As I watch the news and speculation as to what will happen with AIG over the next few days, one interesting scenario that surfaced in the news was that the US Treasury might give 40-80 Billion Dollars to AIG for controlling 79.9% of the company. Without going into how bad the debt situation is, that would be an interesting way for the US to actually and quite literally “own” the world. Think about it.
It may not be profitable at first but we would be owning all the insurance and investments in a lot of countries all over the world including India. AIG is (or maybe should we say was?) a powerful multi-national insurance company. The joke use to be that AIG knew what it was doing because it could sell life insurance in India to people who believed in reincarnation.
I am thinking that a lot of people are wondering if AIG can get reincarnated and honestly, without seeing how deep the rabbit hole is in terms of their debts, maybe it isn’t a good idea for the US to bail out the company. Still, that would make for some pretty exotic income streams and sadly, we could always print more money to cover our problems – something I am not fond of because we are already in a stagflation state and we are probably just a few years away from crazy inflation (I hope I am wrong about that but that is the way things seem to be going unless we continue with a globalized deflation).
Russia suspended trading in their markets – there was a drop of 20% My thinking is that the Russian and international companies that have money started pulling it out because of the domino effect of AIG among other financial meltdowns. Interesting to note that there will probably be dumping of a lot of commodities and the price at least for the short term will go down.
We all know that in the long run, anything that is scarce and of value (like oil, gold, silver) will go eventually go back up.
How does this affect the US and AIG? Well, if we are collecting internationally everbody’s insurance payments and certain investment vehicles, one would hope that it would give us political clout in the countries we are doing business in. Maybe we can leverage that into better trade agreements, better diplomatic agreements and we can alleviate some of the international hostilities that are going on. Maybe we can get payment in some of these lower priced commodities like oil, gold, silver and yes, even fresh water!
Nothing says love and come and be my friend as covering their insurance policies in times of need and of course, getting favorable trading agreements!
Be well, save money and if nothing else, it is fascinating to watch what is unfolding in our lifetime!
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Kim Greenblatt
Kim Greenblatt asks in his blog, profitable, if the US ends up owning AIG, would we own the world?