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Guest Post: The Growing Rift With Saudi Arabia Threatens To Severely Damage The Petrodollar
Submitted by Michael Snyder of The Economic Collapse blog,
The number one American export is U.S. dollars. It is paper currency that is backed up by absolutely nothing, but the rest of the world has been using it to trade with one another and so there is tremendous global demand for our dollars. The linchpin of this system is the petrodollar. For decades, if you have wanted to buy oil virtually anywhere in the world you have had to do so with U.S. dollars. But if one of the biggest oil exporters on the planet, such as Saudi Arabia, decided to start accepting other currencies as payment for oil, the petrodollar monopoly would disintegrate very rapidly. For years, everyone assumed that nothing like that would happen any time soon, but now Saudi officials are warning of a "major shift" in relations with the United States. In fact, the Saudis are so upset at the Obama administration that "all options" are reportedly "on the table". If it gets to the point where the Saudis decide to make a major move away from the petrodollar monopoly, it will be absolutely catastrophic for the U.S. economy.
The biggest reason why having good relations with Saudi Arabia is so important to the United States is because the petrodollar monopoly will not work without them. For decades, Washington D.C. has gone to extraordinary lengths to keep the Saudis happy. But now the Saudis are becoming increasingly frustrated that the U.S. military is not being used to fight their wars for them. The following is from a recent Daily Mail report...
Upset at President Barack Obama's policies on Iran and Syria, members of Saudi Arabia's ruling family are threatening a rift with the United States that could take the alliance between Washington and the kingdom to its lowest point in years.
Saudi Arabia's intelligence chief is vowing that the kingdom will make a 'major shift' in relations with the United States to protest perceived American inaction over Syria's civil war as well as recent U.S. overtures to Iran, a source close to Saudi policy said on Tuesday.
Prince Bandar bin Sultan told European diplomats that the United States had failed to act effectively against Syrian President Bashar al-Assad and the Israeli-Palestinian conflict, was growing closer to Tehran, and had failed to back Saudi support for Bahrain when it crushed an anti-government revolt in 2011, the source said.
Saudi Arabia desperately wants the U.S. military to intervene in the Syrian civil war on the side of the "rebels". This has not happened yet, and the Saudis are very upset about that.
Of course the Saudis could always go and fight their own war, but that is not the way that the Saudis do things.
So since the Saudis are not getting their way, they are threatening to punish the U.S. for their inaction. According to Reuters, the Saudis are saying that "all options are on the table now"...
Saudi Arabia, the world's biggest oil exporter, ploughs much of its earnings back into U.S. assets. Most of the Saudi central bank's net foreign assets of $690 billion are thought to be denominated in dollars, much of them in U.S. Treasury bonds.
"All options are on the table now, and for sure there will be some impact," the Saudi source said.
Sadly, most Americans have absolutely no idea how important all of this is. If the Saudis break the petrodollar monopoly, it would severely damage the U.S. economy. For those that do not fully understand the importance of the petrodollar, the following is a good summary of how the petrodollar works from an article by Christopher Doran...
In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.
This means that every country in the world that imports oil—which is the vast majority of the world's nations—has to have immense quantities of dollars in reserve.
These dollars of course are not hidden under the proverbial national mattress. They are invested. And because they are U.S. dollars, they are invested in U.S. Treasury bills and other interest bearing securities that can be easily converted to purchase dollar-priced commodities like oil. This is what has allowed the U.S. to run up trillions of dollars of debt: the rest of the world simply buys up that debt in the form of U.S. interest bearing securities.
This arrangement works out very well for the United States because we can wildly print money and run up gigantic amounts of debt and the rest of the world gobbles it all up.
In 2012, the United States ran a trade deficit of about $540,000,000,000 with the rest of the planet. In other words, about half a trillion more dollars left the country than came into the country. These dollars represent the number one "product" that the U.S. exports. We make dollars and exchange them for the things that we need. Major exporting countries (such as Saudi Arabia) take many of those dollars and "invest" them in our debt at ultra-low interest rates. It is this system that makes our massively inflated standard of living possible.
When this system ends, the era of cheap imports and super low interest rates will be over and the "adjustment" to our standard of living will be excruciatingly painful.
And without a doubt, the day is rapidly approaching when the petrodollar monopoly will end.
Today, Russia is the number one exporter of oil in the world.
China is now the number one importer of oil in the world, and at this point they are actually importing more oil from Saudi Arabia than the United States is.
So why should Russia, China and virtually everyone else continue to be forced to use U.S. dollars to trade oil?
That is a very good question.
