Sunday, April 17, 2016

Saudi Threats

The Saudi government is threatening to sell all their Treasury bonds if Congress passes a bill allowing lawsuits against them for assisting 9/11 attacks.  Many people think it is an empty threat because the cost of doing so would be extraordinary: $750 billion worth.

But what would realistically happen?  Dumping bonds would drive down bond prices, thus increasing yields.  I don't know Saudis will follow theough, but, waiting to buy bonds is probably a good idea.

This 4/17/16 New York Post article indicates that there was widespread obstruction of justice with respect to the Saudi ambassador to the U.S., but I suspect the Saudi government was not involved.  Al-Qaeda's brand of puritanical Islam would not have been popular with the Saudi royal family, who demonstrate a liberal style of debauchery when in the West.

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