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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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It was a great analysis and I really hope it goes near enough as stated. Putin won't be using polonium again after the mess it caused last time. Suicide hanging works much better. I think the polonium was really used to send a prolonged message to the Mossad that he could play their game. Putin is the right man for Russia to shepherd this transition. He is smart, measured, charming and ruthless to his enemies and I think his heart is in the right place, judging by the results he gets.
http://www.telegraph.co.uk/news/uknews/9950494/Assassination-fears-over-...
Thanks Bank Guy, that was well articulated.
The resulting problem that the US will have or has from a loss of Petro-Dollar dominance is the flood of USD that will be coming back home to wreak havoc. Dollar oversupply as other countries begin to use less USD's, favoring other Asian currencies (Yuan). This is the real reason the dollar will fall in value and why some real USD denominated assets will appreciate relative to the USD (which is the reason high end and commercial US real estate have been so strong).
Simple economics perhaps. Supply and demand.
"Honey, if you have an extra 5 grand, pick up a loaf of bread when you bicycle home."
One quibble, Bank Guy. The neo-con plan for a post-Saddam Iraq was supposed to provide a relief valve of sorts for the House of Saud's Shia problem. An Arab Shia southern Iraq was to be a counter-balance to the Persian Shia across the Gulf. The thinking was that with Saddam's boot off their necks and with control of local Shia holy sites, they'd form a sort of "middle way" between Hezbollah and Iran. Didn't happen -- and Sunni suicide bombers certainly haven't helped.
Ya I agree with everything except about how the petro dollar going under is bad for America. Wouldn't that be good? I mean a collapse is bad sure but after the dust settles an economy can rebound very fast. Look at Germany after the Weimar Republic, they went nuts. Look at Russia now, it took them awhile sure but they did it. If America lost reserve currency status it would force us to actually care about our budget. We would have to reduce government..foreign interventions would go out the window...I see more positives then negatives really..
bgiB
I follow and it makes sense but where do you get your 'couple of years' figure from?
Do you see active support for the dollar from the Russians and Chinese or is it just 'hands off'?
Obviously any one of many countries could cause at least a panic by dumping treasuries, certainly either China or Russia could do so.
If it is just a 'hands off' policy then I would imagine that the end of the dollar could come at any time. With active support they might be able to stretch things out a bit but 'a couple of years' I dunno...
I figure it is all about purpose. Money holds no allegiance to any country. The US is just a tool for the global elite. As this global debt disaster unfolds there is a need for deep markets that can absorb significant amounts of capital without blowing up the local currency. US markets and USD is perfect for this.
If the EU goes belly up before some sort of black swan event here, it will be very interesting to see how capital shifts. I would wager we see real fireworks here - and the terminal decline really kicks in as capital eventually flows back out en masse. 2016 sounds about right. Couple of years or so, election cycle, etc.
I'm not so sure about your 'allegiance' statement. There is no doubt that in America few hold our country in much esteem, but i think many other countries are chock full a very nationalistic and even radicals that would very much act to advance something less the a strictly selfish personal interest. And most would gladly sacrifice the lives of their fellow citizens to advance religion and national interests.
l
Who says that China even needs to dump those treasuries? They could probably crash the dollar by simply refusing to roll maturing USTs into new USTs. It would probably take longer, but it could very well force the Fed to print more, as what is now a two way flow of dollars would become a one way flow of dollars, at least when only USTs are considered. The Chinese would then have free rein to quietly start buying up assets in dollars, driving prices up. Dumping treasuries on the open market would look like a very aggressive move. Refusing to continue to purchase debt from an irresponsible fading superpower? Not so much.
Agreed. But that would clearly mark an acceleration, and I'm not sure China is ready to push the pedal down themselves. There is always maneuvering, angling for space. Even those Princeton and MIT folks are not completely sure they're right, and so they hedge. There will certainly be a point of fulcrum, but predicting when that point arrives is another matter. Everyone procrastinates while there is no penalty for doing so. As risk rises, so does the nervousness.
I think China knows it needs to do nothing at this point. It's just waiting for Amerika to step on its dick.
I don't think there is a set time agreement on the dollars demise.
Once a secure alternate to SWIFT for trade settlement is up and running,it is game over.
Considering they have been working on this for only 6 months publically, two years maybe
correct.Anything could upset this applecart before then though.
A dollar-panic wouldn't realy be a "panic" if we knew beforehand, now would it?
"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel" - Rashid bin Saeed Al Maktoum.
Ok ok NOT from Saudi but Dubai has the same problem
And when I say "ride" a camel, I mean I'm gonna R-I-D-E that camel...
Thanks Bank Guy. Great post.
It was a good post
Saudis will also be out of water tables by 2016
I am always amazed how stupid (and self destructive) our energy policy has been in the last few decades
like every empire, we think we're the exception to every empire
The Saudis aren't waiting to run out of water. They will build desalination plants in places like Al Jubail to make up the difference. Desalination is expensive, and they'll use ERI’s PX Pressure Exchangers in the next SWRO plant being built.
true
example number 100 why oil producing countries will have to keep increasing amounts of their production
Amen - everything makes sense now.
Check matey.
Who's really stopping ANYone from invading Saudi Arabia and giving them a taste of "Resource Curse."