In fact, China has been making a whole lot of noise recently about the fact that it is time to start becoming less dependent on the U.S. dollar. The following comes from a recent CNBC article authored by Michael Pento...
Our addictions to debt and cheap money have finally caused our major international creditors to call for an end to dollar hegemony and to push for a "de-Americanized" world.
China, the largest U.S. creditor with $1.28 trillion in Treasury bonds, recently put out a commentary through the state-run Xinhua news agency stating that, "Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated."
For much more on all of this, please see my previous article entitled "9 Signs That China Is Making A Move Against The U.S. Dollar".
But you very rarely hear anything about this on the evening news, and most Americans do not understand these things at all. The fact that the U.S. produces the de facto reserve currency of the planet is an absolutely massive advantage for us. According to John Mauldin, this advantage allows us to consume far more wealth than we actually produce...
What that means in practical terms is that the United States can purchase more with its currency than it produces and sells. In theory those accounts should balance.
But the world's reserve currency, for all intent and purposes, becomes a product. The world needs dollars in order to conduct its trade. Today, if someone in Peru wants to buy something from Thailand, they first convert their local currency into US dollars and then purchase the product with those dollars. Those dollars eventually wind up at the Central Bank of Thailand, which includes them in its reserve balance. When someone in Thailand wants to purchase an imported product, their bank accesses those dollars, which may go anywhere in the world that will take the US dollar, which is to say pretty much anywhere.
And as Mauldin went on to explain in that same article, a significant amount of the money that we ship out to the rest of the globe ends up getting reinvested in U.S. government debt...
That privilege allows US citizens to purchase goods and services at prices somewhat lower than those people in the rest of the world must pay. We can produce electronic fiat dollars, and the rest of the world accepts them because they need them to in order to trade with each other. And they do so because they trust the dollar more than they do any other currency that is readily available. You can take those dollars and come to the United States and purchase all manner of goods, including real estate and stocks. Just this week a Chinese company spent $600 million to buy a building in New York City. Such transactions happen all the time.
And there is one other item those dollars are used to pay for: US Treasury bonds. We buy oil and all manner of goods with our electronic dollars, and those dollars typically end up on the reserve balance sheets of other central banks, which buy our government bonds. It's hard to quantify the exact amount, but these transactions significantly lower the cost of borrowing for the US government. On a $16 trillion debt, every basis point (1/10 of 1%) means a saving of $16 billion annually. So 5 basis points would be $80 billion a year. There are credible estimates that the savings are well in excess of $100 billion a year. Thus, as the debt grows, the savings also grow! That also means the total debt compounds at a lower rate.
Unfortunately, this system only works if the rest of the planet has faith in it, and right now the United States is systematically destroying the faith that the rest of the world has in our financial system.
One way that this is being done is by our reckless accumulation of debt. The U.S. national debt is now 37 times larger than it was 40 years ago, and we are on pace to accumulate more new debt under the 8 years of the Obama administration than we did under all of the other presidents in U.S. history combined. The rest of the world is watching this and they are beginning to wonder if we are going to be able to pay them back the money that we owe them.
Quantitative easing is another factor that is severely damaging worldwide faith in the U.S. financial system. The rest of the globe is watching as the Federal Reserve wildly prints up money and monetizes our debt. They are beginning to wonder why they should continue to loan us gobs of money at super low interest rates when we are beginning to resemble the Weimar Republic.
The long-term damage that we are doing to the "U.S. brand" far, far outweighs any short-term benefits of quantitative easing.
And as Richard Koo has brilliantly demonstrated, quantitative easing is going to cause long-term interest rates to eventually rise much higher than they normally should have.
What all of this means is that the U.S. government and the Federal Reserve are systematically destroying the financial system that has enabled us to enjoy such a high standard of living for the past several decades.
Yes, the U.S. economy is not doing well at the moment, but we haven't seen anything yet. When the monopoly of the petrodollar is broken, it is going to be absolutely devastating.
And as I wrote about the other day, when the next great economic crisis strikes it is going to pull back the curtain and reveal the rot and decay that have been eating away at the social fabric of America for a very long time.
Just check out what happened in Detroit recently. The new police chief was almost carjacked while he was sitting in a clearly marked police vehicle...
Just four months on the job, Detroit’s new police chief got an early taste of the city’s hardscrabble streets.
While in his patrol car at an intersection on Jefferson two weeks ago, Police Chief James Craig was nearly carjacked, police spokeswoman Kelly Miner confirmed today.
Craig said he was in a marked police car with mounted lights when a man quickly tried to approach the side of his car. Craig, who became police chief in June, retold the story Monday during a program designed to crack down on carjackings.
