Bush can't deliver. He was rebuffed, again, buy Saudi Arabia who refused to expand their oil production at Bush's request. Saudi Arabia did, however, spill out a little embarasing information. According to the AP:
Saudi oil minister Ali al-Naimi said the kingdom decided on May 10 to increase production by 300,000 barrels a day to help meet U.S. needs after Venezuela and Mexico cut back deliveries.
Did I hear that right? Maybe one has to read the shipping news to know that Mexico and Venezuela cut back deliveries to the US. How vulnerable is the US to deeper cut backs?
I'm reminded of Bear Stearns. We found out that they had a foul reputation among other Wall Street firms for their dirty tactics. The word is that Bear Stearns was effectively sacrificed by the other titans of finance in a drastic measure to stabilize the financial sector.
One has to wonder whether a similar analogy is taking form on a global scale, with the US, and its foul reputation abroad, playing the role of Bear Stearns. It's not too hard to imagine the other nations isolating themselves from a US economic implosion for their own survival.
Sources:
Associate Press, Bush fails to win Saudi help on gas prices, TERENCE HUNT, AP White House Correspondent
3 comments:
The decision by Mexico makes perfect sense given the falling dollar. The Saudis probably needed to do a little to prop up the US economy, given how much money the Saudi royal family has invested here.
Those holding vast amounts of US dollars and dollar-denominated assets are damned if they hold them, damned if they dump them.
But, when the dollar-crash looks like it's about to come, watch how fast everyone dumps them.
nice picture
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