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Bush in $20 billion arms deal with Saudis; Saudis threatening dollar collapse

Discussion in 'Political Zone' started by CowboyJeff, Sep 20, 2007.

  1. CowboyJeff

    CowboyJeff New Member

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    Bush in $20 billion arms deal with Saudis; Saudis threatening dollar collapse

    Friend and Ally Update.
    "Looming $20B Arms Sale Raises Concerns," by Barry Schweid for AP:
    WASHINGTON (AP) — The Bush administration's proposed multibillion-dollar weapons sale to Saudi Arabia brought new allegations on Capitol Hill Tuesday that the monarchy has been lax in countering terrorism.

    The kind of weapons that the Saudis would purchase and other details, including any U.S. conditions on how they might be used, have not been disclosed yet by the administration.
    The sale is part of a broader effort to strengthen U.S. friends in the region, with Israel and Egypt due to receive major boosts in military aid. One goal is to counter Iran's hard-line policies, including suspicions it is building nuclear weapons.

    Keynoting the skepticism at a hearing, Rep. Gary L. Ackerman, D-N.Y., chairman of the House Foreign Affairs subcommittee on the Middle East and South Asia, said the Bush administration has been unable to persuade Saudi rulers to stop the flow of fighters to Iraq and to attend a proposed regional meeting on the Israeli-Palestinian conflict.

    "Then why," he asked, "should we believe that they see the war on terror as we do, and why sell them those weapons?"
    "In the end," he said, "selling them arms won't guarantee their cooperation, much less their love."
    "Fears of dollar collapse as Saudis take fright," by Ambrose Evans-Pritchard in the Telegraph:
    Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

    "This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.
    "Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.

    The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

    As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.
  2. iceberg

    iceberg nothing is nothing Zone Supporter

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    interesting. but why is the $ going to collapse?
  3. CowboyJeff

    CowboyJeff New Member

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    I believe the U.S. dollar is the currency they are either investing in or basing their monetary policy on. I'm not a monetary expert by any means (check my bank statements), so hopefully someone else on the board can shed some light on this.
  4. jterrell

    jterrell Penguinite

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    Because they own so much of the American dollar. China could do the same thing.

    Unfortunately we own world banks dollar amounts I can't even pronouce.
  5. vta

    vta The Proletariat

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    China is already threatening that 'option'.
  6. jterrell

    jterrell Penguinite

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    yea I know:(

    We have to get our debt under control and be fiscally conservative.
  7. arglebargle

    arglebargle Well-Known Member

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    You know, the last time we were all angry with Iran, we sent lots of military supplies and support to this guy named Saddam in this place called Iraq. That worked out well....
  8. Dallas

    Dallas Old bulletproof tiger

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    We got his oil. I think it worked out splendidly. :D
  9. jterrell

    jterrell Penguinite

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    yea and we are only paying 41% of our tax dollars for it:(
  10. ZeroClub

    ZeroClub just trying to get better

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    .... outsourcing our quality of life....

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