The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

http://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret

by jonbaer • 10 years ago

203 145 10 years ago

chiph• 10 years ago

I think we always knew that they were buying a lot of government debt, this just makes it official and puts some numbers to it.

lr4444lr2• 10 years ago

Look at that gas station photo during the embargo: "Limit: $300 per customer". $300 in 1974? Wow!

Luc• 10 years ago

That's $3.00 :)

lr4444lr2• 10 years ago

Thanks - makes much more sense. I haven't had my coffee yet. According to the Dept. of Energy that'd be about 7 gallons. (http://energy.gov/eere/vehicles/fact-915-march-7-2016-averag...) Not sure what typical passenger car engine efficiency was in those days, though.

ZoF• 10 years ago

That's $3.00

eternalban2• 10 years ago

Bitter Lake [1] connects the Saudi windfall with the rise of global bankers as a power. Showdown at Doha [2] looks into the growing discomfort of US with rise of Iran and the subsequent strategic deal with SA which has lead us directly to the current mess. The role of the Brits (always busy busy in the shadows) is well worth looking into.

[1] https://en.wikipedia.org/wiki/Bitter_Lake_%28film%29

[2] http://masoudbehnoud.com/weblog/s2.pdf

Cyph0n• 10 years ago

Thanks for the links. I've added Bitter Lake to my watchlist.

arethuza4• 10 years ago

FYI Bitter Lake is probably the best thing I've watched in the last couple of years - not sure I completely agree with all of it, but the format and approach is breathtaking.

s_q_b12• 10 years ago

the Brits (always busy busy in the shadows) is well worth looking into.

Sigh, the British are constantly furthering their own agenda in the Middle East. Their HUMINT network is just much better than anyone else's in the region, and their active intelligence work is informed by a much more nuanced view of that portion of the world.

Americans like to do things from a distance, if they possibly can. Airstrikes, cyberattacks, drones, all involve minimal risk of casualties. The Brits have been on the ground, building their network, for far longer than the Americans.

If only they'd share more of the fruits of their labor. It's been a quarter millennium, and British intelligence still looks down their nose at the Americans, treating them like a rebellious problem child.

arethuza4• 10 years ago

If anyone thinks the UK doesn't have an agenda in the Middle East separate to that of the US then you might want to consider the Al-Yamamah arms deal:

https://en.wikipedia.org/wiki/Al-Yamamah_arms_deal

NB - of course the UK does a lot that aligns with US interests, but they aren't identical.

s_q_b12• 10 years ago

You can see from their reported figures that their U.S. treasury holdings are far too low for a sensible national portfolio. It's a pretty glaring hole, and you know that the money is going somewhere off the balance sheets.

The question has always been how much U.S. debt exactly the Saudi's hold. This is an interesting historical anecdote, but it doesn't provide any information about the size of the debt, other than "much larger" than official figures, which isn't terribly informative.

At this point, Saudi Arabia needs the United States more than the United States needs Saudi Arabia. The OPEC cartel is broken, Saudi Arabia is running a massive deficit, both China and Europe have economies mired in the aftershocks of 2008 which cannot absorb the additional supply, and the United States is energy independent.

If the Saudis are even willing to suggest selling off their dollar-denominated debts, they must be either unfathomably arrogant or extremely desperate. My read is the latter.

They really must want to keep those documents secret. There is no way that a country gobbling up it's meager monetary reserves could afford the hit to the value of those assets as they unwound them, even if they sold them off very slowly and predictably.

Something potentially very bad for world security is in those documents. Something that would force us into confrontation with the Saudis. Something that could cause a run on the dollar.

There must be some extremely senior officials involved in that report. Whoever they are, they're senior enough that they can't be made to disappear quietly into the night.

If those pages do contain information specifically identifying financiers of 9/11, the United States might be war-weary, but you can bet that a massive majority of Americans would demand their heads on pikes. As much as I support the public's right to know, that's a very nightmarish scenario.

dforrestwilson12• 10 years ago

Perhaps we should be demanding heads on pikes. This has very real implications for Hillary Clinton's election chances as well. The Clintons have been supporters of the Saudis for some time now and have accepted Saudi government money through the Clinton Foundation.

https://www.clintonfoundation.org/contributors?category=%241...

http://www.motherjones.com/politics/2015/05/hillary-clinton-...

