Monday, May 23, 2011

Libya's money

Today Libya is still sitting on a cash hoard of far over one trillion, the second largest after China, but safer.

By Hermes MSafiri

In Tripoli the “journalists” of ABC asked me how long Gaddafi could last financially?
I answered them much longer than the US. They couldn’t believe me and continued: ”no seriously, how many months can he last?” My answer, 10/20 years, brought a very big surprised expression on their faces: “NO, impossible”.

Our society of money changers and bean counters is not able anymore to think about a solid society, not based on debt or credit. Libya has known an embargo for decades and a real ostracism for 42 years. Gaddafi was never understood nor accepted. He was declared crazy and loony from the very beginning because he didn’t accept the orders from his “betters”. His feeling of oppression by the Western powers that be and afterwards his betrayal by the Soviets convinced him to look for an alternative solution, based on their native tribal structure. He didn’t spend money because he couldn’t, the embargo obliged him to save money. This frugal lifestyle wasn’t really bad for the country, they learned to live with it.

Only the Western educated and latter “revolutionaries” wanted more pieces of the cake.
I have seen governors of provinces, with budgets of billions, walking around in old army fatigues and plastic sandals, driving in old Toyota Corolla’s, with absolutely no desire for more luxury. Gaddafi himself is of the same ilk, money doesn’t drive him, the fate of his country is his only driving force. If that is enough to consider him a lunatic than he will proudly declare himself a lunatic.

As far as the money of the country is concerned, the calculation is rapidly made.
The total revenue during 42 years went far over a trillion dollars. During the embargo time Libya spent only the interest of its investments, they didn’t touch their capital.
They had some amounts in foreign, US, European and Arab countries and banks.

That money was continuously siphoned off by those banks, they didn’t receive any interest on their money, the paid expenses every year on that money, pure highway robbery. Gaddafi is a very astute investor and made several very good investments worldwide, which saved Libya a lot of money and kept their capital intact.

Today Libya is still sitting on a cash hoard of far over one trillion, the second largest after China, but safer. China has too much worthless US paper. Because of his cash position, Libya was thinking to make Africans benefit of their commodities by introducing their own gold backed currency and their own Reserve Fund. This would have shown the decrepit situation of the world credit system and the real abysmal situation of the Western banks.

Because the emperor had no clothes anymore Gaddafi had to disappear. Russia and China are still hesitating what to do and whom to join. The sirene songs of Wall Street are very seductive but extremely empty.

The main US corporations are already voting with their feet to Asia, just in case.

Article source here

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