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

bloomberg.com

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

#131

Post by int_19h »

cmurf wrote: post #75
maze-le wrote: post #29

Earlier quoted context omitted.

> But in the broader geopolitical sense, it really does make sense to have at least one close ally in that region. What about Israel, Turkey, Egypt?

Really? You think their moral positions are significantly better than Saudi Arabia? And they have essentially zero to offer economically? Their governments aren't any more sane or stable, in the enduring sense, than Saudi Arabia.

Yes, they are significantly better in a moral sense. They don't behead people for sorcery, or stone them to death for adultery. They also don't finance Wahhabi madrasa in other countries. Here's an example of what Saudi money buys elsewhere in the world:

http://www.rferl.org/content/tatarstan-attack-spar-fears-tha...

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

#132

Post by eternalban »

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…

> 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.

Figures were published by US. ;) Alternatively, you can also consider that US is playing hardball and letting SA know that there is a 'cap' on the threatened liquiditation event.

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

#133

Post by labster »

njloof wrote: post #105
s_q_b wrote: post #92

Earlier quoted context omitted.

There is a theory that Perestroika and Glasnost were responsible for the collapse of the Soviet Union, but to me that seems unlikely. The Soviet Union was bound to collapse, because it's mandate, by definition, was limitless expansion of communism. When the government could no longer coordinate production, Perestroika and Glasnost were last-ditch efforts to bring the Soviet Union more in line with Western norms. Unfo…

> The United States doesn't have that style of federation. Its provinces are held together by a common national identity in voluntary assembly, not a single nation presiding over others by raw force. Don't say that within earshot of the American South.

They started it when they attacked Fort Sumter. The correct way to end a voluntary union is not to engage in insurgent attacks on the national military.

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

#134

Post by kevin_thibedeau »

SixSigma wrote: post #120
travmatt wrote: post #117

Earlier quoted context omitted.

Hillary is a lot of things, but inexperienced in foreign policy's a something she's not.

Gaining experience is another phrase for making mistakes.

Trump has a ton of experience defaulting on business loans. I can't see a better reason for him to take control and use his magic touch to fix everything.

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

#135

Post by 77ko »

randomname2 wrote: post #61

It's interesting how for decades, the story of Saudi Arabia recycling US petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, and how with this fascinating Bloomberg story this "theory" now becomes fact.

It seems to be that this story has been out there for decades now, and this Bloomberg story just adds a few details.

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

#136

Post by GunboatDiplomat »

Chris2048 wrote: post #86
at-fates-hands wrote: post #67

Earlier quoted context omitted.

Actually most of these bases are there because when there's trouble in those parts of the world, we need a place to be able to get troops, equipment and supplies into a given theater in a fast, efficient manner. The countries reap the economic benefits for sure, so it's a win/win situation for both countries. Not so much when the US starts cutting back on its military: City officials in Heidelberg expect annual finan…

> when one country invades another NATO? PeaceKeepers?

And by NATO you mean who, exactly? The US constitutes basically all the long range power projection capabilities of NATO. Hell, the rest could barely sustain a bombing campaign in Libya without US support.

So, let's be honest, the US is the core of NATO, and everyone else depends on US logistical capabilities if they want to deploy troops outside their immediate area, with the limited exceptions of the UK and France.

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

#137

Post by s_q_b »

matt_wulfeck wrote: post #102
s_q_b wrote: post #28

Earlier quoted context omitted.

Yes, the United States and Great Britain have similar, but not identical interests in the Middle East. Their intelligence operatives are almost preternaturally good (or at least seem that way due to their extremely precise knowledge of the Middle East.) And unlike American intelligence officers, they have a much smaller risk of "going native." American officers are rotated every few years to prevent this effect, whil…

Your comments are very interesting. It's clear to me you have a unique perspective on this topic. I hope you don't mind me asking some follow up questions. What does "going native" mean in the context of the intelligence community? Why is it you think British don't have this issue? Why is it harder for the US?

"Going native" in this context means sympathizing with the local population to the extent that their loyalty effectively shifts from the United States to the local people.

I suspect the Americans have this problem due to cultural factors. The binding ethos of the United States includes a hefty (if not total) tolerance to the idea of nationality being less important than their ideals.

The chief unifying principle of Great Britain is ultimately old-fashioned nationalism. They have an expectation that other peoples should become more British, rather than that they should accommodate new cultural norms.

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

#138

Post by s_q_b »

njloof wrote: post #105
s_q_b wrote: post #92

Earlier quoted context omitted.

There is a theory that Perestroika and Glasnost were responsible for the collapse of the Soviet Union, but to me that seems unlikely. The Soviet Union was bound to collapse, because it's mandate, by definition, was limitless expansion of communism. When the government could no longer coordinate production, Perestroika and Glasnost were last-ditch efforts to bring the Soviet Union more in line with Western norms. Unfo…

> The United States doesn't have that style of federation. Its provinces are held together by a common national identity in voluntary assembly, not a single nation presiding over others by raw force. Don't say that within earshot of the American South.

The South is the largest contributor to the national military by far, the location of the capital, and "the South will Rise Again" folks are emphatic but few. There still is a great deal of (often subtle) racism in the Ameican Southeast, but little to no enthusiasm for actually leaving the United States.

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

#139

Post by PhantomGremlin »

sailfast wrote: post #11

How is it possible to sell U.S. Treasuries in secret or in a dark market while still providing an ostensibly transparent market for Treasuries? Those two things seems counter to each other. A deal with this structure as a preference seem extremely misguided, and I'm not sure if the secrecy was requested by the Saudis or by the Nixon / Kissinger NSC / Cabinet which was prone to secrecy for no reason. Either way, one m…

How is it possible to sell U.S. Treasuries in secret or in a dark market while still providing an ostensibly transparent market for Treasuries? Those two things seems counter to each other.

Let's consider equities first. A huge amount of invested money is indexed, which basically means not doing active investing but simply tagging along with the price discovery done by more active market participants. That seems to work out pretty well. Not perfect, but good enough.

Why can't treasuries be the same? There's such a thing as a "noncompetitive bid"[1], which means you agree to purchase Treasuries at the same price that the smarter money chose to purchase at.

Right now there are low limits on how much can be bought by noncompetitive bids. But perhaps the Saudi's just get that price for however much they want to buy? The treasury market is huge huge huge. It probably remains reasonably "transparent" regardless of what the Saudis buy.

[1] https://www.treasurydirect.gov/instit/auctfund/work/work.htm

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

#140

Post by CyberDildonics »

cloudjacker wrote: post #64
advertising wrote: post #36

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 infrastructur…

The IMF primarily. Yes the US takes part in that, but the organization is the IMF. The IMF partially realizes their role in this, but its more of an outcome than a conspiracy. They've commented on that book in an interesting non-denial, basically saying that the GDP of the countries they've helped/subjected-in-a-giant-conspiracy is so low and such a small fraction of the IMF budget that it doesn't make sense that the…

> Country can't pay, country must raise taxes or expropriate goods, or find natural resources.

Or sell infrastructure to private industries (this is what the economic hit man interview I saw claimed)

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