It's Been A Rough Week In The Middle East

Capitalist Exploits's picture

By Chris at www.CapitalistExploits.at

...and it's only getting worse. Bin, by the way, means "son of" in Arabic.

This is why there are "Bins" here, there, and everywhere scattered across the Middle East. And some of them are having a rough week. In particular:

  • Prince Mansour bin-Muqrin who just died in a helicopter crash near the Yemen border. Could it be...? Nah, I'm sure it was just an accident.
  • Prince Abdul Aziz bin Fahd was shot dead as authorities attempted to arrest him.
  • Prince Alwaleed bin Talal, the 34th-richest man in the world (eclipsing King Salman himself) with an estimated net worth of US$28 billion, was arrested.
  • And 11 other princes have been arrested and bank accounts frozen. (on a side note... I wonder how many wish they'd bought bitcoin?) And here we all thought that capital controls were only a problem for poor and middle class Venezuelans. I guess Jamie Dimon has just been proven wrong.
  • Now, this morning I read that hundreds (yes, hundreds) of others have had their accounts frozen.
  • Also arrested this week was Miteb bin Abdullah. Now, this guy was the head of the National Guard and a son of the late King Abdullah, who died in 2015. He has long been considered a potential future king, and given that he's led the military, which involves protecting the royal family, this is pretty simple. This is the removal of obstacles that could prevent Mohammed bin Salman from succeeding the king.
  • In June, the former Crown Prince — Prince Nayef, who is still under house arrest, was ousted. Why this matters is because Nayef was next in line to the throne and arguably the closest U.S. ally inside the monarchy.

Shock and awe Vin Diesel style!

Adding fuel to the fire we have declarations of war.

Saudi Arabia amazingly said that Lebanon had declared war against it, blaming attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.

As reported by Reuters:

Saudi Gulf affairs minister Thamer al-Sabhan told Al-Arabiya TV that Saad al-Hariri, who announced his resignation as Lebanon’s prime minister on Saturday, had been told that acts of “aggression” by Hezbollah “were considered acts of a declaration of war against Saudi Arabia by Lebanon and by the Lebanese Party of the Devil.

That's quite a threat and declaration. But wait... there's more!

As reported by Al Jazeera:

Saudi Arabia blames Iran for missile attack

Saudi Arabia has accused Iran of being responsible for Saturday's ballistic missile launched from Yemen that targeted Riyadh airport, warning that it could be "considered an act of war".

Now, if you remember what I said earlier this year when discussing Qatar, which was a trial balloon as I said:

The real issue here isn’t Qatar.

They are merely a pawn in this. The target here is Iran, and now that Chairman Trump just gave the Saudis a “we’ve got your back” pledge, it’s time to move things forward.

So to summarize:

The arrests had been decreed by the monarch, King Salman, and carried out by his increasingly powerful son and heir, Mohammed bin Salman, who, for the sake of brevity, I'll call MBS. MBS is in the process of completely upturning the established order so this promises to be more exciting than a Hitchcock thriller.

But first, some background...

Tribal Society - A Gang of Thieves

Saudi Arabia is a tribal society where order has been, up until last week, maintained by a consensus amongst the various branches of the Royal family. Up until now it's been unthinkable to publicly shame, humiliate, and imprison other members of the ruling family, and so fracturing this established order is a big deal. A really big deal!

This is not like admitting at a family gathering to having snuck into auntie's beach house for a quickie with the cute waitress at the corner coffee shop.

Rather, it's like telling them you've already burnt down their homes after becoming a transvestite. It'd be a huge shock, and that's exactly what the families are experiencing right now.

You see, the way it's worked is that the families all have a stake in the system, and this in turn helps secure their loyalty. What MBS has just done is to completely shatter the way things have always worked and in so doing destroyed any loyalty and trust.

So what the hell is happening?

To understand what's likely taking place let's follow the money.

Here's what we do know:

Oil makes up 90% of Saudi government revenue, and the entire place is a giant welfare state. So the price drop has been very painful and they’re bleeding through their reserves.

Source: tradingeconomics.com 

In fact, according to the IMF, Saudi Arabia is set to burn through all of its cash within five years.

