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The REAL Reason for Saudi Arabia’s Shift Away from U.S.
Saudi Arabia has warned of a shift away from the U.S.
Here’s the real reason: China just dethroned the U.S. as the world’s largest importer of oil.
As Oil Price notes:
Last month the world witnessed a paradigm shift: China surpassed the United States as the world’s largest consumer of foreign oil, importing 6.3 million barrels per day compared to the United States’ 6.24 million. This trend is likely to continue and this gap is likely to grow, according to the EIA’s October short-term energy outlook. Wood Mackenzie, a leading global energy consultancy, echoed this prediction, estimating Chinese oil imports will rise to 9.2 million barrels per day (70% of total demand) by 2020.
Forget Syria, Iran and Bahrain … the stated reasons for the Saudi shift.
Those are all real … but the much bigger driver is oil. Indeed, most geopolitical policy is based upon oil (and here) and gas.
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Ahem! Jim Willie also said Bandar was dead...
Look it's in NO BONDHOLDER'S SELF INTEREST to just DUMP USTs on the market like a child throwing a temper tantrum, the USTs get monetized and tangible assets (or non-dollar denominated paper assets denominated get purchased with the proceeds).
BTW - look at the US collateral MKT- the Saudi's would have NO TROUBLE offloading any and all undesired UST exposure that they still maintain...
ChiComs couldn't care less about our paper. They got what they wanted: factories, bridges, ports, airports, highways, cities, jobs, know-how. Torch the pile of paper and they'd be fine.
this is true. Just look at our role model: Japan. How many times has Kyle Bass and a long line of predecessors prophesied the imminent demise of the rising sun? no my friends: never "worthless" Fed notes, as it does not suit their purpose, just perpetually "Worth less" in fits and starts.
I love Dr. Jim Willie. Man does he despise the House of Saud as much as I do.
But we have the greatest financial industry in the world
Nobody but nobody takes it in the dumper like chief Kessler and officer Pike, pulling a train from Ted Nugents ranch to the Koch brothers estate. Nobody!
Thanks! I hadn't seen that...
trust is a fine line!
"the East will be shoving the USTBonds back to Anglo-American shores "
That's not the only place those reserves will be shoved.
Good riddance ! I never like the Saudis anyway.
But Damn, they could fly 757's -- and with almost no training. Gotta give um credit for that! It must be from locomoting on those camels for the last 6K years.
But Damn, they could fly 757's -- and with almost no training. Gotta give um credit for that! It must be from locomoting on those camels for the last 6K years.
US 'american' Saudi Arabarbarian petrodollar citizenism: it's the mattering thing.
Ah, ah, Confusius say: "a turd on the Bandar is worth two on the Bush."
Despair does exist. Hopeless situations do exist. When someone is pushing successful at destroying hope, then you get hopeless situations.
The US 'american' Saudi Arabarbarian Wahhabizenist Party has been extremelly successful on this mattering phenomenum. The air is ripe with the smell of their dung hand of duplicity.
The House of Saud becomes more expendible by the day US domestic gas & oil production improves & the technology to use gas translates into consumer products. They know they are 6 cards into a Texas hold-em round with a losing hand.
Not likely mate....
THE FRACKING PONZI SCHEME
Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled." http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/
Why America's Shale Oil Boom Could End Sooner Than You Think
http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/
FRACKING WILL CREATE AN ECONOMIC CRISIS
Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years. A report released in March by the Berlin-based Energy Watch Group (EWG), a group of European scientists, undertook a comprehensive assessment of the availability and production rates for global oil and gas production, concluding that: "... world oil production has not increased anymore but has entered a plateau since about 2005." Crude oil production was "already in slight decline since about 2008."
http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis
I have a bridge for sale if you believe that.
What good is oil without a manufacturing base ?
All those dollars will flood back into the US and make Weimar look tame.
Enjoy your hopium.
Winston, I just want to say one word to you.
Plastics?
No. Wheelbarrows.
Even worse. The dollar is a huge currency, there are vast dollar reserves in any part of the world hidden away in vaults and basements and worst of all, the dollar is highly liquid. A dollar run will cause demand across the entire hard asset spectrum to skyrocket, turning all other fiat currencies into ash as well.
We don't accept those dollars anymore. Only ameros.
Yes, inflation will be Zimbabweesque but we won't be taking any foreign held dollars. 100% haircut.
Suckers have been glued to the boob-tune for 5 damn years and still haven't figured out the damn plot line to this play? And they PROMISED they were going to fix the educamaction system...
“If you sit in on a Central Bank con game and don’t see a sucker, get up. You’re the sucker.”
