• 1 day The Shroom Boom Is Here To Stay
  • 2 days Biden Will Be A Boon For Solar Stocks
  • 4 days The Gold Rally Has Finally Run Out Of Steam
  • 4 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 7 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 7 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 9 days Why 12 Million American Millionaires Isn’t Good News
  • 10 days Big Oil Is Paying The Price For Investing In Renewables
  • 11 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 12 days Did Amazon Just Democratize Prescription Drugs?
  • 13 days The Private Space Race Just Got Very Real
  • 15 days Short Sellers Are Willing Big In This Turbulent Market
  • 16 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 17 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 18 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 19 days Black Friday Could Be Retailers’ Only Hope
  • 20 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 21 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 23 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 24 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Saudi Arabia Delays Payment to Contractors, Considers IOUs: Liquidity Crunch at Best

Liquidity Crunch or Worse

Saudi Arabia burnt through its reserves faster than anyone thought.

In signs of a huge liquidity crunch, at best, the country has delayed paying contractors and now considers paying them in IOUs and tradable bonds.

In retrospect, the Saudi threat to dump US assets looks more ridiculous than ever.

Please consider Saudi Arabia Considers Paying Contractors With IOUs.

Saudi Arabia has told banks in the country that it is considering giving contractors IOUs to settle some outstanding bills, according to people with knowledge of the discussions.

A projected budget deficit this year is prompting the government to weigh alternatives to limit spending. Contractors would receive bond-like instruments to cover the amount they are owed by the state which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private.

Contractors have received some payments from the government in cash and the rest could come in "I-owe-you" notes, the people said.

The government started delaying payments last year to prevent the budget deficit from exceeding $100 billion after the oil slump.


Beyond a Liquidity Crisis

Deficits don't shrink if you delay paying the bills. Deficits arose because more money was spent than collected.

On May 17, the Senate Passed a Bill Allowing 911 Victims to Sue Saudi Arabia.

Obama threatens a veto. Meanwhile, Saudi threatens to dump $750 billion in U.S. securities and other American assets if the bill becomes law.

Does Saudi Arabia even have $750 billion. Color me skeptical.

Saudi Arabia's bluff that it would sell US assets if the Obama signed the bill seems more ridiculous than ever.

For discussion of Saudi involvement in 911 and the alleged dumping threat please see Understanding the Saudi, Chinese "Economic Nuclear War" Threat; Saudi 911 Round-Up.

For discussion of Saudi Treasury holdings, please see Treasury Department Finally Discloses Saudi Treasury Holdings - Incorrectly?

There is no "nuclear" economic threat by Saudi Arabia or China as some have proclaimed.

 

Back to homepage

Leave a comment

Leave a comment