Empty threats

From the New York Times:

Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.

Oh no! That will ruin us!

NOT.

The Saudis are referring to $750 billion worth of Treasury Securities that they have bought.

“Selling them off” means selling their T-securities to someone else. This will mean a huge loss for the Saudis, since no one will buy the securities unless they are offered at a steep discount, and since the Saudis would lose any interest they would have gained. (The interest would go to the new owners of the T-securities.)

Still, the Saudis might do it, even at a loss, because they have fallen into a trade deficit, and because the price of oil remains depressed. The Saudis are desperate to get foreign currency with which to by imports, and they could get that currency by selling their holdings.

But would a sell-off hurt the USA? Not in the slightest. The Saudis deposited $750 billion in Fed savings accounts. In exchange, they were given certificates of despot (otherwise known as Treasury securities). If the Saudis sell those CDs to someone else, then the Saudis will get some money, but there original $750 billion will remain deposited in the Fed, and the CDs will have new owners. This will have zero effect on the U.S. government.

If the Saudis really wanted to cause problems, then they could publicly announce that, “The U.S. government did 9-11, with Israeli help, in order to create a pretext for the war on terror.”

That would rock the boat.

Why are the Saudis whining anyway? Under the current US law, allied nations have a degree of immunity from being sued in American courts. The Foreign Sovereign Immunities Act of 1976 is one of the reasons why families of the 9-11 false flag attacks can’t sue the Saudis.

But on 16 Sep 2015, Senator John Cornyn (R-Texas) introduced a bill to change that: S. 2040: Justice Against Sponsors of Terrorism Act. The bill removes the immunity for cases involving terrorist attacks that kill US citizens on US soil. It passed the Senate Judiciary Committee on 28 Jan 2016, but has not yet passed the overall U.S. Senate.

On 23 Oct 2015 in the U.S. House, Rep. Peter King (R-New York) introduced H.R. 3815: Justice Against Sponsors of Terrorism Act which does the same thing.

Both bills are aimed at punishing Iran and Hezbollah. On 8 March 2016, US District Judge George Daniels ordered Iran to pay $7.5 billion to 9/11 victims’ families, plus $6.88 million in punitive damages, plus $3 billion to insurance companies.

(Iran had nothing to do with 9-11, but let’s not let facts get in the way of hate. Also, the lawsuit against Iran claims that the resistance group Hezbollah helped Al-Qaeda, even though the two groups have always been mortal enemies.)

However the Saudis are whining because they realize that families of 9-11 victims could use the same bills to sue the Saudis.

The whole thing is a bunch of hot air.

My point is that many blogs and corporate news web sites are repeating the news about the empty Saudi “threat” as though it’s real.

Even Bernie Sanders gets it wrong.  “Saudi Arabia is one of the most powerful and wealthiest families of the world. That’s why they can threaten to withdraw hundreds of billions of dollars from our economy.”

Saudi Arabia is a country, not a family. And by selling their T-securities, the Saudis would not remove a single penny from the U.S. economy. Moreover the Saudis are weak and vulnerable. Their meaningless threat to sell their T-securities proves how desperate they are. They are in severe economic trouble because they have a huge trade deficit, and because the price of oil remains depressed (although the price is slowly rebounding).

“The evidence is quite clear that sections of that very large royal family have funded a Wahhabism; this extremely right-wing fundamentalist ideology, which is what ISIS is about, which is what Al Qaeda’s about. There are schools all over this world that are — where children are being educated in this anti- — this horrific fundamentalist ideology.”

Bernie, you are correct about Wahhabism relying on Saudi support. However ISIS and Al Qaeda are U.S. inventions, as is the Muslim Brotherhood in its original guise. The USA trains, funds, arms, and equips extremist groups in order to harass and overthrow foreign governments. It’s called proxy wars. Examples include the Central American “Contras” which the USA sent against Nicaragua’s government.