The Untold Story Behind Saudi Arabia’s U.S. Treasury Holdings(bloomberg.com)
bloomberg.com
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
153 comments
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.
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.
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...
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...
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.
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.
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!
http://www.robertlacey.com/?q=book/inside-kingdom
It describes the length the Saudi's go to in rehabilitating jihadists - including getting them married!
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.
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.
I quite agree with you that the Saudis' approach here is much less horrible!
>Here, if you are ever once a criminal, you're a criminal for life
OTOH, recidivism for sorcery must be pretty low over in the Kingdom, since the punishment for this crime (?) is beheading (!).
>Here, if you are ever once a criminal, you're a criminal for life
OTOH, recidivism for sorcery must be pretty low over in the Kingdom, since the punishment for this crime (?) is beheading (!).
The fact that anybody would ever get convicted for sorcery tells you all you need to know.
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.
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.
> 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)
Or sell infrastructure to private industries (this is what the economic hit man interview I saw claimed)
> 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.
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.
The current US Secretary of the Treasury is the most influential member of the IMF, with 16.66% of the total voting power (Jacob Lew) [1]. He was promoted to his current posts shortly after banking on the 2008 economic collapse with Citi.
[1]https://www.imf.org/external/np/sec/memdir/members.aspx#3
[1]https://www.imf.org/external/np/sec/memdir/members.aspx#3
I'd add that I think the Managing Director, Christine Lagarde, is considered the most influential person, though I'm not sure how the voting works.
The deal long (or always?) has been that a European runs the IMF (Legarde) and an American runs the World Bank, currently Jim Yong Kim. As you might imagine, the rest of the world feels a bit left out.
The deal long (or always?) has been that a European runs the IMF (Legarde) and an American runs the World Bank, currently Jim Yong Kim. As you might imagine, the rest of the world feels a bit left out.
> 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.
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.
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.
^^^
There is a new edition of the book mentioned above if anyone's interested: "The New Confessions of an Economic Hit Man."
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...
http://www.amazon.com/New-Confessions-Economic-Hit-Man/dp/16...
I read it a good few years back and found it interesting although I was slightly skeptical about to what degree the conspiracies described existed outside of the author's head.
However, being older and somewhat more cynical (particularly after binge reading about the UK involvement in the Iraq and Afghan Wars) I do wonder if I should read this again - are there any materials out there that support his claims?
However, being older and somewhat more cynical (particularly after binge reading about the UK involvement in the Iraq and Afghan Wars) I do wonder if I should read this again - are there any materials out there that support his claims?
I also read the book, and what he describes is pretty much classic, straightforward bribery of foreign officials. There's a lot of embellishment by the author for the sake of hinting at broader conspiracies he didn't personally witness, and to aggrandize his own role in the matter.
I read the book and it didn't seem like it was embellished in anyway.
Where were you? I was in SA from 79-95 as a kid in various Aramco compounds, mostly RT and DH.
Riyadh, but wasn't in aaramco or military. We lived in the middle of the city. Small 5 villa compound. Saudi neighbors.
The student debt indenture system is the same thing in the microcosm.
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.
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.
"Nobody forced you to take the money."
Prices rise to what the market will bear. Cheap debt means the market will "bear" more than it would in a less leveraged society.
If everyone but me takes a loan, the price of tuition goes up. This means I now have to take a loan or not go to school (which means I can't get a job).
Same happens with housing. If everyone but me takes out a jumbo mortgage, prices go up and I now must take out a jumbo mortgage or forego homeownership.
As long as a degree is a required piece of paper to obtain most jobs, college will be a requirement. As long as rent offers no equity and mortgage interest (but not rent) is deductible, homeownership will remain one of the middle class's sole paths to the accumulation of wealth.
Today's wacky "in-deflationary" economic condition can continue as long as central banks hold interest rates near zero and wages are stagnant.
See also: https://en.wikipedia.org/wiki/Law_of_rent
Prices rise to what the market will bear. Cheap debt means the market will "bear" more than it would in a less leveraged society.
If everyone but me takes a loan, the price of tuition goes up. This means I now have to take a loan or not go to school (which means I can't get a job).
Same happens with housing. If everyone but me takes out a jumbo mortgage, prices go up and I now must take out a jumbo mortgage or forego homeownership.
As long as a degree is a required piece of paper to obtain most jobs, college will be a requirement. As long as rent offers no equity and mortgage interest (but not rent) is deductible, homeownership will remain one of the middle class's sole paths to the accumulation of wealth.
Today's wacky "in-deflationary" economic condition can continue as long as central banks hold interest rates near zero and wages are stagnant.
