Tuesday, February 05, 2008

U.S. sees Russia, China, OPEC financial threat

Seriously? You are just now seeing this?

Russia, China and OPEC oil-producing countries have a worrisome potential to use their growing financial clout to exert political pressure, the top U.S. spy chief told Congress on Tuesday.

U.S. National Director of Intelligence Michael McConnell voiced the concern to Congress in his annual assessment of potential security threats to the United States.

McConnell also told the Senate Intelligence Committee in prepared testimony that the global threat of terrorism remained, but that al Qaeda had suffered setbacks and its international reputation was diminishing.

He voiced continued concern over Iran's potential to develop nuclear weapons despite its halt to nuclear warhead design, and said political uncertainty in Pakistan had not threatened the military's control of that country's nuclear arsenal.

In listing top threats, McConnell cited "concerns about the financial capabilities of Russia, China and OPEC countries and the potential use of their market access to exert financial leverage to political ends."

Russia was positioning itself to control an energy supply and transportation network spanning from Europe to East Asia, and China's global engagement was driven by a need to access markets and resources, McConnell said.

He voiced concerns about the impact of a weaker U.S. dollar on global oil suppliers, some of whom have asked to be paid in currencies other than dollars, or delinked their currency pegs to the dollar.

"Continued concerns about dollar depreciation could tempt other producers to follow suit," McConnell said.

The dollar devaluation has its pros and its cons.
The pro being more exports from the US.
One of the cons are the supposed removing of the dollar from Oil purchases, but that is probably not going to happen. The world economy is way to invested in it to take that kind of hit.

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