There is no reason the U.S. should be allies with the House of Saud. We have almost no aligned interests and very different views on human rights and Wahhabism. My hope is that the report is published.

s_q_b12• 10 years ago

Swinging the election toward a hawkish demagogue with no knowledge of foreign policy does not seem like a desirable outcome for the United States either.

It's worth noting that for now the Saudis still retain a bit of leverage. They could potentially start a kamikaze run on the dollar. They are our largest regional ally, and in very close proximity to Israel. We have very little knowledge of their nuclear program. Finally, they're a vital partner in the ongoing war with Russia and its proxies (Iran et al.)

Also, I cannot begin to fathom what would happen if a "Christian" nation invaded the keeper of Mecca and Medina...

I never thought I'd say this, but perhaps some secrets are better left untold.

knodi1232• 10 years ago

There is no reason the U.S. should be allies with the House of Saud. We have almost no aligned interests and very different views on human rights and Wahhabism.

Well, in isolation, sure. But in the broader geopolitical sense, it really does make sense to have at least one close ally in that region.

Shivetya• 10 years ago

I would prefer that instead of piking more heads we, the US, just bugger off. I have no issue with a strong military, I have a big concern with protecting countries or having bases in countries that have more than sufficient GDP to protect themselves.

For the time being availability of oil for all nations through the Gulf states is as simple as keeping a US CV fleet or two in the area. It benefits all nations outside the region and doesn't require propping up repressive regimes to accomplish.

hackuser3• 10 years ago

There is no reason the U.S. should be allies with the House of Saud.

There is a very good reason:

1) The US needs a stable oil supply

2) The US needs global stability, for which the world needs a stable oil supply.

3) A stable oil supply requires a stable Persian Gulf region.

4) Leverage and influence with the most powerful nation in the Persian Gulf (with the possible exception of Iran, an enemy of the U.S.), is very valuable and perhaps necessary to stability in the Persian Gulf.

That arrangement worked for decades, and look what's happening now that it fell apart.

Recently things have changed a little: The US has become less dependent on Persian Gulf oil due to domestic supplies; there is/was a global glut of oil, making the world less dependent on the Gulf; US-Iran relations improved somewhat; and Saudi religious fundamentalism has gone from being their internal problem to a global problem.

Also, US policy changed: The US became a cause of instability in the Persian Gulf with the invasion of Iraq and the reckless disregard for the need to find a stable, political outcome for that country (no planning for occupation, etc.). Also, the Arab Spring created a dilemma: Support democracy or support short/medium-term stability? At times the US chose democracy, further undermining current stability (democracies would of course be more stable in the long run, but getting from here to there involves a period of instability).

ArkyBeagle• 10 years ago

"...We have almost no aligned interests..." So if you buy the story that effectively, T.E. Lawrence installed the House of Saud, then we have the interest of maintaining the Former British Empire. S.A. is also parked on both Mecca and Medina. We also have an interest in an ally, no matter how ... dissonant ... in that spot.

"... and very different views on human rights and Wahhabism..."

With maximum snark - celebrate the cultural diversity. One of the most interesting features of nation-state-dom is that we can smile and ignore all that. Er, right until Wahabbism runs smack up into our Security Industrial Complex.

Sophistifunk• 10 years ago

I think it's much more likely that the result will be an un-deniable public insistence on the right to sue the royal family. And if the Sauds can be sued for 9/11, the US can be sued for all the drone strikes and the like.

jokoon• 10 years ago

Mmmmh there is a difference between a family of individuals and a country that executed drone strikes. Suing a government is harder.

Pinckney• 10 years ago

Win-win.

Spooky23• 10 years ago

It also adds an additional dimension as to the drama associated with the bullshit "debt ceiling" debates that come up from time to time, usually pushed by the House republicans.

How much of that nonsense is actually the House looking to influence foreign policy decisions? Based on the article, it sounds like this "add-on" facility is the go-to path for central banks to move money around.

jonstokes2• 10 years ago

A few years ago I read a good book on the collapse of the USSR (can't remember the title, too lazy to go back and find it right now). One of the major factors that the author identified was glasnost ("transparency"), which I'm old enough to remember being talked about on the news at the time.

Basically, his thesis was that it was the transparency, after a generation of buildup of really nasty official secrets, that ultimately brought down the communist regime. Once it was clear that everything people thought was probably happening was actually happening, and worse, the whole thing just disintegrated from the bottom up. The regime lost all legitimacy, and the death blow was basically self-inflicted since it was the regime itself that started to open up.