See also: https://en.wikipedia.org/wiki/Law_of_rent
The economy is circular. The money created through the loan benefits the entire economy, going from hand to hand. you don't consume money or burn them. Then its unfair to burden one group or say one country (like Greece) to have to pay through the nose for the activity that everybody benefits from. This is basic macro-economics. The root cause of debt slavery and financial troubles we have can be solved by separating the creation of money from lending. In a democracy the power to create money should lie with the people not private banks. If the politicians misbehave you can vote then out of office unlike the CEO of Goldman Sachs at al
We've got piles of people with degrees in <SomeGroup> Studies, working as waiters and waitresses. The money that was spent housing and feeding them as students for 4+ years, paying the professors and administrators, could have been used more productively in some other pursuit. As you note, it's not quite equivalent to burning the money. But it's still a net loss, and given its size, it's not insignificant.
When your life depends on holding a job, you are less likely to question the system that provides said job.
Similarly, "homeowners" are less likely to riot...
Similarly, "homeowners" are less likely to riot...
And prop up a sector that donates a fair amount of money to political campaigns.
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.
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.
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.
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.
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.
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.
This makes sense, and I think (and hope) it's probably right.
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.
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.
> 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.
Don't say that within earshot of the American South.
Don't say that within earshot of the American South.
The South is the largest contributor to the national military by far, the location of the capital, and "the South will Rise Again" folks are emphatic but few. There still is a great deal of (often subtle) racism in the Ameican Southeast, but little to no enthusiasm for actually leaving the United States.
They started it when they attacked Fort Sumter. The correct way to end a voluntary union is not to engage in insurgent attacks on the national military.
After the civil war the southern states voluntarily rejoined the union
What does TS mean?
> 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.
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.
> global poverty and inequality has plunged rapidly during that time
Can you show that this is the case (for some measure of inequality), and that the US is responsible?
Can you show that this is the case (for some measure of inequality), and that the US is responsible?
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.
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.
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.
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.
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.
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.
"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. "
Do you have an idea of whether their increased production has affected the fracking production in the US? Would they, in the long-term, have success in making the US more dependent again?
"They are our largest regional ally, and in very close proximity to Israel... Finally, they're a vital partner in the ongoing war with Russia and its proxies (Iran et al.)"
As I understand it, the Saudi Royal family derives part of its legitimacy through the backing of the religious leaders of their country, and the Sunni world at large - but many of the Saudi family itself are actually more progressive than the conservative country. Is there any chance that they want to or could push back against the Wahhabist ideology that seems to spout from the gulf peninsula?
" We have very little knowledge of their nuclear program"
How is that possible? It'd seem as though their supplies of nuclear weapons are precisely the types that we want to be aware of at all times?
"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."
When the cube was seized in 1979 and the Muslim world thought the US was to blame, we got the glimpses of what reactions could be. We'd truly see the Middle East in flames.
Do you have an idea of whether their increased production has affected the fracking production in the US? Would they, in the long-term, have success in making the US more dependent again?
"They are our largest regional ally, and in very close proximity to Israel... Finally, they're a vital partner in the ongoing war with Russia and its proxies (Iran et al.)"
As I understand it, the Saudi Royal family derives part of its legitimacy through the backing of the religious leaders of their country, and the Sunni world at large - but many of the Saudi family itself are actually more progressive than the conservative country. Is there any chance that they want to or could push back against the Wahhabist ideology that seems to spout from the gulf peninsula?
" We have very little knowledge of their nuclear program"
How is that possible? It'd seem as though their supplies of nuclear weapons are precisely the types that we want to be aware of at all times?
"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."
When the cube was seized in 1979 and the Muslim world thought the US was to blame, we got the glimpses of what reactions could be. We'd truly see the Middle East in flames.
1. Do you have an idea of whether their increased production has affected the fracking production in the US? Would they, in the long-term, have success in making the US more dependent again?
The theory that a lot of people had was that the Saudis are attempting to push down oil prices. My family owns some property on which they're conducting hydraulic fracturing (not my call, I campaigned to have the practice banned in the state.)
There's still faith that oil prices will rise again, and investment, while reduced, is continuing. To the extend that the Saudis lower production, US facilities are already built now, and most of the mothballed facilities can come back online in a year or so.
2. As I understand it, the Saudi Royal family derives part of its legitimacy through the backing of the religious leaders of their country, and the Sunni world at large - but many of the Saudi family itself are actually more progressive than the conservative country. Is there any chance that they want to or could push back against the Wahhabist ideology that seems to spout from the gulf peninsula?
In brief, yes, and the liberalizing push from the royal family is growing stronger with time. Saudi Arabia has gone through great pains to construct a world-class university. Built in an isolated area to avoid the interference with the religious police, KAUST has an endowment of ~$20 Billion, which puts it monetarily on par with each of H/Y/P and is twice the combined endowment of Oxford and Cambridge.
KAUST has partnerships with prominent United States universities, including several in the Ivy League, and is headed by the former University President of Caltech. Most instruction is in English, men and women study side-by-side, and freedom of discussion is encouraged. There are also plans to construct a series of model cities along the coastline, following much a similar model.
