this post was submitted on 10 Jul 2024

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Saudi Arabia threatened to sell off European debt if G-7 seized Russian assets: Report (www.middleeasteye.net)

submitted 1 month ago by [email protected] to c/[email protected]

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[–] [email protected] 99 points 1 month ago (3 children)

So we need the ECB to start QE in a big way to buy back government bonds. However the Saudis do not own too many.

We also have to go electric on transportation and that much much faster. Only a third of the EUs oil comes from the US and Norway. The rest comes from mainly dictatorships. Going green means supporting democracy. Staying on fossil fuels means supporting dictatorships.

[–] [email protected] 53 points 1 month ago* (last edited 1 month ago)

Yep, even if you didn't care about the environmental aspect (which you should), not having to rely on dictatorships all over the place for your energy needs should be enough reason to transition away from fossil fuels.

[–] [email protected] 6 points 1 month ago (1 children)

I’m in agreement, but who produces the batteries? China…

[–] [email protected] 11 points 1 month ago (1 children)

There are a lot of battery factories being built in the EU right now. Even if they come from China, it is a one time purchase and not a total dependence.

[–] [email protected] 6 points 1 month ago (1 children)

True, but right now, a lot of the resources come from China. Solar is also something that is mainly from China. EU dropped that ball pretty fast.

[–] [email protected] 2 points 1 month ago* (last edited 1 month ago) (2 children)

This might change in the near future some time ago(not to sure how long exactly) I read an Article about a massive ore field of the resources needed for electrical components being discovered in ~~Denmark~~ Sweden.

[–] [email protected] 3 points 1 month ago (1 children)

Iirc: For certain materials like Lithium as well as Rare Earths, China basically has a monopoly on processing currently. E.g. with Lithium, Australia and Chile are major sources of the raw materials but virtually all of it is processed in China. Even if the raw materials come from the EU, there may be a major piece of the supply chain missing.

[–] [email protected] 1 points 1 month ago (1 children)

Okay, that's fair. I'm not entirely sure but I know that Intel is building a processing plant in Germany. I don't know if they use raw materials, or they also rely on other manufacturers to produce stuff for them.

[–] [email protected] 1 points 1 month ago (1 children)

Chip plants are another matter yet again. They usually work with silicon wafers into which they a chip surface.

I don't know where Intel get their materials from either. The silicon processing industry is largely Chinese again—I think Western and Japanese countries do have the appropriate factories and technology too though.

[–] [email protected] 2 points 1 month ago

I just read, that TSMC also plans on creating a processing plant in Germany(near Dresden) so in the near future we might see chips made entirely in Europe.

[–] [email protected] 1 points 1 month ago (1 children)

It was in Sweden. Denmark got jack shit when it comes to natural resources.

[–] [email protected] 1 points 1 month ago

Thanks. My comment got corrected.

[–] [email protected] 0 points 1 month ago (1 children)

Glad my money isn't wrapped up in EUR. QE = inflation.

I'm all for going green, it's worth mentioning that having trade with dictatorships is a two-way street, we can also use that trade as leverage to hold them slightly accountable.

[–] [email protected] 6 points 1 month ago

In this case it gives the Saudis central bank money, which then leads to more money being removed over the coming years. Since the Saudis want to dump it, they have to sell it below market value. Due to that at intresst this means the ECB is moving money out of the monetary system. Hence this is deflationary. We actually saw that in the real world as well. QE meant low intresst rates. The intresst rates shot up as soon as QE was stopped.

[–] [email protected] 42 points 1 month ago (1 children)

Dictators all stroking eachother off

[–] [email protected] 5 points 1 month ago

Desperate. They're licking each other's boots because the resource wars are beginning and they're not in the greatest standing

[–] [email protected] 22 points 1 month ago

Hey two of trump’s bestest buddies!

[–] [email protected] 15 points 1 month ago (2 children)

What does this even mean? I'd like to be able to make a huge debt and then sell it for a profit too. Teach me how 🥺

[–] [email protected] 12 points 1 month ago

Well first this doesn't really have anything to do with the article.

But to answer your question:

Be in a situation where your central bank (they can't get bankrupt as they literally print money) doesn't give interest (negative interest even better)

Be big, financially competent and trustworthy enough that no one doubts that you can pay back any loan.

Now people that have too much money and need a convenient place to store that money without too much costs buy your debt for more than what it's worth.

Profit.

[–] [email protected] 5 points 1 month ago

Sorry I somehow forgot the first part of your question. If I understand correctly they threaten to sell off the debt they hold which will increase the supply of that debt, while at the same time decrease the amount of potential buyers.

To still be able to sell their debt the EU countries now have to (as any country needs a constant influx of money) make the new debt more attractive by offering better interest etc

[–] [email protected] 14 points 1 month ago

Do it.

