Can Treasury Geithner Convince Investors That Their US Assets Are Safe?

By Gilbert Mercier, NEWS  JUNKIE  POST

Treasury Secretary Geithner will be in the Middle-East this week trying to re-assure the oil rich states that their investments in the US are safe, despite the looming budget deficit.

A month ago, Geithner was in China trying to sale the same argument to Chinese officials. They were not fully convinced.

Geithner will be holding meetings on Tuesday and Wednesday with officials & top business executives in Saudi Arabia and the United Arab Emirates.

Foreign investors are nervous about the state of the US economy and the value of the US currency for very good reasons. The budget deficit, expected to be announced today, for the first 9 months of this budget year will be more than $ 1 Trillion.

Another critical topic on Geithner’s Middle-East agenda will be oil prices and their lack of stability. A spike in oil prices, similar to the one that took place in the Summer of 2008 would have disastrous consequences for a fragile US economy and would compromise the already sluggish recovery.