Most recently, Saudi Arabia underwent a fairly silent transition of power to Prince Salman. Prince Salman is a modernizer, who very much understands that Saudi Arabia needs to invest its oil revenues into creating an economy that is not dependent on oil exports. He has the blessing of the King and the Allegiance Council, has consolidated power through as the official head of the defense, economic, and oil ministries.
A few months ago, King Salman issued a series of liberalizing decrees widely seen to be the result of Prince Salman's influence. [0] So there is hope for the Kingdom yet.
3. " We have very little knowledge of their nuclear program" How is that possible? It'd seem as though their supplies of nuclear weapons are precisely the types that we want to be aware of at all times?
We know they have a nascent capability being developed south of Riyyhad. The reason we have little insight is that American HUMINT in Saudi Arabia is woefully weak. We do not know whether they have already have a weapon, whether they've miniaturized it, or if they don't, what the breakout time for them to develop one is.
When the cube was seized in 1979 and the Muslim world thought the US was to blame, we got the glimpses of what reactions could be. We'd truly see the Middle East in flames.
Agreed, and unfortunately the only way to douse those flames would be a mobilization effort the Western world can scarcely afford.
[0] http://www.nytimes.com/2016/05/08/world/middleeast/saudi-ara...
The theory that a lot of people had was that the Saudis are attempting to push down oil prices. My family owns some property on which they're conducting hydraulic fracturing (not my call, I campaigned to have the practice banned in the state.)
There's still faith that oil prices will rise again, and investment, while reduced, is continuing. To the extend that the Saudis lower production, US facilities are already built now, and most of the mothballed facilities can come back online in a year or so.
2. As I understand it, the Saudi Royal family derives part of its legitimacy through the backing of the religious leaders of their country, and the Sunni world at large - but many of the Saudi family itself are actually more progressive than the conservative country. Is there any chance that they want to or could push back against the Wahhabist ideology that seems to spout from the gulf peninsula?
In brief, yes, and the liberalizing push from the royal family is growing stronger with time. Saudi Arabia has gone through great pains to construct a world-class university. Built in an isolated area to avoid the interference with the religious police, KAUST has an endowment of ~$20 Billion, which puts it monetarily on par with each of H/Y/P and is twice the combined endowment of Oxford and Cambridge.
KAUST has partnerships with prominent United States universities, including several in the Ivy League, and is headed by the former University President of Caltech. Most instruction is in English, men and women study side-by-side, and freedom of discussion is encouraged. There are also plans to construct a series of model cities along the coastline, following much a similar model.
Most recently, Saudi Arabia underwent a fairly silent transition of power to Prince Salman. Prince Salman is a modernizer, who very much understands that Saudi Arabia needs to invest its oil revenues into creating an economy that is not dependent on oil exports. He has the blessing of the King and the Allegiance Council, has consolidated power through as the official head of the defense, economic, and oil ministries.
A few months ago, King Salman issued a series of liberalizing decrees widely seen to be the result of Prince Salman's influence. [0] So there is hope for the Kingdom yet.
3. " We have very little knowledge of their nuclear program" How is that possible? It'd seem as though their supplies of nuclear weapons are precisely the types that we want to be aware of at all times?
We know they have a nascent capability being developed south of Riyyhad. The reason we have little insight is that American HUMINT in Saudi Arabia is woefully weak. We do not know whether they have already have a weapon, whether they've miniaturized it, or if they don't, what the breakout time for them to develop one is.
When the cube was seized in 1979 and the Muslim world thought the US was to blame, we got the glimpses of what reactions could be. We'd truly see the Middle East in flames.
Agreed, and unfortunately the only way to douse those flames would be a mobilization effort the Western world can scarcely afford.
[0] http://www.nytimes.com/2016/05/08/world/middleeast/saudi-ara...
Obviously invading KSA would be a total disaster. Even embargoing the place could have chaotic results beyond the massive oil price spike. Not to mention the strategic complications of the US relying on bases there.
I find it interesting that you've gone straight for "war with Russia" without bothering with "cold". I really don't like this second cold war because at least the first one was obvious to everyone and publicly discussed. The new one is conducted just like the old one through proxy countries which the players are prepared to burn down to deny them to the enemy, but if the chaos spreads to Turkey then that will be the end of the EU as everyone rolls out the barbed wire and machine guns to stop the tens of millions of potential refugees.
I find it interesting that you've gone straight for "war with Russia" without bothering with "cold". I really don't like this second cold war because at least the first one was obvious to everyone and publicly discussed. The new one is conducted just like the old one through proxy countries which the players are prepared to burn down to deny them to the enemy, but if the chaos spreads to Turkey then that will be the end of the EU as everyone rolls out the barbed wire and machine guns to stop the tens of millions of potential refugees.
>hey could potentially start a kamikaze run on the dollar.
I'm not so sure. Assuming they had several hundred billion dollars worth of Treasuries, and further assuming that they dumped them all on the market, the demand for USG debt is sufficiently large that I suspect it would be purchased in an orderly fashion without even causing much uptick in interest rates.