"Russia & China cornered the US gov - if attack on Syria, they would blow the Saudi oil fields, collapsing US dollar & US economy"
And you got this direct from what source...? Sometimes you are quite full of yourself. Anyhow, you are correct inso far as this will really hasten the end of the petro-dollar. Gold will get a big boost from this moving forward.
BTW..., are you the new pitchman for ZH contributors, or just the fastest typist know to mankind?
The REAL Reason for the longest war in American history?
Otherwise, it is a long way by sea, through a couple of narrow straits that can easily be defended with a couple of carrier groups.
We damn sure did not invade a soverign nation, Afghanistan, and are still occupying it after more than 12 years, because a now deceased Saudi Arabian was hiding there. Did we invade Pakistan when this very same Saudi Arabian was allegedly hiding out there? No. That wouldn't make sense, would it? Allegedly, we sent a SEAL team into the sovereign nation of Pakistan to kill Osama, not capture him, eventhough he was unarmed and out numbered, then we immediately dumped his body into the ocean instead of questioning this terrorist mastermind about future terrorist attacks.
Oh yes, makes perfect sense.
Because China will just obviously be so much more successful at projecting force into Afghanistan than Britain, Russia, or the US was. Right.
And because Iran has so much oil to sell it would so make the investment in that pipeline worth it. Right.
So wishing there was some market I could take a bet on this in.
Sometimes a map is just a map.
@ lewy14
Got to agree, Russia is a major producer, right next door, supplying China now, and a strategic partner of China. Maybe a pipeline from Iran (which is already happening through Pakistan to China anyway) is sensible as a diversification of sources, and undercuts the US strangulation option, but through Afghanistan? Doubt that one.
And if Iran is looking for a big market and Pakistan wants revenue, then why should China pay for more than the oil pumped through it?
humans complicate something simple(for obvious reasons)-if it seems complicated you r not thinking clear yet.
as in all things (such as the fed res) once you truly understand it, it is simple. H H clearly understands how simple
these manmade systems are set up to dupe the masses. but on a time line of understanding, a new manmade system evovles(same ole fuking few fuking masses). i would sugest the evolved system of petro dollar becomes the new world order and merica has only one ace in the hole.
violence to control these systems. it is unraveling. the fed. the petrodolla. the plain and simple future is self sufficiency-the farm with double barrel behind the mudroom door.
let the culling of the weak begin...
darwin for new world order master!
violence is balance-ask a rabbit or mouse. death is one mistake away. humans have made there mistakes awaiting the outcome-they just don't know their fate...
Pipelineistan. You are killing me
No surprise; HH owns and comprehends an atlas. Sad he is such a small minority. Looking at Iraq and "Pipelineistan" makes one rub one's chin, doesn't it? A good hard look at East Africa is fascinating as well.
And to add to that HH, there are NR worth $1Trillion
Wait a minute. I think the Chinese government has said that Pipelineistan historically belonged to the Chinese empire .. along with Tibet, North Vietnam, the Senkakus, Japan, and Korea. Maybe all resource rich countries.
Yeah that whole kill Osama then dump him in the sea (no proof) thing was pretty hard to believe in. Even pinheaded sheeple were questioning that one. It is all about control of easily pumped oil.
As an aside, HH, you are a fountain of knowledge. Read your book recommendation "Born to run" and started to barefoot thing. My ankles and heels have never felt so good. I'd just grown to accept that myh ankle would hurt if I did a few miles (laid it off on two severe ankle sprains). Feet muscles still growing stronger (ie I would cramp right now if I curled my toes after doing three miles barefoot) but I know it's right. Feel a little stupid for not figuring it out on my own (really, what animal needs footwear, bad feet should be weeded out fairly quickly by evolution) but whatever.
If I could ask, what did you do before you bought your farm? I come from farming people and farmers either have a side job or came from money. It's kind of a joke when someone tells you they farm you ask, "what's your other job"?
I posted an Article from Reuters yesterday about how fracking has recently made the US the #1 Oil supplier in the World and has surpassed Saudi Arabia. Maybe that's part of the reason. Here's the Article,
http://www.reuters.com/article/2013/10/15/us-oil-pira-idUSL1N0I51IX20131015
I read the article you linked to.
Troll.
Peddle your globalist BS elsewhere. This is not the place.
Did you actually read what the article said?
If you did your taxes like some people count "oil", the IRS would blowtorch your ass...
Yet another reason Afghanistan is so critical.
Things that make you go Hmmmm.......
they've extracted the u.s., now they're going to extract china...
global commerce and fascism have no
quarrel.
The crossroads of Civilisations, as well as the graveyard of Empires.
Both titles are apt, and well earned.
Are they drawing straws for the remaining US forces after withdrawl.
Will it be the successors to Custers cavalry ?
I still remember vividly the war memorials, listing the dead, all the way
down the Khyber Pass.There are Russian ones now aroud in the Mazar e Sharrif.
Will the US ones be moved to Chicken Street in Kabul ?
I can only imagine what the natives think of drones,they like their killing up front and
personal.
HH & Bank Guy are on fire. Thanks for your insights.
So glad the Russians and Chinese are fighting the Zionist mother fuckers.