BIG WAVE
03-25-2006, 02:25 AM
Wasn't sure if this was a lounge thread, it could very well be a "conspiracy theory". Read at your own discretion. The author is Matein Khalid is a Dubai based investment banker.
25 March 2006
IN THE 1970s, the petrodollar became the symbol of a seismic power shift in global finance, the arrival of the Arabs as the new priesthood of money in the Third World. Of course, vast wealth existed in the Middle East centuries before a handful of geologists found subterranean lakes of black gold under a Dhahran salt dome and changed the history of Arabia forever.
The Nabatean city of Petra, for instance, was an ancient Dubai, a hub of tourism, finance and transportation (camel caravans, not Boeing 777s to be sure), an entrepot that stayed aloof from the geopolitical East-West struggle of the time between the Roman Empire and the Persian Kings of Kings. Makkah, the birthplace of Islam was a Hijazi trading haven rich from the Red Sea caravan trade between Yemen and Byzantine Syria, a place where a Syrian monk, a Persian Zoroastrian priest’s renegade son and an Abyssinian slave could all exchange ideas of human possibility and witness the seal of prophethood on a young orphan son of the Quraish. The Queen of Sheba visited Jerusalem to close a frankincense deal with Sulaiman, King of Jerusalem.
The Abbasid empire was one of the ancient world’s true, economic free trade zones, its capital Baghdad the world's Wall Street Moorgate and Bahnhofstrasse in the ninth century after Christ, the Arabian superpower whose merchants wrote seks (the letter of credit from which derives the English and word cheque) accepted by their peers from Venice to Canton. Venice, the fabled serenessima of the Atlantic, grew fabulously wealthy financing the East-West silk trade, with the sort of arms dealing bonanza during the Holy Crusades replicated by Cyprus and Monaco during the Lebanese civil war in our time.
Beirut, of course, was the first modern offshore banking centre in the Mideast, the Arabian Geneva and Monte Carlo. Lebanon’s huge diaspora included some of the wealthiest bankers and merchants in the Arab World, its émigré traders are true descendants of the Phoenicians who once roamed the ancient Mediterranean, founded Carthage and slashed the cedar trees of Mount Lebanon for the naval fleet of the Pharoahs millennia ago. Lebanon benefited hugely from the petrocurrency El Dorado in Saudi Arabia and Kuwait when the banking systems of the Gulf consisted of Handramuthi money lenders, Maria Theresa gold coins, Sindhi baniyas and embryonic currency boards. Yet the petrodollar tsunami in the Gulf changed everything in the 1970s, the exact moment that Lebanon descended into the surreal abyss of civil war.
It is surely significant that 1975, the year the Bahrain Monetary Authority launched a new offshore banking centre, was also the year that Beirut was shelled into the Stone Age as the blood feud between the Maronite Christians, the Druze and the Palestinians erupted into a full-scale civil war. Political risk has doomed money hubs since the beginning of time and Beirut’s fate was no different from Berlin, Vienna, Shanghai and Piraeus before it.
Beirut’s great banking and gold dealing clans — Audis, Azharis, Shikarchis — fled to Paris, Switzerland, Geneva and London once the Taif Accords failed to stop the confessional fratricide in the city that was once the hippest, freest honky tonk town on the Arab Mediterranean, a place of grand hotels, Riviera-esque corniches, ski chalets, casinos and the cabaret acts of Place Pigalle and Covent Gardens. The reve du Orient, an Orientalist dream gone horribly wrong.
The petrodollar bonanza saw the Arab central banks emerge as significant providers of funds to the global banking system (petrodollar recycling in popular parlance). Sama, KIO and Abu Dhabi’s Adia were the Arab institutional investors who determined the fate of Uncle Sam’s borrowing binges at the T-bond auctions, accumulated stakes in British Petroleum and Reuters PLC, moved the price of gold and Swiss francs and Eurodollar deposit rates at Wall Street money centre banks with a single phone call from the Arabian desert. Libya once owned a stake in the Agnelli clan’s Fiat. Shaikh Nasser Al Sabah of Kuwait’s ruling clan owned Lonrho, the City of London conglomerate that once commanded influence and power across Black Africa.