I'm not so sure. Assuming they had several hundred billion dollars worth of Treasuries, and further assuming that they dumped them all on the market, the demand for USG debt is sufficiently large that I suspect it would be purchased in an orderly fashion without even causing much uptick in interest rates.
Assuming a rational market, sure. But market panics aren't governed by the normal rules of supply and demand. They're a behavioral phenomenon caused by the non-rational human agents in the system panicking.
> ... I suspect it would be purchased in an orderly fashion
"Orderly fashion" and trading (algorithmic or otherwise) are oil and water, surely.
"Orderly fashion" and trading (algorithmic or otherwise) are oil and water, surely.
> a hawkish demagogue with no knowledge of foreign policy and a high opinion of Putin
enlarged on that for you :)
enlarged on that for you :)
> Swinging the election toward a hawkish demagogue with no knowledge of foreign policy
At this point that sounds like either of them.
At this point that sounds like either of them.
Hillary is a lot of things, but inexperienced in foreign policy's a something she's not.
Of course one must note that experience in foreign policy may not be as important as the outcomes achieved during that experience.
The Iranian nuclear deal?
That was during Secretary John Kerry's tenure.
Hillary has threatened war to enforce the deal, which is something...[0]
[0]http://www.washingtontimes.com/news/2015/sep/9/hillary-clint...
Hillary has threatened war to enforce the deal, which is something...[0]
[0]http://www.washingtontimes.com/news/2015/sep/9/hillary-clint...
Gaining experience is another phrase for making mistakes.
Trump has a ton of experience defaulting on business loans. I can't see a better reason for him to take control and use his magic touch to fix everything.
> 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.
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.
Americans are better aligned with the largely Shi'ite Muslim Persians than with Wahhabbist (Sunni) Muslim Arabs. Note that this has almost nothing to do with relations between the governments of the U.S. and Iran.
On the axis of prince to ayatollah, I prefer the ayatollah. On the axis of theocratic absolute monarchy to theocratic constitutional republic, I prefer the republic.
Supporting the Shah was a mistake. Supporting the House of Saud is also a mistake. Supporting the ayatollahs would be another mistake.
What the U.S. should be doing is to support the personal and economic freedoms of all people living in Asia Minor, and to stop making their sole points of contact the strongarm governments and/or rebel groups. Like everyone else on the planet, the people in that region just want one of two things: help my business prosper, or leave me in peace. The constant military interventions and arms support and political deals serve neither goal.
On the axis of prince to ayatollah, I prefer the ayatollah. On the axis of theocratic absolute monarchy to theocratic constitutional republic, I prefer the republic.
Supporting the Shah was a mistake. Supporting the House of Saud is also a mistake. Supporting the ayatollahs would be another mistake.
What the U.S. should be doing is to support the personal and economic freedoms of all people living in Asia Minor, and to stop making their sole points of contact the strongarm governments and/or rebel groups. Like everyone else on the planet, the people in that region just want one of two things: help my business prosper, or leave me in peace. The constant military interventions and arms support and political deals serve neither goal.
It is true that U.S. culture is far more aligned with Shia Islam, but it is merely a game of numbers and control. ~80% of muslims are Sunni or some offshoot whereas the remaining percentage consists of Shia and other very small sects. As a result, Sunni is the dominant force in the ME except in Iran and half of Iraq where the Shia population is concentrated. If the goal of the US policy is to exert as much control over the ME, then aligning with Sunni is the clear play.
"support" personal and economic freedoms for all people is code for what policy, exactly? Because the word is vague on its own, and in the way in which you're using it. This sounds like a very interventionist foreign policy, otherwise what else could "support" mean, if it's at all a meaningful statement?
I also think you severely underestimate the strength of entrepreneurship as a social class, in that area of the world. It's not like they materialize out of nowhere the instant the U.S. stops propping up strongarm governments. They didn't exist in any signficant number before U.S. intervenist policies either. And by what moral authority do you draw upon to suggest that these countries should be modeling themselves off the U.S. economically in the first place?
I think the better policy is to leave them alone, in the John Quincy Adams approach to foreign policy. https://www.mtholyoke.edu/acad/intrel/jqadams.htm
I also think you severely underestimate the strength of entrepreneurship as a social class, in that area of the world. It's not like they materialize out of nowhere the instant the U.S. stops propping up strongarm governments. They didn't exist in any signficant number before U.S. intervenist policies either. And by what moral authority do you draw upon to suggest that these countries should be modeling themselves off the U.S. economically in the first place?
I think the better policy is to leave them alone, in the John Quincy Adams approach to foreign policy. https://www.mtholyoke.edu/acad/intrel/jqadams.htm
"Peace, commerce, and honest friendship with all nations; entangling alliances with none." --T. Jefferson
It means you leave people alone, unless you have a mutually beneficial trade to offer them. If a country has no entrepreneurial class, you look to make money elsewhere.
