144 views
Sep 28

I freely admit that sometimes (my wife would say a lot of the time) I am easily distracted - and this must surely double when I’m on the web ;-) but there are times when you just stumble on a little nugget of gold?

I have picked up on TED from a post my mate Dave Oliver regarding new developments on graphics and a truly mind blowing video and as a consequence I signed up for updates via email, and so today I was simply skimming through the headlines and ready to move on, and on a whim really, clicked on a link to John Maeda and the laws of simplicity.

The first page was OK and kind of interesting, but then on the second page, I found this little nugget of advice regarding Investment Advice. It is so simple and clear it is a wonder it doesn’t get more attention as something that should be listed under “Top Ten Pieces of Financial Advice”?

Simplified Investing

Last week in Bologna I met an investment banker and we got on the topic of ING Direct and their incredible success with a strategy centered around simplicity. The banker told me something interesting I hadn’t heard before that I couldn’t find online. Something to the effect that ING Direct tells their customers that to determine how much of their money they should put into high-risk investments versus low-risk ones, just take your age up to 100 years old. However old you are, that is the percentage that you should invest in the low-risk stuff; then take the number 100 and subtract your age from it and invest that percentage in the high-risk stuff. I was impressed with the simple elegance of the thought.

Making it even simpler (with apologies to John ;-) )

In any Investment Portfolio your age is the ideal percentage you should focus towards Low-Risk as opposed to High-Risk

written by dcaddick

204 views
Sep 28

Now this is quite interesting because up until now most of the news and information (dare I say Hype?) has been based around the benefits of flexibility and high availability (like VMotion, etc.) but we are now starting to see enough real world examples of Server and Desktop Virtualization that we can have broad benchmarks or rule-of-thumb guidelines that are indicative of the savings that can be gained even at the design stage when details of the intended environment are almost non-existent?

Although it has been around for some time, the Citrix ROI template (available at http://www.acecostanalyzer.com ) is still quite valid, even more so if your environment is still stuck in Client Server mode? Some of these best practice calculations can be applied to a VDI scenario but not all, so it will certainly be of some benefit when we start to see more of these details emerging.

I don’t suppose that Citrix, VMware and Microsoft might get together under a Green banner and co-fund a similar ROI tool for VDI in general as part of climate change initiative? Perhaps the Bill Gates foundation should kick this off?

What do you think? Pass it on to Bill for comment?

Analysts: Virtualization to save businesses millions

Butler Group report predicts savings from virtualization as it reduces energy consumption and operating costs.

By Gemma Simpson
Special to CNET News.com

Analysts: Virtualization to save businesses millions

Virtualization could save companies millions of dollars and be the dominant data center technology within the next two to three years, according to analysts.

Virtualization can reduce energy consumption and cut operating costs for companies adopting the technology, according to a Butler Group report released this week on infrastructure virtualization.

The report estimates a company currently operating 250 dual-core servers can save $4 million over the next three years by adopting virtualization technology.

Butler also estimates that a power savings on the order of $157,500 for every 1,000 PCs per year can be achieved by businesses moving from a full desktop PC infrastructure to a server-hosted desktop virtualization setup.

And a further $8,000 per 1,000 help-desk calls per month could also be saved by reducing the number of such calls and encouraging the use of self-service application virtualization technologies, the research reveals.

Many companies initially adopt virtualization to save money through server consolidation, and then start to notice other benefits, so that virtualization becomes part of the overall IT plan, according to the analyst house.

Roy Illsley, senior research analyst with Butler, said companies need to understand what virtualization can deliver–and how it is delivered–to successfully use the technology to manage an organization’s IT resources.

The virtualization revolution seems to be slowly marching on, with analysts and industry experts naming the technology as one of the most versatile tools in IT, and analyst house Gartner stating that virtualization will be a key technology to help companies beef up security on corporate mobile devices.

Senior industry figures have also named virtualization as the technology poised to play the most significant role in tackling the challenges many chief information officers face, such as rising energy costs.

Gemma Simpson of Silicon.com reported from London.

written by dcaddick

205 views
Sep 27

Some very provocative comments from Randall Kennedy regarding Microsoft’s possible intentions?


Microsoft’s Virtualization Endgame

…….

