Posted on 03/07/2016 3:40:27 AM PST by HomerBohn
To the casual observer, Saudi Arabia might seem like an emboldened nation that is asserting itself. They’ve been challenging Iran, fighting rebels in Yemen, threatening to invade Syria, and if some rumors are to be believed, they are currently trying to attain nuclear missiles from Pakistan. However, these aren’t the actions of a stable nation that is asserting its dominance in the region. These are the flailing death throes of a nation that is struggling to hang on.
Ever since global oil prices started to plummet, Saudi Arabia just hasn’t been the same. That’s no surprise. Since prices fell, other oil rich nations have been hurting as well. Russia’s economy has been on the ropes, Canada is plummeting into a recession, and Venezuela is on the verge of total collapse. However, there probably isn’t any nation on Earth that is more reliant on oil than Saudi Arabia. If anyone is going to be destroyed by low oil prices, it’s the Saudis.
The crux of the matter is that this country is running out of money. It doesn’t look like it at first glance. They’ve only recently started to dip into their enormous savings, and their debt to GDP ratio is remarkably low. However, they are hemorrhaging money at an alarming rate. They’ve been flooding the market with cheap oil to drown out their competition (a dangerous gambit for a government that receives 80% of its revenue from oil) , and they’ve been fighting several expensive proxy wars with Iran, which are not going so well. The situation is so dire that the IMF expects them to run out of money within 5 years.
For most countries this wouldn’t be such a big deal. They would just go into debt and kick the can down the road until their financial system crumbled after many years. But the Saudi’s can’t do that. Their government and their society is structured in such a way that they can’t maintain anything with debt. The reason why is that they are not a traditional nation-state.
In fact, Saudi Arabia is no state at all. There are two ways to describe it: as a political enterprise with a clever but ultimately unsustainable business model, or so corrupt as to resemble in its functioning a vertically and horizontally integrated criminal organization. Either way, it can’t last. It’s past time U.S.decision-makers began planning for the collapse of the Saudi kingdom.
In recent conversations with military and other government personnel, we were startled at how startled they seemed at this prospect. Here’s the analysis they should be working through.
Understood one way, the Saudi king is CEO of a family business that converts oil into payoffs that buy political loyalty. They take two forms: cash handouts or commercial concessions for the increasingly numerous scions of the royal clan, and a modicum of public goods and employment opportunities for commoners.
Essentially, Saudi Arabia runs on institutionalized bribery. They need cold hard cash to keep the population in line, to keep the ever-growing royal family rich and happy, and to make sure everyone is doing their job. It’s not like what you see in most Western nations, where much of the population has a misplaced sense of civic duty. This system needs cash, and can’t survive on IOUs.
The elites in this society demand a life of perpetual luxury, and government handouts are the only thing keeping the oppressed masses from rebelling. Once they run out of money, everything will fall apart from the bottom up.
But the financial situation isn’t the only problem with the Saudi kingdom. Much of their budget is being burned up from fighting their war in Yemen, which they are losing badly. Dozens of their Blackwater Mercenaries were killed in a missile attack last month, the Yemeni rebels captured one of their military bases two weeks ago (within Saudi territory no less), and last week Yemeni forces managed to capture over a hundred Saudi soldiers.
This is a regime that rules with fear and oppression. How can they do that when their own military can’t beat an insurgency in their own backyard? When the handouts and bribes grind to a halt, and their population is sick and tired of being dominated by the Saudi family, how long do you suppose it will take for them to rebel?
And on top of all that, Saudi Arabia is faced with a severe water crisis. They’re heavily reliant on underground aquifers that aren’t renewable, and they use more water per person than in many Western nations (in fact, twice as much as the average person in the EU). They could run out of water in as little as 13 years. This has prompted the Saudi regime to start taxing water for the first time, partly due to the water crisis, and partly due to falling oil revenues.
As you can see, there are a lot of existential threats bearing down on Saudi Arabia. Their proxy wars with Iran are bleeding their coffers dry just as oil revenues have reached record lows, their oppressed population is restless, they can’t meet the demands of their gluttonous elites, and they’re facing a nationwide environmental disaster that could grind everything to a halt.