I often wonder about that in the US context. What if a lot of crazy stuff that many people suspect has gone on actually turns out to be true, or what if it's even worse than some of the tinfoil hatters think, and we suddenly start finding out about it all.

I figured it would be some type of Wikileaks or Snowden-type reveal that would do us in, if it happened. But we may actually do ourselves in with an American glasnost that, just like the Russian one of the 80's, is done by well-meaning people in our own government.

Eric_WVGG• 10 years ago

I was a kid at the time and mostly heard “glasnost” in the context of “open-ness”, mostly regarding opening the culture and the borders and a McDonald’s in Red Square. Interesting to learn that the double-meaning translates so, uh, clearly.

snowwrestler• 10 years ago

The difference between the USSR in the 1990s and the U.S. today is that the U.S. has cultural and governmental norms that accept and manage change.

I know that's not necessarily going to be universally accepted here on HN, where it's somewhat popular to assert that all politicians are the same, all the strings are pulled by a small group of global elites, etc.

We have contentious national elections frequently, and tolerate a high level of conflict and dissent in public discourse. This is not to say that everything is objective and equitable--it's not. But each viewpoint has a lot more leeway to pursue its own goals than in the USSR in the 1990s.

In terms of secret crazy stuff that turned out to be true, that does happen. The Snowden leaks are a recent example.

adventured2• 10 years ago

What if a lot of crazy stuff that many people suspect has gone on actually turns out to be true, or what if it's even worse than some of the tinfoil hatters think, and we suddenly start finding out about it all.

What if that premise is mostly or entirely wrong. It's absurd, and entirely empty speculation at best. Extreme edge case scenarios very rarely actually occur. Most of the world has a very large vested interest in the US remaining exactly where it is: most of the world has gotten radically wealthier and more free during the reign of the US superpower, global poverty and inequality has plunged rapidly during that time.

s_q_b12• 10 years ago

There is a theory that Perestroika and Glasnost were responsible for the collapse of the Soviet Union, but to me that seems unlikely. The Soviet Union was bound to collapse, because it's mandate, by definition, was limitless expansion of communism.

When the government could no longer coordinate production, Perestroika and Glasnost were last-ditch efforts to bring the Soviet Union more in line with Western norms. Unfortunately, since their empire was built on force, the loosening of the reigns only encouraged irredentist movements, until one by one the Soviet republics fell like dominos.

Don't get me wrong. It is a major mainstream theory that the liberalizing reforms unleashed too much information on the Soviet public all at once, causing a massive reaction.

I do believe Glasnost and Perestroika were the cause of the collapse, but it wasn't was because of the volume of information released. Rather, it was the increased freedoms to organize and communicate outside the strictures of the state. Free speech and freedom of assembly are anathema to dictatorship. Once that occurred, it was only a matter of time before their vassal states rose up.

The United States isn't quite as vulnerable to that type of collapse. You have to remember the Soviet style of occupation was absolutely brutal. The murder of anyone considered to be part of the elite class, including everyone from factory owners to the university professors, constant surveillance, and indiscriminate use of force were the first steps upon the Soviets gaining control of a country. The result was subjugated nations and people, not new provinces and citizens.

The United States doesn't have that style of federation. Its provinces are held together by a common national identity in voluntary assembly, not a single nation presiding over others by raw force.

I do also believe that if the United States' TS archives were ever opened, many things suspected by conspiracy theorists would be proved correct, even more would be proven false, and there would be countless other plots no one even suspected.

DenisM• 10 years ago

You're underestimating the fact that the Soviet economy was essentially bankrupt. The high oil prices hiked up by the oil embargo became addictive, but having subsequently collapsed caused huge withdrawal syndrome. Agriculture was underperforming for decades to a staggering degree, in the last few years the food was rationed and there was international food aid sent to the country.

eternalban2• 10 years ago

You can see from their reported figures that their U.S. treasury holdings are far too low for a sensible national portfolio. It's a pretty glaring hole, and you know that the money is going somewhere off the balance sheets.

Figures were published by US. ;) Alternatively, you can also consider that US is playing hardball and letting SA know that there is a 'cap' on the threatened liquiditation event.

sailfast• 10 years ago

How is it possible to sell U.S. Treasuries in secret or in a dark market while still providing an ostensibly transparent market for Treasuries? Those two things seems counter to each other.

