
U.S. Discloses Saudi Holdings of Treasuries for First Time - aburan28
http://www.bloomberg.com/news/articles/2016-05-16/u-s-discloses-saudi-arabia-s-treasuries-holdings-for-first-time
======
kafkaesq
Utterly fascinating, both that this "special arrangement" has existed and has
been kept out of general public awareness throughout all this time.

Brought into context with the otherwise inexplicable tolerance for that
regime's egregious human rights abuses, and the "delicateness" with which it
was handled during the 9/11 investigations (extended the fact that its key
people were allowed to slip out of the country in the immediate aftermath,
despite a nation-wide travel ban on everyone else) -- it all starts to make
sense.

Not in any tinfoil kind of way. But in a more banal, mundane, "Why do we keep
kissing this bloodthirsty, homophobic, misogynist and utterly decrepit
regime's ass, for decade after decade?" kind of way.

 _The U.S. started releasing data on foreign ownership of Treasuries in 1974.
Since then, the Treasury’s policy had been to not disclose Saudi holdings, and
it grouped them instead with those of 14 other mostly OPEC nations, including
Kuwait, Nigeria and the United Arab Emirates, Bloomberg reported in January.
The group held $281 billion as of February, down from a record of $298.4
billion in July._

 _For more than a hundred other countries, from China to the Vatican, the
Treasury had provided a detailed monthly breakdown of how much U.S. debt each
owns. The figures for March are scheduled for release at 4 p.m. New York time
Monday._

 _The special arrangement was a product of the 1973 oil shock following the
Arab embargo. It’s among concessions that U.S. administrations made over the
years to maintain America’s strategic relationship with the Saudi royal family
and access to the kingdom’s oil reserves._

~~~
twoodfin
_(extended the fact that its key people were allowed to slip out of the
country in the immediate aftermath, despite a nation-wide travel ban on
everyone else)_

This is an urban legend:

[http://www.snopes.com/rumors/flights.asp](http://www.snopes.com/rumors/flights.asp)

~~~
acqq
The article just claims it's "false" that they flew out before 11:00 A.M. on
September 13, 2001 (apparently the end of an "official" ban on air travel) not
that it's false that they flew out of the country.

So it happened, just not before that exact date and time.

~~~
twoodfin
It vitiates the claim that somehow these Saudis got special treatment from the
U.S. government.

Many foreign nationals flew out of the U.S. when the travel ban was lifted.

~~~
acqq
> It vitiates the claim that somehow these Saudis got special treatment

No, it doesn't, the "special treatment" is documented, it's just that the
special treatment wasn't that they flew exactly "before 11:00 A.M. on
September 13, 2001." Specifically, FBI lied about the whole issue:

[http://investigations.nbcnews.com/_news/2012/03/14/10672374-...](http://investigations.nbcnews.com/_news/2012/03/14/10672374-new-
questions-about-fbi-probe-of-saudis-post-911-exodus)

"Instead of just noting that the FAA record showed the travel occurred after
U.S. airspace was reopened, the FBI said Sultan and his three companions “had
arrived in Lexington from Tampa by car.” “The four individuals,” the report
went on, “had disobeyed the Prince [Ahmed] by traveling by car instead of by
jet as the Prince had instructed them.”"

And the very Snopes page seems to state that the pilot of one of the flights
("the bin Laden flight") was in fact an FBI agent?

------
secfirstmd
This is yet another fascinating step in the disenagement of the US from Saudi
Arabia (pity it took so long to happen). Drip by drip stories are emerging
which are preparing for it. The Saudi 9/11 pages in the report. Diplomatic
spats etc.

It's fascinating to watch such a deal with the devil break down. The long term
natural ally for US in the Middle East is Iran. It seems the Washington
establishment knows this.

~~~
partiallypro
Just because we made a deal with Iran doesn't mean they are our ally, and I'd
hardly call them our "natural" ally; their regime is only marginally less bad
on human rights than Saudi Arabia. Iran still funds terror groups, much like
Saudi Arabia. They are just part of two different tribes and despise one
another. Really the U.S. mission should be to do whatever it takes to prevent
Saudi Arabia and Iran from going to war. They are already in a proxy war in
several locations, Iraq and Syria being the two largest.

I think that's what people in Washington know, has nothing to do with being
their ally and everything to do with stopping an implosion. If Iran got a
nuke, it's not likely they would give it to a terror group (from what I see)
it's just incredibly likely that it will push Saudi Arabia to get one too and
then we'll have quite the situation on our hands.

