Where are the Iranians spending their Oil Revenues?

Discussion in 'Politics' started by bsmeter, Sep 18, 2006.

  1. bsmeter


    Does anyone know how Iran is spending its oil revenue? Please provide links and data instead of "opinions".

    At least with the Sunnis we know where their revenue is going. It's all spent on Million dollar gold plated cars and a new palace for every child in the Harem. I read about how the Saudis, UAE and Kuwaiti royal families being the biggest buyers of Eastern european women for their massive collection of Harems.

    The Sunnis spend all their oil money in fancy yachts, homes and women. What are the Shiites spending their money on?
  2. Dogfish


    American debt by the truckload, they fund the US deficit, they effectively own a big chunk of america.


    see the increasing holdings of the oil exporters here, 3rd down list from 68.5bln to 101.5bln from jun05 to jun06

    On friday they warned again they might have no option but to sell US dollars. They hold considerably more than $25bln of foreign holdings according to al jazeera news articles

    an interesting article...

    "The U.S. national debt now stands at more than $8.3 trillion, of which more than $2 trillion is owned by foreigners. Since 2000, the percentage of U.S. public debt owed to foreigners has doubled.

    Take China for example. As of March of this year, China held over $321 billion worth of U.S. Treasuries, up from the $60 billion it owned at the end of 2000. Similarly, Japan now owns $640 billion worth of U.S. Treasuries, up from $317.7 billion in December 2000. Lately, however, America has also borrowed heavily from oil exporter nations (as defined by the Department of the Treasury), which include many nations that despise America. Luminaries such as Venezuela, Ecuador, Iran, Libya, Algeria, Indonesia and Iraq, and several other primarily Middle Eastern nations, now own $98 billion worth of U.S. debt.

    According to Brad Setser, director of research at Roubini Global Economics, “The irony is that the three countries in the world adding to reserves the fastest and thus buying the most U.S. debt now are China, Saudi Arabia and Russia, none of them democracies. … We are increasingly counting on a group of creditors who are not our closest friends but have a bigger and bigger stake in America,” he says.

    So America’s debt is growing, and a greater amount is in less reliable hands.

    This creates two problems.

    First, the value of the dollar is increasingly dependent upon foreigners. This makes the U.S. vulnerable to coercion and blackmail.

    In commenting on this radical shift in holders of U.S. debt, Frederick Kempe of the Wall Street Journal says, “The more closely economists study that data, the more they worry,” especially over America’s “decrease[d] influence over … the world’s largest market, the $2 trillion in foreign exchange that changes hands daily. The dollar forex market can increasingly be shifted by decisions that foreign governments make about selling dollar assets. What’s also at stake is leverage on matters as diverse as U.S. home mortgage rates and America’s global political clout” (May 9).

    For example, remember what happened on June 23, 1997, when former Japanese Prime Minister Ryutaro Hashimoto wondered aloud about what would happen to the U.S. economy if Japan diversified and began to sell some of its, at that time, $300 billion in U.S. Treasury securities (remember Japan now owns more than $640 billion worth). Following Hashimoto’s remarks, the Dow Jones Industrial Average plunged by the largest single day amount (at that time) since the Crash of 1987. Aids to Hashimoto were quick to say that the comments were not intended as a threat. Since then, other foreigners have wondered aloud about dumping U.S. debt (Treasuries), also causing ripple effects through global markets (Moscow Times, May 11).

    But what if, at some point, our debtors did want to influence American policy? In a potential conflict between China and Taiwan, would China stand idly by, holding $321 billion in U.S. debt, if the United States was to interfere to protect democratic Taiwan? Would Taiwan simply hold its $68.9 billion if China attacked it and America did not come to its aid?

    What if China and Taiwan were to peacefully reunite? Together they would control $389.9 billion worth of U.S. debt. Since China also controls Hong Kong, you can add in an additional $46.6 billion worth of U.S. debt, for a grand total of $436.5 billion.

    That is a huge chunk of potential economic or political influence. So much influence that if China even “reduces its Treasury purchases, the U.S. would run into difficulties” financing its debts, says the Nikkei Weekly. That same publication says Chinese leaders have boasted that because China is such an important lender to America, “Beijing is holding a dagger to Washington’s throat” (May 1).

    The second problem with having foreigners hold so much U.S. debt is the risk that foreigners may choose to stop accumulating it and start spending it. As with any person, the more money you have, the greater the pull to spend. If foreign nations begin to spend their dollars, the increased supply of U.S. greenbacks in circulation would probably drive the value of the dollar down, making American possessions less expensive relative to assets in other currencies. Consequently, American corporations and businesses could increasingly become targets of foreign acquisitions.

    There are signs that some of America’s top corporations are already being snapped up................

    Full article at: