In the midst of a currency war pitting the American petrodollar against the Russian oil-ruble, a fault line grinding away between Washington and Saudi Arabia has given way. For the past six months the Saudis have vehemently opposed the passage of the Justice Against Sponsors of Terrorism Act, even threatening to dump $750 billion worth of US Treasury securities.
Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill
On the 27th of September, President Obama’s veto was overridden by Congress and the bill was passed into law. If the Saudis are threatening their own ally and Obama is calling the override “a mistake,” the stakes have to be high and the consequences profound, but in what way?
Despite threats to sell off Treasury securities, the Saudis are certainly not in a position to deal giant blows to their economy. The recent oil glut coordinated by the Saudis, OPEC and the West to keep oil prices low and to stifle Russia’s economy has stifled the Saudi economy as well. Recent attempts to privatize and sell off the state-run Aramco oil company have failed to garner sufficient investors. Saudi plans currently in place to diversify their economy by the year 2030 are already reliant on heavy foreign investment and capital as well as government funding for education reforms and the creation of a technically skilled work force. Selling off all US Treasury assets and imploding the Saudi economy is simply not an option if they want to maintain their goals.
Obama’s concerns that the bill would introduce new legal liabilities is indeed a valid one. The day the bill was passed, an organization called the “Iraqi National Project” declared their intention to sue the US government over war crimes during the Iraq War. Later that week, a widow who lost her husband at the Pentagon filed a suit against the Saudis, bringing to light another, more urgent concern for these two governments. New information regarding the struggle that took place on 9/11 could become public due to the discovery process of lawsuits. With 9/11 being such a big event that impacted so many people, nobody can say exactly how many lawsuits could be filed, or how many subpoenas could be served to the Saudis and the various departments of the US government.
Issues of legal liability not withstanding, the biggest ramification of the passing of the bill has yet to manifest itself on the world scene.
OPEC Agrees to Cut Production, Sending Oil Prices Soaring
The day after Obama’s veto was overridden, OPEC and Saudi Arabia announced they would cut oil production. Allowing oil prices to rise will give oil nations a short economic reprieve from the glut, something that Venezuela could have used two years ago. It also boosts the Russian economy and the value of the ruble as Russian oil sales become more profitable as well. The Saudis say that the price increase will be temporary and that the glut is not over, but this could be taken as a warning from the Saudis to the Globalists. They may not be able to crash the US economy without crashing their own, but they can help America’s rivals in a way that is equally beneficial to themselves. The Saudis understand that if potentially embarrassing information about them is in danger of being released from these lawsuits, they will need to have a way to pressure the Globalists into keeping their secrets for them.
Chirographer 