With SoftGrid, Microsoft has the technology portfolio to enable its SaaS endgame strategy. The first salvo was fired at the VMworld conference when Microsoft announced it was decoupling the SoftGrid Virtual Application runtime client from the back-end streaming server (see my review of SoftGrid 4.2 for more on this development). By doing so, Microsoft is positioning the SoftGrid environment as a distribution mechanism on par with its Virtual Hard Disk (VHD) format. Soon you’ll be able to "test drive" Office, et al, via this new, highly portable medium.
But test drives and demos are only the tip of the iceberg. Once Microsoft has successfully driven the SoftGrid format into the mainstream expect the company to slowly begin phasing out traditional delivery modes. That means no more Office CDs/DVDs with a thousand installed components – an MSI-wrapped SoftGrid OSD file is the future distribution model for virtually all of Microsoft’s non-server applications. It’s the perfect segue towards the "holy grail" of software development: Uninterrupted, subscriptions-based usage, i.e. utility computing.

Don’t expect the move to a hosted, subscriptions-based model to signal the end of Microsoft’s annoying anti-piracy technologies; the likes of the universally loathed Windows Genuine Advantage (WGA) will live on. As the folks over at Thinstall are happy to point out, SoftGrid is far from a secure distribution platform. In fact, once an application has been cached locally it’s almost trivially easy to isolate the bits and extract a working copy. For Microsoft to protect its intellectual property, it will need to employ some sort of validation logic beyond a simple subscriber login. However, the implementation will likely be more granular than the current WGA model, possibly woven into multiple components within the virtual image. Suffice to say that Microsoft won’t be releasing a hosted offering until it has worked out how to effectively secure it against piracy.

……

written by dcaddick

163 views
Sep 27

I was digging around the other day and came across this neat report that puts things in perspective - I’m not sure that I agree with the conclusion, and assigning MS’s Softgrid a price of free does not really take in to account the cost of MS’s SA?

If you find this remotely interesting I’d encourage you to go and check out the article in full over at infoworld as the comments were filling fast…  ;-)

 

On the road to the virtual desktop

Windows application virtualization and streaming solutions from Microsoft, Symantec, and Thinstall are laying the groundwork for a subscription-based, click ‘n’ run future. Imagining the possibilities, we put them through a simple SaaS performance test

By Randall C. Kennedy
September 24, 2007

Click ‘n’ run. It seems like such a simple concept. Surf up to a Web page, select the desired application from a list, and click. Voila! Microsoft Word appears on your desktop. Or Excel, or Adobe Photoshop… you name it.

SVS Pro Thinstall SoftGrid
Click for larger view.

In practice, click ‘n’ run is a nightmare to implement. Setting aside the licensing issues (and they are legion), the fact remains that delivering traditional fat client applications over the Internet is a technological hurdle on the scale of enabling pigs to fly. First, you have to package the code in a way that allows it to run without actually installing anything. That’s where virtualization comes in. Then you need to find a way to deliver the bits to the end-user without choking their network connection or leaving them helpless when they no longer have access to the distribution point. Here streaming and caching are the keys.

Previous attempts at Web-based application distribution have focused mostly on kiosk-style computing, using a virtual machine or terminal session running on a back-end server to deliver a “screen-scraped” UI to the remote user. However, with the emergence of application virtualization solutions from Softricity (now part of Microsoft), Altiris (now part of Symantec), and Thinstall, the industry is poised for an explosion of new and potentially revolutionary delivery models.

These three solutions virtualize the interaction between Windows programs and the Windows OS resources they depend on, including the file system and system registry, allowing them to run in isolation from the underlying desktop. (For the differences in how they go about it, see my writeup on application and desktop virtualization in "Virtualization: Under the hood.") Combine the virtualization capabilities with streaming servers, as two of the vendors have done, and click ‘n’ run, on-demand application deployment is just a step or two away. 

What makes application virtualization so compelling is its immunity to the very issues that torpedoed the kiosk solutions. For starters, virtualized applications are modular. Though streamed by default, virtualized applications can be configured for offline use, either through caching or by simply copying the application image to the client. And though isolated from the local system (because the application’s registry access and private file set are virtualized), they can still interact with local resources, seamlessly accessing the PC’s storage and print devices, for instance.

