Qatar Close To Running Out Of Dollars?

Let's be honest, the Saudi-led campaign to starve Qatar's citizens of food and businesses of trade was doomed from the start, while the Saudi's my feel they can rely on big bully boy best mate the USA to deter anybody thinking of helping Qatar, with both Turkey and Iran volunteering to provide food and other essentials to the tiny Gulf nation while local entrepreneurs have started a cow paradropping campaign to beat the blockade on milk imports,  the key factor is what will Russia's President Putin do.

Putin has little time for the Saudis, is fed up of American meddling in the middle east, and is a strong ally of both Iran, the real target of the Saudi move against Qatar, and of Syria's President Assad. And Putin is well aware of the role the USA and Saudi Arabia have played in sponsoring the iSIS / Al Nusra war in Syria. In fact, right up to the end of his failed presidency Barack Hussein Obama was telling the world America's priority in Syria was not to defeat the terrorists of ISIS but to remove Assad and open the way for the Saudis to install a Muslim theocracy that would support its own extreme version of Islam.

A new problem has now emerged in Qatar, the world's biggest source of natural gas: the financial system is running out of dollars. Bloomberg reports that several Qatari banks have boosted interest rates on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate the gas-rich state intensifies.
  
Adding to concerns of a monetary blockade, Bloomberg also reports that some banks in neighboring countries have been offloading investments in Qatar amid concerns of a widening of the blockade.

Qatar is the world's wealthiest nation on a GDP/capita basis and is well able to withstand a prolonged financial siege, and defend its currency and economy. Finance Minister Ali Shareef Al Emadi  played down the impact of the crisis on the country, in an interview with CNBC on Sunday (11 June) saying the plunge in Qatari assets last week was a “normal” reaction to the standoff.

Finally, the question nobody dares ask out loud is, "Where does Russian president Vladimir Puting stand on all this. Well aware of the US role in this latest crisis and the real reasons behind it (reported HERE and HERE) Puting has said the US has “got a false sense that it is able to do everything without any consequences,” in particular after the Soviet Union’s collapse.

“In such a situation, a man or a country begins to make mistakes… Putin said. The state begins to function ineffectively. One mistake follows another. That is the trap in which, as I believe, the United States got caught into,” Putin reflected during a press conference.

"I believe that if you think you are the only world power, trying to impose on the whole nation the idea of their exclusiveness, this creates an imperialistic mentality in society, which in turn requires an adequate foreign policy expected by society. And the country's leaders are forced to follow this logic. And in practice this might go contrary to the interest of the Americans.... It demonstrates it's impossible to control everything."


 

Which some might interpret as a warning to the USA to stay out of the middle east and mind its own business.


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Saudi Arabia Threatens To Liquidate Its Treasury Holdings If Congress Probes Its Role In Sept 11 Attacks

An excellent insight into the west's relationship with the medieval mindset of Wahhabi Muslim autocracies. Why do we let the primistive mindset of these oil rich vagina mutilators dictate to us. Maybe it is because the USA has not, for atound a century been a democracy because it was hijacked by oligarchs during World War One and Saudi Arabia is not an ancient monarchy like britain but was created by an opportunist religious nut after the fall of the Ottoman Empire. And that's nor all the two nations have in common. Both like to achieve their political aims by the use of threats and terror.

Anyway, here's Tyler Durden of Zero Hedge on how, once again, the Saudi government is calling the Obama Administration to heel.

Back in January, when the market was watching in shocked silence as oil prices were crashing to decade lows and as concerns emerged that Saudi Arabia may need to commence selling its vast, if unquantified, USD reserves, we wrote a post titled "Attention Finally Turns To Saudi Arabia's "Secret" US Treasury Holdings" where we noted something very surprising: whereas we do know that Saudi Arabia is the owner of the world's third largest USD reserves ... their actual composition remains as a secret, because while the US discloses the explicit Treasury holdings of all other nations, Saudi Arabia's holdings, for some unknown reason, are not officially disclosed.

(Image source: Zero Hedge)

"It’s a secret of the vast U.S. Treasury market, a holdover from an age of oil shortages and mighty petrodollars," Bloomberg wrote of Saudi Arabia’s US Treasury holdings.



"As a matter of policy, the Treasury has never disclosed the holdings of Saudi Arabia, long a key ally in the volatile Middle East, and instead groups it with 14 other mostly OPEC nations including Kuwait, the United Arab Emirates and Nigeria,” Bloomberg goes on to note, adding that the rules are different for almost everyone else. Although Saudi Arabia's "secret" is protected by "an unusual blackout by the U.S. Treasury Department," for more than a hundred other countries, from China to the Vatican, the Treasury provides a detailed breakdown of how much U.S. debt each holds."



So who does know how much US paper the Saudis are sitting on? Well, the Saudis of course,"a handful of Treasury officials," and some bureaucrats at the Fed, Bloomberg says, noting that “for everyone else, it’s a guessing game."



Yes, a “guessing game,” but one that will very soon have profound consequences for markets and for geopolitics.



We closed with a simple, if suddenly very prophetic question:



"who would be the new patron saint of the US Treasury Department in the event the Saudis drawdown all of their reserves and decide to diversify away from USD assets... Put differently, who will monetize the US deficit if relations between Washington and Riyadh hit the skids over Iran?"



It is this question that has suddenly reemerged with a bang, and could rock the US administration to its core as what until recently was a "fringe conspiracy theory" is suddenly exposed as an all too unpleasant fact, and becomes the biggest political scandal to rock the U.S. in years, in the process maybe even crushing the friendly diplomatic relations the U.S. has held for years with its biggest Mid-East ally, Saudi Arabia.

It may be pure coincidence of course that the Saudi Arabian treasury has deciced to put pressure on Washington in this way when of the topic of September 11 has reappeared in the news recent weeks. The taboo - in official circles - topic of whether there was a "Saudi connection" in the biggest terrorist attack on US soil (Yes there was). Last weekend, out of the blue, the 60 Minutes news review broadcast an item on the "28 pages" that were classified beyond top secret in the Congressional investigative report into 9/11 - pages that allegedly confirm the Saudi connection.

A report in the New York Times earlier this week revealed Saudi Arabia has told the Obama administration and members of Congress it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.

Saudi officials have always denied that the global beheading capital had anything to do with the Sept. 11 attacks, and the 9/11 Commission officially found "no evidence that the Saudi government as an institution or senior Saudi officials individually funded the operation." But critics have noted that the commission’s narrow wording left open the possibility that less senior officials or parts of the Saudi government could have played a role or were selected to take the hit if Saudi involvement was confirmed.

Suspicions have lingered, not just because the conclusions of a 2002 congressional inquiry into the attacks cited evidence that Saudi officials living in the United States at the time had a hand in the plot. Just this week an independent invastigator claimed evidence existed of the detonation of three thermonuclear devices at the site (That is an unofficial report by the way, this publication mentions it as evidence of continuing doubts, we do not endorse it.)

The information contained in those 28 pages removed from the report, still has not been released publicly. It was the surprising rekindled focus on these 28 pages in recent days that suggested that something may have been afoot.

More on that New York Times Story and the fall out from it in Our relationship with Saudi Arabia is fracturing at HOT AIR


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