Sulaiman Olayan, who rose from a humble clerkship in Aramco to own the largest stake in Chase Manhattan Bank after the Rockefellers when I worked there in the 1980s, built a global investment empire managed by the late Akram Hijazi one of the most honorable Arab financers, based in offices in Greece. The Bin Mahfouz, the Al Ghanems, princes of the House of Saud, the oil sheikhs of the lower Gulf all established banks, opened investment offices in Geneva and London, invested in Texan real estate and Mayfair townhouses and Manhattan duplex penthouses. Gulf investors also snapped up assets on the peripheries of the Islamic world. From the UAE, the Al Futtaims manufactured tractors in Pakistan, the Galadaris owned hotels in Sri Lanka, the Al Habtoors bought resorts in post civil war Lebanon. Saudi financiers founded Islamic banks in Malaysia and drilled for oil in Sudan.
The GCC stock exchanges were miniscule and illiquid bourses during the first petrodollar boom. So it was only the currency, gold and silver markets, the winner hard assets as paper money's value went into a death spiral in the inflationary 70s that attracted the petrodollar. When Nelson Bunker Hunt cornered the world silver market in 1980, when the silver bubble burst and the metal plunged from $54 to $0 since, the Texan oilman had a Saudi Arabian royal connection in Geneva. When an Iraqi banker at my banking alma mater Chase founded the most successful Arab merchant bank of its time, he hunted for trophy deals on Wall Street, Tiffany, Gucci and Saks Fifth Avenue. When Lebanon emerged from civil war, a billionaire construction magnate from Sidon named Rafik Hariri enlisted Saudi petrodollars and French influence to create Solidere, the company that literally rebuilt Beirut. When the PLO needed a banker, the Palestinian owned Arab Bank, colossus of the Amman Stock Exchange, handled Chairman Arafat's offshore finances. In UAE, the Al Ghurair scion Abdel Aziz built the most profitable private bank in Dubai while the Bin Mahfouz lost control of Jeddah's NCB after credit shocks and the fallout from BCCI. Money talks everywhere, but it shouts the loudest decibel counts in Arab societies as an instrument of power in the world’s ultimate souk culture.
Matein Khalid is a Dubai based investment banker
http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/opinion/2006/March/opinion_March81.xml§ion=opinion&col=
25 March 2006
IN THE 1970s, the petrodollar became the symbol of a seismic power shift in global finance, the arrival of the Arabs as the new priesthood of money in the Third World. Of course, vast wealth existed in the Middle East centuries before a handful of geologists found subterranean lakes of black gold under a Dhahran salt dome and changed the history of Arabia forever.
The Nabatean city of Petra, for instance, was an ancient Dubai, a hub of tourism, finance and transportation (camel caravans, not Boeing 777s to be sure), an entrepot that stayed aloof from the geopolitical East-West struggle of the time between the Roman Empire and the Persian Kings of Kings. Makkah, the birthplace of Islam was a Hijazi trading haven rich from the Red Sea caravan trade between Yemen and Byzantine Syria, a place where a Syrian monk, a Persian Zoroastrian priest’s renegade son and an Abyssinian slave could all exchange ideas of human possibility and witness the seal of prophethood on a young orphan son of the Quraish. The Queen of Sheba visited Jerusalem to close a frankincense deal with Sulaiman, King of Jerusalem.
The Abbasid empire was one of the ancient world’s true, economic free trade zones, its capital Baghdad the world's Wall Street Moorgate and Bahnhofstrasse in the ninth century after Christ, the Arabian superpower whose merchants wrote seks (the letter of credit from which derives the English and word cheque) accepted by their peers from Venice to Canton. Venice, the fabled serenessima of the Atlantic, grew fabulously wealthy financing the East-West silk trade, with the sort of arms dealing bonanza during the Holy Crusades replicated by Cyprus and Monaco during the Lebanese civil war in our time.
Beirut, of course, was the first modern offshore banking centre in the Mideast, the Arabian Geneva and Monte Carlo. Lebanon’s huge diaspora included some of the wealthiest bankers and merchants in the Arab World, its émigré traders are true descendants of the Phoenicians who once roamed the ancient Mediterranean, founded Carthage and slashed the cedar trees of Mount Lebanon for the naval fleet of the Pharoahs millennia ago. Lebanon benefited hugely from the petrocurrency El Dorado in Saudi Arabia and Kuwait when the banking systems of the Gulf consisted of Handramuthi money lenders, Maria Theresa gold coins, Sindhi baniyas and embryonic currency boards. Yet the petrodollar tsunami in the Gulf changed everything in the 1970s, the exact moment that Lebanon descended into the surreal abyss of civil war.