But despite having the right general plumbing, none of these first-generation solutions is designed specifically with a subscription-based computing model in mind. Microsoft SoftGrid and Thinstall Virtualization Suite are still aimed at internal enterprise deployment, whereas Symantec SVS Pro — by virtue of its integration with a streaming server component from partner AppStream — is closer to the goal of a true click ‘n’ run format. All Symantec needs to do is work out the optimization kinks.

It’s worth noting that, although the focus of SoftGrid is still internal, the 800-pound gorilla in Redmond has everything it needs to deliver a future Office suite via the Web. The future of software distribution is subscription-based click ‘n’ run; the question is no longer if, but when. The three platforms reviewed here are helping pioneer the transition.

Randall C. Kennedy is a contributing editor of the InfoWorld Test Center, and he writes the Enterprise Desktop blog.

Continued
1 | 2 | 3 | 4 | 5 | 6 | NEXT PAGE » 

 The Bottom Line

Symantec SVS Pro 2.1
Symantec, symantec.com

Good  7.5
criteria score weight
Management 8 25%
Scalability 8 25%
Setup 7 20%
Usability 7 20%
Value 7 10%

Cost:
SVS Client free for private/student use; $55 per client for commercial use (includes streaming support)

Platforms:
Requires Windows Server 2003 (for AppStream); supports Windows 2000, XP, and Vista as clients

Bottom Line:
SVS gains in partner AppStream a much needed streaming capability to support its already robust virtualization layer. The combined solution allows applications to be launched from a Web browser, and headless services are supported. However, the level of integration between the OEM components is imperfect and simple deployment tasks require too many steps, not to mention the slow initial response time for virtualized applications. Still, it’s the closest thing to “click ‘n run” on the market today.

About our Reviews and Scoring Methodology

 The Bottom Line

Microsoft SoftGrid 4.2
Microsoft, microsoft.com

Good  7.4
criteria score weight
Management 8 25%
Scalability 8 25%
Setup 7 20%
Usability 6 20%
Value 8 10%

Cost:
Free to Microsoft Software Assurance Program customers

Platforms:
Requires Windows Server 2003 with Active Directory; supports Windows 2000, XP, Vista and Windows Terminal Services as clients

Bottom Line:
SoftGrid has changed little since our previous review. Strong points are tight integration with Active Directory and a well-optimized streaming model. However, it still suffers from usability quirks and an overly complex sequencing process, and it lacks support for headless services. Nevertheless, Microsoft’s acquisition of SoftGrid, and its decision to de-couple the client from the server, point to an important role for the underlying technology in future Microsoft products and services.

About our Reviews and Scoring Methodology

 The Bottom Line

Thinstall Virtualization Suite 3.2
Thinstall, thinstall.com

Good  7.1
criteria score weight
Management 7 25%
Scalability 7 25%
Setup 7 20%
Usability 8 20%
Value 6 10%

Cost:
$5,000 for Virtualization Suite; $39 per node for deployed applications

Platforms:
Supports most variations of Windows 2000, XP, 2003 and Vista

Bottom Line:
Bottom Line: Thinstall continues to deliver a no-frills solution that makes the process of packaging and deploying virtualized applications almost trivially simple. The completely self-contained virtualization environment requires no client agent or back-end server, and it delivers excellent runtime performance. However, the acquisition of competitors Softricity and Altiris has left Thinstall as the lone pioneer in a rapidly maturing market. Previously overlooked deficiencies, like the lack of client-side caching and the inability to stream over non-SMB connection types, will become magnified in the light of this newly competitive landscape.

About our Reviews and Scoring Methodology

written by dcaddick

74 views
Sep 26

As Stephen Hilton from Credit Suisse puts it "You can’t be a box-hugger any more", although it’s interesting to note that they expect to be only just past the half way point by the end of 2009? Perhaps they should consider looking at Power Recon? I’m sure that they have, and it will certainly make very interesting reading when the Whitepapers start emerging as a consequence of this project…

What has always been a challenge in any large IT Department (and they don’t come much bigger than with the major banks?) is breaking the various Business Dept’s insistence on having separate servers. Dept. A doesn’t want Dept. B insisting that there application now needs an upgrade to Oracle ver. 10.x while their application is still rooted in 9.x?