This is why the market is putting more pressure on their currency peg than at any time in its history. I wrote about this back in May when I said the Saudi sheikhs only have two options.

This is also why they need to list Aramco — in order to shore up their finances.

Not only have weak oil prices hurt them. They've been engaging in futile silly wars... and these things cost billions. Yemen, Syria — both of which they figured would be easily won and over in months. Oops!

So their expense column looks horrible due to their losing billions in wars and welfare, while their revenue column has been under severe pressure due to the price of oil.


Here's brent:

In fact, their status as swing producer just ain't what it used to be either. They've the US to thank for that.

Here's US oil production:

What else do we know?

We know that the house of Saud is Sunni in a region bordered predominantly by Shia. In their neck of the woods they are, therefore, the minority. Kinda like the Israelis. Thus far, they've managed to keep things together though constant skirmishes with their neighbours keep popping up. Notably Yemen. Any dissent within their own borders has been met with a combination of brutal crackdowns and, as mentioned, a giant welfare system. People who're fed well tend not to complain.

Importantly, the Wahhabi sect tolerates other religious or ideological beliefs in the same way you and I'd tolerate a cockroach on our kitchen bench: Not so much.

For instance, in all its 50 years, there has not been a single non-Sunni Muslim diplomat in the embassy. These guys are so radical that the branch of Imam Mohamed Bin Saud University in Fairfax, Virginia instructs its students that Shia Islam is a Jewish conspiracy. 

So with that backdrop: Finances in turmoil, a bunch of rich (15,000 odd) squabbling family members, being a minority in a dangerous region, which has ruled brutally, what would you be thinking?

I know what I'd be thinking. 

I'd be thinking that the House of Saudi is like an expiring option contract and it's out of the money. Some in the family realise that, namely MBS.

This is why he's been pushing forward to liberalise the economy. It's not hard to look across the pond to the success Dubai has seen to realise that Wahhabism is antithetical to economic growth. And so if Saudi Arabia is to survive and the Royal Family to survive, by default, they need a plan. And fast.

This requires getting rid of some of the clerics and old tribal establishments. This has been taking place ever since MBS moved into the gilded rooms 6 months ago.

What you've got to remember is that the old guard don't want change, and these guys have depended 100% on oil revenues.

It looks to me like MBS sees this for the expiring option contract that it is. My best guess is that he realises that if they wait too long, by the time the welfare money has run out, they'll all be overthrown. The old guard probably don't want to hear that, but it is the truth. And because they don't want to hear it, you need to get rid of them.

So why all the noise about war with Lebanon and Iran?

Certainly, the enemy of my enemy is my friend applies, and Israel and Saudi have formed some sort of unholy alliance. It's clearly not so secretly backed by Washington because let's not forget that Saudi Arabia don't even recognise the Israeli state.

But why all at the same time?

I think Goering nailed it:

The first order of events it so consolidate power, eliminate anyone within the royal family that could pose a threat to what will be some radical changes to what Saudi Arabia looks like.

The second order of priority is to ensure the local populace don't get any funny ideas. Thus some pretty decent scare tactics. Threats of war will do that perfectly adequately.

And the unholy alliance with the infidels is to ensure that, should the going get tough, they'll have formidable military power behind them. Who better than the US and Israel?

This is one very risky initiative, but it's do or die for these guys. History indicates that when despots allow more freedoms and reforms, they are forced to begin using popular support in exchange for welfare. I can't think of one that's managed it. Typically, the lose power.

So, what do you think?

Saudi Poll

Cast your vote here and also see what others think is going on in the House of Saud

- Chris

"The rain begins with a single drop." — Manal Al Sharif

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RightLineBacker's picture

Here a Bin, there a Bin, Bin Bins everywhere.

Don't know if Chris knows what he is talking about, but I really like his style of communicating via the written word so therefore I like him regardless.

 

Iconoclast421's picture

All these princes and others who were arrested and/or had their accounts frozen were obviously the ones who wouldnt agree to being israeli muppets.

