Saudi Arabia Bans Protests

Joy.  The royal family is busy buying people off:

Last month, [King] Abdullah returned to Riyadh after a three-month medical absence and announced $37bn in benefits for citizens in a bid to curb dissent.

But that is not terrifically sustainable--particularly as the royal family continues to expand.  I am certainly not saying it will happen soon, but if unrest in Saudi Arabia goes hot, the level of economic impact on *everyone* is going to be on a level most of us have never seen--perhaps none of us have ever seen.

US Dollar's Reign

Barry Eichengreen at the WSJ joins those saying that the days of the US Dollar being the lingua franca of currency between countries are numbered. I've heard this argument for a while now, but it still hasn't happened and I suspect that it will still take a while before it does.

The Euro still isn't quite trusted because of many reasons probably, but chief amongst them has to be the situations in Ireland and Greece demonstrating that there are still major issues to contend with regarding stability and, frankly, just who is in charge. Unintentionally (and rather ironically), the Euro is somewhat imposing the gold standard on many of these European countries that are having financial difficulties (see Spain). They don't have the flexibility of inflating or deflating their economy because the Euro won't let them, effectively.

And the Chinese Yuan...? I would suspect it has a fairly long way to go. It may become the de facto currency for Asia--particularly SE Asia, but they aren't near as transparent as they need to be for other international businesses to trust having vast reserves of their currency--or at least I would strongly suspect that.

But we shall see. If the US debt keeps piling up as it is, the US Dollar could possibly force other countries to think differently about their reserve currency, I suppose.

Ellington and Coltrane

Back when saxophone players didn't sound so God-awful cheesy. Coltrane coming back in at about the 3:30 mark and Ellington's finish on this version is gorgeous.

Duped by Obama?

Quite possibly. Andrew Sullivan makes the case.

The [fiscal] crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there's some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I'd feel duped. And they were duped. All of us who took Obama's pitch as fiscally responsible were duped.

We can hope for something substantial to happen after the 2012 elections, perhaps, but I am more and more resigned to the likelihood that nothing substantial will change in our fiscal policy unless and until it becomes completely unavoidable. ('Unavoidable' as in when the US just can't borrow money because no one will lend it to us at a reasonable rate and almost all tax dollars go to interest and entitlements). I sincerely hope that both Sullivan and I are wrong.