USA for Sale

Bloomberg is reporting Transurban Buys Pocahontas Parkway Road for $611 Mln.

Transurban Group, Australia's second- biggest toll road owner, agreed to buy Virginia's Pocahontas Parkway for $611 million, gaining its first U.S. motorway.

Transurban bought the rights to manage, operate and maintain the 8.8-mile (14 kilometer) highway known as State Route 895 for 99 years, the Melbourne-based company said in a statement today. Transurban plans to build an extension linking the route to Richmond International Airport in Virginia's capital.

Transurban is among companies attracted to the reliable cash flows from toll roads that it estimates will spur some $200 billion of deals worldwide in the next 10 years. Macquarie Infrastructure Group and Cintra SA got state approval in March for their $3.85 billion bid for Indiana's toll road as U.S. states sell rights to their highways to pay debt.

Pocahontas is Transurban's ``first baby step into the U.S. market,'' said Jason Teh, who helps manage the equivalent of $4.2 billion at Investors Mutual Ltd. in Sydney, including more than 22 million Transurban shares. ``A lot of the state governments there are running budget deficits and they need the cash from wherever they can get it.''

There are $25 billion of private investments proposed for new and existing toll roads in six U.S. states including Virginia, Texas and Oregon, according to a report last month by the Los Angeles-based Reason Foundation, which advocates for such privatization.

More Highway Sales

More U.S. states will sell roads as they seek to raise non- tax revenue to pay for repairs to heavily traveled highways and bridges, Merrill Lynch & Co. said in a report in March.

The firm said 14 U.S. states have enacted laws allowing for toll-road, public-private transactions, and five more have introduced legislation permitting it.

International Jpost is reporting Dubai firm completes US $1.3 billion acquisition of Doncasters .

Dubai International Capital said Sunday it had completed its acquisition of Doncasters Group Ltd, which operates several US manufacturing plants that make parts for US military vehicles and aircraft.

The White House approved the US $1.3 billion deal last week after a two-month review satisfied some American lawmakers who earlier blocked a Dubai company's attempt to buy a British firm that operated several US ports.

"Dubai International Capital is pleased to have successfully completed its acquisition of Doncasters," said Sameer al-Ansari, company CEO. "This acquisition allows Dubai International Capital to move forward with its investment strategy to build a diverse portfolio of direct investments across various industries around the world."

The deal followed a fierce and much-publicized battle between The White House and Congress over Dubai Ports World's bid for control of six US ports.

Government-owned Dubai Ports World was forced to give up control of six US ports it had bought from Peninsular and Oriental Steam Navigation Co. after that deal provoked concerns over the national security implications of the Arab company running several US ports.

Given our trade deficits and our massive government debt I wonder what is not for sale. Then again we refused to allow China to buy Unocal. Given that oil is fungible, it really did not matter one iota who bought Unocal.

What is clear is that the US is for sale provided we like the buyer. Thank President Bush for cutting taxes while funding a stupid war off budget. Heck thank the entire Republican Congress. While you are at it, thank the spineless Democrats for not objecting.

The Moscow Times is reporting Russia Currency Reserves Jump to $225Bln.

Russia's foreign currency and gold reserves rose to a record $225.7 billion on surging oil and natural gas prices, giving the country cash to pay off its foreign debts early.

The reserves jumped by $8.6 billion by April 28, the 23rd consecutive weekly gain and the biggest increase since January 2005, the Central Bank said in an e-mailed statement Thursday. The country's reserves are now the fourth-largest in the world, behind China, Japan and Taiwan.

Russia is awash with cash from oil and gas after the price of Urals, its main export blend of crude, more than doubled in the last two years.

The stockpile prompted President Vladimir Putin to say on April 27 that he wants to pay off the country's debt to the Paris Club of creditor nations ahead of schedule.

"We are going to see massive reserve growth over the next few months as Russian oil sold today at these record prices will arrive with a lag of one to three months,'' said Peter Westin, chief economist at MDM Bank in Moscow. Westin expects reserves to rise by as much as $6 billion per week over the next few months.

The country's reserves have climbed almost 20-fold since 1998, when crude sank to less than $10 per barrel and the government was forced to default on $40 billion of domestic debt and devalue the ruble, sending the economy into recession.

"This year, Russia plans to fully repay its debt to the Paris Club," Putin said April 27 in the Siberian city of Tomsk, where he was hosting German Chancellor Angela Merkel. Russia paid $18 billion to the Paris Club ahead of schedule last year and has another $30 billion or so to go.

BRIC nations surpass G-7 in forex, gold holdings

So Russia is sitting on a huge pile of US dollar reserves. Of course so is China and so is Japan. The question is "What are they going to do with them?" One answer of course is to outbid US companies for oil and gas reserves in Canada, Nigeria, and other places. The next answer is to buy US treasuries, but perhaps they might be getting ready to choke on them. Of course they could buy overpriced US equities, but then again why not buy US roads and bridges and convert then to Toll Roads?

Think about how much money we are blowing in Iraq, how much we have blown on the latest Medicaid giveaway, how much our pathetic energy policy has cost us, and you have the answer as to why the USA is on sale to the highest bidder.

On that note, the telepathic thought lines are now open.
Once again I am flooded with calls.
The big question on everyone's mind is "Who else besides Russia"?

Enquiring minds deserve answers so let's take a look.

SmartMoney is reporting BRIC nations surpass G-7 in forex, gold holdings.

Brazil, Russia, India and China, referred to as BRIC group that currently manifests the world's highest economic growth rate, have surpassed G7 countries in their forex /gold holdings for the first time in history.

As of the end of March, the aggregate holdings of BRIC amounted to $1,292,200 million, according to estimates published on Thursday in Japan's leading economic newspaper, 'Nihon Keizai'.

As compared with the state of affairs in this respect as of the end of 2004, the forex/gold holdings of BRIC went up by 40 per cent. At the same time, the forex /gold reserves of G7 countries (Britain, Germany, Italy, Canada, the United States, France, and Japan) amounted to $1,253,900 million, said the paper.

At present, China accounts for 68 per cent of forex/gold reserves of BRIC countries. However, according to the estimates of Japanese experts, the growth of its forex/gold reserves has slowed down while those of Russia, India and Brazil now increase by more than 10 per cent a year.

BRIC countries, the daily wrote, will continue to increase their influence on the world currency market while having a mounting impact on the rate of the US dollar, in particular.

So the big question is does BRIC buy more gold, silver, copper, and oil, or do they buy more US toll roads, bridges and ports? Either way please tell me how the US wins.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/