Isn't that crazy?
These days, the criminals are not even afraid to go after the police while they are sitting in their own vehicles.
And this is just the beginning. Things are going to get much, much worse than this.
So let us hope that this period of relative stability that we are enjoying right now will last for as long as possible.
The times ahead are going to be extremely challenging, and I hope that you are getting ready for them.
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Amen Brotha! ;-)
The Book of Revelation has 200 million of them cruising in to take delivery.
Yen Cross,
There is zero chance that the USA will be a net exporter of crude oil EVER. Look at Bakken oil statistics and ask yourself where in the USA are better oil plays. I thought you analyzed data--guess not.
I don't know why I waste my time with pinheads like you. Happy reading...
U.S. petroleum product exports exceeded imports in 2011 for first time in over six decades - Today in Energy - U.S. Energy Information Administration (EIA)
US could reclaim role as net energy exporter - Features - Al Jazeera English
Commentary: Is it only a question of when the US once again becomes a net oil exporter?
Yen Cross,
Namecalling is good, but your reading comprehension isn't "petroleum products" isn't petroleum. Look at the Weekly Petroleum Report from EIA on Wednesdays and look at the EIA link you posted. Crude oil imports are usually 7.5 to 8 million barrels per day. Imports, not exports.
I posted 3 articles for you. The chart I believe you're mentioning shows imports and exports. Quit "cherry picking" pinhead. I purposely provided both sides of the argument for your reading joy.
Additionally U.S. consumption is dropping, and I suspect will decline further based on the state of our GDP. Additionally the U.S. only gets 8.1% of it's imports from Saudi.
U.S. Oil Demand Falls to 16-Year Low, API Reports - Bloomberg
What are you talking about, YC? Hohum is correct: the U.S. will never be a net exporter of crude oil. Here are the facts:
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_a.htm
While net imports have dropped over the past few years, and (I agree with you) are likely to drop further, they are above three billion barrels per year!
They already were in 2011. Yes, reserves are declining. The intent of my original comment is the U.S. can make due without the 8.1% of it's imported Saudi oil. Yes, I know it's petroleum products.
U.S. Was Net Oil-Product Exporter for First Time Since 1949 - Bloomberg
You simply have this wrong YC. A lot of petroleum product exports is gasoline that was created from crude imported. Venezuela can't refine its own oil, too difficult.
They ship to Houston, it is refined there and because gasoline is less viscous than crude, the volume expands. What is exported is then more barrels than what was imported.
The US is importing about 7 million barrels/day of crude. That's just a straightforward number. It comes from Canada, Mexico's Canterell, KSA and Nigeria. 7 million barrels every day.
We export none. It's illegal to export US crude.
It's NOT illegal to export crude. Licenses are granted on a small scale to export crude. Oil companies work around the export restrictions by exporting refined products as well. I'm well aware of declining crude stocks. As per my earlier comment, "The U.S. could make due without the 8.5% of imported Saudi oil."
Sell & Export of Crude Oil & Refined Products From U.S. Not Illegal
The Case for Allowing U.S. Crude Oil Exports - Council on Foreign Relations
IEA urges swift U.S. decision on allowing crude oil exports
You are in denial. The USA is not going to be an net exporter in the next few years. It costs too much to get the Oil out of the ground here. thus the development for infrastructure for getting that Low Grade crap is being delayed. Furthermore the Refineries wlll have to be compltely reengineered to handle the low grade crap as we will not build new refineries to deal with it.
We will not last that long with a shock of Saudi Sweet High Grade, and Venezulean Sweet High Grade to the refineries being cut off.
You are so deluded if you buy into the hucksters selling of that crap. The EROEI is not worth it at the present.
Besides...Do we really want all of those worthless US Dollars back from Foreign Nations in return for our Oil?
Hell no. Not only no but HELL NO. We need to first DEFAULT on Foreign Holdings. That is what the rip off scam has been about in the first place.
While in the future it may be the only Oil available it still takes TIME to change over. Time is a precious commodity that we are running out of.
So we are in for some very rough times before that panacea ever comes online to fruition.
Obama is so stupid he may be smart. The whole world is holding trillions of worthless paper all looking at each other like a Mexican standoff. If they want to get anything of value for it they all have to stay in this mess together. Either that or they buy anything or everything they can, property, companies, commodities, politicians. Oh shit, fuck it-Obama is stupid.
All the world leaders need to shock the 12 US federal Reserve Ponzi bank heads and cash in their US dollars.
I want a few grams of whatever this guy is smoking.