A deal with this structure as a preference seem extremely misguided, and I'm not sure if the secrecy was requested by the Saudis or by the Nixon / Kissinger NSC / Cabinet which was prone to secrecy for no reason. Either way, one more crazed "feather" in their cap that greatly influenced the future of the country for better or worse.

PhantomGremlin• 10 years ago

How is it possible to sell U.S. Treasuries in secret or in a dark market while still providing an ostensibly transparent market for Treasuries? Those two things seems counter to each other.

Let's consider equities first. A huge amount of invested money is indexed, which basically means not doing active investing but simply tagging along with the price discovery done by more active market participants. That seems to work out pretty well. Not perfect, but good enough.

Why can't treasuries be the same? There's such a thing as a "noncompetitive bid"[1], which means you agree to purchase Treasuries at the same price that the smarter money chose to purchase at.

Right now there are low limits on how much can be bought by noncompetitive bids. But perhaps the Saudi's just get that price for however much they want to buy? The treasury market is huge huge huge. It probably remains reasonably "transparent" regardless of what the Saudis buy.

[1] https://www.treasurydirect.gov/instit/auctfund/work/work.htm

aedron2• 10 years ago

The most surprising thing is the backdoor arrangements the Treasury and Federal Reserve handily created to keep Saudi bonds purchases off the books - through forty years!

I'm sure most people would not believe something like this could be done - that actual governing and federal dealing is so hidden, through changing administrations, in spite of apparent transparency, like annual reports, budgets, hearings, and so on. It really puts a big question mark on the U.S. democratic system, as if that wasn't tenuous enough already.

Oh, and if anyone was in doubt about the shift to Iran, this suddenly being publicized as much as anything tells you all you need to know. It's a big middle finger to Saudi Arabia.

mark_l_watson• 10 years ago

+1 Couldn't agree more.

This story would have really surprised me 10 years ago but now I accept that the Economic Royalty (or Deep Government, or whatever you want to call them) use a lack of transparency to do what profits them.

aedron2• 10 years ago

The massive issuance of U.S. Dollar debt to Saudi Arabia, as a result of the deal mentioned in the OP, coincided perfectly with the abolition of the gold standard (the dollar being linked to physical gold reserves) [1]. So right from the start, the U.S. was purchasing oil with pieces of paper with no guaranteed value of any sort.

[1] https://en.wikipedia.org/wiki/Nixon_shock

rwmj• 10 years ago

I'd rather have fiat currency than gold, because that would save me the time and hassle of selling the gold and getting something I can actually spend.

ericHosick• 10 years ago

I'd rather have fiat currency than gold, because that would save me the time and hassle of selling the gold and getting something I can actually spend.

Isn't currency backed by commodities considered something other than fiat currency?

lmm• 10 years ago

For an individual that makes sense. For a nation the cost/hassle of selling gold is comparatively low, and the risk of the fiat backer's interests being averse to one's own is much higher.

dpc59• 10 years ago

The ability the US has to assure people that you'll be able to buy oil with USD through military bullying of OPEC countries is a pretty good guaranteed value.

marcusgarvey• 10 years ago

Mentioned is the GAO's finding -- all the way back in 1979 -- that the secrecy had no legal basis. Reports from the GAO, the Government Accountability Office, are a great way to keep an eye on all sorts of wonky, provocative investigations that are often left in the shadows.

coldcode• 10 years ago

I wonder how many other secrets we know nothing about in the US like this.

advertising4• 10 years ago

There's a book called confessions of an economic hit man - https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit...

Essentially U.S. helps impoverished nations with infrastructure and other aid, but saddles them with debt in order to control them politically or otherwise.

The interesting part was when it came to Saudi Arabia, which had so much money it didn't need to take on debt to develop their infrastructure. So instead they bought America's debt as this article explains.

I lived in the kingdom from '82 - '04 which was quite an interesting time span to have lived there. Things have definitely changed as a younger, mostly western educated generation, returns home and social unrest cannot be quelled with unlimited social programs anymore.

Most of the Saudi's I know now simply take american concepts/franchises and spin them out over there. From hamburger chains to house cleaning services. Works pretty well for them.

The most annoying thing was the weekends were on Thursday and Friday, so if you wanted to do anything international with a bank you could only do it Mon - Wed as their banks were closed on their weekends and then U.S. banks were closed Sat / Sun.

