Saudis Tried To Extort G7 Over Fate Of Putin’s Frozen Billions
Would-be macro mavens and self-styled geopolitical observers harbor a lot of misconceptions about Saudi Arabia's willingness and, more importantly, logistical wherewithal, to sell its oil for something other than hard currencies.
Westerners are inundated on a daily basis with Russian and Chinese propaganda, a lot of it disguised as macro commentary. I personally guarantee that a lot of you consume such content in mass quantities without realizing it. There are sell-side strategists caught up in
Back in the Dark Ages, when I was a very junior banker, I had to give a presentation to some folks at the Saudi Monetary Agency on Treasury’s planned dematerialization of bonds. When it was all over, a couple of them took me aside to ask what the real motivation for this project might be. (Obviously fraud prevention, operational efficiency, and anti -money laundering were not good enough.) I jokingly suggested that it might be so that when the time came, the US could selectively default on our debt. They didn’t seem to like my sense of humor.
ha!
Ah, another dear friend and ally against Russia, Iran & China is happy to not set aside their national interests to further US policy goals. They are following the advice DJT told delegates at his first (only?) address to the UN General Assembly where he advised other nations to also put their own national interests first.
Nor is it confined to our dear Sunni friends. India continues to openly buy huge amounts of Russian oil. Then there is much of Southeast Asia and the Southern Hemisphere starting to balk at US demands to further curtail goods & services trade with China.
The impact of the fracturing of the world trade system is not solely limited to the trade balance figures. It’s right in front of our eyes.
But I deserve a scolding from the sysop for not remaining solely focused on the path of one-month volatility and when the Fed will finally deliver an earth-shaking 25 bp cut in rates.
India is an interesting place. On the one hand, why should they care if half of Europe get subjugated by a mad revanchist Russian Tsar? It’s half a world away with few direct links to whatever they might want to achieve…
OTOH, though – boosting Putin is boosting China… and China really would like to fuck up India and make them their bitch. So… Modi should be thinking carefully about second order consequences when he buys that sweet sweet Russian oil…
I agree. I believe Tom Kean’s rule of domestic politics applies internationally- you must remember who hates who….
Some historical legeacy there as well. Older people in India still resent how the US favored Pakistan and remember that Russia was a reliable supporter of the nation.
Time for a shameless display of my ignorance. What do the Indians use to pay for all this oil? Certainly not Rupees. Rubles? Liquidating their bubble gum wrapper cache? Maybe gold donations from their beleaguered citizens?
I recall that Russia was accepting some payment in rupees in a sort of barter transaction for Indian goods & services. Otherwise, they pay in USD like they do for all of their other oil imports. A price of $50-per-barrel incentivizes India to turn a deaf ear to whatever back-channel threats and whining the US delivers.
Always enjoy and impressed by scope of your purview. Learning every day.