I think there are a couple of things that may affect Obama's thinking on this. (They might all be false)
How much oil does Saudi Arabia still have? It may be that they don't have any bargaining chips left.
A move away from being the savior of Israel at every turn
If we are in the process of blowing up the dollar the petro dollar is toast anyway
The global warming issue, a move away from carbon based fuels
A lack of cash to run the U.S. imperial machine and more wars
Both Iran and Syria are tar babies with no exit stategy and funding Al kida-- Really?
Lets be clear, its the Federal Reserve Note that gets blown up we just happen to attached at the hip to the fed.
And you make an excellent point, rumors of pumping water into the saudi reserves to maintain pressure in the fields have circulated for many years since Kuwait. USInc.'s hand holding with the house of saud may not be advantageous as it once was Or, maybe back channel tension is becoming front channel obvious whether national policy change is announced or not.
It is hard to ignore the relationships in flux in the middle east, starting initially with Germany this year. The fed delaying German gold delivery 7 yrs was a slap in their face with USInc.'s backhand and now caught tapping Merkles phone?
Me thinks they have been watching "Rollover" too much... but, you never know.
That deluded, arrogant desert simian must be insane. The "prince" is so far removed from reality he actually thinks he can piss off not one, but two super powers and live. The fucker first threatens Putin to play ball with Syria, then pisses on his only American lifeline in a world which universally finds his entire fucking country abhorrent.
He is still reading from the zionist/neo con PNAC script, while any western politician with half a brain knows the game is up and runs away to disassociate himself from it (until the next opportunity, after the sheep have had some time to get selective amnesia).
I give him 12 months to live. As for his country, the key to its survival is Israel. If the Israelis turn on him, or he turns on them, I expect a very rapid uprising with 24/7 media bombardment about the terrible (and real this time) human rights abuses and terrorism perpetrated by the evil "royal" Saud family. When the bombs start to fall, he'll be screaming for his friends, the Bush and the Cheney family to make it all go away. These rich and powerful idiots never learn, which is quite comforting. I hope the whole disgusting lot of them get what they deserve.
+1, and more if I could. Sometimes, strong words and passion express things best.
The US has a Monopoly on money and a seemingly endless supply of Monopoly money to play with, perfect... until it is not. The Power to play the lead in this game is the trump card. Get out of jail free cards are easy to come by for now, just ask Jamie Dimon, Hank Paulson,Angelo Mozilo and Jon Corzine.
Stop talking an do it already. Kill the petro dollar. Talk is cheap.
Another reason to leave the petrodollar is because the US Fed and their printing the value away are making chumps of you.
Countries world-wide should be dumping their US dollar holdings (And quickly) and no longer accept the US dollar as the reserve currency.
That process is underway. The revolution will not be televised - or published in any corporate owned main scream media.
Geezus fuck. Just go away already.
Wanna "kill the Petro dollar"?
Ride a bike!
The whole "The Saudis are Behind It All" meme is so fucking silly I can't even believe that TPTB are trying this.
Seriously, anyone who believes the Saudis are capable of anything is really gullible.
Nice try, PTB! NOT!
Although I generally agree with the author, he gets something very wrong:
"Saudi Arabia desperately wants the U.S. military to intervene in the Syrian civil war on the side of the "rebels". This has not happened yet, and the Saudis are very upset about that."
The US shadow military is knee deep in innocent's blood on the rebel side of the Syrian shitshow, and has been supplying the blood bath fromthe getgo. The Saudis are well aware of the situation. Ergo, this is another dog and pony orchestrated brouhaha, and who is the maestro? Who are those puppeteers anyways? Hmm, could it be...Satan? No? Well, maybe it is Satan's minions, those unholy international banking cartels and multinational offshore antihumanist corporate demons.
Well, it IS all about resources. And That is most certainly serious business. Historically that which is coveted ends up causing disturbances.
The powers in SA are quite aware that their days are numbered. I suspect that Bandar see that they're now being used by the US in the strategic US vs. Russia game. Really, both the US and Russia really have no need of a collapsing SA: the US wants to get away from the collapse; Russia benefits from any disturbance to global oil output.
It's a game of resources, who controls the markets. With SA oil decline (exhaustion or political disruption- take your pick, both produce the same result: decreased production) the US and Europe needs to have a replacement swing-producer, and the only dance partner left would be Iran. While I believe that Russia would prefer that Iran didn't take on the role, I don't believe that it's [Russia] strategically wise to apply much pressure toward stopping it; there is, IMO, not a lot in it for Russia to risk it: maybe just supporting low-level disturbances that fester, but no real big push.