The US has no moral authority to demand imitation. It just has money--lots and lots of money. And it lets its own businesses spend their own money relatively freely, so long as they obey most of the laws and regulations and pay most of the taxes and make sufficient campaign contributions.
So that leaves only two acceptable foreign policy sticks. You have the embargo, and you have the boycott. And you have only one carrot--access to all the money held by your country's consumer market and philanthropic donors.
The US could decide, for instance, to boycott all goods and services produced in whole or in part by children under the age of 16 years, or by prisoner or slave laborers. This would, of course, require detailed provenance records for all goods entering US ports, and voluntary certification inspections for facilities listed in those records. And it would make all goods imported to the US more expensive. And it would put a lot of child laborers out of work, even if they really do need to be working to survive. If you are an international supplier, you only need to imitate US working conditions if you want to export to the US. If you do want access to the market, you can't get there with kids, convicts, or slaves.
This is slow. Apartheid ended 35 years after the first international boycott campaign, and the actual impact of the boycott is debatable. Israel has shrugged off a boycott for a long time, because the US actively undermines it. The US embargo against Cuba never produced any meaningful result, after many long decades.
In contrast, you can charge in, guns blazing, topple a regime, eradicate its bureaucracy, and stir up its internal politics with a bayonet, then go home by the end of your presidential term. But it isn't going to earn you many friends.
It means you leave people alone, unless you have a mutually beneficial trade to offer them. If a country has no entrepreneurial class, you look to make money elsewhere.
The US has no moral authority to demand imitation. It just has money--lots and lots of money. And it lets its own businesses spend their own money relatively freely, so long as they obey most of the laws and regulations and pay most of the taxes and make sufficient campaign contributions.
So that leaves only two acceptable foreign policy sticks. You have the embargo, and you have the boycott. And you have only one carrot--access to all the money held by your country's consumer market and philanthropic donors.
The US could decide, for instance, to boycott all goods and services produced in whole or in part by children under the age of 16 years, or by prisoner or slave laborers. This would, of course, require detailed provenance records for all goods entering US ports, and voluntary certification inspections for facilities listed in those records. And it would make all goods imported to the US more expensive. And it would put a lot of child laborers out of work, even if they really do need to be working to survive. If you are an international supplier, you only need to imitate US working conditions if you want to export to the US. If you do want access to the market, you can't get there with kids, convicts, or slaves.
This is slow. Apartheid ended 35 years after the first international boycott campaign, and the actual impact of the boycott is debatable. Israel has shrugged off a boycott for a long time, because the US actively undermines it. The US embargo against Cuba never produced any meaningful result, after many long decades.
In contrast, you can charge in, guns blazing, topple a regime, eradicate its bureaucracy, and stir up its internal politics with a bayonet, then go home by the end of your presidential term. But it isn't going to earn you many friends.
> But in the broader geopolitical sense, it really does make sense to have at least one close ally in that region.
What about Israel, Turkey, Egypt?
What about Israel, Turkey, Egypt?
Really? You think their moral positions are significantly better than Saudi Arabia? And they have essentially zero to offer economically? Their governments aren't any more sane or stable, in the enduring sense, than Saudi Arabia.
Yes, they are significantly better in a moral sense. They don't behead people for sorcery, or stone them to death for adultery. They also don't finance Wahhabi madrasa in other countries. Here's an example of what Saudi money buys elsewhere in the world:
http://www.rferl.org/content/tatarstan-attack-spar-fears-tha...
http://www.rferl.org/content/tatarstan-attack-spar-fears-tha...
This was not a moral judgement, I simply questioned the claim, that Saudi Arabia is the only influential US-ally in the middle east.
Influentially speaking, they are. Israel has zero influence on neighbours except for threats of nuclear war. The Egyptian government is currently seen as illegitimate pretty much everywhere. Turkey leverages its geopolitical position towards Europe and Russia, but Erdogan has few friends left and might well end up like Mubarak in the long run.
For good or bad, the combo of economic and religious power Saudis can swing is pretty unmatched in the region at the moment -- their only counterweight being, potentially, an Iranian state with smart people at the wheel for more than a few token years.
For good or bad, the combo of economic and religious power Saudis can swing is pretty unmatched in the region at the moment -- their only counterweight being, potentially, an Iranian state with smart people at the wheel for more than a few token years.
you're right, I was inaccurate about that. But saudi is certainly a valuable ally, right?
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.
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.
having bases in countries that have more than sufficient GDP to protect themselves
As in Germany, the bases aren't there for the US to protect that country but the other way round: to ensure that country remains US-aligned.
As in Germany, the bases aren't there for the US to protect that country but the other way round: to ensure that country remains US-aligned.
