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Beware of ‘Debt Bomb’ and $70-$80 crude : Prince Alwaleed

Posted by WARREN MOSLER on May 20th, 2011

So how would the fact that even the world’s largest investors don’t even begin to understand the monetary system
fit into the various theories about markets efficiently allocating capital, etc?

And note that he also did just say on CNBC the Saudi’s objective is $70-80 for crude.
So even though he’s probably not the decision maker, seems he does understand how a monopolist sets price.

Raise Ceiling but Beware of ‘Debt Bomb’: Prince Alwaleed

By Jeff Cox

May 20 (CNBC) — Saudi Prince Alwaleed bin Talal called on US lawmakers to raise the debt ceiling, while also warning that steps must be taken to control government spending.

The renowned investor and philanthropist, and nephew of King Abdullah, also rejected the notion that the US could delay payments on its bonds for several days as has been suggested by Rep. Paul Ryan and hedge fund manager Stanley Druckenmiller.

“We in the outside world, outside the United States, believe the United States is not giving much care and attention to this time bomb that you have right now here,” bin Talal said in a CNBC interview.

“You need some structural changes in the United States,” he added. “You can’t go forever with $1 trillion in arrears. That’s the thing.”

10 Responses to “Beware of ‘Debt Bomb’ and $70-$80 crude : Prince Alwaleed”

  1. roger erickson Says:

    here you go; How to get the next Nobel Prize in Economics, and a guaranteed NYT blog

    Publish: the “Efficient Nonsense Theory” (and then challenge policy wonks to make sense of it)

    ps: didn’t he become renowned by investing inherited wealth into Citibank? :)

    Reply

  2. PJ Pierre Says:

    If the Saudis wanted $70-80 crude. All they have to do is post that price and let the spot price fall to it or as close to it as their capacity allows.

    Reply

    WARREN MOSLER Reply:

    correct.

    Reply

  3. Jason Says:

    “So how would the fact that even the world’s largest investors don’t even begin to understand the monetary system
    fit into the various theories about markets efficiently allocating capital, etc?”

    Interesting point. However, is it possible in the crowd sourcing sense that capital is fairly efficiently allocated even though the participants have far less than perfect knowledge?

    OTOH, if you are correct and a massive misunderstanding of the monetary system has led to a complete misallocation of capital, I would think it implies that massive gains are available to an entity that understands the monetary system. Given an understanding of MMT, is there any easy investment layup available? It doesn’t seem that way to me.

    Reply

    art Reply:

    @Jason,

    “if you are correct and a massive misunderstanding of the monetary system has led to a complete misallocation of capital, I would think it implies that massive gains are available to an entity that understands the monetary system.”

    Or social gains, which is what the MMT crowd tends to focus on.

    “Given an understanding of MMT, is there any easy investment layup available? It doesn’t seem that way to me.”

    EOLR policy (see above).

    Reply

  4. pebird Says:

    Heredity Intelligence

    Reply

  5. pebird Says:

    Non sequitur because the less than symbol and the greater than symbol did not display.

    Reply

  6. Stuart Says:

    Warren, I believe you need to write a heavy article for the NY Times, for instance, or for the Economist, or for that matter, at Ha’aretz(!), to get the attention of people like Al-Waleed. These types don’t believe in bloggers, they believe in the high prestige conventional media.

    Look at poor Bill Mitchell. Issue after brilliant issue of his blog, and without seemingly making a dent in cement-headed Australians. And people elsewhere are no different, blinded by the mass media and conventional Chicago school-Washington consensus thinking. Latin America is particularly pathetic in this respect, but look at the Chinese committing suicide as well!

    Reply

    WARREN MOSLER Reply:

    agreed!

    Reply

    Save America Reply:

    Newt Gingrich said do you want a foodstamp population versus a paycheck population and they went NUKULAR on his arse! Is someone here talking to newt about the jobs gaurantee programs? He gets it right?

    I am at Ft. Belvoir right now, lots of press were in the food court, now last week I posted I was at andrews AFB and lots of press where there covering Obama playing golf, so I jokingly said, are you here watching Obama play golf (just being sarcastic like I normally am) they said YAH! My eyes rolled, good lord! Israel and Pakistan are about to go NUKULAR and this guy is out playing golf every weekend at all the military bases and he never even served in the military! The suckers, umm I mean sheeple get the politicians they deserve :(

    Reply

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