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Federal Reserve 1 - 0 Saudi Arabia
Since we last updated the state of Saudi Arabia's reserve stash, things have gone from bad to worse. It appears the battle to crush US Shale producers is taking its toll as The FT reports, Saudi Arabia is burning through its foreign reserves at a record rate as the kingdom seeks to maintain spending plans (and thus social stability) despite lower oil prices. All the time The Fed remains 'easy', no matter how negative US Shale cashflows are, the muppets will buy their debt and keep the mal-invested market alive. Saudi reserves are now their lowest in almost 2 years (but they have plenty more to chew through to out-wait The Fed).
Saudi Reserves have dropped to 2 year lows and fallen by the most ever in the last 2 months...
The central bank’s foreign reserves have dropped by $36bn, or 5 per cent, over the past two months, as newly crowned King Salman bin Abdulaziz al-Saud dips into Riyadh’s rainy-day fund and increases domestic borrowing to fund public sector salaries and large development projects.
The latest data show Saudi’s foreign reserves dropped by $16bn to $698bn in March, driven by public sector bonuses paid by King Salman after he assumed power in January. This follows a fall of $20bn in February. Saudi Arabia has spent $47bn of foreign reserves since October.
As one analyst noted, “There is a need to rationalise spending,” as King Salman promised a bonus payment for military personnel engaged in the kingdom’s month-long bombardment of Houthi rebels in Yemen, a campaign that itself added pressure to state coffers.
...
“The [military] bonuses are not an encouraging sign,” said Steffen Herthog of the London School of Economics. “It shows the knee-jerk reaction to political challenges is to distribute more money.”
* * *
The royal family, whose social contract with the people offers cradle-to-grave care in return for loyalty, is seeking to reduce state subsidies without sparking popular anger. But analysts are unclear how quickly the government can move on such a sensitive topic.
* * *
Simply out, as long as The Fed keeps ZIRP, it will cost Saudi Arabia.
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The worst post in Zerohedge's history
Worst since Lehman?
awesome
If the Saudis want to step it up, all they need to do is ask for their offshore Gold to be returned....
Saudi 1 Fed 1
Business is Business. SA has Oil Clout, but USA would look askance at returning Gold.
However, when you are cash starved, when you have an Obvious Reserves problem, but can't stop till you ruin the Industry... SA could get a way with a short term request for Gold Reserves.
Short term 2 years. 5-7 years would not help with the Driving of Oil Price to $50. USA would stall, stall, stall.
Actually, most Saudi Gold reserves are in London and Switzerland but the CB's are all colluding together via Loans and Paper. So net result would be the same.
The Saudis will have about as much luck getting their gold back as the Germans have had.
Yep pretty sucky post.
So they spent 5% of their foreign reserves in 2m while giving it away to their people and making war.. wow..
700 billion USD for a small country like saudi arabia is a lot of grass to chew on. Surely war is expensive, but how does it give the FED 1-0? At this pace, which must be on maximum speed, it would take saudis 2 years to burn through their reserves. Sureley it might happen a little faster if the oil price drops to 0.
There is no way the shale industry will outlive the saudis production if they intend to crush the shale. And there is no way that the saudis are dumping the oilprice to damage the US shale production. American puppets do as their masters are being told by ze banksters.
One man's burning foreign reserves is another man's dumping foreign reserves.
Dr. Jim Willie has a friend who is German or Swiss old guy. Jim has said for months that the USSA and UK have stole all of the Saudis gold in London.
Precisely
BWHAHAHAHAHA HA
If the Saudis want to step it up, all they need to do is "ask" for their offshore Gold to be returned....
BWHAHAHAHAHA HA
Any shill with a JD will tell you possession is 9/10ths of the law.
Fed 4. 5 trillion - 0 House of Saud, though the Bonus Round just ahead looks like Saudis will get to bathe in and eat that black ooze they keep pumping from the ground for less and less margin....
And Tyler says ... we posted some folks.
