Saudi's just took on another $10 billion in debt from international banks. While that's small potatoes, it continues to add to a growing pile of foreign debt.
Low oil prices have drained their budget: the Kingdom is now running deficits. They're also maintaining the riyal peg to the dollar at $3.75.
How much cash are they willing to burn to keep maintain this peg? On the one hand they're selling dollars and on the other hand they're borrowing dollars...to sell?
Crazy shit.
I can't wait 'till this country implodes and the people there chop of their motherfucking rulers' heads.
4 comments:
I'm maintaining a small short position there Mike... may not go down (youve made the point that they have a lot of reserves....) but I dont see it going up either....
Yes, you just have to have a position on like an "insurance" policy. It's gonna blow eventually.
Why wouldn't the US simply loan the Saudis all the dollars they need? There must be a hundred ways of dollars finding their way into the Saudi coffers. Given how important Saudi Arabia is to the US, it seems unlikely that the US won't come to their aid. If the US is willing to bail out numerous foreign central banks during the crisis, it's hardly going to let its most important ally implode. I hope for whatever reason Saudi Arabia does implode, but it seems unlikely that this will be the reason.
I forgot to add that perhaps the Saudis will come to their senses and decide not to keep the peg. Other than that, there is no political reason to suppose the US is going to kneecap the Saudis. Forget all the nonsense now doing the rounds that the US has suddenly realised the error of its ways, understood the danger of continuing this demonic relationship, and is quietly but effectively ending the relationship. Unfortunately it's nonsense. In any case. if the Saudis want to keep the peg, the US will facilitate.
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