Comment: I find this interesting due to China & the Petrodollar

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Slaughts31's picture

I find this interesting due to China & the Petrodollar

It leaves a few things unanswered in my mind.

Who are the Saudi's "shifting" towards? China? Not really sure because I believe China/Russia support Assad. The Saudi's hold a chunk of our debt but not the biggest

They hold about $492 billion of their $690 billion of foreign currency reserves in U.S. debt.
Dec 2012;

"In theory, Saudi Arabia can crash the US bond market through a “fire sale” of its bond portfolio. The impact on the US economy will be devastating, but House of Saud will have to pay a steep price for the crash. The value of its currency reserves will be wiped out and its main military ally will turn hostile. It is unlikely that the Saudis will take such risks. A more likely scenario is that the Saudis will start a slow diversification of their currency reserves and will invest more in Chinese and European assets. Such a move will not produce an instant crash but will surely damage the dollar over the long term. If the “petrodollars” disappear from the world oil trade, the dollar is likely to lose its status of the world’s main currency".