In short, one of America’s strongest allies in the Middle East and the linchpin of the petrodollar, is facing a complete collapse, and it may happen within a decade. This could lead to chaos in the Middle East, and would have huge ramifications for the global economy. And at the end of the day, there really isn’t anything that can be done to stop it.
A smart scientist would be one who finds uses for radioactive glass.
What happens in Iran is up to the people of Iran, who, by all evidence, overwhelmingly support the regime.
Western-sponsored coups that install a government by the 5% of the population that are westernized end in disaster, usually after some sort of war.
What happens to "protesters" in some barbaric craphole is not the responsibility of "Obama", or any other American President.
I always like to check out the authors I don’t know:
Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .
The Saudis could save some money if they stopped the worldwide support of radical mosques and schools.
I can't wait to see the State Farms Commercial where a Female Saudi Driver gets the lower Insurance Rates.... ;-)
Saudi Arabia, far from being our "ally" is, together with Pakistan, our principal enemy in the current religious war.
Obama is the President because of Bush's mind-boggling mismanagement of the events following the Saudi-Baluchi attack on New York. By attacking Iraq, which could have been much better used as an ally in our march on Riyadh, we wasted the lives of 4500 irreplaceable heroes, crippled 30 000 others, and pissed away trillions of dollars, for nothing.
It takes a special mental disposition to refer to Saudi Arabia as an American ally. The sooner the heads of the al-Saud clan fall to the sword, the better.
So...the US Government sees the Saudis as kindred spirits? :)
So you know, that.
Since 2009 Obama has handed the regime a string of concessions and foreign policy wins. Iran now gets to sell their oil and build nuclear weapons. He's allowing another vile extraction economy to replace, or to compete with, Saudi.
The Iranian government now feels invincible. To much of the populace they are 'the strong horse that faced off the great satan'.
Obama has effectively stabilized the Iranian junta and placed it on firm foundations. We will be dealing with the fallout from his murderous decisions for as long as we've been dealing with Carter's.
Bump!
If they are truly this desperate, they’d stop importing foreign maids and drivers, clean their own homes and drive their own women.
The cost of that support labor would be relatively low, but it would eliminate at least 10% of the population.
You don't send in the Marines to (a then) allied nation. Iraq may have been a mistake but the US should have crippled Iran then, not Iraq.
Again, if the House of Saud goes down the tubes, Iran will get the oil fields. Is that a better post-Obamian world order?
Now, what about the Israelis?
Would you agree that the Saudi Royal family knows it has an expiration date on the Arabian Peninsula and is the reason they are so heavily invested in global real estate, particularly in Switzerland and other perceived safe-havens?
I would be interested in your opinion regarding the relationship between the Saudi ruling and religious classes.
Question: Do the rulers of Saudi Arabia defer to the religious leaders of Saudi Arabia as a political necessity or out of devotion to Islam?
If the answer is both, which force is the stronger?
What about them?
They're in a tough spot. Hopefully they can hang on.
It's fortunate that their enemies are for the most part Arabs, not exactly known for social cohesion and martial valor, but there ARE a lot of them.
I would not blame them if they nuked the Iranian facilities.
As far as the big picture, there are two opposing arguments. The first is that they occupy the land (including Judea and Samaria) by a royal deed (Genesis 12:1-9) and have the right to smite (kill) all their enemies and disputants. The second is that they occupy the land because of international law and some resolutions passed by the United Nations.
Unfortunately for the people who live there, the government of Israel has been pleading its case using argument #2.
The same UN that told them they could go there will, some day, tell them they must leave. What they will do then is anybody's guess.
Well said!
"...and it will take only slightly more organization than the Cologne New Year’s Eve mob to put their entire family in front of firing squads." - BobL
Indeed, it took very few to achieve the siege of Mecca in 1979...which yielded decades of after effects across the globe.
Later
See Netz' post at #5. I think he lays it out pretty well.
Spot on.
Hand out IUD’s to all women in the middle east. Problem will be solved.
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