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No the thesis is not that the current budget deficit is a problem but the increasing costs of bribing and subduing the populace and the factions of the royal fa
by justincormack 11y ago
No the thesis is not that the current budget deficit is a problem but the increasing costs of bribing and subduing the populace and the factions of the royal family turn into a bidding war, with increasingly expensive wars as the proxy war in Yemen escalates. The ownership of the assets overseas is somewhat complex too - there is little public documentation, but the country does not really own much, it is owned by individuals, as this is a traditional feudal monarchy, not a modern country, so there is no real "state". At some point with increasing factionalism this could be problematic for borrowing. If there were serious political issues, like the Saud's being kicked out, much of the money would go with them, and the credit rating would not last for long.
On the other hand people have been predicting the end of the House of Saud for decade now, and people have continued to support them and sell them unlimited weapons.
- sremani 11y agoWould you think that House of Saud would venture into a price war if it felt vulnerable at home ?
- cmdkeen 11y agoOne theory is that Saudi is keeping prices low to try and destroy the US shale industry. Another is that OPEC is no longer operating as a cartel and Saudi couldn't persuade other governments to cut production to boost prices so they didn't want to lose their own market share. Saudi may be in trouble, but we're more likely to see instability in other petro-states first, especially Venezuela.
- danieltillett 11y agoI think it is similar to Germany's WWI 'gamble' of fighting a war on two fronts. Everyone knew this was a very bad idea, but it was thought that the gamble just might work if they could knock France out quickly. The house of saud knows they are sitting on a demographic time bomb in a world where renewables are getting cheaper every day. When you feel your options are limited you tend to take risks that are not wise.