Saudi Arabia has actually made a pretty viable threat to sell off $750 billion in assets if Congress allows courts to find them liable for September 11, 2001 lawsuits.
We should let the Saudis do it. As Dirty Harry would say, “Go ahead, make my day.”
President Obama opposes Congress passing a bill that allows the Saudi government to be held responsible for any role in the 9/11 attacks. That means the Saudi government was probably Keffiyeh-deep in papering over Al Queda and providing visible support for its mission.
Saudi foreign minister Adel al-Jubeir personally told Washington lawmakers that Saudi Arabia would “be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.”
Good. Let them do it.
It’s like trying to find a buyer if you stole the Mona Lisa. Flooding the market with U.S. treasury securities will destroy the Saudi economy (along with all the Gulf states) far before it hurts America. You see, we can just print more money. We’ve been doing it all along–it’s called “Quantitative Easing.” We print the money, and use it to buy back the securities.
Does it work? It works until the bubble bursts. The Saudi economy would be in shambles well before America would have to face the music (and we will face the music one day). The rest of the world would suffer, but the Chinese and the Europeans would follow America’s lead and do their own round of Q.E.
The pot just gets bigger until somebody folds, and Saudi Arabia is not holding any cards.*
But Obama is backing the Saudis on this one, traveling to Saudi Arabia Wednesday to bow to King Salman.
Saudi officials have long denied that the kingdom had any role in the Sept. 11 plot, and the 9/11 Commission found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization.” But critics have noted that the commission’s narrow wording left open the possibility that less senior officials or parts of the Saudi government could have played a role. Suspicions have lingered, partly because of the conclusions of a 2002 congressional inquiry into the attacks that cited some evidence that Saudi officials living in the United States at the time had a hand in the plot.
Those conclusions, contained in 28 pages of the report, still have not been released publicly.
The president should release those 28 pages before he heads to Riyadh. He should be transparent with the American people about what involvement the Saudis had in the worst attack on U.S. soil since Pearl Harbor. He should not make any secret deals with King Salman or his satraps.
If the Saudis want to threaten to topple the U.S. dollar, let them try. They know it’s a hollow threat.
*In reference to Quantitative Easing, Donald Trump has always claimed that China manipulates its currency to monkey with our trade imbalance. That’s true, they do. But they also do it (and I’d say mainly do it) to protect themselves. The bubble the Fed has created with three rounds (and continuing) of Q.E. is sufficient to throw the world into an enormous recession the likes of which we haven’t seen since 1929.
Going “full protectionist” when in reality we’ve been almost predatory with our monetary policy for 10 years is like Samson knocking the temple columns out from under him. It’s the desperate action of a blind strong man pulling down the house on top of everyone, himself included.
The Saudi threat is real, and if only the Saudis had any real cards to play (the Chinese do, and the Europeans do), we would be wise to heed it. One day, the Fed will have to clear its own checks, and it’s going to be messy. We should have been listening to Rand Paul a lot more.