Freedom Lover's picture

The KSA is up Schitts Creek without a paddle burning through 150-billion per year and growing of their cash reserves and that is after they raised local petroleum and other utility prices and stiffed most of the foreign contractors working in the country. Their only option at this point is to go to war. It seems Israel will be on board with this but the big question is will the USA. God lets hope not. I don't believe Trump and Tillerson will follow the neocon play book but Mattis and McMaster might.

Warthog777's picture

Intel sources are warning of Yemini terror attacks in the West soon. Could be another 9/11 to get the muppets to go along with taking out Iran. Don't think the WMD story is going to work again any time soon.  Maybe that's what the Las Wages deal was all about.  Wahabiists partnered with Iran.  Maybe the  King had a come to Jesus moment when Trump was there and shown the writing on the wall.  (See what I did there?). Let's see, something like: "Knock this shit off"! "Either that or we turn these sand castles to glass." "You can be rich or dead, you choose."  Something like that.

Freedom Lover's picture

The KSA is up Schitts Creek without a paddle burning through 150-billion per year and growing of their cash reserves and that is after they raised local petroleum and other utility prices and stiffed most of the foreign contractors working in the country. Their only option at this point is to go to war. It seems Israel will be on board with this but the big question is will the USA. God lets hope not. I don't believe Trump and Tillerson will follow the neocon play book but Mattis and McMaster might.

Freedom Lover's picture

The KSA is up Schitts Creek without a paddle burning through 150-billion per year and growing of their cash reserves and that is after they raised local petroleum and other utility prices and stiffed most of the foreign contractors working in the country. Their only option at this point is to go to war. It seems Israel will be on board with this but the big question is will the USA. God lets hope not. I don't believe Trump and Tillerson will follow the neocon play book but Mattis and McMaster might.

Honest Sam's picture

Rough week?

Where the hell have you been for the last 2070 years since a couple of thieves and--- from all indications----a Jewish idealist, with no belly button, were crucified?

Warthog777's picture

I smell war a cumin.... Hello, Iran, are you paying attention? I think the Arabs have been green lighted.

DjangoCat's picture

The war part makes no sense to me.  Why would MBS remove the CIA hawks who have been financing war in Yemen and Syria, only to launch more war against Lebanon and Iran?  He needs to placate the region and stem the bleeding from his treasury.

 

aliens is here's picture

I don't give it fk on them towel heads. They are rich and they had it good for a long time. Let them have a taste of what violenec is like in their own hell hole.

IvannaHumpalot's picture

great analysis piece, enjoyed reading that. Maybe though it's just Game of Thrones family fight for power and once consolidated - no change.  IDK the mid east is very confusing. But if the population overthrow the House of Saud then it's going to look like Islamic State Caliphate. They're more religitarded, not less.

 

OUR rule should be NO Muslim refugees at all. If they want to have their wars, then have at it. But NOT ONE migrant more will we take in the West.

Is-Be's picture

Monotheist doing what monotheist do.

American Dissident's picture

Moishe' doin what Moishe' does.

JerseyJoe's picture

Oh and non-mono's don't war?  Get real.

Easyp's picture

While I would not miss the House of Saud what would replace it?

Akzed's picture

While I would not miss the House of Saud what would replace it?

 

The House of Finklestein.

Honest Sam's picture

Some connected Israeli loligarchs, and neo-CON elitists?

JerseyJoe's picture

They are the keepers of the moon rock in Mecca and they use the Hajj to recuit and radicalize - what's not to love?  LOL

Read "God's Terrorists" - it discusses how the Saudi/Wahabbi alliance exports radicals using the Hajj - including what led up to the Great Mutinity in India under the Brits.

They butchered their way to power and they will probably be butchered on the way out.  The real problem - they follow the Koran and Moh's every barbaric word and deed.

The pedophile, genocidal, misogenistic, homophob, slave holding and raping war "propheteer" - aka "The Prefect Human."   Define evil.

flapdoodle's picture

Crypto Jews and put in power by the British to facilitate the establishment of Israel. The history of what went on 100 years ago in the ME makes what is happening today perfectly clear. SA and Israel allied? Que surprise! Not...

css1971's picture

Here goes the PetroDollar...

