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> These investors have so much money Saudi Arabia is running out of money - they have huge budget deficits and are steadily draining reserves. They're so despe

> These investors have so much money Saudi Arabia is running out of money - they have huge budget deficits and are steadily draining reserves. They're so desperate they considered selling parts of ARAMCO but couldn't get the over-inflated valuation they wanted The reason Saudi Arabia is spending money in foreign investment is because it's part of a last-ditch effort to diversify a dying and unsustainable economy

wahern 7y ago
> The reason Saudi Arabia is spending money in foreign investment is because it's part of a last-ditch effort to diversify a dying and unsustainable economy It's not a last ditch effort. It's been their strategy for like 50 years. It's just that it was always doomed to fail from the beginning. What changed is that they now have a lot more money to throw around and more places to throw it. I want to disagree with your characterization of their budget problems, but it's all beside the point. My point was that Saudi Arabia has ridiculous amounts of cash--much more than ever before--because the global economy has exploded. Saudi Arabia isn't printing funny money to invest in the U.S. They don't give oil away, and countries don't buy it with IOUs. The cash they're burning reflects actual, global economic growth. Likewise for SoftBank. Even if Saudi Arabia and SoftBank implode tomorrow, over the coming decades we're going to see these types of cash-rich investors multiply many fold. They're not anomalous; they're representative of changing fundamentals. The article author almost comes to this realization, but not completely. The world grew up while Europeans were navel gazing, Americans were shooting terrorists, and the Japanese were doing whatever the Japanese do (secretly bankrolling SE Asian growth?). We still act as-if the industrialization of the rest of the world is in the future. Spoiler alert: it already happened. Not happening. Happened. It may not look like what we expected, but the future never does. Like, 5 billion people doubled, tripled, quadrupled, and more their wealth. Global GDP more than doubled, much of which happened on the backs of people we assumed (and continue to assume) still didn't have two stones to rub together. That's where this surfeit of cash is coming from. It doesn't matter that most of these places still seem (and are) ridiculously poor from our perspective, or that in absolute terms the cash surfeit they're generating isn't that huge relative to our own GDP. The world is overflowing with cash, and whatever the magnitude it still represents a fundamental, qualitative change in the global economy. Even if global growth rates fall, from our perspective the avalanche of money might still continue and even accelerate. Fast or slow, for the next 50+ years things will only get crazier and weirder.

wahern 7y ago

> The reason Saudi Arabia is spending money in foreign investment is because it's part of a last-ditch effort to diversify a dying and unsustainable economy It's not a last ditch effort. It's been their strategy for like 50 years. It's just that it was always doomed to fail from the beginning. What changed is that they now have a lot more money to throw around and more places to throw it. I want to disagree with your characterization of their budget problems, but it's all beside the point. My point was that Saudi Arabia has ridiculous amounts of cash--much more than ever before--because the global economy has exploded. Saudi Arabia isn't printing funny money to invest in the U.S. They don't give oil away, and countries don't buy it with IOUs. The cash they're burning reflects actual, global economic growth. Likewise for SoftBank. Even if Saudi Arabia and SoftBank implode tomorrow, over the coming decades we're going to see these types of cash-rich investors multiply many fold. They're not anomalous; they're representative of changing fundamentals. The article author almost comes to this realization, but not completely. The world grew up while Europeans were navel gazing, Americans were shooting terrorists, and the Japanese were doing whatever the Japanese do (secretly bankrolling SE Asian growth?). We still act as-if the industrialization of the rest of the world is in the future. Spoiler alert: it already happened. Not happening. Happened. It may not look like what we expected, but the future never does. Like, 5 billion people doubled, tripled, quadrupled, and more their wealth. Global GDP more than doubled, much of which happened on the backs of people we assumed (and continue to assume) still didn't have two stones to rub together. That's where this surfeit of cash is coming from. It doesn't matter that most of these places still seem (and are) ridiculously poor from our perspective, or that in absolute terms the cash surfeit they're generating isn't that huge relative to our own GDP. The world is overflowing with cash, and whatever the magnitude it still represents a fundamental, qualitative change in the global economy. Even if global growth rates fall, from our perspective the avalanche of money might still continue and even accelerate. Fast or slow, for the next 50+ years things will only get crazier and weirder.