And while the banking cartel may have a lot of say-so I believe that the real power lies in the hands of those controlling energy: the banking cartel's "services" are critical to the game, but the "game" is, as always, about physical resources.
Sounds like somebody wants another green revolution in their own country.
The world is awash in oil. And dollars. The reason gas is 4 bucks is the fed. Nothing more. Nothing less. But that's the deal they made. If the Saudis want to fuck around, and if we actually had politicians that looked out for us, we could drill so much fucking oil that the Saudis couldn't give theirs away. Even the threat to do it would collapse the futures price. Oil price can be manipulated just like a currency. Ask the Russians. They learned that the hard way.
And another thing.......let those fuckers go it alone in their own in their neighborhood. The house of Saud is not exactly revered by their own people, and certainly not by their neighbors. Let them go full-wahabbi or whateverthefuck. It will be a blast. In fact, multiple ones. The Iranians, Syrians and every fundementalist this side of Mecca would welcome that with open arms (and suicide vests). The petro dollar ain't going anywhere anytime soon. Unless you know of another military in mind that could protect them from long distance.
Exactly, and this fetish with other countries becoming owners of the reserve currency is laughable. They would need to quickly become a major importing nation, and that means raise the stanard of living of a lot more people than they currently allow. The dollar is backed by imports, not nothing.
I've been wanting to make this comment for a while. I don't know why so many people want the dollar to crash.
Most of you people need to really think about a world that the US doesn't have influence over. As screwed up as we are at the moment, we need to maintain our influence. A world run by Iran, China, and Russia is not the world you are looking for. Unless you are all idiots.
Maybe you haven't had your eyes open for the past 20 years, and especially the past 10. And do you seriously think it can be stopped or prevented by hoping it won't change?
This would not even be occurring if the US were not observably rotten to the core and uncaring about its absurd debt habit, police state apparatus, torture, renditon, and rank aggressive militarism. Google the words that China used last week, and take your blinkers off. The logic they cited was that the US is plainly far too corrupt, hypocritical, war-obsessed and a danger to everyone's future, and to every contry to be in such a position of undeserved global hegemony.
That rang-true right across the planet, virtually everyone agrees.
Now who's fault is that?
While I won't argue about America's state of rot, I can say that our debt has been enabled by the rest of the world powers. China would not have their power and wealth if they had not been willing to buy our debt and accept worthless fiat in exchange for all of their crappy goods. Same goes for every other country. If we are to blame then so are they for they have sold their soul to the devil for a few dollars moar.
"If the Saudis want to fuck around, and if we actually had politicians that looked out for us, we could drill so much fucking oil that the Saudis couldn't give theirs away. Even the threat to do it would collapse the futures price. Oil price can be manipulated just like a currency."
I don't want any "politician" "looking out" for me, thank you very much.
But how's the logic hold up on driving prices down so low as to kill margins for those producing oil from US-based wells? And when we burn it up faster it's only GONE that much faster. I'd have thought that this "strategy" (drill-baby-drill) would have been done a LONG time ago if it were thought to have any true impact (it was already figured that the global price could only be dented), before there was real risk to the USD's status as world's reserve currency started.
"Retaliations" are generally emotionally-based and, therefore, strategically berefit.
I agree with your last paragraph, except with the notion that the petro-dollar is safe. According to CitiGroup (http://www.businessweek.com/news/2012-09-04/saudi-arabia-may-become-oil-...) the tide will completely change in SA by 2030; figure that this is a relatively short timeframe -17 years- and that there will be plenty of shocks felt before this time is up. The Russians and Iranians now have the greatest say-so over what is to become of the petro-dollar, it is their influence with China that'll drive it all.
Caution: No smoking or truth around the US paper-tiger.
Attack on the whitehouse or washington by the Saudis? They did 9-11 after all. cough*lies*cough Then we get COG (continuity of government) and martial law.
I am seeing the things about SA and bandar being mostly about a paranoid and very concerned family wondering how they will stay on top now that Ghawar et al are on the decline.
The amount they need each year to stay in power(budget) is amazing.
LOL! Saudi Arabia burns through money like Elton John and Michael Jackson combined. They must need mega money to pay off their subjects with gold plated welfare. I remember when oil crash a bit around Clinton or Post Gulf War 1 (false flag). They had to cut back the money the Saudi populace gets and the moochers were not happy. Oil rebounded in a few years but the game may be up soon.
As one poster here mentioned the shark waiting for the swimmer to miss a stroke. Or a runner being chased by a bear and the runner is tiring. The House of Saud is losing steam and the Saudi public is the bear who will eat them soon.