WE suied some folks.
What is "suied"?
So I'm supposed to believe that PETRODOLLAR JOOBUX are bad for KSA...
Ok then... THX 4 letting me know who I have to hate today, to, supposedly, keep my mind OFF of of what's happening somewhere else....
FED vs. Saudis? No chance. Both have same master.
As for the Saudis burning through reserves, fat chance of that too. US wanted this crash, so the US is paying for it. And notice how other OPEC members haven't been complaining for months?
They got their sack of cash too, no doubt.
The oil crash is the beginning of the fall of the US, planned for decades, with the Manchurian candidate in office. The one groomed to be a constitutional lawyer, so he could study the constitution and know it's weaknesses in preparation to destroy it.
Want proof that we're watching the fall of America? Simply ask yourself why a freedom hater like Obama would become an expert on the constitution. Then look at his actions, and how he faces no resistance.
The FED could fix the oil price any time they want, but Yellen brushed it off as a "tax break."
Bulls should think long and hard about that while betting oil will see $100 again.
"Obama.... expert on the Constitution". LMAO. like all of Barry's BS - it's all smoke. Means nothing but sounds good - like Community Organizer. WTF is that? Fuk l need a drink
i agree. obama is making bipartisan the radical authoritarian changes instituted by the more influential and visionary bush (although clinton and prior regimes back to reagan, lbj, even woodrow wilson did some important softening up).
the problem isn't weaknesses in the constitution but in the constituents and their representatives.
Yellen has the ball on the edge of the box, she fakes Al-Shuliman out of his shoes......bends a curling shot. Goalllllllllllllllllllllllll!!!!!!!!!!
Then she does an adjustment of her cup...
Low oil prices? Last time I checked oil has only been more expensive than $55 for all of about six years in the last 100.
The long term average is somewhere around $26. Considering the Saudis pull it out of the ground for $6 I think they would be happy with anything over $20.
Your 100 year average is not adjusted for inflation so its a worthless exercise.
Saudi Arabia could release the details of who they worked with in the US to bring down the WTCs. We already know; just need the details.
wtc you say A
keep it 2 yourself hush hush need to know basis loose lips sink liberty ships and all that what what
Israel did 9/11 - All the Proof in the World
https://www.youtube.com/watch?v=NUbTe50UUgM
Funny thing happend today streaming Sophia Smallstorm's 911 Mysteries. Very well put together. All of a sudden took a power hit (eq. on ups). Restarted AppleTV, poof...youtube app gone. Did a search on it. At first people were screaming APPL. On further search it appears GOOG killed it at that very moment & also on a streaming DVD player. No longer supported A/O 4-20. Will have to buy new EQ if you want to stream. Since I get most of my video content from youboobs, I was hopping mad. I have to suspect either a pithing contest between AAPL & GOOG or merely revenue generation via ads that no one pays attention to.
I must say it was more than a bit coincidental given the content I was streaming at the time, not to mention the method. It just vanished.
Yeah maybe if Princes and attache's are cash starved, some will turn Whistle Blower on WTC. Maybe.
until then check out JFK-9/11: 50 Years of Deep State – August 22, 2014
by Laurent Guyenot
Put your life in someone elses hands and they are bound to steal it.
when the drunken sailor runs out of money then what? on a timeline...
The Saudi's have been raking in oil money since the early 70's. It is kind of hard to believe that they only had $50B in foreign reserves in Jan '01.
Official reserves.
The Royal families stash is seperate and Huge.
I wouldn't doubt their stack has been turned into taels.
saudi arabia is an intellecually dead country. If every citizen in it disappeared, the world would have an average raise in their IQ score. All they have is the wests need for oil.
listen you evil antisemite the house of saud are jewish royalty.
retract your hate goy or suffer the wrath of caananite kabbabababallallas
All kidding aside, normally, most countries would be afraid of Purges in this case.