Actually most of these bases are there because when there's trouble in those parts of the world, we need a place to be able to get troops, equipment and supplies into a given theater in a fast, efficient manner. The countries reap the economic benefits for sure, so it's a win/win situation for both countries. Not so much when the US starts cutting back on its military:
City officials in Heidelberg expect annual financial losses of up to $25 million, as a result of the closures of U.S. bases in the region.
"We estimate that a total of about 1,000 civilian jobs will be lost, when the nearly 8,000 service members pull out," said Diana Scharl, a spokesperson for the city of Heidelberg.
http://worldnews.nbcnews.com/_news/2012/06/30/12482964-bye-b...
I'd love for us to pull back from a lot of these areas, but let's face it, when one country invades another, they don't call France, Ireland, or Norway to help them do they? They expect the US to be the world's defender from the bad guys.
City officials in Heidelberg expect annual financial losses of up to $25 million, as a result of the closures of U.S. bases in the region.
"We estimate that a total of about 1,000 civilian jobs will be lost, when the nearly 8,000 service members pull out," said Diana Scharl, a spokesperson for the city of Heidelberg.
http://worldnews.nbcnews.com/_news/2012/06/30/12482964-bye-b...
I'd love for us to pull back from a lot of these areas, but let's face it, when one country invades another, they don't call France, Ireland, or Norway to help them do they? They expect the US to be the world's defender from the bad guys.
> I'd love for us to pull back from a lot of these areas, but let's face it, when one country invades another, they don't call France, Ireland, or Norway to help them do they?
1. This makes it sound like you are talking about the invading country calling for help. Which is probably not what you intend.
2. In point of fact, if its in Africa, the boots on the ground for any call for help (whether the problem which provoked it is internal fighting or international conflict) are more likely to be French than American.
1. This makes it sound like you are talking about the invading country calling for help. Which is probably not what you intend.
2. In point of fact, if its in Africa, the boots on the ground for any call for help (whether the problem which provoked it is internal fighting or international conflict) are more likely to be French than American.
And France's African adventurism is... You guessed it. Made possible by massive security guarantees from the United States, as well as the US troops on European soil.
> when one country invades another
NATO? PeaceKeepers?
NATO? PeaceKeepers?
And by NATO you mean who, exactly? The US constitutes basically all the long range power projection capabilities of NATO. Hell, the rest could barely sustain a bombing campaign in Libya without US support.
So, let's be honest, the US is the core of NATO, and everyone else depends on US logistical capabilities if they want to deploy troops outside their immediate area, with the limited exceptions of the UK and France.
So, let's be honest, the US is the core of NATO, and everyone else depends on US logistical capabilities if they want to deploy troops outside their immediate area, with the limited exceptions of the UK and France.
> 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).
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).
Except we don't need a stable global oil supply. We WANT a higher oil price so we can sell our supply outside of the U.S. Following Neocon logic, the best outcome for us is a war that closes off access to Middle Eastern oil, forcing more countries to purchase energy from us.
The old Neocon argument is no longer relevant.
The old Neocon argument is no longer relevant.
And why is Iran an enemy of US?
I can't tell if you're genuinely asking, but Iran is widely considered one of the largest sponsors of state-funded terrorism in the world. Lots of self-flagellating Americans like to ask about the US/Saudi Arabia, but Iran's IRGC and esp. Quds Force are famous for their successes in cultivating and logistically supplying terror groups (think Hamas, Hezbollah) - if the US took such an intense and long-term view of the ME I think the world would be different.
Any such assessment largely depends on your definition of "state-funded terrorism". Saudis, for example, fund a massive network of Salafi religious schools all over the world, that has a very impressive record of radicalizing their students. Said students then end up running organizations like Caucasus Emirate or Daesh, or just blowing up local targets of opportunity (including moderate Muslim clergy that is trying to actively counter Salafi propaganda in their area, thereby preventing or at least limiting further radicalization).
But most importantly, I was asking about US. How many terrorist groups in US does Iran fund, and what damage have they done to date?
But most importantly, I was asking about US. How many terrorist groups in US does Iran fund, and what damage have they done to date?
The US toppled their democratically elected government a while back and the Iranians (rightly) hold a grudge and are highly suspicious of any US foreign policy.
Yes, but that was many decades ago.
For comparison, in the same time frame, US has actually invaded a different country outright, with a total death toll for its residents being on the order of hundreds of thousands even for the most conservative estimates.
And these days, said country manufactures a lot of goods for sale in US, and has recently signed a weapons deal.
I'm talking about Vietnam, of course.
The primary reason why Iran is the enemy of US today, is because US actively supplies its regional enemies - Sunni monarchies like Saudi Arabia, for example. Stop doing that for a decade, and I bet you that things will change significantly.
The problem is that it is a self-fulfilling prophecy loop - US supports KSA and others to counter Iran, which Iran [justifiably] interprets as hostile, and acts accordingly, justifying more US backing of its enemies etc.
For comparison, in the same time frame, US has actually invaded a different country outright, with a total death toll for its residents being on the order of hundreds of thousands even for the most conservative estimates.