The Fleecing of the Sheeple: Buggery with Yield Curve, A Tragedy in Four Acts
by TPTB
Act I- The "Bankruptcy" of Freddie & Fannie - the Fed printed money and bought agency securities, driving up the price and providing a profitable exit for some very large US creditors, who held otherwise worthless Agency Securities.
Act II- The long end of the curve - where the the FED has bought up the majority of issuance - and there isn't even enough left for a functioning shadow banking system, again the FED bought, drove prices up and allowed large un-levered creditors a graceful exit.
Act III- the present - suppress rates at the middle of the curve (either by threatening to taper, or by outright purchases, or by putting on a fear trade -- they all achieve the same end) bail out large US creditors and allow them a graceful exit...
Someone shouts fire a in the theatre...
Act IV- the short end, cash-equivilent crap can be swapped or repo'd on a moments notice (What you didn't realize this was a non-linear Quentin Tarentino production?)
-- Curtain Falls --
check your lap, you're probably holding a bag (and it's filled with all that crap the FED has been printing and giving to those large US creditors, and it's now worth the same as those as those worthless securities (before the FED went and bid them up)...
"Thank you for playing... Hope you enjoyed the game..."
And all our good (straight) Generals have been fired or retired....perfect
haven't enjoyed the game as my hard earned time/wealth is being taken. so in due time i am hoping with a little education the anger is directed AT these sheep fuks.
I've been thinking about this same thing - my guess is that there will be confiscatory tax rates for repatriation of USD in conjunction with launch of a New Dollar (or Amero).
Unless the US starts to export anything apart from Boeing aircraft and freedom bombs,
how will that work exactly ?
Ak ll US assets overseas will be imounded/nationalised,trade will stop etc etc
More likely Uncle Scam will try a two tier exchange rate(again) but the world
will not buy that crap.
The $ are going to flood back here anyway after the Fed's reaction to the inevitable global credit to collateral mark to market. If the House of Saud went nuclear with UST, unpegged the Riyal & required all oil trade in it, that may or may not accelerate that process. The difference in the outcome of a car being 40 feet or 50 feet away from a cliff going 100MPH with no breaks is not significant anyway.
You're presuming an awful lot of stupidity from some people who buy some the very best strategic advice from the very same people who advise TPTB... (and suggesting they would do something that's both practically impossible and also not in their best interest)
No, I'm "presuming" they're fucked anyway, smart or stupid.... just like the 1,000+ dictators who historically preceded them.
Many of those dictators "retired" to quite comfortable lives on the Continent (or slightly less glamorous places for those who weren't prepared), we're all fucked by what's coming down the pipeline, and the upper echelons of the House of Saud have been "prepping" for decades so being fucked nominally and being fucked relatively (to everyone else) are two very different scenarios with different scales of measurement.
It is deeper than that ... the torturing mediaeval Saudi Arabian regime is in mortal fear its days are numbered, and it will soon be overthrown ... hated by many of its own people, by many Muslims around the world tired of Saudi-funded extremism, but above all by its oppressed Saudi Shia minority who predominantly live in the area of the Saudi oilfields
The Saudi fears of demise are above all fuelled, though, by the recent events where China and Russia cornered the USA into abandoning the attacks on Syria and Iran ... which meant the US was being forced to walk away from the petro-dollar, and from support for Saudi regime
Petro-dollar is the whole reason for US-Israeli hostility to Iran - Syria (implicit threat to Saudi & petro-dollar), but Russia & China showed US gov they could not win.
Russia & China cornered the US gov - if attack on Syria, they would blow the Saudi oil fields, collapsing US dollar & US economy, so the war-game to protect the petro-dollar would not work.
Russia & China did offer the US 'breathing space' for a few years to maintain petro-dollar and 'reserve currency' status; this was secret centre of recent deal re Syria & Iran, that Saudis and thus petro-dollar will remain propped up for a while. Tho Saudis are nervous now, they know their days in power are numbered.
So are the Israelis, as their economy collapses without petro-dollar US 'gifting' as well.
Angry Saudi regime is looking for new 'sponsors' but they do not realise they are walking dead ... especially after threatening to sabotage the Russian Olympics ... China will not ride to the rescue when Saudi royal family falls, they will just do a deal with the new gov't in Saudi
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Any Shia country is an inspiration for revolt against Saudis, so Shia countries or their allies, or nations pricing oil in non-dollars, are intrinsically threat to petro-dollar, thus Iran / Syria / Lebanon are targets, as were Iraq / Libya (both priced oil in non-dollars).
