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Saturday, March 19, 2016
Mark Nicholas — Obama's Hypocritical Legacy-Building Sends Saudi Allies Flying Off the Handle
Apparently from the letter, they think they are doing a favor to the United States by buying US-Treasuries. And by extension, maintaining a dollar-peg. But those decisions have nothing to do with helping the United States. It is all about their economy, avoiding Dutch disease and maintaining maximum flexibility over domestic affairs given their external financial surpluses. The US doesn't need Saudi investment.
The Saudis aren’t “investing" in anything. They’re just parking their USD-petrodollar profits in US treasury securities. When they buy something American with those dollars, then they are investing.
When the Saudis, and Henry Kissinger, agreed to do this in 1975 under a MOU (Memorandum of Understanding) with the US Treasury so that Congress wouldn’t be involved (John Perkins’ Confessions of an Economic Hit Man also describes this in detail), the point the US wanted to cement was absolute establishment of the USD as reserve currency following Nixon’s removal of the international gold standard in 1971. If the Saudis insisted that every country in the world buy their oil in USD, then the USD as reserve currency would be assured. In return, Kissinger promised the Saudis that the US would keep the price of oil high; i.e. support it). That’s why building new refineries was prohibited in 1979. The recent US fracking exports broke that agreement.
Since the neocons rid the State Dept of brainy Arabist analysts (along with the Russian ones) starting in the late 1980s and then with a vengeance under Clinton (and the rogue Rahm Emanuel), how would any US President have the adequate history upon which to make decisions?
It’s my less-than-educated-and-my-uninformed guess that Saudia Arabia thought they could punish the Americans for breaking their agreement by destroying US fracking firms’ profitability through price, and pick up China’s global energy needs at the same time.
But the Saudis miscalculated. The Chinese are not buying from Saudi Arabia in any great heaps, they are buying from Russia. Russia is their biggest oil supplier now thanks to Obama’s idiotic misplaced sanctions. (Courtesy of the Susan Rice-Samantha Power-Valeria Jarrett-Ben Rhodes national security “expertise” and hyperbolic assumption that they are the keepers of the world; ergo, R2P. Keeps Power/Rice/Jarrett/Rhodes in control.)
Apparently from the letter, they think they are doing a favor to the United States by buying US-Treasuries. And by extension, maintaining a dollar-peg. But those decisions have nothing to do with helping the United States. It is all about their economy, avoiding Dutch disease and maintaining maximum flexibility over domestic affairs given their external financial surpluses. The US doesn't need Saudi investment.
ReplyDeleteEGObama.
ReplyDeleteThe US doesn't need Saudi investment.
ReplyDeleteThe Saudis aren’t “investing" in anything. They’re just parking their USD-petrodollar profits in US treasury securities. When they buy something American with those dollars, then they are investing.
When the Saudis, and Henry Kissinger, agreed to do this in 1975 under a MOU (Memorandum of Understanding) with the US Treasury so that Congress wouldn’t be involved (John Perkins’ Confessions of an Economic Hit Man also describes this in detail), the point the US wanted to cement was absolute establishment of the USD as reserve currency following Nixon’s removal of the international gold standard in 1971. If the Saudis insisted that every country in the world buy their oil in USD, then the USD as reserve currency would be assured. In return, Kissinger promised the Saudis that the US would keep the price of oil high; i.e. support it). That’s why building new refineries was prohibited in 1979. The recent US fracking exports broke that agreement.
Since the neocons rid the State Dept of brainy Arabist analysts (along with the Russian ones) starting in the late 1980s and then with a vengeance under Clinton (and the rogue Rahm Emanuel), how would any US President have the adequate history upon which to make decisions?
It’s my less-than-educated-and-my-uninformed guess that Saudia Arabia thought they could punish the Americans for breaking their agreement by destroying US fracking firms’ profitability through price, and pick up China’s global energy needs at the same time.
ReplyDeleteBut the Saudis miscalculated. The Chinese are not buying from Saudi Arabia in any great heaps, they are buying from Russia. Russia is their biggest oil supplier now thanks to Obama’s idiotic misplaced sanctions. (Courtesy of the Susan Rice-Samantha Power-Valeria Jarrett-Ben Rhodes national security “expertise” and hyperbolic assumption that they are the keepers of the world; ergo, R2P. Keeps Power/Rice/Jarrett/Rhodes in control.)