Saudi is and always has been the key...

 

You guys prepped yet?

LOL123's picture

Saudi has been wanting to be sole ruler in the middle east for a long time and using Iran as an arch enemy brings in Israel and US as major supporter of weapons and intel. But what happens after that, should they actually take over the reigns? Does Israel let Saudi have all that power to defeat Iran? If so when does Israel pull the plug on Saudi for fear of muslim overtake of complete middle east... You see at some point Israel will call on little sister America to restrain Saudi. US is just a whore to Israel and Saudi a midwife to Israel and US. War games where the rich win and masses die.

DjangoCat's picture

Make me laugh.  Saudis beat Iran?  With drones, maybe?

You won't see many of those lilly skinned princelings out there with a rifle.  So it will be slave labour on the front lines against a well trained and hardened Iranian army.  

Not my idea of an overwhelming force.

JohninMK's picture

Not just Iran, look how they are failing in Yemen, Somali merceneries for Christ's sake! Native Saudi soldiers aint gonna happen anytime soon as the only potential members are the mainly Shia peasants. See the problem there?

Then, their potential buddies with the incredible Israeli armed forces, you remember, the ones who the Hezzies beat back ten years ago giving them a bloody nose the military has not forgotten!

That was before the Hezzies upped the anti by deploying thousands of rockets/missiles aimed at Israel. We have been told all about the NK offensive line whilst most have no idea that Lebanon has the same with much of Israel in range of a virtually unstoppable barrage of destruction.

Then there are all those really juicy virtually undefended targets scattered around, like the US command centre in Qatar, should the US lift a finger. I say undefended because US/NATO doesn't really do short range anti air defences, haven't needed them since the Cold or even Korean wars.

One hopes the US isn't going to double down on their Syrain farce.

dunce's picture

They have to slaughter the shiites, Sunnism is the only thing they will fight for,not some person. This is just the beginning. Imams are pretty much useless for military action but they can provide some leadership. They must prevail in Yemen to prevail at home. They can not allow some enemy at their border like Israelis have taking potshots at them forever.

Fred123's picture

This article has an interesting take. http://www.whatdoesitmean.com/index2426.htm

If true, Hillary, 0bama and Bush might have some explaining to do.

Squidward_Tentacles's picture

The article in the link makes a glaring mistake.  That is Obama in China, not SA, when they made him take the back door, so to speak, isn't it?

DjangoCat's picture

This article backs up a lot of what I have gleaned from readings this past year.  Really good news.

JerseyJoe's picture

Why?  Muzzies kill more muzzies than any other group...and they are just warming up.   Have at it.  Less money to build mosques in the US and around the world and the world will be a much better place for it.  Maybe with a good war, some US muzzies will export themselves back to the ME to fight - can't hate that.   Just don't let them back in if they survive.

We don't need them - let them pray for themselves...they need it.  Jihad is their only salvation.   Muzzies on Muzzies Jihad - that is how the Wahabbi/Saud alliance came to power and that is how they will leave.

Reaper's picture

How many stupid Exceptionals will have to die?

mendigo's picture

Not sure Im buying the thing about petrodollar. No doubt that is a nice feature but I think this is simply about business and dominance and control.

Saudi Arabia is our surrogate in region due to its dominance of regional oil market. But is losing its dominance as are we.

GreatUncle's picture

Try this for a conspiracy theory.

Saudis burned down the twin towers and blamed it on Osama Bin Laden just for shits and giggles.

If so ...

The Afghanistan war was total bullshit ...

The Iraq war was total bullshit ...

