britain to China, Japan and most international economies.
And the Saudi banking that the dollar will suffer erosion of its market value in the long run, especially under the pressure of U.S. debt large, amounting to around $ 14 trillion, which is not likely ever to help austerity measures or reduction of expenditures on mitigation of its impact on the U.S. economy, which means that the empire of U.S. monetary collapse.
The dollar and gold
“The light of the dollar and gold for decades a source of security for investors and today with the growing weakness of the dollar and the inability of everyone to rely on gold, as well as initiate Europe in dealing with the crisis seriously, what could bring the euro to a good area, the change in the centers of power exchange, especially with the growing strength of Liwan, yen, pound sterling will address the next phase of the global economy. “
The Saudi banking that, at the local level, the positive results achieved by the Saudi riyal and the national economy over the decades by its association with the dollar is no longer available today, calling for a rapid re-evaluation of the riyal exchange rate, and proceed immediately in the distribution of Saudi investments in more than a basket rather than in one basket is a basket of America “worn”.
On his part, Fahad Al-Saif, head of investment banking at the bank HSBC, that the map of credit ratings in the world will see for the first time in its history, substantial changes, pointing out that the last action agency Standard & Poor’s no surprise that this action will raise the cost of capital for banks and investors who deal with bonds America.
He said, “there will be an additional cost of capital, especially when applying the Basel standards 3, this means that Saudi Arabia and the local economy and the Saudi banks-bearing bonds, the U.S. will have to pay the cost of additional capital.”
And the sword that the diversification of investment assets is now a duty and an option not a must, noting that China and Japan and developing countries had already started to diversify their assets away from dollar investment to reduce the size of the risk.
He added, “It has become necessary to the Saudi investor to diversify his investments, whether in currency or in the U.S. economy because the issue of America’s declaration of non-financial solvency have become an improbable, there was smuggling of capital, but the question Almtorah Where to? Europe experience, if the destination potential is the developing countries growing GDP growth rates which are good. “
On the other hand put Suhail pheasant, a financial analyst in the global markets, the issue of falling oil prices and collapse as the leading risks to the Saudi economy due to the turmoil that hit the U.S. economy, pointing out that during the past few days, the dollar lost 13% of its value because of the deliberations of America on the debt and reduce the classification.
And between the rider that what is happening now hit the world’s disorder, severe because the United States for the first time in its history no longer has the ability to continue to spend record as Europe began to reduce its expenses, which means that the global economy moving closer to a recession and there are indications that including the decline in U.S. gross domestic product and industrial and other indicators.
“The most dangerous point that America can no longer over-issued low-interest bonds, as in the past, funding will be more difficult and may have to raise interest rates and this is another problem.”
The financial analyst in the global markets that the first effects on the Saudi economy will be in oil prices and the possibility that the Kingdom recorded a deficit in the budget because of it, but he does not expect significant impacts on the exchange rate of the dollar or to reach the stage of America’s inability to pay its bonds.
The United States has maintained the highest rating Standard & Poor’s “AAA” since the founding of this agency in 1941. And remains in the other two largest rating agencies, Moody’s is the oldest (established in 1917) and Fitch Ritingz.
The Business Bank Goldman Sachs recently that the probability of impact on a large market, has examined the potential consequences. And is expected to sign forced to reduce U.S. investors to reassess the overall risk.
