Right now, the Saudis are in deep financial distress with investments in Neom and allied projects facing massive issues over funding. Most projects are stalled or cancelled. Saudi Arabia's problem resembles what is now happening in Dubai, trying to tame nature with hype and money. Dubai is failing on all fronts since the start of the war against Iran. It is a lesson for the Saudis, and I think they have taken the cue.
The Arabs know that oil reserves are finite and they need to diversify their economy away from oil. But their choices are limited being largely barren desert. Dubai focused on tourism and the lure of the wealthy to set up base in UAE. It is failing with all the artificial facade of attraction that is losing steam. The war against Iran put paid to all the hyped-up safety mantra, while the sea and the desert are claiming back what belongs to them.
Now the Arabs are stuck. Extracting all that wealth and moving them away from the USA is impossible. Not doing so means going down together with the USA when it collapses. Sure, every expert and analyst are saying the USA cannot collapse, same as saying that the Titanic was unsinkable. Yeah, just printing and more printing solves all the USA's problems. Is that the reality? Do those countries who bought USA debts really believe in the hubris today? If so, why is the usage of the US$ falling, from around 70% to almost slightly just 50% in a space of over two decade or so. This is despite all the money printing by the USA to flood the world.
If oil trading moves away from being priced solely in USS, expect a tsunami of countries keeping less US$ to buy oil and that really is going to be traumatic. Oh, lest I forget, Trump is going to hit them with massive tariffs it they de-dollarize. I do not know whether that is going to make the US$ fall faster of save it. Just wait and see when the shit hits the fan.
Anonymous
2 comments:
The Arabs are in deep shit. Iran is always going to be the permanent resident in the Middle East, defeated or not, while the USA is no more than a hotel guest, just looking at the oil. A hotel guest may stay, for say 20 years, like in Afghanistan, but when the shit hits the fan, it will just leave in a hurry.
The Arabs cannot extract themselves from USA control with their oil wealth all stuck in USA assets - mostly real estate investments all of which cannot be uprooted. The Arabs have been caught in a very sinister trap set by the USA. Other countries must also be watching and asking, when will we be next. Best case scenario is not being greedy and stay away from investing in USA.
On the other hand, hanging on to the coattails of the USA is bound to be counter-productive, with the Iranian 'Sword of Damocles' hanging over their heads. A defeated Iran, even if it happens, is not going to disappear overnight. How many times have Iran risen from the ashes in its tumultuous history, going back to the era of the Persian empire? This is a civilization, not a simple country that can be trampled upon like Germany and Japan.
One question not answered is what is going to happen to all those Arab assets in the USA should the empire really collapse? The wealth of the Gulf derived from oil is going to end up in smoke.
USA is the unsinkable Titanic. Iran is the unsinkable iceberg. The Arabs are the passengers on the Titanic.
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