This is the structural reason for the US-Israeli hostility to Iran, the Israeli whopping lies about 'nuclear Iran', the crazy influence of Israeli Zionists over US politicians ... it's all a cover show for the fact that both the US and Israel have their economies dependent on the US 'reserve petro-dollar' ... it is the thing propping up the Bernanke Bux, actually ... the Fed's printed dollars collapse without the petro-dollar basis
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So, significantly, US oligarchs, in accepting the loss of the petro-dollar, are also accepting the US empire is over, with quick mass impoverishment of the US people, as the US loses its ability to sell worthless dollars & debt to finance its uniquely horrid .5 trillion annual trade deficit (by comparison, the EU has no trade deficit at all!)
The somewhat plan for the USA, already visible in what US leaders say, is a much poorer USA taking over Canada to get its oil (US politicians already talking about this, and Canada's quisling leaders already signed away rights to US troops to enter Canadian soil after a 'terrorism' incident, which criminal US gov will certainly provide under false flag fakery).
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But the Saudi regime has no future, they are not stable, they have only been propped up by the dirty deal in 1970s, Kissinger and Saudis and Israel, to force all oil pricing in oil, giving USA unique ability to buy imported energy & goods for printed dollars, giving zero in return.
This is why US military was ordered to back Sunni Saudi Arabia, and is also the basis for the traitorous US-Israeli 'alliance' ... Israel is a weapon for regional chaos, for threats to petro-dollar, and for distraction from the ugly truth about what keeps the US economy artificially alive, and Israel's financing as well.
What you see now in US foreign policy - US walking away from Israel and Saudi - is US accepting that Russia and China won the game, the petro-dollar will fall a bit sooner ... tho Russia and China have given the US a couple of years to sort out its future ... US oligarchs getting their assets converted out of USD and so on.
---
China & Russia will not prop up Saudi rulers like the US did ... they just want the oil, and they are fine with the upcoming culmination of the 'Arab Spring' ... the overthrow of the cruel House of Saud. Which also, ends all those Saudi-funded religious schools around the world driving Muslims into extremism ... Tho there will still be decades of blowback from all the Muslim women and children that US - Nato military and drones have murdered
That sounds about right.
Everyone is lining up to tell the US to get fucked - they can smell blood in the water ever since Bernanke admitted last month that he was on the road to Zimbabwedum (i.e. that he can never stop the printing press)
Watch for more snubs from the global community - America has made a lot of enemies with their bullying over the decades - and there are many who will engage in schadenfreude - and many who will actively look for revenge against this vile nation
The US will never have to "take over Canada" We'll give them the oil like we're doing now.
Besides, if the American military invaded Canada they would take heavy losses from high powered hunting rifles.
Don't mistake our Hospitality for being Pussies.
Well, all the foregoing and that Obama just ain't smart, at all. Having a Fucking "vision" and winding up the apparatchiks just doesn't work on foreign countries that can see the little emperor is just a naked little fraud.
FORWARD ASS NAPKIN OBAMA!
Makes sense, but doesn't fit the script of the Grand Chessboard (Brzezinski). Well, I guess it does except Russia and China just check-mated US (or at least, checked US). Hard to believe that is the end of the game. No rockets red glare? No bombs bursting in air? It's not the American way. Somehow I don't think this is game over, they've been planning absolute power for a long long time. America is a big piece that was just taken maybe, but the King is still alive, as is the Queen. This probably fits into an even larger script, as is mentioned below, SDR and absolute power by the TPTB. Russia and China therefore didn't check mate, they only checked, perhaps they are knights or bishops as well, the central banks are the rooks.
Remember, there cannot be absolute power with a democracy, because your foriegn policy needs approval of the people. Democracy's demise is upon us. The King is 5 steps ahead. The King is untouchable.
TPTB don't pledge allegiance to countries, countries pledge allegiance to TPTB. Absolute Power is the name of the game.
Why do people not seem to grasp that the IMF only exists because of the primary USD backing?
But somehow can't connect that SDRs are USDs in drag?
Are you saying the USD can't be replaced by the SDR? SDR, USD, doesn't matter what the currency is as long as it is one currency for the West. The point is the goal has always been the union of Western countries. The Atlantic Union --> New World Order. The UN, NATO, and the IMF. Three arms. The IMF does exist because of USD backing but it was created for a reason.
The only caveat is that it appears the gold has, for the most part, left the West. So what backs that one currency? Oil? No secret that the IMF is heavily involved in Africa, Somalia, Lybia, Sudan, Mali, and the like. Who needs Saudi Arabia when there is plenty of oil elswhere in the world.
The other thing is this: This all may be a cover (cold shoulder to SA and Isreal while snuggling up to Iran). The US isn't exactly moving forward on the Geneva II meeting involving Syria, it's business as usual in Syria regardless of what is being reported. Perhaps SA and Isreal are only acting to make Russia believe that the US is playing along with the deal. I smell a double cross.
