Gas Week

EWN Publishing

Stricken US credit markets shut down; six year war in Iraq could cost US taxpayers $US1 – $US2 trillion

Posted by gasweek on 26 September, 2007

The Iraq war will cost US taxpayers dearly for some time to come while the cash reserves of high-growth Asia are rising. According to Glenda Korporaal, writing in The Sydney Morning Herald, (19/9/2007, p.48) China had emerged as a world capital exporter, a force that can be expected to becoming increasingly powerful as the country looks to spend its $US1.2 bil­lion in foreign exchange reserves and hold the lid on its appreciating currency. By the end of 2006, more than 5000 Chinese “investment entities” had estab­lished almost 10,000 companies abroad in 172 countries and regions offshore.

“Bush’s “out of control spending”: In his new book released this week, former US Federal Reserve Board chief Alan Greenspan is scathing of Bush’s “out of control spending” and high-deficit policies that have only added to this trend. Estimates are that the six-year war in Iraq could cost US taxpayers $US1-$US2 trillion.

Asia stock exchanges a rising force: The rising US deficits, which have been made worse by the massive financial burden of financing the Iraq war, will only further reduce the relative economic power of the US and boost the importance of Asian capital in the world financial system. At the same time the Singapore Stock Exchange is also increasing its role in the world’s capital markets, while the Govern­ment’s $US120 billion investment arm, Temasek, is casting around the globe, looking for new places to invest from Asian banks to the London Stock Exchange to Australia’s ABC Learning Centres.

The Sydney Morning Herald, 19/9/2007, p. 48


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