My hope is Putin has some nice gentlemen visit the House of Saud scum when they go to exile in London or Switzerland or even Colorado or Boston.
Bingo. That combined with not being able to milk what's left due to the economic depression leaves them very worried at night about the masses that hate them as much as I.
They're stirring up shit just to keep the US fleet buying.
"Dual Use? The Iranian Nuclear Program" 11/6/12 by Patrick Truffer http://smallwarsjournal.com/jrnl/art/dual-use-the-iranian-nuclear-program
Why is this of interest regarding the PetroDollar? Saudi Arabia as with so many ME`OPEC members use most if not all their natural gas for desalination and heating, eg. "at the end of 2007 and the beginning of 2008 when Iran was confronted with a harsh winter, its supply of natural gas came from Turkey.
The world has changed in the ME... and ironically they're willing to exchange "Atoms for Peace" with the U.S.! It goes back forty-plus years, but is being reinvented! Just ask Iran! It's quite simple-- just sign the NPT papers, Additional Protocol Agreement... allow the IAEA to inspect and your on your way. France, Germany, Japan, Russia/ China and of course the 'Great White Elephant in the Room', USSA will supply all your energy needs! Just don't fuck-up. They'll supply the fuel, Period! Again, don't fuck-up or your toast... believe me.
Israel doesn't want anyone in the ME to have Nuke's,... especially if they can have a 'nuclear-enrichment (5%-19.75% Max.!!!) program'! Can't say that I blame them, but, it's the 21st century and fossil fuel won't be around forever, but uranium's yellowcake is in the dirt under your very feet (?) and will be forever!?!
Bandar is a tyrant like all the Saud's, Period! A ruthless maraudering tribe of bedouins that were in the right place at the right time when America handed them the Crown`Jewel! They have no religion, but claim they are the caretakers of Mecca,... the holiest city in Islam! They make a sham of Islam... carving up the Sunni and Shiite, creating perpetual chaos! The game is up! The internet has exposed their evil!
So, in summary the USSA will do just fine if we can get Iran on board and bring the inferno fires of Syria some cooling down by keeping the Saudi's at bay and Muzzle Bibi!!!
There are great changes coming to the ME as America cuts it's umbilical cord and starts acting like a grown-up, and not the world's 'Sand-Box-Bully'! (esp. in the ME!)
Ps. China's is overextended, and Russia just ain't ready yet-- JMO
Ref: "Media Pushes Narrative That Arabs want War with Iran, Ignors Cables that show Arabs urging Restraint" 12/1/10 by Zaid Jilani http://thinkprogress.org/media/2010/12/01/132803/media-iran-ignoring-warning/
Ps2. Ref. `IAEA' ( transcripts of interviews, briefings, media interviews, and press briefings -- archives, etc., etc.,) Site: http://www.iaea.org/newscenter/transcripts/
Ps3. Think of the manufacturing jobs, and the revenues the USSA can (could/ should) also get by allowing export of our crude oil. Just end the FRB System , it's that easy :-))
How bad will it really be when all these things happen at once :
- end of petrodollar
- end of deficit
- skyrocketing interest rates
GDP will crash by at least 40-50%.
But but but...I thought 'globalization' was like M.A.D...if we go down, they all go down.
So the worlds largest economy with the worlds biggest military should become nothing more than a hit man for another country? Should we violate international law because a ruthless Monarchy wants us to?
where have you been all this time? There's tons of backroom deals and horsetrading going on. That has resulted in military strikes/coups etc. quite a few times
careful now...Saudi Israeli aims are aligned on this one and both are shocked the tail aint wagging the dog. (but what is working nowadays)
all three are basically against Russkies (Syria) and China (Iran crude). OB/Kerry stepped in it and Putin obliged and pulled a rabbit out of his ass but this aint over.
i'm more worried about our British enemies setting up FOREX w/ China and keep an eye on Kish Island Crude exchange in our nuclear 'negotiations'. u think the Israelis/Saudis are pissed now? this will get ugly. very ugly
we've had 40 years to prepare for this day,...? as i've stated before... the USSA is at minimum a decade ahead of its closest adversary in intelligence and the wherewithal to apply it! we can survive without the saud's-- but, they can't survive without us, period! remember '911' !!! i will never forget! it was the saud's, period! and, i wouldn't doubt if it wasn't the saud's that whacked iran's two top nuclear scientist (mossad getting the blame), and Bandar's 'Boston Marathon'! this guy Bandar has a problem,... a big, big problem, now! Ps. it was the saud's that started Syria's civil war. let em do business with the british if the british dare!!!
jmo
"...It is paper currency that is backed up by absolutely nothing..."
that is not really a correct statement....it is backed by debt and faith and good credit of the usa which is code for taxation.
