The report published by The New York Times has claimed that, Saudi Arabia warned the Obama government and members of congress to sell off the hundreds of billions dollars of worth American assets held by the kingdom. If the threat given by the kingdom becomes the reality than it will shake up the economy of the entire world since the Dollar is considered to be one of the major international currency of exchange. This report has been published by major national and international media. What made the kingdom to take such drastic measures against the most powerful country in the world? Read the complete report here to know more..
The NY Timeshas revealed that, Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts. Although key outside economist feel that this would not the practical step for Saudis as this will amount into crippling the entire economy of the Kingdom but the threat is another sign of the escalating tensions between Saudi Arabia and the United States.
But why did the Saudis in first place has decided to take such drastic steps and what strategy they have to support their decision? Let’s have a look at the complete story behind this. According to the sources, American congress has decided to pass the bill which will hold the Saudi Arabia responsible for the terror attacks of 26/11.
Saudi Arabia is the third largest holders of U.S. Treasury bills in the world following China and Japan and their warning of liquidating the huge U.S. assets needs to be taken seriously. The US needs to take this issue very seriously as the Saudis holds around three-quarters of a trillion dollars in T-bills and the sudden divestment would almost certainly crash the dollar as well as global markets along with it says the report.
The reports also claim that, Obama administration is strongly supporting the Wahhabi regime and this is confirmed by the congress insiders. According to them Obama has been lobbying Congress to block the passage of the bill. Administration officials have warned Senators that if the Saudis make good on their threat, there would be extreme economic and diplomatic fallout.
The bill before the Senate is meant to clarify that the immunity enjoyed by foreign nationals should not be applicable to cases where a nation is found responsible for a terrorist attack on American soil. If passed, the bill would effectively clear the way for the role of the Saudi government to be explored in the numerous lawsuits filed regarding 9/11. Realizing their complicity in the events of 9/11 is on the precipice of being exposed, Saudi Arabia has gone into full panic mode. They are now threatening to liquidate hundreds of billion in U.S. denominated assets, and perhaps as much as $750 billion in U.S. T-bills (the NYT’s estimate of Saudi Treasury holdings).
The spectacular threat by the Saudis was not expected, as speculation about using divestment of T-bills as a weapon was largely thought of as a potential threat to be wielded by the Chinese in the event of a major geopolitical conflict with the U.S. Surprisingly, it was the Saudis that are the first to threaten to use this potentially devastating economic weapon.
The threat is indicative of a continually deteriorating relationship with the Saudis, as the U.S. and the Kingdom have been at odds over how to deal with Iran. Many experts are skeptical of the threat by the Saudis due to the fact that the move, would in turn, decimate the Saudi Arabian economy, as their currency is pegged to the dollar.