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MrsClassy:    PetroDollar System In Trouble As Saudi Arabia Continues To Liquidate Foreign Exchange Reserves

 
Posted by SRSrocco in Energy, News on June 16, 2017 --
Petro-Dollar-FIMAGE2.png?x65756
 
The U.S. PetroDollar system is in serious trouble as the Middle East’s largest oil producer continues to suffer as the low oil price devastates its financial bottom line.  Saudi Arabia, the key player in the PetroDollar system, continues to liquidate its foreign exchange reserves as the current price of oil is not covering the cost to produce oil as well as finance its national budget.


The PetroDollar system was started in the early 1970’s, after Nixon dropped the Gold-Dollar peg, by exchanging Saudi Oil for U.S. Dollars.  The agreement was for the Saudi’s only to take U.S. Dollars for their oil and reinvest the surpluses in U.S. Treasuries.  Thus, this allowed the U.S. Empire to continue for another 46 years, as it ran up its ENERGY CREDIT CARD.
 
And run up its Energy Credit Card it most certainly did.  According to the most recent statistics, the total cumulative U.S. Trade Deficit since 1971, is approximately $10.5 trillion.  Now, considering the amount of U.S. net oil imports since 1971, I calculated that a little less than half of that $10.5 trillion cumulative trade deficit was for oil.  So, that is one heck of a large ENERGY CREDIT CARD BALANCE.
 
Regardless… the PetroDollar system works when an oil exporting country has a “SURPLUS” to reinvest into U.S. Treasuries.  And this is exactly what Saudi Arabia has done up until 2014, when it was forced to liquidate its foreign exchange reserves (mostly U.S. Treasuries) when the price of oil fell below $100:
 
Saudi-Arabia-Foreign-Reserves-vs-Oil-Pri
 
So, as the price of oil continued to decline from the mid 2014 to the latter part of 2016, Saudi Arabia sold off 27% of its foreign exchange reserves.  However, as the oil price recovered at the end of 2016 and into 2017, this wasn’t enough to curtail the continued selling of Saudi’s foreign exchange reserves.  The Kingdom liquidated another $36 billion of its foreign exchange reserves in 2017:
 
Saudi-Arabia-Foreign-Currency-Reserves-A
 
According to the Zerohedge article, Economists Puzzled By Unexpected Plunge In Saudi Foreign Exchange Reserves:
 
The stabilization of oil prices in the $50-60/bbl range was meant to have one particular, material impact on Saudi finances: it was expected to stem the accelerating bleeding of Saudi Arabian reserves. However, according to the latest data from Saudi Arabia’s central bank, aka the Saudi Arabian Monetary Authority, that has not happened and net foreign assets inexplicably tumbled below $500 billion in April for the first time since 2011 even after accounting for the $9 billion raised from the Kingdom’s first international sale of Islamic bonds.
 
….. Whatever the reason, one thing is becoming clear: if Saudi Arabia is unable to stem the reserve bleeding with oil in the critical $50-60 zone, any further declines in oil would have dire consequences on Saudi government finances. In fact, according to a presentation by Sushant Gupta of Wood Mackenzie, despite the extension of the OPEC oil production cut, the market will be unable to absorb growth in shale production and returning volumes from OPEC producers after cuts until the second half of 2018.

Specifically, the oil consultancy warns that due to seasonal weakness in Q1 for global oil demand, the market will soften just as cuts are set to expire in March 2018.
 
The Saudi’s have two serious problems:
 
As the Saudi’s cut their oil production due to the OPEC agreement, the U.S. shale energy companies ramp up production because they are able to produce oil by shifting any losses to Brain-Dead investors looking for a higher yield. 

This destroys the ability for OPEC to drain global oil inventories, so the oil price continues to trend lower.  Which means the Saudi’s may have to liquidate even more foreign exchange reserves in the future on lower oil prices.  Rinse and Repeat.
 
The Saudis are planning a 5% IPO – Initial Public Offering in 2018 of their estimated $2 trillion of their oil reserves and are hoping to get $200 billion.  However, energy analysts Wood Mackenzie estimates that the value of the reserves are more like $400 billion, not $2 trillion. 
 
This is due to all the costs, royalties and 85% income tax to support the Saudi Government and the 15,000 members of the Royal Saudi Family.  Thus, Wood Mackenzie doesn’t believe there will be much in the way of dividends left over.
 
That being said, I highly doubt the Saudi’s have the 266 billion barrels of oil reserves stated in the new 2016 BP Statistical Review.  The Saudi’s produce about 4.5 billion barrels of total oil liquids per year.  Thus, their reserves should last them nearly 60 years.
 
Now… why on earth would Saudi Arabia sell a percentage of its oil reserves if it has 60 more years of oil production in the future????  Something just doesn’t pass the smell test.  Is it worried about lower oil prices, or maybe it may not have all the reserves that it states?
 
Either way… it is quite interesting that Saudi Arabia continued to liquidate its foreign exchange reserves in April even though the price of oil was above $53 for the majority of the month.  I believe the Kingdom of Saud is in BIG TROUBLE.  That is why they are trying to sell an IPO to raise much needed funds.