With Large Citrix farms it was always a nice idea to share the Test and Development servers, but you could never get buy in from the business dept’s, even with the advent of AIE’s it still didn’t get much traction, then with Softgrid we were starting to see the light at the end of the tunnel? But ultimately Softgrid was more effective in cutting back on the Silo’s but still not quite allowing IT to be able to seriously start looking at a widespread push towards a centralized service within a charge-back model back to the business dept’s.

What we see here from Credit Suisse is a perfect example of why IDC and Gartner etc. predict very flat Server Sales over the next 2 - 3 years. Every Server that Credit Suisse virtualizes and is less than 3 years old can simply be added to the Virtual Farm to serve out it’s remaining years?

I’d almost go as far to say that by the time they are done converting all 10,000 Servers there will have been quite a number of advances within the Hypervisor space (VMware’s or others.. ;-) so that by the end of 2009 they would be looking at doing a further 5,000? The main thing is that we will now see a clear de-coupling between the Hardware and the Applications/Business and this will free up the agility of the IT department to adopt any further advances that come along.

Watch this space…   ;-)

Credit Suisse plans virtualization a massive scale

A process of elimination cut half of the financial giant’s servers from consideration – but that still left 10,000 to virtualize

By Galen Gruman
September 24, 2007

With 20,000 servers to manage, financial services powerhouse Credit Suisse had a long list of reasons to consider server virtualization: reducing the number of physical servers to manage, cutting power needs, improving software provisioning time, and deferring expensive datacenter buildouts. But it also needed a clear set of guidelines to determine when to virtualize, plus a clear set of procedures for managing a virtualization initiative.

Credit Suisse began by eliminating servers as candidates for virtualization. For example, the company had already created server efficiencies by sharing instances of Web servers on one box and sharing databases on another box — both time-honored, proven techniques, notes Stephen Hilton, managing director for enterprise server and storage. "Putting a hypervisor there doesn’t necessarily help you," he says, because Credit Suisse had already raised utilization rates and reduced hardware needs for those applications.

Other sets of servers just didn’t make sense for virtualization, Hilton says, including I/O-intensive servers, servers with specialized add-on hardware, and servers whose transactional applications had very tight processing windows, where the overhead of virtualization added milliseconds that would cause timing problems.

That still left a large pool of virtualization candidates — about 10,000 servers, in fact, most running either Windows or Solaris. In general, their utilization was low, particularly those used in development and test environments where, in both cases, the boxes tended to have more horsepower than needed. That low utilization is apparent in Hilton’s expectations of how many VMs he will get per physical server: at least a 20:1 ratio for servers in the development environment; 15:1 to 10:1 for the test and disaster recovery environment; and 5:1 in the production application environment. Hilton’s team is now in the process of virtualizing these servers, with plans to be done with 5,000 by early 2009. The group has already virtualized 1,000.

In crafting Credit Suisse’s server virtualization strategy, Hilton decided to take a page from the storage virtualization playbook and conceive of the environment as a shared service, not just as a collection of VMs. "We created a complete hosting platform from which we ’sell’ slices of capacity," he says. That meant treating physical servers as parts of a bigger resource pool from which capacity could be pulled as needed.

Accomplishing that meant the storage associated to the servers also had to be malleable — a perfect fit for the datacenter’s SAN. But a SAN alone didn’t go the whole distance, Hilton notes. He brought in thin provisioning, which let him logically account for physical storage capacity he didn’t have yet, so when additional storage was needed, it was added without having to change the logical storage pool, a nontrivial effort. "When you have hundreds of VMs, it would be very painful to the cluster management without thin provisioning," he says.

Deploying virtual servers on a SAN brought its own complications. "We learned that the I/O characteristics of a SAN that has a lot of VMs running are very difficult at startup," Hilton notes. When a physical servers starts, a dozen or more virtual servers all start as well, using not only physical I/O within the server blade but also on the SAN. "When you have 50 to 60 VMs on eight [physical] servers, they’re chatty," he says. That situation required a change in how the physical servers connected to the SAN and the startup timing of VMs on a host to better distribute those I/O demands.

The SAN also needed to be resized and rebalanced for the steeper failover I/O in a virtual-server environment. The issue, Hilton says, is that a dozen server images take a lot of storage and I/O all at once if their physical server fails and they need to be moved. Essentially, there’s a price to be paid in the SAN infrastructure to support the higher density of multiple VMs on a physical server.