Get the drift everything was bullshit, Osama Bin Laden was a patsy to justify the rest.

strannick's picture

Those wars werent b.s. Iraq was for oil and Afghan for heroin.

jeff montanye's picture

got some heroin out of afghanistan.  very little oil, except for israel and turkey, out of iraq, except at full price.  they got to sell to somebody.

certainly 9-11 and the wars that followed are exclusively to primarily the work of the mossad/likud and their sayanim and assets in the u.s. and likely britain.  everywhere you look in this elaborate conspiracy you find neocons, zionists, israelis, etc.  check the below with an open mind and no other conclusion really suggests itself.  larry silverstein is not a wahhabist.

http://www.voltairenet.org/article179295.html

http://www.whale.to/b/israel_did_911.html

https://sites.google.com/site/onedemocraticstatesite/archives/-solving-9...

http://www.amazon.com/Solving-9-11-Deception-Changed-World/dp/0985322586

http://www.luogocomune.net/site/modules/sections/index.php?op=viewarticl....   

http://topdocumentaryfilms.com/everything-rich-man-trick/

https://smile.amazon.com/dp/098213150X/sr=1-1/qid=1467687982/ref=olp_pro...

http://www.europhysicsnews.org/articles/epn/pdf/2016/04/epn2016474p21.pdf

https://www.youtube.com/watch?v=zgE-hGNy2W0

https://www.youtube.com/watch?v=IYUYya6bPGw

https://www.bing.com/videos/search?q=Trump+there+must+have+been+bombs&vi...

https://www.youtube.com/watch?v=Rt-ldMj9y9w

GreatUncle's picture

It was always war it is "how were you going to get it"?

Walt's picture

'People who're fed well tend not to complain.'

There are always exceptions to the rule - Antifa and BLM come to mind.

Wild tree's picture

Good fabric weave Chris, at what is going on and why. I don't think that this time is any different from history; as the empires wealth declines, so does it's power. This tactic is an all or nothing Hail Mary pass to keep the status quo for a few more years. If war develops in the West and oil begins a climb back into the hundreds, then the play will result in more years. Keep the price where it is at, and we are talking maybe five years before revolution.

Either way, it is coin toss as to whether it is sooner, or later. The only question I really have, is whether or not they will beat us to the bottom. I sincerely hope that they pass us with afterburners lit.

 

besnook's picture

the elephant in the room is china/russia's influence on mbs. mbs is clearing out the prousa people(alltheweed the citigroup guy) despite what trump says. i think mbs is ready to switch sides and go with the future in the east. china is already the biggest customer for saudi oil. with all the other available vendors the sauds need china. that means china can ask to pay in yuan which the sauds will gladly use as investment in china for their diversified economy. this will put a lot of pressure on the petrodollar. the usa is done in the region outside of israel(which is why nutandyahoo has been shitting in his pants over the syria debacle. the sauds aren't dumb. they know the future is in asia. that's where they are going. the putin visit was a formal declaration of their intention.

Oracle of Kypseli's picture

<<<(on a side note... I wonder how many wish they'd bought bitcoin?) >>>>

A bit of ugly persuasion (like loosing your eyes or else) will make them transfer the coins to the KSA treasury. Only burried (hiddenaway) gold is safe. 

DjangoCat's picture

"Only burried (hiddenaway) gold is safe. ..."

Till Alzheimers sets in. I have a friend (British aristocrat) whose dad kept a go-bag full of gold, but forgot where he hid it.  Friend has searched for years.

HedgeJunkie's picture

Said when etherium lost $350 million fron user 'wallets' due to a programming error.

jeff montanye's picture

they're going a little too all in on political revolution for another all in.  my bet is they add yuan and more gold to their dollars.  maybe euros, pounds, rubles and swiss francs too.

but bad news for u.s. hegemony in all probability.

BandGap's picture

Is it me or does this read like a script from a Netflix miniseries?

Never cross the streams of reality and the unknown. That's my credo.

cheka's picture

the vegas event is part of the saudi drama.  all of those guns were for an assassination operation on the saudi-owned top floors of mandalay.  the truth is slowly leaking out

the video from tropicana -- where they rush in and extract one of the saudi royals was puzzling...until now.  also the helicopters and shooters in/around the airport were part of the extraction operation

Warthog777's picture

so the folks were killed by stray bullets?  Mission change cuz they don't like country music?

cheka's picture

once the operation was compromized they created the chaos for their escape

it worked

why did they briefly interview the wife/gf and then release her?  patriot act doesnt apply to biggest shooting in US history?

answer - they know, and have known.  they tried some b.s. cover stories - but those got destroyed before the ink was dry

now silence