Problem is, the Saudi's don't have an unlimited supply of dollars and while they do have some supply, it is growing smaller by the day because of the collapse in oil prices. In fact, anecdotal evidence says they might be in trouble because as Matt Franko pointed out in an earlier post, their oil monopoly, Sudid Aramco, is thinking of selling shares via an IPO.
Bottom line...looks like they could be in trouble.
If this peg breaks the riyal is going to implode. You could even get hyperinflation there, which means that a small investment could quite possibly make you a lot of money. Talk about "The Big Short!" Wow!!
Oanda has a USDSAR contract. You buy that, which means you are effectively shorting the riyal.
One caveat, which Matt Franko and I discussed privately...if this were to happe the idiots at the Fed may give the Saudi's unlimited dollar swap lines like they did with the Europeans. If so, that would kill our profit potential. It's definitley a possibility since the necoons in Washington would ot want to see the Saudi regime collapse and they would put a lot of pressure on the Fed to keep the Saudi's afloat.
Even so, I think there is little risk. Just time risk.
P.S. If you don't know how to trade Forex, do yourself a favor and buy my video course.