The other deployment strategy Hilton needed to work out involved the ongoing provisioning and maintenance of the virtual servers: "It’s so easy to provision a VM, so how do you ensure that an enterprise doesn’t create them willy-nilly?" Credit Suisse’s solution was to automate the provisioning. All requests go to a central tool that tracks the requests, available resources, and so forth, so IT can track usage easily and be alerted when potentially abusive requests occur, such as multiple VMs requested by the same person or department in a short period. Essentially, the VM and the resources that they reside in are treated as inventory to be managed.

The automated system also let Hilton introduce the concept of leasing VMs to developers. "They get it for 30 days, then it disappears. Otherwise, it would live forever, as it did with physical servers. You can’t be a box-hugger any more," he says.

written by dcaddick

151 views
Sep 26

Since around late 2003 I was getting fed up with Vodafone’s service at the time in London and was looking to switch, I was also getting somewhat fed up with Nokia’s offerings with it’s monochrome screens while everyone else was offering colour screens.

So I switched to Orange and the MPX 200 from Motorola, not only for it’s colour screen, but also the fact that it was a Microsoft device that seamlessly (well sort of….) synched Outlook contacts etc….

Anyway, the point is that since switching to MS devices some while back I have never looked back, and I now think that it would be very hard for me to shift back to Nokia, although I should never say never? ;-)

But you can’t fault the way that Apple has launched the iPhone, and it’s clear that not only do we all want something like this, but the Analyst’s think so as well?

500 million touch-phones to ship by 2012

More than 100 million handsets with touch screens will be shipped in 2008, and more than 500 million will ship by 2012, according to a new study by ABI Research. Citing recent product introductions, the research firm says intuitive user interfaces are now becoming a critical ingredient in smartphones.

The 18-page report, "Mobile Phone User Interfaces," specifically discusses products such as Apple’s iPhone and the Windows Mobile-based LG Prada, HTC Touch, and Samsung F700 devices, as well as various handsets from Sony Ericsson. Touch screens and touch pads make the handsets more intuitive, pleasant, and efficient to use, the study’s authors note.
According to the report, there is a difference between a standard interface, which may or may not respond to a touch screen, and one that has specifically evolved to employ touch. The firm says that for a handset’s user interface to be considered "advanced," it should offer the user or programmer the following elements:

  • A dynamic layout
  • Skinning/theming
  • Animation
  • Support for 3D effects
  • At least one specialized authoring tool
  • Window management
  • ABI Research’s abstract gives examples of seven different frameworks for creating advanced handset interfaces. These are Adobe’s Flash, Bluestreak’s MachBlue, Mizi’s Prizm, Qualcomm’s uiOne, Trolltech’s Qtopia, Tat’s Kastor, and Symbian’s UIQ interface layer.
    Of these, only Flash has commonly been associated with Windows CE and Windows Mobile-based products, though Windows-based implementations of Kastor are also cited on Tat’s Web site. Though not directly addressed in the ABI Research report, Microsoft Research has created its own advanced user interfaces including, but not limited to, the "zooming" ZenZui, and the Microsoft Surface concept initially applied to table-top devices.

    This promotional video shows Microsoft’s ZenZui user interface

According to ABI Research industry analyst Shailendra Pandey, "Handsets with intuitive user interfaces … can result in higher ARPUs [average revenues per user] for mobile operators by generating greater usage of their value-added services." In the past, many smartphones and high-end handsets with a good number of attractive features have been commercial failures, simply because their user interfaces were too complex, she adds.
ABI’s research report is available now, though pricing was not released. More information is available on the firm’s website, here.

written by dcaddick

505 views
Sep 26

Now this is very interesting news because with all the interest around VDI there is still no real alternative to ICA other than RDP (or VNC…?) and in this I’m not even going to consider Ncomputing’s WoIP, as from a techies point of view this would appear to simply be a rehash of RDP, although I’m prepared to be convinced otherwise?

But it might be exciting to see that there is a real possible alternative to the ICA/RDP stranglehold and this might have the makings of some interesting changes to how things might be approached in the VDI space?

