Something Just Snapped In Saudi Arabia
An Exclusive You Have To See: The Last Frontier of Free Press Is Here! No More Censorship, Unlike YouTube and Others!
Following yesterday’s budget (deficit) and the ‘sacrifice-the-people’s-comfort-for-the-death-of-US-Shale’ plan that we detailed here, it appears market concerns about Saudi Arabia’s forward-looking health are rising. As Bloomberg reports, USDSAR 12-month forwards jumped 250pts (the most since December 2007) to 725bps (the highest level since March 1999) implying expectations of a looming de-pegged, devaluation. Perhaps just as worrying is this is the same pattern that played out in August as Yuan weakness sparked HIBOR stress, leading to SAR forward weakness and then US equity market collapse.
Earlier today, we parsed Saudi Arabia’s budget report in order to determine if the kingdom’s fiscal nightmare was better or worse than market expectations.
As it turns out, it was better. This year’s deficit is expected to come in at around 15-16% of GDP, considerably below the 20% some analysts feared. For 2016, it looks as though the number should be somewhere in the neighborhood of 13%, broadly in line with expectations.
Be that as it may, the Saudis are boxed in as long as they insist on, i) keeping oil prices depressed, ii) maintaining the riyal peg, and iii) holding subsidies steady. If something doesn’t give with at least one of those imperatives, then the kingdom will continue to burn through its SAMA reserves which fell by $12.55 billion in November from October.
The problem is that deviating from any of the points outlined above has consequences. Allowing oil prices to rise risks putting uneconomic US production back online, dropping the riyal peg would be a significant black swan event for markets and would represent a landmark break with three decades of precedent, and easing up on the subsidies risks creating the type of social unrest that occurred elsewhere in the region during the Arab Spring.
Well it looks like when it came time to choose, the Saudis decided that the people will have to suffer because today, Saudi Arabia raised the price of domestic fuel by up to 40%.
And that’s not all.
Prices for gas, diesel, kerosene, water and electricity were also raised.
But now it seems the market is pricing in the probability of breaking the peg too…
Saudi Riyal Forwards blew wider (implying weaker Riyal relative to the USD) by the most since 2007 and to the weakest since 1999…
And, more worryingly, we have seen this pattern of global pass the illiquidity hot potato contagion before…
Deja vu all over again? Or more blowback from The Fed’s liquidity withdrawal as it ripples around the world’s collateral chains?
Charts: Bloomberg
An Exclusive You Have To See: The Last Frontier of Free Press Is Here! No More Censorship, Unlike YouTube and Others!
Source: http://silveristhenew.com/2015/12/28/something-just-snapped-in-saudi-arabia/
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).
They’ll be vitrified soon . . .
Saudi Arabia ~ USA ID Arab AI
.
.
The Arab AI ~ Ha! It a Bear
.
The Arab AI ~ Ha! Ra a Bite
Saudi Arabia ~ USA I Arab Aid
2 pesos are more than your worth
“…more blowback from The Fed’s liquidity withdrawal as it ripples around the world’s collateral chains?”
Sounds like “collusion” rather than “blowback”. What ever happened to America’s Prudhoe Bay? Keystone XL? Yeah, more COLLUSION…
Collateral “chains” are the beginning of licensing more proxy wars for wars sake, and never free energy for the world’s sake.. while all of these weak and tame minds of modern day Pharisees and Saducees have the power to resist their own energy persecution?
We owe you NOTHING, PHAROAH! NOTHING!
Looks like chickens may be coming home to roost. After mercilessly bombing the citizens of Yemen for greedy purposes, God may turn the wrath of the people back on the Saudi family & it’s way overdue.