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Mish on Saudi ArabiaSaudi Arabia Delays Payment to Contractors, Considers IOUs: Liquidity Crunch at Best18WednesdayMay 2016 Liquidity Crunch or Worse Saudi Arabia burnt through its reserves faster than anyone thought. In signs of a huge liquidity crunch, at best, the country has delayed paying contractors and now considers paying them in IOUs and tradable bonds. In retrospect, the Saudi threat to dump US assets looks more ridiculous than ever. Please consider Saudi Arabia Considers Paying Contractors With IOUs.
Beyond a Liquidity Crisis Deficits don’t shrink if you delay paying the bills. Deficits arose because more money was spent than collected. On May 17, the Senate Passed a Bill Allowing 911 Victims to Sue Saudi Arabia. Obama threatens a veto. Meanwhile, Saudi threatens to dump $750 billion in U.S. securities and other American assets if the bill becomes law. Does Saudi Arabia even have $750 billion. Color me skeptical. Saudi Arabia’s bluff that it would sell US assets if the Obama signed the bill seems more ridiculous than ever. For discussion of Saudi involvement in 911 and the alleged dumping threat please see Understanding the Saudi, Chinese “Economic Nuclear War” Threat; Saudi 911 Round-Up. For discussion of Saudi Treasury holdings, please see Treasury Department Finally Discloses Saudi Treasury Holdings – Incorrectly? There is no “nuclear” economic threat by Saudi Arabia or China as some have proclaimed. Mike “Mish” Shedlock https://mishtalk.com/2016/05/18/saudi-arabia-to-pay-contractors-with-ious/ |
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