As Saudi Arabia continues to liquidate more of its foreign exchange reserves, it means serious trouble for the PetroDollar system.  Again… without “SURPLUS” funds, the Saudi’s can’t purchase U.S. Treasuries.  Actually, for the past three years, Saudi Arabia has been selling a lot of its U.S. Treasuries (foreign exchange reserves) to supplement the shortfall in oil revenues.
 
If the oil price continues to trend lower, and I believe it will, Saudi Arabia and the PetroDollar system will be in more trouble.  The collapse of the PetroDollar system would mean the end of the U.S. Dollar supremacy and with it, the end of gold market intervention.
 
https://srsroccoreport.com/petrodollar-system-in-trouble-as-saudi-arabia-continues-to-liquidate-foreign-exchange-reserves/
 
MrsClassy:   Cant stress enough, re=value happens, have your game plan on!
 
Ms.tisdale:    Do you still think we are close?
MrsClassy:   Yes mam, I do!
 
Pacificpalm:    So ready, socks and shoes on stand by!!!!  CARPE READY!!!!
 
Floridian:    Great advice, Mrs. Classy.  :)  We all have a lot to consider if the dollar falls.
 
Blessed2017:     MsClassy, We know you are not a financial advisor, but what are 3 top things people need to do now to prep?
 
MrsClassy:   OK,,here I go.
 
1. Trust no one, legal advice is great, but, you be in control in the direction you want to go.
 
2. Invest in Tangible products, A tangible investment is something physical that you can touch. My direction, small increments of Gold and Silver, in my possession. You say you dont have a safe that big, Buy a bigger one.
 
3. I will be shopping for large rental complexes, that are in financial trouble , to get the best deal, not only for a return on my investment, but to have a home for broken families, run by broken families, be a shrewd but respected business person, they dont want your offer, theres another one right around the corner.
 
You know the one thing Ive learned on this journey, is who my friends really are, Do I trust them, Nope! I will not boast or tell anyone, of our new found wealth, I will have a Trust put together, with directions of what I want.
 
Im writing this in simple terms. One other thought, if the rate comes out at say 1 to 1, I will exchange enough to get the plans put into place in hopes of seeing a higher value, trust me I wont be playing Iraq's Hide and Seek game, Ill watch and set my time limit.
 
Friends these are just my thoughts, If you are a believer you will understand this next statement, we are in a spiritual warfare, seek, wisdom and Guidance from, the Good Lord up Above.
 
Take this FWIW, Im no genius or financial advisor, Im just me, and I know what Im going to do.
 
Blessed2017:   This is SPOT ON!!!
 
Newgm:  My plan is still to buy silver and gold.  Protection for worthless currency!
 
Floridian:     Tyler Durden - 4/27/17  Unfortunately, today the gold price is being based on the energy in oil.  However, when the oil industry collapses, there is nothing to replace it.  Thus, the value of most paper assets will plummet.  Gold and silver will become stores of economic energy because the world was brainwashed into believing PAPER ASSETS will always retain their value…. not so.
 
MrsClassy:   Iraq ranked 37th among 100 countries in gold reserves
(IraqiNews.com) Baghdad – World Gold Council revealed on Saturday, that Iraq’s reserves of gold amounted to 89.8 tons, emphasizing that it represents 4.6 percent of Iraq’s reserves of foreign currency.
 
World Gold Council said in statistics published for the month of January 2016, and followed by IraqiNews.com “Iraq’s reserves of gold remained stable and did not change, reaching 89.8 tons,” noting that, “This amount represents 4.6% of its reserves of foreign currency.”
 
The council added, “Iraq did not buy gold since April 2014, in which it bought 15.16 tons,” indicating that, “Iraq is ranked the 37th among 100 countries, which has reserves, according to Global Central Bank for Reserves.”
 
The Central Bank of Iraq announced on Thursday (April 3, 2014), that Iraq’s gold reserves reached 90 tons to support the value of the Iraqi dinar, noting that it contributes to the strengthening of the national economy.
 
FooFighter:   Well in the word it says they will cast their gold and silver in the streets at some point.
 
So for me I believe in the basics food shelter and protection . After that help as many as I can anonymously as possible be a ghost in the machine.
 
MrsClassy:    The world's gold reserves rise the month of June and Iraq maintains the fifth Arab rank
 
History of edits:: 2017/4/18 13:20 • 34 times readable
Iraq's fifth Arab gold reserves
[Oan- follow - up]


World Gold Council announced that the world 's gold reserves rose to April, indicating that Iraq maintained the Arab fifth of the world 's reserves rank.

The Council stated in statistics published on its website that the world 's gold reserves rose for the month of April by 70 tonnes for the month of last March to reach 33 thousand and 329 tons, while the United States ranked first globally in terms of these reserves , which amounted to 8.133.5 tons, followed by Germany with 3.377 tons.

The Council added that Iraq , which was ranked fifth Arab maintained the 37th place worldwide out of 100 countries listed in the international financial statistics for global reserves of gold during the month of April of this year , 2017.

