World View: Saudi Arabia Under Pressure to Reverse U.N. Security Council Decision
This morning's key headlines from GenerationalDynamics.com
- U.S. and the world approach the point of 'peak debt'
- Saudi Arabia under pressure to reverse its U.N. Security Council decision
U.S. and the world approach the point of 'peak debt'
U.S. Private and Public Debt as % of GDP since 1870
As I've written many times, Generational Dynamics predicts that the
global financial crisis is far from over, and a global panic and stock
market crash could happen at any time. As I've said, this is
inevitable because of the exponential growth of public debt. The
above graph is interesting, because it shows the ratio of private and
public debt as a % of GDP going back as far as 1870. I've written in
the past about how this has been growing exponentially since 1950, but
this graph shows the secular nature of the growth a lot more clearly
than I've been able to do in the past.
The U.S. ratio is currently at about 350%, but there are other
economies that are far worse off: the Eurozone is at 450%, the U.K. is
at 550%, and Japan's debt is close to 700% of GDP.
These figures show how precarious the world economy is, and how any
factor that creates some kind of disequilibrium could result in a
global financial crisis. Just to take one of many possible examples,
interest rates might rise from their current artificially low
near-zero percent levels. This could affect hedge funds that are
holding hundreds of trillions of dollars in interest rate swaps, who
would suddenly have to sell to cover their own debts, resulting in a
worldwide chain reaction and spiral downward. Other possibilities
include a war or a start of Federal Reserve tapering.
It's worthwhile pointing out that there's nothing that the U.S.
government can do to cause this or to prevent this. Continue the
sequester or end the sequester, reduce food stamp payments or increase
them, and so forth -- it doesn't even matter. "Eat, drink and be
merry, for tomorrow we die." [Ecclesiastes 8:15, Isaiah 22:13]
The world economy is so fragile and out of kilter that this massive
deleveraging is baked into the cake, and the financial crisis will
begin when the right event triggers. It doesn't matter too much what
anyone does in the meantime. Future Tense blog
Saudi Arabia under pressure to reverse its U.N. Security Council decision
After Saudi Arabia's surprise announcement that it would
reject a non-permanent seat on the United Nations Security Council,
a group of Arab nations at the United Nations called an emergency
meeting and appealed to Saudi Arabia to reverse its decision.
According to the Arab Group's statement:
"We hope that they (Saudi Arabia), which are amongst
the blessed who represent the Arab and Islamic world at this
important and historical stage, specifically for the Middle East
region ... maintain their membership in the Security Council.
[they should] continue their brave role in defending our issues
specifically at the rostrum of the Security Council."
Reports indicate that Saudi Arabia's rejection was due to its anger at
United States policy. King Abdullah was furious at the Obama
administration for throwing Egypt's leader Hosni Mubarak under the bus
when the Arab Revolution began in 2011. Recently, the Saudis are
disillusioned by the unwillingness of the U.S. and the U.N. to do
anything about the genocidal slaughter, by Syria's president Bashar
al-Assad, of hundreds of thousands of innocent civilians, even after
crossing clearly stated "red lines" by using chemical weapons, after
president Obama's flip-flop.
The latest concern is that president Obama appears to be close to
another flip-flop, by reaching some kind of détente with Iran that
would lift sanctions and permit Iran to continue developing nuclear
The Saudis believe that they have played by all the rules, not
pursuing any nuclear development of their own, and following all of
America's wishes for decades. Since president Obama has taken office,
America has turned its back on Saudi Arabia in one policy after
another. The rejection of the U.N. seat is a signal that the Saudis
don't intend to play by the rules any more.
Saudi Arabia is not scheduled to take the seat until January 1, and so
there's still time for its leaders to change their minds. The National (UAE) and Reuters
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