The debt is backed up by the good faith and credit of the US government (and hence taxation), but I'm missing how the paper dollars in my pocket are backed up by that?
Not true. It is backed up by the savings and 401k's of the 99%.
In other words, it's backed by the slave labor of Americans. I am trying to teach my college freshman son and his girl friend this truth right now. They are grasping it, I believe.
Taxation = slavery.
...that's not really a correct statement either...it is backed by the ability to project force sufficient to enforce tax collection.
Good article. That coked out vampire John Mauldin doesn't know the math on a basis point? 1/10th of 1% is 10 basis points. 100 basis points = 1.00%. If you're cool, or a Banksta, you call them bips.
And reduced interest rates saved the US $100 billion a year? What about TRILLIONS... if interest rates were free market, they would be in the 10%+ range for the 10 years... which would cost a whole lot more than +100 billion a year in debt interest payment.
An idea for Saudi Arabia's dilemma.
We nuke the shit out of this tent dwelling backward village which predominately lives in Riyadh. Then we make a glass parking lot out of Tel Aviv and Haifa.
Two birds with one stone.
Problem solved!
Since you like long shots..... you have a greater chance of winning the Powerball
I hope that you weren't one of the people advocating passivity with regard to Syria as you now propose to commit genocide in KSA and Israel!
No actually I'm just keeping score.
If you factor in 9/11 (which they both were duplicitous in their involvements) along with the selected bunch at the top of our government that took the money and direction I'd say it would be more than justified. This doesn't even take into consideration all of the manipulation of our IC and defense communities over the years like the planning of Northwoods Lavon Affair, U.S.S. Liberty Lebanon 1983, the U.S.S. Cole... And on and on...
I always like to mention the cost that has been associated to the American taxpayer in keeping the Israeli alliance since it's inception including building their war machine and yes nuclear arsenal (they don't have) that threatens everyone, including in more recent years that thing that happened in Japan that may end up killing all of us.
So in reality the U.S. is to blame for creating two very real monstors of there own making. Maybe it's time to take care of the leadership in Washington that keeps taking care of the both of them and just "call it a day"?
We are going to see some weird combinations of alliances as time goes on. Necessity makes for some strange bedfellows.
Didn't the saudi's demand ro be paid in gold in the early seventies when the USD was suffering from inflation.
Ummm, that was pretty much every other country on earth after Nixon closed the gold window.
Here's an idea..........
Why don't we drop the filthy rag headed terrorist/extortionists Saudis for the once villified/now our new best friend Iranian regime.
Because we fucked with Iranian politics and sovereignty (want freedom? you get shah!), shot down a passenger airliner (in cold blood, "Amerikkka, fuck yeah!" - say the Reagan Youth), spent decades demonizing them (BombBombBombBombIran), and now they'll have nothing to do with your arrogant pile of exceptionalist hubris.
Funny how ALL of the founding fathers warned posterity about entangling alliances yet out of 195 soverign countries in the world 2 of our "allies" (Israel and Saudi Arabia; who are nominally allied with each other at our behest) have done more damage to the United States than all of our enemies (perceived at least) combined.
you got that story upside down :
When US hit peak oil and peak gold around 1971, they jumped on the Ghawar bus to save their way of life singing "our money your problem." They practically instated Israel as Templar state, official guardian of OIL Jerusalem and did a deal of profit sharing with the NEw Ayyubid kings of Arabia sitting in Riyadh. Recycle those petrodollars bitchezz...and hello inflation!
So these allies became vital for US and surrogate Europe's lifeline on the export model of oil bonanza, source of consumerista nirvana.
Now the empire is caught up in its own contradictions. Don't blame the gnats for living off the hide of the buffalo.
That's what buffalos are for from the perspective of the gnat; until the long horn dies.
There was once a frog that had an annoying gnat sitting on its head. No matter what it did it couldn't make the gnat go away. The frog got so enraged that it jumped in front of an oncoming wagon wheel and caused the wagon wheel to crush the gnat sitting on its head. <Asop>
For Yen Cross: Weekly Petroleum Status Report from EIA. We'll see what happens:
http://ir.eia.gov/wpsr/wpsrsummary.pdf
Obomber was ready to move on Syria.. Public outcry caused a Congressional vote.
Americans from left, right and center lit up the phones in Congress at the same time. However, I think the Joint Chiefs were told by the Russians and Putin that they were not walking away from this one.
