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The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

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Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#31

Post by xenophonf »

CapitalistCartr wrote: post #10
lr4444lr wrote: post #6

Earlier quoted context omitted.

Thanks - makes much more sense. I haven't had my coffee yet. According to the Dept. of Energy that'd be about 7 gallons. ( http://energy.gov/eere/vehicles/fact-915-march-7-2016-averag... ) Not sure what typical passenger car engine efficiency was in those days, though.

I remember the '73 embargo vividly. Rationing was based on license plate, even or odd. My parent's two autos were one of each. Of course, a station wagon and pickup truck. So my dad would get up about 4:30, put the snub-nosed .38 under the seat, and go get in line. Those who waited until the station opened were too late. Stations had big signs up if they had no gas. Gas was always pumped by the attendant. When you go…

I don't understand why Nixon and subsequent administrations didn't push _hard_ for total energy independence after that, as in moonshot-levels of investment into alternative energy (whether alternative sources of oil or research into nuclear/renewables).

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#32

Post by jonstokes »

s_q_b wrote: post #9

You can see from their reported figures that their U.S. treasury holdings are far too low for a sensible national portfolio. It's a pretty glaring hole, and you know that the money is going somewhere off the balance sheets. The question has always been how much U.S. debt exactly the Saudi's hold. This is an interesting historical anecdote, but it doesn't provide any information about the size of the debt, other than…

A few years ago I read a good book on the collapse of the USSR (can't remember the title, too lazy to go back and find it right now). One of the major factors that the author identified was glasnost ("transparency"), which I'm old enough to remember being talked about on the news at the time.

Basically, his thesis was that it was the transparency, after a generation of buildup of really nasty official secrets, that ultimately brought down the communist regime. Once it was clear that everything people thought was probably happening was actually happening, and worse, the whole thing just disintegrated from the bottom up. The regime lost all legitimacy, and the death blow was basically self-inflicted since it was the regime itself that started to open up.

I often wonder about that in the US context. What if a lot of crazy stuff that many people suspect has gone on actually turns out to be true, or what if it's even worse than some of the tinfoil hatters think, and we suddenly start finding out about it all.

I figured it would be some type of Wikileaks or Snowden-type reveal that would do us in, if it happened. But we may actually do ourselves in with an American glasnost that, just like the Russian one of the 80's, is done by well-meaning people in our own government.

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#33

Post by marcusgarvey »

Mentioned is the GAO's finding -- all the way back in 1979 -- that the secrecy had no legal basis. Reports from the GAO, the Government Accountability Office, are a great way to keep an eye on all sorts of wonky, provocative investigations that are often left in the shadows.

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#35

Post by someguydave »

s_q_b wrote: post #16
dforrestwilson1 wrote: post #13

Earlier quoted context omitted.

Perhaps we should be demanding heads on pikes. This has very real implications for Hillary Clinton's election chances as well. The Clintons have been supporters of the Saudis for some time now and have accepted Saudi government money through the Clinton Foundation. https://www.clintonfoundation.org/contributors?category=%241... http://www.motherjones.com/politics/2015/05/hillary-clinton-... There is no reason the U.S…

Swinging the election toward a hawkish demagogue with no knowledge of foreign policy does not seem like a desirable outcome for the United States either. It's worth noting that for now the Saudis still retain a bit of leverage. They could potentially start a kamikaze run on the dollar. They are our largest regional ally, and in very close proximity to Israel. We have very little knowledge of their nuclear program. Fi…

>hey could potentially start a kamikaze run on the dollar.

I'm not so sure. Assuming they had several hundred billion dollars worth of Treasuries, and further assuming that they dumped them all on the market, the demand for USG debt is sufficiently large that I suspect it would be purchased in an orderly fashion without even causing much uptick in interest rates.

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#36

Post by advertising »

There's a book called confessions of an economic hit man - https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit...

Essentially U.S. helps impoverished nations with infrastructure and other aid, but saddles them with debt in order to control them politically or otherwise.

The interesting part was when it came to Saudi Arabia, which had so much money it didn't need to take on debt to develop their infrastructure. So instead they bought America's debt as this article explains.

I lived in the kingdom from '82 - '04 which was quite an interesting time span to have lived there. Things have definitely changed as a younger, mostly western educated generation, returns home and social unrest cannot be quelled with unlimited social programs anymore.

Most of the Saudi's I know now simply take american concepts/franchises and spin them out over there. From hamburger chains to house cleaning services. Works pretty well for them.

The most annoying thing was the weekends were on Thursday and Friday, so if you wanted to do anything international with a bank you could only do it Mon - Wed as their banks were closed on their weekends and then U.S. banks were closed Sat / Sun.

I believe you can still simply walk to a certain part of town and watch an execution, along with a couple of hands once a week there. Just you know, if you wanted something to do on a weekend.

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#37

Post by SCAQTony »

We pretty much put a price on our morality. Looking at the bond holders graph, it appears we owe about a 1/2-trillion dollars to oil producing nations. It's no wonder we tolerate tolerate gross human rights violations therein.

Sort of like that J. Paul Getty Quote: "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."

Makes me wonder if we have a similar deal with China: we sacrifice our industrial sector (no other nation allowed that to happen) in exchange for bond buying?

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#38

Post by ericHosick »

rwmj wrote: post #24
aedron wrote: post #17

The massive issuance of U.S. Dollar debt to Saudi Arabia, as a result of the deal mentioned in the OP, coincided perfectly with the abolition of the gold standard (the dollar being linked to physical gold reserves) [1]. So right from the start, the U.S. was purchasing oil with pieces of paper with no guaranteed value of any sort. [1] https://en.wikipedia.org/wiki/Nixon_shock

I'd rather have fiat currency than gold, because that would save me the time and hassle of selling the gold and getting something I can actually spend.

> I'd rather have fiat currency than gold, because that would save me the time and hassle of selling the gold and getting something I can actually spend.

Isn't currency backed by commodities considered something other than fiat currency?

Re: The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

#39

Post by logfromblammo »

knodi123 wrote: post #20
dforrestwilson1 wrote: post #13

Earlier quoted context omitted.

Perhaps we should be demanding heads on pikes. This has very real implications for Hillary Clinton's election chances as well. The Clintons have been supporters of the Saudis for some time now and have accepted Saudi government money through the Clinton Foundation. https://www.clintonfoundation.org/contributors?category=%241... http://www.motherjones.com/politics/2015/05/hillary-clinton-... There is no reason the U.S…

> There is no reason the U.S. should be allies with the House of Saud. We have almost no aligned interests and very different views on human rights and Wahhabism. Well, in isolation, sure. But in the broader geopolitical sense, it really does make sense to have at least one close ally in that region.

Americans are better aligned with the largely Shi'ite Muslim Persians than with Wahhabbist (Sunni) Muslim Arabs. Note that this has almost nothing to do with relations between the governments of the U.S. and Iran.

On the axis of prince to ayatollah, I prefer the ayatollah. On the axis of theocratic absolute monarchy to theocratic constitutional republic, I prefer the republic.

Supporting the Shah was a mistake. Supporting the House of Saud is also a mistake. Supporting the ayatollahs would be another mistake.

What the U.S. should be doing is to support the personal and economic freedoms of all people living in Asia Minor, and to stop making their sole points of contact the strongarm governments and/or rebel groups. Like everyone else on the planet, the people in that region just want one of two things: help my business prosper, or leave me in peace. The constant military interventions and arms support and political deals serve neither goal.

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