Saudi Arabia Just BROKE The Dollar – Record Treasury Dump
By Sean Foo
Saudi Arabia has dumped their holdings of US treasuries to a 6-year low. Even as a global recession nears, Saudi Arabia is diversifying away from dollar assets into risky investments like stocks. This underscores a big economic and geopolitical shift away from Washington and the world reserve currency. Here’s what you must know and why the dollar system is in trouble.
Here’s what others had to say:
Congress can’t balance the budget. Finally paying the piper.
I believe many countries around the world would like to say ‘thank you’ to MBS of Saudi Arabia for his co-operation and effort in helping to progress the de-dollarzation.
Thanks Sean for keeping us informed about the real world news. Rough times ahead.
Avoid being sanctioned if you ever annoy the US. Get rid of dollars at every opportunity. It is a lesson that has been learnt.
Treasury Bonds depend on the return investment from the US at maturity. If the US is bankrupt then they can’t pay or if the dollar value falls off then the US will default.
Sean many countries will join BRICS. And many countries are looking at reducing their exposure/ risks. Holding US dollars presents a risk to many at this time. Diversification becomes key for all.
It is only desirable for Saudi Arabia to hold dollars as long as they can readily buy goods and services from other countries with them and the value stays relatively constant.
If they build their own economic system as a separate trading system then it will become immune to the effects of US economic policy and become a stable investment if run properly. The BRICs have nearly all they need. They have access to virtually every element on the periodic table and they have the means to build all the products they need. As they do then the BRICs economy will be available to smaller countries who can jump over to their system and their rules. You will see the dollar system still running alongside, but on shrinking ground.
Remember when the Saudis withheld oil in solidarity with the Palestinians, America (Kissinger) told them that they had two choices: 1. Go back to selling oil, sell oil using the US$ and invest a large percentage of the profits into American businesses/stocks and keep the Kingdom as is or… 2. America would turn their land into a glass desert and they would lose everything.
Today, the tide has turned. The Saudis have other choices (e.g. BRICS) while the US is struggling and distracted by wars, recession and waning power.
BRICS has had plenty of time to make a correct assessment of the world monetary system. But since it means America will be squeezed-out, we can expect them to pull-off a ‘special attempt’ similar to the ‘who done it’ Nordstream event. BRICS needs to anticipate Washington will not go quietly.
Worse. As China and the Gulf states sell off treasuries, that makes other countries far more nervous about holding US debt. Too much risk of default. That effect snowballs, accelerating and amplifying likelihood of default. Makes me wonder how many countries assets the US will seize WHEN there is a default.
The answer to your “hard choice for America” question is this: faced with a choice between embracing recession and printing more money, the powers in Washington will choose the option that enables them to avoid discomfort. This is really a moral question, about accepting the consequences of your actions or trying to avoid them. Eventually, the choice will be made for them, and for all of America.