[–] [email protected] 12 points 1 month ago

Is that the same Saudi Arabia that did 9/11?

[–] [email protected] 11 points 1 month ago

It sure is great to see all these pinnacles of democracy that work for the betterment of all mankind who are the ones supporting Russia.

All those anti-fascist leaders of progressive countries, with progressive governments, who are clearly urging Russia to cease hostilities...

[–] [email protected] 11 points 1 month ago (1 children)

Typical villains remind me why we are allowing them to monopolize the sporting industry

[–] [email protected] 6 points 1 month ago

Who is WE? Sure as hell not me. Corrupt assholes maybe.

[+] [email protected] -11 points 1 month ago (3 children)

At what point will a naked war for resources with Saudi Arabia make sense? Like if a leader went to the EU/America/Japan/Korea and said, "we're gonna take the Saud's oil and sell it for $25/barrel to everyone that helps us for 25 years." And then we went to the public and said, "25 years to get off oil for good" when does that ship?

[–] [email protected] 4 points 1 month ago (1 children)

Welcome to the gulf wars.

[–] [email protected] -1 points 1 month ago (1 children)

The issue with the Gulf Wars is that we wanted to control the oil resources via local proxy. Honestly, we (the US, I realize this is on the Europe@) could use our Navy to directly control about half of Saudi Arabia's oil and buy ourselves time to get off oil.

[–] [email protected] 2 points 1 month ago (1 children)

Lol welcome to Afghanistan. It's not armies marching in a straight line that will be the problem.

[–] [email protected] -1 points 1 month ago (1 children)

The Saudis don't have a Navy. About half their reserves and a massive chunk of Iran, Kuwait and the other Gulf State's reserves are in the Gulf. We don't have to set foot on the Peninsula.

[–] [email protected] 3 points 1 month ago (1 children)

Neither does Ukraine. Still decimated the russian navy.

Also to nip this whole "argument" in the bud, and I'm not even going into how terribly colonialistic your proposal is, how many billions of euro would you propose to put into essentially propping up a already dead technology. Fossil fuels have to be eliminated by 2050. Why wage war for something we won't even need in 25 years.

We WANT to increase fossil fuel prices. To hasten the change to renewables, the higher the potential savings the better.

[–] [email protected] 1 points 1 month ago (1 children)

Fossil fuels have to be eliminated by 2050. Why wage war for something we won't even need in 25 years.

I don't think that fossil fuel usage will be eliminated in 25 years given the opposition to mass nuclear deployment. I think this would ideally be a carrot that dictates green energy buildouts in exchange for subsidized oil.

[–] [email protected] 1 points 1 month ago (1 children)

My dude, but essentially that's whats already happening. No energy is cheaper than renewable energy. Every process we thus electrify and use renewables is not using fossile fuels.

Thus we have less of a need for subsidized oil.

[–] [email protected] 1 points 1 month ago

My dude, but essentially that’s whats already happening.

Yes but it's happening with Natural Gas as the baseline power generation method. Which is much better than oil or coal for carbon emissions, but it's not green.

[–] [email protected] 2 points 1 month ago (1 children)

The issue is that currently, the cost of extracting oil exceeds $25/barrel. Personally, I would be glad to see the Saud family ousted from Arabia, as there are countless reasons to consign those disgusting Salafists to the dustbin of history. However, reducing the price of oil at this moment is not feasible.

[–] [email protected] 1 points 1 month ago

This analysis is from 2019 and it doesn't break down the cost difference for onshore vs. offshore oil. But it estimates the cost for the Saudi's at $8.98/barrel (approximately $11.01 in todays dollars).

Do you have the analysis where it says $25+/barrel. It is certainly possible that production costs have risen significantly in the last half decade.

[–] [email protected] 0 points 1 month ago (1 children)

Turns out people really don't like being ruled over by nakedly colonialist regimes, and when people really don't like things they tend to blow stuff up, and when people blow stuff up, it hurts the bottom line of oil companies, i.e. the only thing you care about for some reason.

Do you want to create a second Iran? Because that's what happened there.

[–] [email protected] 0 points 1 month ago (1 children)

That's why we don't take all the oil, just the offshore oil. It's significantly more difficult to conduct terrorism when you have to swim to it.

[–] [email protected] 1 points 1 month ago (1 children)

Ah yes, the sea, a place famous for how difficult it is to get away with crimes. I see no flaws in your plan. The seas around the Arabian Peninsula specifically haven't had any notable activity from anti-Western rebel groups in 2024.

Here's a completely unrelated graph:

[–] [email protected] 1 points 1 month ago (1 children)

How long do you think they (the Houthis) can keep it up?

[–] [email protected] 1 points 1 month ago

Well, let's see, they've been fighting the Saudis (backed by the US) for the last 20 years, and your brilliant plan to subjugate the region involves attacking their main enemy, so I would say, a pretty long-ass time.