If you are a sovereign wealth fund manager, a government decision maker, or simply an investor (or speculator) you way want to pay attention to commodity exporter mistakes that may not be apparent now, but that will be apparent in the future.

What those people in sovereign wealth countries did not understand was not only what was written in a prophetic article various places (such as the financialtraders blog, read excerpt below), but they also made other rookie classical mistakes that they will remember for the rest of their lives (hopefully it will not take them more than a generation to correct them).

They could have learned a lot if they dreamed like the pharaoh, and learned from the way Yusuf(for Muslims)/Yosef (for Jews)/Joseph (for Christians) prepared Egypt for the lean years, during the fat years.

What these countries did look good, and is wrong because it was done not at the right time, and was compounded by an imitation and idolation of Wall Street.

They should have stashed their cash, delayed their projects, and started the work after the lean years (we are in lean year number 2, and leans years last at least 3 years).

Here is what they did and comments related to it:

1. Their well paid investment managers, bought stocks of now bankrupt companies at the high of the market (when the high was already known!). What were they thinking? Any trader with minimum experience would tell you to never catch a falling knife until it is on the ground and does not move (for sometime). I would even say to never touch it until you see a happy person picking it and not cut after the picking.

2. They started expensive grandiose projects. If they even finish them, they would get old and noone would show up (like the case of the olympics projects).

The only projects that I think would last are those spent on developing human capacity.

A man should never put money in things that do not rise, and compound over time!

3. They tried to imitate wallstreet (at the wrong time). Their private banking took loans from western banks, which are now calling the loans, and going for their jugulars. Their central bankers have no choice, but to come to the rescue (to at least save the facade).

These bankers are putting petrodollars in finance crisis, like a man putting cash in a fire to extinquish it. Yes, cash is liquid in finance, but is NOT water.

If you are a central banker, read what a mere mortal non-paid blogger is giving for free, and compare it to the pin stripped expensive empty suites that you have hired, and loved to hear talking to you.

Have a peek at their portfolios (I can share with you mine, as well as my prophetic predictions published for all to read but probably would not heed), and you will see that what you once viewed as grand manager are nothing but smoke builders, and that if you do not act soon, what you have may become a heap of ash.

4. The part that gave them assurance in their decision is the oil purse. Well Oil is crashing, and if it falls too low (even below $100) the commitments are now higher than the income.

Time then take care of putting these men back on their knees.

5. Most of the money poured from sovereign funds in wallstreet finance stocks is now NOT sovereign anymore. It is gone. What is sovereign is what is now in the sovereign hand which is a worthless piece of paper called stock, or preferred bond. (By the word prefereed is meant for the guy who issued it not for the guy who holds it, even if you think otherwise).

6. If you are a hot shot manager in, or a decision maker in relation, to the sovereign funds, have you ever thought why the old men from oil states always sent the money to USA bonds?. Those old men are wiser then you think, even if they did not go to the Ivy league schools.

Winds and time remove all superficial things except the solid rock on the ground, and line of age in a man's face. (Listen to the old man, younger shot--He knows more than you do.)

Leverage has killed you, or is about to kill you, O yo young sheik of the arabian desert!

I am not as arrogant as this post would suggest. So please email you humble blogger.
When people were dancing in lean years, this blogger was sitting in a library reading all books that were written on the topic of finance over more than 2000 years! History has tuaght him a lot.

Excepts from the financialtraders blog (will follow once I retrieve them soon. May sure you come back and/or enroll to the blog by sending an email (email address is at top right of this page):


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