It is surely significant that 1975, the year the Bahrain Monetary Authority launched a new offshore banking centre, was also the year that Beirut was shelled into the Stone Age as the blood feud between the Maronite Christians, the Druze and the Palestinians erupted into a full-scale civil war. Political risk has doomed money hubs since the beginning of time and Beirut’s fate was no different from Berlin, Vienna, Shanghai and Piraeus before it.
Beirut’s great banking and gold dealing clans — Audis, Azharis, Shikarchis — fled to Paris, Switzerland, Geneva and London once the Taif Accords failed to stop the confessional fratricide in the city that was once the hippest, freest honky tonk town on the Arab Mediterranean, a place of grand hotels, Riviera-esque corniches, ski chalets, casinos and the cabaret acts of Place Pigalle and Covent Gardens. The reve du Orient, an Orientalist dream gone horribly wrong.
The petrodollar bonanza saw the Arab central banks emerge as significant providers of funds to the global banking system (petrodollar recycling in popular parlance). Sama, KIO and Abu Dhabi’s Adia were the Arab institutional investors who determined the fate of Uncle Sam’s borrowing binges at the T-bond auctions, accumulated stakes in British Petroleum and Reuters PLC, moved the price of gold and Swiss francs and Eurodollar deposit rates at Wall Street money centre banks with a single phone call from the Arabian desert. Libya once owned a stake in the Agnelli clan’s Fiat. Shaikh Nasser Al Sabah of Kuwait’s ruling clan owned Lonrho, the City of London conglomerate that once commanded influence and power across Black Africa.
Sulaiman Olayan, who rose from a humble clerkship in Aramco to own the largest stake in Chase Manhattan Bank after the Rockefellers when I worked there in the 1980s, built a global investment empire managed by the late Akram Hijazi one of the most honorable Arab financers, based in offices in Greece. The Bin Mahfouz, the Al Ghanems, princes of the House of Saud, the oil sheikhs of the lower Gulf all established banks, opened investment offices in Geneva and London, invested in Texan real estate and Mayfair townhouses and Manhattan duplex penthouses. Gulf investors also snapped up assets on the peripheries of the Islamic world. From the UAE, the Al Futtaims manufactured tractors in Pakistan, the Galadaris owned hotels in Sri Lanka, the Al Habtoors bought resorts in post civil war Lebanon. Saudi financiers founded Islamic banks in Malaysia and drilled for oil in Sudan.
The GCC stock exchanges were miniscule and illiquid bourses during the first petrodollar boom. So it was only the currency, gold and silver markets, the winner hard assets as paper money's value went into a death spiral in the inflationary 70s that attracted the petrodollar. When Nelson Bunker Hunt cornered the world silver market in 1980, when the silver bubble burst and the metal plunged from $54 to $0 since, the Texan oilman had a Saudi Arabian royal connection in Geneva. When an Iraqi banker at my banking alma mater Chase founded the most successful Arab merchant bank of its time, he hunted for trophy deals on Wall Street, Tiffany, Gucci and Saks Fifth Avenue. When Lebanon emerged from civil war, a billionaire construction magnate from Sidon named Rafik Hariri enlisted Saudi petrodollars and French influence to create Solidere, the company that literally rebuilt Beirut. When the PLO needed a banker, the Palestinian owned Arab Bank, colossus of the Amman Stock Exchange, handled Chairman Arafat's offshore finances. In UAE, the Al Ghurair scion Abdel Aziz built the most profitable private bank in Dubai while the Bin Mahfouz lost control of Jeddah's NCB after credit shocks and the fallout from BCCI. Money talks everywhere, but it shouts the loudest decibel counts in Arab societies as an instrument of power in the world’s ultimate souk culture.
Matein Khalid is a Dubai based investment banker
http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/opinion/2006/March/opinion_March81.xml§ion=opinion&col=