 ******UPDATE******
As a consequence of this post I have been contacted by Ncomputing and it would appear that their WoIP is actually what they term a combination of UTMA and UXP and does indeed make the connection/transition/session at a lower level in the stack. However, you will not find much detail on the inner workings of this as it’s proprietary, and I’m still trying to understand how this all plays out with regards to the Microsoft Licensing side of things as detailed here in a post on their Forum
http://ncomputing.com/ncomputing/wbb2/thread.php?threadid=963&hilightuser=1087If/when I find out more I’ll update either here, or as a separate post on my new blog at www.techagility.info
******UPDATE******

Qumranet leaves stealth mode and enters VDI market with Solid ICE

By Alessandro Perilli

After almost two years in stealth mode, one of the most interesting virtualization startup at the moment, Qumranet, launches its first product: a VDI solution called Solid ICE.

Solid ICE is made of a connection broker, but also features a server component which adds resources control capabilities to KVM, and a new remote access protocol, called SPICE, which can be optionally used as replacement for Microsoft RDP.

The connection broker has some interesting capabilities in itself, supporting high availability and exposing a web portal for standard PC clients access which is designed to scale up to thousands of virtual machines. Despite that first version will provide basic capabilities to operate the virtual machine, with enhancements to be released over time.

The new protocol adds further value to Qumranet solution, being designed to deliver on thin clients all those multimedia protocols which usually don’t perform well into a terminal services session (an approach which competes with NEC VPCC one).

Last but not least Qumranet took care to support several thin clients on the market, developing a dedicated MiniOS (probably a special purpose Linux distribution).

Solid ICE will support Windows 2000 Professional, Windows XP and Linux as guest OSes, and it’s expected to be available before the end of this year.

more at source…

written by dcaddick

125 views
Sep 25
Microsoft opens Viridian technical preview to general public

By Alessandro Perilli

After revealing that codename Viridian beta 1 will be included in Windows Server 2008 RTM, set for February 28, Microsoft published a 10-minutes demo of the technical preview included in Window Server 2008 RC0.

It’s the first time Microsoft shows Viridian to a broad audience since first demo presented at WinHEC 2006.

The video shows Viridian integration in a full version of Windows, a scenario which Microsoft didn’t plan initially, stating that virtualization capabilities would be available only on Windows Server Core 2008 Edition.

The whole video is available for download here and in streaming here.

written by dcaddick

126 views
Sep 25

After a wet and wild weekend camping Dugie pulls out all the stops again…

Thanks Dugie, I wasn’t aware I needed to install the 64bit version to make it work?

URLs for Windows 2008 RC0 and WSv

WSS, Virtualization September 25th, 2007

If you want to download Windows 2008 RC0 with the Windows Server virtualization preview, the URLs are below:

Remember to grab the 64 bit version (6001.16659.070916-1443_amd64fre_Server_en-us-KR1SXFRE_EN_DVD.iso) as it is the only version that will run WSv

John Howard has some great install primers in his post , “How to install the Windows Server virtualization role in Windows Server 2008 RC0“, a snippet is below:

more at source…

written by dcaddick

88 views
Sep 25

Even though we might work in IT we cannot neglect the business, after all it’s the business requirements that we strive to fulfill (isn’t it? ;-)

I strongly believe we need to be mindful of what’s going on in the wider world from a Financial context so that we can understand (sometimes even before the business does?) why projects need to be revised or canceled?

The reality is that many other countries around the world have traditionally used the USD as a basis for their own currency, but with things shaping up the way they are the Fed’s changes are not relevant to other global and local economies and so as a matter of course they will start considering to break these traditional links and this may have further consequences on the perceived value and strength of the USD

Exciting times indeed?

Fears of dollar collapse as Saudis take fright

From the Telegraph.co.uk

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signaling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

  • China threatens ‘nuclear option’ of dollar sales
  • Ambrose Evans-Pritchard: Brace yourself for the insolvency crunch
  • The credit crisis in full

    Fears of dollar collapse as Saudis take fright

    Ben Bernanke has placed the dollar in a dangerous situation, say analysts

    "This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.

    "Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.

    The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

    As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilizing its own economy.

    The Fed’s dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

    There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

    The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit - expected to reach $850bn this year, or 6.5pc of GDP.

  • written by dcaddick