~~~
avn2109
Before the Iranian revolution, Iran under the Shah was the USA's staunchest
regional ally. And before that, the British and Russians spent centuries
wrestling over influence inside Iran. There are sound geopolitical reasons to
court Iranian friendship, and undoubtedly the days of Anglo-Persian
cooperation will someday return. Though perhaps after regime change.

~~~
GFK_of_xmaspast
I don't see the regime in London changing anytime soon.

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dharma1
My guess is they will reduce those holdings - they have a large budget deficit
they need to cover, before it bankrupts them. Defense and fuel subsidies make
a large part of that deficit.

For a country of 30 million people with a lot of sun, I find it crazy they
produce most of their electricity with oil and are the 6th largest oil
consumer in the world. Much of that is simply wasted through inefficient power
plants and AC.

Would do them well to use their foreign reserves (while they still have them)
to cover their energy needs by building solar.

~~~
brianwawok
Oil is $1 a barrel for them. I bet solar is 40x the price per MW.

~~~
chillacy
But if it would have sold for $50 a barrel, that's $49 in lost revenue
(ignoring supply/demand curves shifting).

They could have used that $49/barrel to buy some solar panels and (maybe) come
out energy even in however many years.

~~~
brianwawok
But they can't sell anymore! Supply currently exceeding demand. If they put 1
million more barrels of oil a day on the public market, prices go down by Y,
making the net gain of that 1 million barrels low (maybe negative, but if not
at least close).

So if market has demand for you to sell 10 million barrels of oil a day, but
you have capacity to pump 20 million... you found a way to basically have
"free" energy by burning some oil.

Yes it shortens the length of your oil reserve and yes it kills the
environment, but in the short term it is the best option. Most
people/countries make decisions in the short term. So to me it is very logical
that the middle east burns oil for electricity, nowhere near a "duh why not
use solar" moment.

~~~
dharma1
Not only they burn it in very large quantities, but they subsidise burning it
to a degree that ends up as a hole in their budget, eroding foreign currency
reserves they've built up previously. And there are huge wastages - old power
plants, inefficient AC, oversized cars etc

They are starting to wake up to building solar now though:

[http://www.theatlantic.com/magazine/archive/2015/07/saudis-s...](http://www.theatlantic.com/magazine/archive/2015/07/saudis-
solar-energy/395315/)

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fredgrott
Here is the interesting thing, why now?

Let me give you a hint....what resource do Saudi's loose in the next 5 to 10
years?

Give up? Its the next thing to reach $100 per barrel..at least in several
parts of the Middle East

Okay okay okay...Water, specifically the water table Saudi has relied upon for
so long will be gone.

~~~
dmfdmf
Interesting side note. In a previous life back in the 90's, I worked in the
(civilian) nuclear power industry. I came across some old company reports from
the 80's for selling nuclear reactors to Saudi Arabia for desalination and not
electrical power generation. I asked my boss about it because he was around at
the time and he said the Saudis were serious but the numbers just didn't work
out. I think the main problem was fouling of the tubes used to boil off the
water leaving behind all sorts of dissolved mineral and salt deposits. Chronic
cleaning or replacing the tubes killed the economics.

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c-slice
This calls Saudi Arabi's bluff. Just a few weeks ago they threatened to sell
all their US treasuries and some speculated that they held much larger
ownership in US treasuries. They claimed to hold up to $750 billion in US
treasuries. [http://www.nytimes.com/2016/04/16/world/middleeast/saudi-
ara...](http://www.nytimes.com/2016/04/16/world/middleeast/saudi-arabia-warns-
ofeconomic-fallout-if-congress-passes-9-11-bill.html)

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marcosdumay
US$120G does not put their reserves bellow China, Japan, Brazil, and Russia?
How is it the 3rd?

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sehugg
They sure bankrolled the heck out of the Iraq War, didn't they? To the tune of
around $80 billion starting in 2003.

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Aelinsaar
I would not want to be holding US debt, this election cycle.

~~~
toomuchtodo
Can you name a safer financial instrument than US debt? Its definitely not
fiat currency nor metals (incl. gold).

~~~
dragonwriter
> Can you name a safer financial instrument than US debt? Its definitely not
> fiat currency

I dunno. I mean, US government debt is conceptually subject to both US
monetary risks (the same as US dollars) and US government fiscal risks, so US
government (dollar-denominated) debt must always be (even if only
infinitesimally) less safe than at least one fiat currency, to wit, the US
dollar.

~~~
brianwawok
In what case would tbonds go down but not the dollar?