The Council noted that Iraq 's gold reserves remained constant as recorded 89.8 tonnes , a representing 7.9 of the rest of the other currencies , "noting that" the last purchase of Iraq gold was in the month of April in 2014 where 15.16 tons bought. "

the Central Bank of Iraq decided in January 23 2014 seek a variety of alloys of pure gold ranging weights between [ 50 g and 1000 g] to sell to gold traders, investors and evil H society wishing to do so in Iraqi dinars.

MrsClassy:          Iraq maintained the Arab fifth of the world 'reserves rank.

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 economic  Number of readings: 65 18/04/2017 13:22

World Gold Council announced that the world 's gold reserves rose to April, indicating that Iraq maintained the Arab fifth of the world 'sreserves rank.

The Council stated in statistics published on its website that the world 's gold reserves rose for the month of April by 70 tonnes for themonth of last March to reach 33 thousand and 329 tons, while the United States ranked first globally in terms of these reserves , which amounted to 8.133.5 tons, followed by Germany with 3.377 tons.

The Council added that Iraq , which was ranked fifth Arab maintained the 37th place worldwide out of 100 countries listed in theinternational financial statistics for global reserves of gold during the month of April of this year , 2017. 

The Council noted that Iraq 's gold reserves remained constant as recorded 89.8 tonnes , a representing 7.9 of the rest of the other currencies , "noting that" the last purchase of Iraq gold was in the month of April in 2014 where 15.16 tons bought. "

the Central Bank of Iraq decided in January 23 2014 seek a variety of alloys of pure gold ranging weights between [ 50 g and 1000 g] to sell to gold traders, investors and evil H society wishing to do so in Iraqi dinars.

MrsClassy:    Your asking Why?  "to secure a currency"

MrsClassy:    The world's gold reserves rise the month of June and Iraq maintains the fifth Arab rank

The world's gold reserves rise the month of June and Iraq maintains the fifth Arab rank
 08-06-2017 01:45 PM    Euphrates -   World Gold Council announced that the world's gold reserves rose this month in June, noting that Iraq maintained the Arab fifth of the world's reserves rank.

The Council stated in statistics published on its website that the world 's gold reserves rose for the month of June by 51 tons for the month of May for up to 33 425 tonnes, while the United States ranked first globally in terms of these reserves , which amounted to 8.133.5, followed by Germany b 3.377 tons.

The Council added that Iraq maintained the fifth Arab rank in terms of these reserves , as they came after both Saudi Arabia, Lebanon, Algeria and Libya, noting that Iraq maintained also ranked 37 globally out of 100 countries listed in the international financial statistics for global reserves of gold during the month of June of this year 2017.

noting that Iraq 's reserves of gold remained steady as recorded 89.8 tonnes, representing 8.0 from the rest of the other currencies, stressing that the last purchase of Iraq gold was in the month of April in 2014 where 15.16 tons bought.

MrsClassy:    Iraq maintains the Arab rank gold reserves

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Baghdad / term  World Gold Council, announced on Thursday that the world 's gold reserves rose this month in June, indicating that Iraq maintained the Arab fifth of the world 's reserves rank.

The Council stated in statistics published on its website and seen long, he said , "the world 's gold reserves rose for the month of June by 51 tons for the month of May to reach 33 thousand and 425 tons, while the United States ranked first globally in terms of these reserves , which amounted to 8.133. 5, followed by Germany with 3.377 tons. "

The council said that "Iraq has maintained its fifth among Arab countries in terms of these reserves , as they came after both Saudi Arabia, Lebanon, Algeria and Libya , " noting that "Iraq maintained also ranked 37 globally out of 100 countries listed in the international financial statistics for global reserves of gold during the month of June of the year 2017 ".


The Council noted that "Iraq 's reserves of gold remained stable recorded 89.8 tonnes, representing 8.0 from the rest of the other currencies , " noting that " the last purchase of Iraq gold was in the month of April in 2014 where 15.16 tons bought."
The issue of Iraq, the same place in the past two months, after the World Gold Council, announced the world 's reserves of gold rising in the months of April and May, noting that Iraq maintained the fifth Arab rank global reserves.
 
Decided the Central Bank of Iraq at the end of January 2014 , seeks a variety of alloys of pure gold ranging between weights (50 g and 1000 g) to sell to gold traders, investors and segments of society wishing to do so in Iraqi dinars.
 
The report pointed out that the United States ranked first in the world gold reserves amounted to 8133.5 tons, which constitute 73.3% of total reserves, while Germany ranked second worldwide reserves reached 3381 tons (forming 67.4% of the total reserves).
 
While China came, the second largest economy in the world, ranked the 6 global reserves of gold reached 1778.5 tons, which is equivalent to 1.9% of the total reserves. It pushed the global economic crisis in 2008 and the implementation of the United States policy of quantitative stimulus, prompted China 's central bank to start the yellow metal storage.
 
Reached Turkey, which accounted for commercial bank reserves of gold reserves , part of the national reserves, it amounted to 516.7 tons of gold, what security has ranked 12 globally.

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