The US Navy would have lost some ships. A war game where, I think, a old Marine officer create a rag tag navy and sunk quite a few US Navy ships in the simulation. Putin's AA and anti-ship missiles are world class stuff. I am sure China chimed in as well telling the USA to back off.
Hogan's Heroes appreciates your viewership.
Obama didn't need congressional approval and he even said that. Obama was hoping congress would give him an out. Obama didn't want to engage in Syria, but he has no guts so he wouldn't admit that.
China has commercial interests in every country in Africa and all are expanding, i do not recall any of the rag heads killing or kidnapping any Chinese. With a population of over a billion and industrial wealth and power, they can easily field a modern army of a million men with air and naval support. In a couple of months of real war as opposed to our humanitarian nation building nonsense. They would have complete control of any objective and there is no way we would do more than talk. We would not get into a nuclear exchange over a bunch of desert scum.
This Saudi story is not getting the attention it deserves. Anything that could end the petrodollar system is big.
I heard from the parent of an 82nd airborne that 30,000 are headed for Japan to train for....Syria. Supposed to arrive 11/20 or so.
so much for 'no boots on the ground' if this is confirmed.
Putin better get some ships over there and he and China better tell the USA hell no.
Don't bet on it, the Russians just held the largest military exercises since the fall of the Soviet Union, they are ready for major combat engagements again. If the US were training for Syria they would be doing it in the ME.
Me thinks the US should do an Italian and switch alliances. Negotiate a new petro dollar deal with Iran and then go on to liberate Saudi and store it's gold in the same place their storing Gaddafi's gold.... unless ofcourse that's in US politicians Swiss bank accounts.....
Bandar Bush America basher, wow. He might start looking for Drones. I expect the US reaction is to call up the Chinese and Russians and ask them how they want to spit Saudi.
\
Bandar and the bum's rush is on the way just like the others when their time is up as friends.
Good or bad, right or wrong, I think the Saudis would be doing themselves a favor at looking at the history of countries that threaten the petro dollar.
The Saudi's have more to lose with this outcome - a major FX exposure!
Bandar should be shot dead.
It seems to me that the Euro is much more stable in the long term and holds its value much better than the $US. I don't think it would destroy KSA if they sold oil in Euros and US dollars.
That wouldn't, but the cruise missiles most definitely would.
"You see this little revolver I have brought to make my point, brother Dubya?"
Ever notice how the 0bozo regime is managing to fuck up US relationship with damn near every other nation on Earth?
Because there aren't any idiots in Congress or in the media ever.
Some of these relationships were fucked up by Carter and Reagan, but if it makes you feel better to throw poo at the puppets, have at.
There isn't much downside for Saudi Arabia here. Russia already supplies KSA with military weapons. It also isn't just Syria and Iran, but it is also Egypt. The gulf coast states have replaced the USA in providing Egypt with aid.
Obama has systematically turned his back on Sunni Muslims, in exchange for false hope and failed promises from Iran.
Obama's foreign policy will turn out to be an absolute disaster for the USA for years to come. Obama's legacy will make Carter look like a foreign policy genius.
Sure, because Americans don't burn gas like it's going out of style while exporting little beyond low-yielding promissory and sell weapons to every eager trigger finger willing to play along (with Petro$, mind you, very important, small, unmarked, please...oh, fuck it, we'll wash it at the footie match on the way home).
http://thinkingaboot.blogspot.ca/2013/10/saudis-flex-their-oil-muscles.html
The US is a net exporter of Oil. So why do we buy it from the Saudis? This is why. This is why Obama had to try to take the US into a war with Syria. And this is why, in a few months or maybe a few years, there will be an announcment that OPEC will now accept Yuan - which will be backed partially (10% of value maybe) by basket Gold, Silver, Rare Earths and OPEC Oil. All China has to do to get the reserve at this point is offer a better deal than the US. Saudi Arabia will then, of course, wage a covert war inSyria using Chinese troops and weapons. WE won';t hear much about it in the US of course, because we will be too busy with a Civil War and a famine to care. Go Leftists. Go get your free lunch... while it lasts.
Not very illuminated after all, it turns out.
Trying to switch to something other than Dollar worked real well for Sadam.
GW jumped real quick to carry the Saudi's water on that one. We should earn some points with them over that, no?
"Trying to switch to something other than Dollar worked real well for Sadam."
Yes, but is has gotten to a point where we are outnumbered.
Make your peace with God - there's not likely to be much peace elsewhere.
Saudi is just trying to learn the skill of Israel.... Complaining and manipulating without doing lasting damage.
The tail wagging the dog still has a few years to run.