Trump has been calling for lower oil price without any impact on anybody over the last month.
Saudis have run out of money, are borrowing funds which is blasphemy, selling assets, ejecting expats, cutting subsidies, hiking tariffs by doubling or tripling on water and electricity, opening up their economy, trying to diversify, reducing religious barriers etc.
But more importantly, Saudis are meeting with Russians and the Chinese.
Russians are building nuclear plants in Saudi while Saudi handed USD 10b to Russians for investment last year.
Saudis are also at the verge of buying S-400 anti-missiles from the Russians, that are the best in the world unlike what America keeps claiming that they make the best military equipment in the world.
Whether it's electronic capabilities, internet surveillance or military, Russians are far ahead of the Americans.
King of Saudi visited China last year. This is very important.
Since China (and India) are the largest oil buyers on the planet therefore, their view point matters more than anybody else in this world.
Chinese have created futures exchange for oil, gold and other commodities in early 2018.
However, despite selling large oil quantity to China and India, Saudi refuses to accept Yuen (at least publicly).
However, we have projected (since 2015) that in 2018 or latest 2019, Saudis need to accept Chinese Yuan else there will be no buyer of Saudi oil, which is where Saudis derive their strength from.
The 1973 deal between America and Saudis is coming to an end and will bring the petro dollar down.
Trump is getting agitated who has humiliated as well as is warning the Saudis.
We expect petro dollar system to recycle dollars while selling oil of Saudis as coming to an end.
Many reasons for the same. Saudis are no longer the largest producers of oil, America is no longer a buyer but an exporter of oil/gas, America has almost burnt more than half of Middle East, war drums with Iran are sounding and tensions are at their highest, China has risen and America doesn't like it one bit.
The day Saudis/UAE accept Chinese Yuan will bring an economic earthquake.
In our view that day is not too far and is going to happen latest in 2019 and will send economic shockwaves world-wide.
We expect GCC currencies to depeg, we expect many a fortunes to be lost in GCC and we expect real estate prices and business to plunge even further as GCC loses it's value in the world of trade, we expect massive depreciation in asset values across GCC and we expect large businesses and corporations to collapse in GCC.
China will support the GCC for their own interests.
However, the downturn of USD will bring a lot of bad news worldwide.
Just yesterday, Trump humiliated the Saudis while sending a very strong signal to Saudis not to turn over to the Chinese.
Trump humiliated Saudi Arabia and its king again
"Without Us, Who Knows What’s Going to Happen": Trump Warns King Salman to Buy More Weapons
Trump is basically blackmailing the Saudis into not accepting the yuan and pushing them to buy more US weapons and send their billions to America which the Saudis are unwilling and unable to do since they don't have any money left.
This will just not end well.
This was expected nd much more to happen to Saudis because just they forget about the holy places nd inshallah a day will come where they will beg with the country whom they have trouble a lot.
ReplyDeleteSaudi's need to take a stand and show if they have got any balls or not.
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