And these days, said country manufactures a lot of goods for sale in US, and has recently signed a weapons deal.
I'm talking about Vietnam, of course.
The primary reason why Iran is the enemy of US today, is because US actively supplies its regional enemies - Sunni monarchies like Saudi Arabia, for example. Stop doing that for a decade, and I bet you that things will change significantly.
The problem is that it is a self-fulfilling prophecy loop - US supports KSA and others to counter Iran, which Iran [justifiably] interprets as hostile, and acts accordingly, justifying more US backing of its enemies etc.
"...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.
"... 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.
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.
Mmmmh there is a difference between a family of individuals and a country that executed drone strikes. Suing a government is harder.
Well, unless that family is the royal family of a nation. Sovereign immunity, the right of nations not to be sued, is actually based upon the Monarch's right not be sued.
In reality, the judgements of United States' courts could actually be enforced against the Saudis, by seizing their assets abroad. Any judgement by a Saudi court against the United States government is likely to be entirely unenforceable.
In reality, the judgements of United States' courts could actually be enforced against the Saudis, by seizing their assets abroad. Any judgement by a Saudi court against the United States government is likely to be entirely unenforceable.
Win-win.
> 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.
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.
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.
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.
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
[1]: https://en.wikipedia.org/wiki/Bitter_Lake_%28film%29
[2]: http://masoudbehnoud.com/weblog/s2.pdf
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.
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.
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.
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.
Yes, the United States and Great Britain have similar, but not identical interests in the Middle East.
Their intelligence operatives are almost preternaturally good (or at least seem that way due to their extremely precise knowledge of the Middle East.) And unlike American intelligence officers, they have a much smaller risk of "going native." American officers are rotated every few years to prevent this effect, while the Brits can keep people in place for decades without the same worry.
Their intelligence operatives are almost preternaturally good (or at least seem that way due to their extremely precise knowledge of the Middle East.) And unlike American intelligence officers, they have a much smaller risk of "going native." American officers are rotated every few years to prevent this effect, while the Brits can keep people in place for decades without the same worry.
Of course the US and UK have different interests. The UK has as a very high
priority abstract objective the question of "how can we exist as something
other than a US client state?" Given the other priority of "how can we avoid
getting on the wrong side of the US as at Suez?" this often produces
incoherent policy: the ""independent"" nuclear deterrent that may not be, the
aircraft carrier with no aircraft.
Al-Yamamah is simply about money. The arms industry is corrupt everywhere because such large amounts of money are involved. It's a real scandal and a tragedy that this should override the rule of law in the UK, but there we go. The UK is rather bad at state accountability; the central secret state is too big. The US of course prefers to federalise its unaccountability and distribute the abuse of power to random local police departments.
I'm curious as to why you think Americans are far more likely to "go native" than Brits? Is this perhaps a question of people "going native" in the other direction, like the Jordanian Royal family? Something about your writing suggests you're an "insider" of some sort.
(This feels odd to write, as a UK critic of UK domestic intelligence defending UK foreign intelligence, but hey)
Al-Yamamah is simply about money. The arms industry is corrupt everywhere because such large amounts of money are involved. It's a real scandal and a tragedy that this should override the rule of law in the UK, but there we go. The UK is rather bad at state accountability; the central secret state is too big. The US of course prefers to federalise its unaccountability and distribute the abuse of power to random local police departments.
I'm curious as to why you think Americans are far more likely to "go native" than Brits? Is this perhaps a question of people "going native" in the other direction, like the Jordanian Royal family? Something about your writing suggests you're an "insider" of some sort.
(This feels odd to write, as a UK critic of UK domestic intelligence defending UK foreign intelligence, but hey)
It's what I was taught in an intelligence course.
im not surprised.
every (out of 10 or so) brit ive met overseas and had a good chat with out over the last 3 years of being an expat has been a neurotic and/or belligerent asshole whereas most of the americans (out of 20) were able to communicate and assimilate with the local culture.
its become such a pattern that i wont even speak english to a person with a british accent anymore. quite a few of them are just looking for physical fights. so strange.
and thats the end of my n=30 overseas brits and americans anecdote.
every (out of 10 or so) brit ive met overseas and had a good chat with out over the last 3 years of being an expat has been a neurotic and/or belligerent asshole whereas most of the americans (out of 20) were able to communicate and assimilate with the local culture.
its become such a pattern that i wont even speak english to a person with a british accent anymore. quite a few of them are just looking for physical fights. so strange.
and thats the end of my n=30 overseas brits and americans anecdote.
My girlfriend runs a hostel and in my experience, the "Rule Britannia" types are a (vocal) minority. No country has a monopoly on jerks...
Depends on your expat crowd and reason. The british expats to NYC and SF are usually educated H1B immigrant types and are very pleasant people.
The expat who goes to south east asia to retire on their blue collar pension might be a different kind of person.
The expat who goes to south east asia to retire on their blue collar pension might be a different kind of person.