- Saudi Arabia has too many wealthy princes spending money
- Not clear that they are dedicated to Public Education & Welfare
- If Princes stop giving stipends, spending money, building shopping centers & Tall Buildings, clearly could see not only economic halt, but construct stop on new buildings
- Where do the funds come from to clear sand off the Roads
- Saudi High Trust Fund?
- Ports & Railroad Trust Fund?
- Remember all those Foreign workers from Pakistan living in shacks, someone gonna feed them and keep their showers working? Was it like 1 Million Pakistanis 10 years ago working as Construction Day Labor?
- If you have too many Scheming Princes or too many Intelligentsia... Normally the expensive people get Purged
KSA is way down the list in per capita income compared to USA:
http://www.photius.com/rankings/economy/gdp_per_capita_2013_0.html
I still can't prove it, but the run down of oil prices and the run up of the dollar starting about the same time are linked.
Zion has let the Saudis in on the "exit" from the dollar in exchange for playing oil-price whack a mole with Russia. That Zion will end up controlling all of the shale assets via foreclosure is just an added bonus.
This so-called reserves depletion is just the Saudis moving assets around as they shift into the euro and shekel.
Liberty is a demand. Tyranny is submission.
The dollar is up on "exit," not on "strength."
We all know they can't do this forever. I hope I live to see the day when the royals get canibalized by their own people. Would be a pitty that no one would see it since all of the journalists have had their heads cutt off or been burned alive.
I can't wait for a big Sci-Fi movie where Sheik Yerbooty sits in a bombed out penthouse at the top of the Burj with his pimp 'Dubai Doogie', crying in his Moet and screaming at his stool man that, as a camel jockey, "I coulda been a contender!"
Just to state the obvious: "The Saudis have zero ability to control oil prices". The Saudis are a slave to the banker managed (non)markets. "So called" bankers manage price.
The Saudis only had two choices:
1. to continue to produce at their then current rate
2. cut production
The Saudis chose the route that caused them the least pain. They continued to produce.
... and even with the continued production, we are told they burning through cash.
The Saudis have been f*cked by the bankers they trusted. Take it in the *ss Saudi princelings. Lloyd Blankfein is laughing at you.
BoPeople The Saudis have been f*cked by the bankers they trusted. Take it in the *ss Saudi princelings. Lloyd Blankfein is laughing at you.
------
The current cost of oil extraction is still profitable for SA.
Even though their revenues are down, the problem is that they aren't cutting their government expenditures to match it. Just another example of government failure. It has nothing to do with bankers. They could solve their potential future problem if they were fiscally responsible. But governments are rarely fiscally responsible.
It wouldn't matter if no bank were involved. They are fucking themselves by being fiscally irresponsible.
The Saudis found what will crush them. Look for fancy new tech from them involving Lithium and Nickel. The collapse of oil was when they realized this. The actual collapse of oil will be a little more dramatic.
This new device would go nicely with that emerging Lithium and Nickel technology. http://dearchimedes.com/
Along with its claim of being able to achieve 80 percent of Betz' limit, The Archimedes adds that "The Liam F1 generates an average of 1,500 kilowatt-hours of energy [per year] at a wind-speed of 5 m/s [16.4 ft/s], which resembles half of the power consumption of a common household." Needless to say, it will be interesting to see what independent testing reveals. The company states that it has tested the Liam "over 50 times" to confirm the figures, and has already sold 7,000 of the turbines in 14 countries.
That said, the Liam F1 Urban Wind Turbine should be officially available as of July 1st. Although no price was given in today's announcement, a previous posting on the company website puts it at €3,999 (about US$5,450).
http://www.gizmag.com/the-archimedes-liam-f1-urban-wind-turbine/32263/
http://www.extremetech.com/computing/153614-new-lithium-ion-battery-desi...
Then was Saudia Arabia really trying to play a game like that, with such short term limitations? More like they kept up production to get the most money possible before it turns down again, they are scrambling.
