The New York Times reports (and Yahoo! News repeats without any paywall) that the government of Saudi Arabia is threatening to sell $750 billion in treasury securities and other unidentified assets if Congress passes the Justice Against Sponsors of Terrorism Act. The bill would allow foreign governments to be sued by 9/11 victims and their families. The threat was issued by Saudi Arabian foreign minister Adel al-Jubeir to unnamed US lawmakers while he was visiting Washington sometime last month, on the grounds that these assets could be in danger of being frozen by US courts.
(Score: 5, Interesting) by richtopia on Sunday April 17 2016, @01:04AM
For context, the total foreign debt of the USA is roughly 6 trillion (2014). 750 billion is a sizeable portion of this debt.
https://en.wikipedia.org/wiki/National_debt_of_the_United_States#Debt_holdings [wikipedia.org]
(Score: 2) by opinionated_science on Sunday April 17 2016, @01:09AM
so, time to short? Ideological sales never go well....
(Score: 5, Informative) by M. Baranczak on Sunday April 17 2016, @01:56AM
The Saudi government doesn't have anywhere close to $750 billion in US treasuries. First, note the summary: "$750 billion in treasury securities and other unidentified assets ". Here's a spreadsheet [treasury.gov] that was cited as a source in the Wikipedia article you linked. It says that "Asian oil exporters" (a group that includes Saudi Arabia) hold $228 billion in US treasuries. And bear in mind, this includes all the people who live in those countries and own treasuries, it's not just national governments.
The Saudi king probably told his accountant to estimate the total value of all his US-based assets, then doubled that estimate, and arrived at a figure of $750 billion. It's all rather murky, since we don't know what assets they're talking about, but my guess is that this would hurt the Saudis worse than anyone else. If you're trying to sell that much of anything, it'll take many years. And if everyone knows you're in a hurry to sell, then you'll have to sell it for much less than you would have otherwise.
(Score: 5, Insightful) by Whoever on Sunday April 17 2016, @04:13AM
Let's not forget also that Saudi Arabia is spending through its sovereign wealth fund already (because of the low price of oil). So the Saudis are probably already selling US assets.
(Score: 4, Insightful) by SanityCheck on Sunday April 17 2016, @01:47PM
Indeed. This looks like BS grand standing. They have to sell these assets to stay afloat. So what they will do is act like they are beginning to sell them to try to get concessions. Those guys can go fuck themselves. They are pumping oil now through the roof to put US companies out of business. At the same fuckin time when Oil was at $100 / barrel and we were suffering cause of it, these motherfuckers did nothing! They have overplayed their hand and now the world is moving towards renewables. We will leave them in their shitty desert penniless and their own people will eat them alive once they money runs out. All things they fuckin deserve.
(Score: 1) by khallow on Sunday April 17 2016, @04:05PM
Those guys can go fuck themselves.
If what you say is true, then they already are.
(Score: 1, Insightful) by Anonymous Coward on Sunday April 17 2016, @02:03AM
> For context, the total foreign debt of the USA is roughly 6 trillion (2014). 750 billion is a sizeable portion of this debt.
If they dump a huge pile of it on the market it will (temporarily) depress the value so they will have to sell it cheap.
That would be a good time for the US to buy it back.
Might not be so bad for the US, but definitely bad for the saudis.
(Score: 4, Informative) by c0lo on Sunday April 17 2016, @02:04AM
While non-negligible, maybe it's a good way to drive the US dollar down and make the US manufacturing be competitive again.
But... the real danger is the drop of USD as the base for petrodollar and World Reserve Currency.
While it may well be a coincidence (do you think so?), here are two things:
* Saddam started to sell petrol in Euro around 2000 [rferl.org]
* Gadhaffi started to want gold (based currency) instead of USD around 2009 [thenewamerican.com]
Maybe we are seeing high production/low oil prices only as a way to disrupt the run from USD as the base for petrol prices (and World Reserve Currency) initiated [globalresearch.ca] by BRICS [globalresearch.ca] countries [theinternationalforecaster.com] (too big/stable to invade?).
You know, any of the above would really make USA lose its special status and force it to compete without resorting on monetary tricks.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1, Informative) by Anonymous Coward on Sunday April 17 2016, @02:22AM
Dont forget that one of the first things we did after knocking heads in Iraq was to put them straight back onto the petro dollar for their oil transactions. The US would have played any excuse they think they could get away with when it comes to protecting their economic livelihood.
(Score: 1) by khallow on Sunday April 17 2016, @04:33PM
But... the real danger is the drop of USD as the base for petrodollar and World Reserve Currency. While it may well be a coincidence (do you think so?),
It is a coincidence. The Iraqi war would have been too expensive in foresight to be justified on those terms (and the enormous profiteering potential from the war and aftermath would have dwarfed any finance side interests). Meanwhile the Libyan adventure was spurred by France who obviously doesn't have a stake in the petrodollar. Personally, I think it's a waste of time to attribute such mystical significant to money. It's just not that valuable even to an owner of a currency.
(Score: 5, Insightful) by Non Sequor on Sunday April 17 2016, @02:15AM
Here's the thing, if they actually tried to move all of their treasury bonds there would be enough buyers to prevent a drastic drop in price/spike in interest rates. Any investor holding corporate bonds or anything else that typically trades in lock step with treasury bonds would be foolish not to sell their corporate bonds and buy treasuries when a major asset holder is offloading them. If there are more sellers than buyers in the market for treasuries, the yield on them goes up. If that yield goes over the yield on corporate bonds, then you can get a safer asset than you're currently holding with the same return by selling your corporate bonds and buying treasuries.
Not to mention that if Saudi Arabia sells $750b in assets, they have to buy $750b of something else (even if it's just currency that they buy). More than likely they would be buying the same assets that other people would be selling to buy treasuries.
Write your congressman. Tell him he sucks.