Your comments are very interesting. It's clear to me you have a unique perspective on this topic. I hope you don't mind me asking some follow up questions.
What does "going native" mean in the context of the intelligence community? Why is it you think British don't have this issue? Why is it harder for the US?
What does "going native" mean in the context of the intelligence community? Why is it you think British don't have this issue? Why is it harder for the US?
"Going native" in this context means sympathizing with the local population to the extent that their loyalty effectively shifts from the United States to the local people.
I suspect the Americans have this problem due to cultural factors. The binding ethos of the United States includes a hefty (if not total) tolerance to the idea of nationality being less important than their ideals.
The chief unifying principle of Great Britain is ultimately old-fashioned nationalism. They have an expectation that other peoples should become more British, rather than that they should accommodate new cultural norms.
I suspect the Americans have this problem due to cultural factors. The binding ethos of the United States includes a hefty (if not total) tolerance to the idea of nationality being less important than their ideals.
The chief unifying principle of Great Britain is ultimately old-fashioned nationalism. They have an expectation that other peoples should become more British, rather than that they should accommodate new cultural norms.
> unlike American intelligence officers, they have a much smaller risk of "going native."
That's interesting. Why's that?
That's interesting. Why's that?
Thanks for the links. I've added Bitter Lake to my watchlist.
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.
Check out the rest of Curtis' documentaries as well.
One eyeopener was part of his Pandora's Box series, A is for Atom, where he looks into the buildup of nuclear reactors on both sides of the cold war.
In particular how said reactors, at least in the US, were basically (massively) scaled up submarine reactors.
One eyeopener was part of his Pandora's Box series, A is for Atom, where he looks into the buildup of nuclear reactors on both sides of the cold war.
In particular how said reactors, at least in the US, were basically (massively) scaled up submarine reactors.
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.
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.
+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.
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.
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.
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.
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.
To some degree they have the big dog of international politics by the balls...
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.
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.
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
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
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.
It seems to be that this story has been out there for decades now, and this Bloomberg story just adds a few details.
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.
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?
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?
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."
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."
We haven't sacrificed our industrial sector:
https://research.stlouisfed.org/fred2/series/INDPRO
https://research.stlouisfed.org/fred2/series/INDPRO
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.
The US manufactures more than ever before, it just takes fewer jobs to do so.
The Kingdom Opening [1] will give you a fast historical overview.
[1]https://www.youtube.com/watch?v=9bHlO057DyY
[1]https://www.youtube.com/watch?v=9bHlO057DyY
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...
https://en.wikipedia.org/wiki/Nixon_Shock
http://qz.com/562128/isil-is-a-revolt-by-young-disaffected-m...
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
[1] https://en.wikipedia.org/wiki/Nixon_shock
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.
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.
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.
> 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?
Isn't currency backed by commodities considered something other than fiat currency?
It's called the "gold standard".
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Look at that gas station photo during the embargo: "Limit: $300 per customer". $300 in 1974? Wow!
That's $3.00 :)
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.
I remember the '73 embargo vividly. Rationing was based on license plate, even or odd. My parent's two autos were one of each. Of course, a station wagon and pickup truck. So my dad would get up about 4:30, put the snub-nosed .38 under the seat, and go get in line. Those who waited until the station opened were too late. Stations had big signs up if they had no gas.
Gas was always pumped by the attendant. When you got to the pump, he would tell you how much gas you could have. Five gallons was common.
My parents were small business owners. The embargo put their business at the edge.
Gas was always pumped by the attendant. When you got to the pump, he would tell you how much gas you could have. Five gallons was common.
My parents were small business owners. The embargo put their business at the edge.
More recently, the even/odd license plate scheme was put in place in NYC in the aftermath of Hurricane Sandy.[1] Local refineries were shut down and every station ran out of gas eventually. There were far away deliveries being trucked in but they were gobbled up almost immediately. People were waiting in multi-hour lines to get gas from the handful of stations that got a shipment in.
[1]: http://www.nyc.gov/html/om/html/2012b/pr406-12-static.html
[1]: http://www.nyc.gov/html/om/html/2012b/pr406-12-static.html
I don't understand why Nixon and subsequent administrations didn't push _hard_ for total energy independence after that, as in moonshot-levels of investment into alternative energy (whether alternative sources of oil or research into nuclear/renewables).
Carter tried, and he learned the very valuable lesson that you NEVER level with your electorate. Always feed them happy, optimistic fantasies or your career is over.
Wow I never knew that. I lived through it too - but on a farm. We were exempt from any sort of rationing. So I didn't get any notion that things were that tight. I thought the lines (on TV) were just panicky folks rushing to fill up, like they empty the grocery store every time a storm is coming.
That's $3.00
I wonder how many other secrets we know nothing about in the US like this.
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.
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.
wahsd(1)
And believe me this deal/collusion has created friction between 1.8 billion Muslims and the West;
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.