The Kingdom has to match its imports to exports (which keeps the forex reserves, at whatever the level, constant) at some point in time for sure. But that time is not right now. They can go on for atleast one more year before looking at cutting their imports.
The cracks appear in the Pax Americana construct of Dear Henry.
If the Sunni alliance around Saud now finds itself fighting the Iran/US axis regionally, 'cos Jihadism is now replacing Ayatollahism as the new menace to West, then all past 50 year deals are unwinding fast.
Saud hits out at US shale its global challenger and realigns itself with the new giants of tomorrow: China/India and who knows maybe even Russia, if Turkey joins the anti US financial/energy clique in name of Sunni solidarity.
The EU now has an interesting choice : Does it stay aligned to USD hegemony or does it move to replace US influence in Sunni lands, pretexting it has a better solution to appeasing the dystopian fall-out of GWB/Cheney's horrendous policies in Afghan/Iraq wars that have destroyed the region. The Gulf council with Hollande currently and the upcoming meetings of Saud and Potus will tell us how the Saud alliance plays out.
I see some deep rumblings under the carpet. Obama is now aligned to appeasing Iran whereas the neo-cons still support Saud. Where will Pax Americana move to in the coming months/Years?
Big geo-political shift. Along with TPP plays with Japan to counter China, this ME game and Asia re-adjustment is where all the action will be.
If Ukraine/Syrac is the new cold war frontier in Europe. If the Sahel/Libya channel is the challenge to Jihad's claim as rival to Western influence in Africa, the South Asia frontier around Asean countries and the South China sea will be the bone of contention between Asia rising and Pax Americana cum Japan cum Australia alliance.
We are heading to some awesome realignments, as the financial world reaches a hiatus of too much debt and too little growth; with a global FIRE economy, stawks and bonds alike, all pumped on steroids, now feeling their Thelma and Louise moment angst in deflationary fear limbo.
I see what you are saying falak, however it is my belief that we are also at a paradigm change in technology at the same time. The danger is the social transition, and whether we assert ourselves to influence the new rules (policy), hence my call for DATA RIGHTS.
CHS has an article today that touches on this.
"This creates a dilemma: we want more prosperity and wider opportunities for self-cultivation (personal fulfillment), yet we don’t want our security and culture to be disrupted. But we cannot have it both ways. Those who attempt to preserve their power over the social order while reaping the gains of free markets find their power dissolving before their eyes as unintended consequences of technological and social innovations disrupt their mechanisms of control.
Yet rejecting free markets also fails to preserve the power structure, for a citizenry denied the opportunity to prosper chafes under a Status Quo that enriches Elites and relegates the masses to stagnation and poverty."
http://www.oftwominds.com/blogmay15/innovation5-15.html
Those who reject "free markets" are the same who created the meme: invisible hand!
Those who pretend serving the ideals of Islam destroy it today in sectarian suicidal games; just like the Popes of old destroyed the universal relgion of Love that became their Papal Crusader world games-- followed by the Inquisition at home (think CIA abroad, Homeland security at home, Templar/Venetian banker's network all over)--leading to the collapse of the Roman church's hold (from Renaissance to Enlightenment period, bringing down with it the divine rights of Kings; the other half of the Papist/Royalty christian combine).
These power combines always end up hanging to their own ropes that they have created for others to dangle from; power corrupts to the point of killing the killers. But they take a lot of innocents on the way.
Innovation is a tool, its not the key to human survival. The key to survival is avoiding excessive power in any construct. Balance of power and open society creates the Mindset where knowledge and innovation point the right way; the tools serve humanity and not power constructs destroying humanity.
I can't wait for this house of cards, oooops, I mean House of Saud, to blow up and get scattered all over the desert. The place is an embarrassment to the human race.
In the meantime, has Cushing filled up yet? Wasn't it already supposed to be full by now and oil at $20? Gee, wonder what happened to those charts??????????????
Once all the US$ been spent they'll accept payment in Yuan. Now who has the last laugh!