I believe you can still simply walk to a certain part of town and watch an execution, along with a couple of hands once a week there. Just you know, if you wanted something to do on a weekend.

zeeshanm• 10 years ago

There is a new edition of the book mentioned above if anyone's interested: "The New Confessions of an Economic Hit Man."

MOARDONGZPLZ• 10 years ago

Thanks for the heads up. I read the original in college and it was very interesting, although I thought it was a bit embellished.

http://www.amazon.com/New-Confessions-Economic-Hit-Man/dp/16...

adventured2• 10 years ago

The interesting part was when it came to Saudi Arabia, which had so much money it didn't need to take on debt to develop their infrastructure.

That's not entirely accurate. Saudi Arabia was extraordinarily poor prior to Standard Oil of California's oil finds there. US companies financed most of Saudi Arabia's initial oil infrastructure build out, including the technology that made it all possible in the first place.

sandworm1012• 10 years ago

The initial wells and basic infrastructure. But everything built since the 70s-80s, ie 95+% of the country, was financed directly. The amount of money swimming around that country put any overseas investment to shame long ago.

api2• 10 years ago

The student debt indenture system is the same thing in the microcosm.

matt_wulfeck2• 10 years ago

Was does the debt force you to do other than hold a job? Heaven forbid. Nobody forced you to take money.

If anything it's a coup for politicians who want to push debt forgiveness as one of their platforms. Get everyone into debt and then offer forgiveness for votes.

thekid314• 10 years ago

I'd love to hear more. Where you married? What was it like for you spouse? If not, what was the dating scene like in 82?

Did you travel around any? What are the most interesting parts of the country? Did you ever make it to Mecca?

How good are you at recognizing family names and power connections? Did that come with time?

How did people in different parts of the country view each other?

I just returned from a week in Jeddah and Riyadh. Here are some photos from a fancy jail. Housing some of the 5000 terrorist/jihadists in a re-integration program. Think about that, the jihadists get the nice jail, because they are rehabilitatable: http://www.daviddegner.com/albums/terrorist-rehab-in-saudi-a...

arethuza4• 10 years ago

Someone a few weeks back recommended Inside The Kingdom in a reply to a comment of mine - I can strongly recommend it:

http://www.robertlacey.com/?q=book/inside-kingdom

It describes the length the Saudi's go to in rehabilitating jihadists - including getting them married!

yardie• 10 years ago

Think about that, the jihadists get the nice jail, because they are rehabilitatable

This is infinitely more humane than the current US strategy of drone strikes, "kills terrorists" never mind the collateral damage and disruption it causes. Hell our DOC could learn a few things. Here, if you are ever once a criminal, you're a criminal for life.

advertising4• 10 years ago

No dating scene whatsoever haha. Restaurants all segregated family / single males. No movie theatres. Entire country dry no alcohol.

The most amusing of all would be safe ways and grocery stores would turn into night club entrances as all the women would be shopping so guys would drive by the entrance and hold up signs with their phone numbers on them. So front of Safeway on a weekend night would be all these sports cars, benz's Etc. Too funny.

Jeddah a lot more lax than Riyadh.

Can't get into Mecca unless you're Muslim. We took a wrong turn on a road trip one time and were stopped and made to turn around.

Check points outside every city. If you were a female and didn't have written consent from your husband you weren't allowed to leave the city.

cloudjacker• 10 years ago

The IMF primarily.

Yes the US takes part in that, but the organization is the IMF.

The IMF partially realizes their role in this, but its more of an outcome than a conspiracy. They've commented on that book in an interesting non-denial, basically saying that the GDP of the countries they've helped/subjected-in-a-giant-conspiracy is so low and such a small fraction of the IMF budget that it doesn't make sense that they would put much effort in it.

In any case, its just the terms of their contracts. Country can't pay, country must raise taxes or expropriate goods, or find natural resources.

hackuser3• 10 years ago

Yes the US takes part in that, but the organization is the IMF.

To be clear: The IMF and World Bank are primarily controlled by the Western powers. EDIT: And are seen as tools of Western power by many.

CyberDildonics• 10 years ago

Country can't pay, country must raise taxes or expropriate goods, or find natural resources.

Or sell infrastructure to private industries (this is what the economic hit man interview I saw claimed)

narrator• 10 years ago

The funny thing about debt is that it's looked at as a fundamental force of nature and not from a political economic relationship. The debt is owed to someone. Someone, somewhere is getting the interest payments. The duty of a debtor to pay the lender is enforced politically. The creation of fiat currency is controlled by the central bank, etc.