There isn't going to be 'unified' Western currency block, that's absurd, what the hell have you been reading? Look at the grand catastrophe the euro has been for the periphery of Europe where they can't compete with the core. And you think this rediculous disaster is somehow relevant to the western world in general as a scaled-up solution to the euro's failure!? Or that Australia is ever going to abandon the AUD for a fucking SDR? LOL
Dude, you're out of your mind if you think any of that is going to occur.
USD is in the process of karking in front of the whole world and you want us to pretend SDRs, from the US-backing of the quite useless IMF, matters at that point?
That whole system is dying and all those organizations are past their useby dates.
And then you mix it all in with Syria, Israel, SA and GenevaII talks? ... wtf? why? ... and oil in Africa? ... and the IMF again???
good grief, put a sock in it
Well, I can see you think the failure of the euro is an accident, I don't. You also seem to think the failure of the USD will be an accident as well, I don't. There are lots of accidents and coincidences in your world. There are no coincidences in mine. The system is dying on purpose, they are letting it die, they have been causing it to die, it is supposed to die...so it can be replaced with a system that better suits the TPTB. The way to kill democracy is to kill it's economy. Absolute power cannot co-exist with democracy.
It's coming to an end for one reason, accrued debt and the compound effects of its usury. The math of fractional-reserve lending is quite inevitable.
This was discussed to death, 3 to 4 years ago at zh.
Occam's Razor
Strange to think that in the hidden world of politics, that Israel and Saudi Arabia are mutually dependant allies.
'Bank guy' I am impressed with your cogent analysis, except for the US invading Canada, that was an overreach. Canada will gladly accept dollars for oil.
I just don't see it this way, the USA wants to use SDR's to keep control of resources since every nation is dumping USD.
Now someone up there is leaking info about the NSA spying on every nation's leaders and their connected cronies in business to cause a well deserved distrust of the US government. What will Western Europe do if anything? Canada's leaders seem like a lapdog to the USA.
Inside the US, gestapo (DHS) is arming like it's Iraq 2003. They are certaintly prepping for a new currency/capital control/resistance of epic size.
So the US central command has pissed off: the productive US citizens, most all nations, now add in Saudi and even Israel, can't think of anyone it has not. Obviously a false flag making 9-11 look like a bingo gathering is going to be the transition to martial law, seizing land/savings, anything else of value from citizens on lists and somehow tied to getting control of the new world reserve currency.
Wow, BankGuy- You've kind of wandered all over the playing field with this post. However, I believe you are spot-on as regards the petrodollar and its relationship to U.S. foreign policy. But I doubt the U.S. is going to attack Cananda. Exploit her resources, sure, but I simply cannot imagine our friends to the north accepting all our baning and clanging. Nice post.
Good post. I would add the US doesn't import quite so much oil because we are pumping a lot more of our own these days and with a depressed economy and high unemployment, I'm sure we aren't buying as many gallons of gasoline as we "normally" would.
We are going to see a lot more turmoil. Not only because of the problems with the USD/debt, but because of peak oil too. When the Saudi fields (and many others around the globe) start to run dry, there will be major problems for them and the oil-dependent world we've become.
Kudos - a work of rare critical thinking, Sir Belgian.
"USA taking over Canada to get its oil (US politicians already talking about this, and Canada's quisling leaders already signed away rights to US troops to enter Canadian soil after a 'terrorism' incident, which criminal US gov will certainly provide under false flag fakery)."
There is nothing that quite unites the two halves of our Political Class like War. The chickenhawks greedily rub their talons at the thought of all that bribery, graft and corruption that such lovelies bring. "My Precious". There need not be a lot of bloodshed in that one, as politicians in CA can be bought as cheaply as elsewhere.
I hope they don't forget Mexico - they have a huge pile of petro underground and undersea, and still can't manage to make money. Maybe Texas can simply buy the country, and then ex-communicate Mexifornia.
Just a side note: If the Us and the dollar fall, Europe will have the fate the Eastern Block had when the Soviet Union collapsed. This is largely overlooked in the EU.
Interesting. Please elaborate.
Great comment and insight.
Sounds like the criminals of the US government are in the same position that I find myself when I play chess. I think that I am winning until my opponent says 'checkmate.' A surprise every time. However, I don't have a guillotine waiting me at the end.
Yes, for the first time in history the empire has willingly given up without a fight. And the redshields don't want extra plunder from financing both sides.
My ballsack.
War before 2020. Big war. My son turns 18 in 2020 so he'll be legal age but ain't gonna fight in some dumbass resource war. You're optimistic, it's not over yet.
Sounds to me like the US needs to spread some freedom and democracy to the Saudi's.
Great analysis. The evil House of Saud is hated worldwide. I hope Putin has a polonium cocktail for all of those vermin.