Prince Alwaleed bin Talal
Know who he is? Well you should. He’s the “Arabian Warren Buffett” (per Time magazine), a member of the Saudi Royal Family, and worth $29.5B. He also happens to be the largest single investor of Citigroup, one of the largest US financial firms.
Foreign investment into US companies was formerly ill received. Here are some examples..
- Remember the Unocal dilemma a couple years back? Unocal was to be acquired by an oil company that was 70% owned by the Chinese government. There was such opposition that the Chinese company withdrew its bid for Unocal because of “the political environment in the United States.”
- In 2006, Dubai Ports World, a government entity owned by the United Arab Emirates took over 7 US ports. There was such opposition that once acquired, the ports were immediately sold by the Dubai company.
But now no one’s putting up a fight. Namely because we need the foreign investors to give straight cash to Wall Street who recently wrote off billions (because of the subprime mess), and, thus, help our economy back to stability. We’re seeing foreign investments by sovereign wealth funds, which are government owned investment funds, left and right in an attempt to help bail out our major financial firms.
- Abu Dhabi’s government investment fund paid $7.5 billion for 4.9% of Citigroup.
- China’s fund has invested $5 billion for 9.9% of Morgan Stanley.
- Singapore has purchased 9.4% of Merrill Lynch for $4.4 billion.
So what? Why should you care that Prince Alwaleed invests in Citigroup? Well, because the revenues of the banks will fall into the hands of foreign governments, marking a shift in economic and political power from the United States to Asia and the Middle East, and perhaps the fall of the US Empire.
Interesting to note - this happened to the Ottoman Empire in the 1870s. But instead of selling off shares of the banks, as we are doing now, the Ottoman government sold off shares of the Suez Canal to European investors in order to help itself out of bankruptcy. Revenue and power was shifted from east to west as the Empire fell. Now after 150 years, we may see movement in the other direction.