The Chinese realize this. On a political basis, they regularly buy up and write down bad loans with money the government electronically prints itself. This wouldn't work in our democratic system because politicized debt forgiveness is too obvious of a way to buy votes. Instead we have the fed buy bad debts from the banks in a form of politicized bad investment forgiveness, but the debts never go away and the taxpayer is partially stuck with the bill and hence austerity in the form of government bailouts.

rqebmm2• 10 years ago

hence austerity in the form of government bailouts.

I don't follow your point here. "Austerity" and "government bailout" are antithetical.

sandworm1012• 10 years ago

Where were you? I was in SA from 79-95 as a kid in various Aramco compounds, mostly RT and DH.

advertising4• 10 years ago

Riyadh, but wasn't in aaramco or military. We lived in the middle of the city. Small 5 villa compound. Saudi neighbors.

SCAQTony• 10 years ago

We pretty much put a price on our morality. Looking at the bond holders graph, it appears we owe about a 1/2-trillion dollars to oil producing nations. It's no wonder we tolerate tolerate gross human rights violations therein.

Sort of like that J. Paul Getty Quote: "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."

Makes me wonder if we have a similar deal with China: we sacrifice our industrial sector (no other nation allowed that to happen) in exchange for bond buying?

strictnein2• 10 years ago

We haven't sacrificed our industrial sector:

https://research.stlouisfed.org/fred2/series/INDPRO

milcron• 10 years ago

I think this chart helps explain why someone might think so: http://blogs-images.forbes.com/timworstall/files/2015/10/mfg...

The US manufactures more than ever before, it just takes fewer jobs to do so.

mikeash• 10 years ago

Wouldn't the Getty quote imply that it's China and Saudi Arabia who have the problem, not the US?

I don't know about "sacrifice our industrial sector" thing, either. The US is the world's second largest exporter. Those exports just happen to be somewhat less visible since they include a lot of things outside of consumer goods. You can walk around the US and see all the Chinese-made phones and think, "China sure makes a lot of stuff." But most people won't walk around China and see all the US-made airliners and think, "The US sure makes a lot of stuff too."

tsunamifury• 10 years ago

The Kingdom Opening [1] will give you a fast historical overview.

[1]https://www.youtube.com/watch?v=9bHlO057DyY

FrojoS• 10 years ago

I have a stupid question that is a bit more general than the Saudi case. What's the advantage of selling oil and the using the dollars to buy treasuries or other conservative investment assets? Wouldn't it make much more sense for a country like Saudi Arabia to limit their oil production and finance their deficit of the sales directly instead of using royalties? This assumes that the value of oil will rather rise over time . In addition, for a producer as large as the Saudi's, this strategy should even raise oil prices.

digi_owl3• 10 years ago

To some degree they have the big dog of international politics by the balls...

jeffcoat• 10 years ago

Not so stupid: Start with the phrase "Hoteling's rule" for a century of academic analysis of that question.

If you own an oil field, you have to balance a number of factors:

* How is the price of oil changing, relative to overall inflation? You mentioned this one.

But also,

* Are technological improvements (either increasing the total amount of extractable oil in the world, or outright oil replacements) going to dramatically lower the price if I wait too long?

* Is it still going to be my oil next year, or am I going to be first against the wall when the next revolution comes?

My (unsophisticated, outsider) opinion is that if you see oil-producing countries selling as quickly as they can, that's weak evidence that they're worried about the last two bullets.

randomname2• 10 years ago

It's interesting how for decades, the story of Saudi Arabia recycling US petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, and how with this fascinating Bloomberg story this "theory" now becomes fact.

77ko• 10 years ago

It seems to be that this story has been out there for decades now, and this Bloomberg story just adds a few details.

known2• 10 years ago

And believe me this deal/collusion has created friction between 1.8 billion Muslims and the West;

ohashi• 10 years ago

Bloomberg site is godawful. It reloaded the article on me 3 times while reading it. Great way to rip off advertisers with more pageviews and piss off readers.

known2• 10 years ago

Since 1971 OPEC is bullied to sell Oil exclusively in US dollars resulting in friction between 1.8 billion Muslims and the West;

https://en.wikipedia.org/wiki/Nixon_Shock

http://qz.com/562128/isil-is-a-revolt-by-young-disaffected-m...

The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings

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