"IT IS WRITTEN...."
Posted on 08/06/2015 1:46:33 PM PDT by SeekAndFind
There’s two interesting little stories in this idea that Saudi Arabia is going to go bust in a couple of years as a result of the sagging oil price. Both are more general economic ideas than just the story of that oil price. The first is that mono-anything in economics is something we don’t really like.
We certainly don’t like either monopolies or monopsonies, but we should also be very careful of an economy that relies on any one product or even supplier. The perils of resting an entire economy on the production of just the one commodity should be obvious here. But the same could and should be said about reliance upon any one supplier in an economy as well. We want diversity, always, of producers and suppliers.
The second is that this is an object lesson in why most economists don’t really believe in the idea of predatory pricing. Sure, it’s possible for a dominant supplier to try to lower prices and drive others out of the marketplace. The idea is that once they’ve bankrupted those others then they can sweep back in, raise prices and thus enjoy monopoly profits having killed the competition.
There’s an element of Saudi having tried this, trying to kill off shale. And it’s not working: and economists have never really seen anyone making this tactic work. Which is why they don’t really believe in it as anything other than a theoretical possibility.
So here’s Ambrose Evan Pritchard: and it should be said, love him dearly though we do, he can be just a little over enthusiastic about his latest idea:
If the oil futures market is correct, Saudi Arabia will start running into trouble within two years.
It will be in existential crisis by the end of the decade.
(Excerpt) Read more at forbes.com ...
Existential crises, all around..!!
On the house..!!
When that place goes down, its gonna get ugly - its going to need a HUGE fence around it (even more than now) and regs in place to keep every one of their citizens out of the USA.
Russia would get killed more than the Saudis
It’s the Will of Allah.
When your country is made of sand, and you have only one natural resource, it’s time to plan ahead.
then there is this.....
Sadara Project...... largest chemical plant ever constructed in one place at one time
“Sadara Chemical Company represents a unique alliance between two corporate leaders in their respective industries – Saudi Aramco and The Dow Chemical Company – brought together through shared values and a dedicated vision to create a game changer in the chemical industry.
Sadara is constructing in Jubail Industrial City, Saudi Arabia, the world’s largest chemical complex ever built in a single phase, with 26 integrated world-scale manufacturing plants that will produce more than three million tons of products every year. Sadara will be a Fortune 500 company within the first year of full operation. “
Will this plant be producing broken plastic or plastic yet to break?
Way before bankruptcy occurs, the coup over the House of Saud will be the game-changer. At that time, we will have a new Iran on our hands, this one posed to destructively use its oil to solidify its political views.
Bottom line: there will be no bankruptcy, as the new regime will simply refuse to pay any bills.
“Russia would get killed more than the Saudis”
Nope, the Russians could easily kill all Saudis to take over the resources.
The ME does not have the power if the developed world has the will.
New Technologies, New Products Fourteen of the 26 world-scale manufacturing plants being built in the Sadara complex in Jubail Industrial City II are new to Saudi Arabia and their products will be made in the Kingdom for the first time. For instance, Sadara introduces the first Polyurethane (Isocyanates and Polyols) plants in the Kingdom. By bringing in advanced technologies to create new products, Sadara is adding new value chains to expand and transform the Kingdom's existing chemical landscape.
First to Crack Naphtha, Add New Value Chains Sadara will be the first chemical complex in the Kingdom to use naphtha as feedstock. By using best-in-class technologies to crack naphtha, Sadara will open the door to many industries that either do not exist in Kingdom or only exist through imports of raw materials (e.g. Oil & Gas Chemicals, Water Treatment Chemicals, Furniture, Bedding, Automobile Parts and Detergents, to name a few); and will enable new downstream businesses and investments.
A bankrupt Royal Saud family? The country may go bankrupt, but not those guys.
I strongly suspect that the Muslim OPEC governments have been bribing the EU politicians to open Europe to immigration of the Muslim underclass.
If this is the case, then it will be interesting to see what happens when they can no longer deliver the bribes.
This is NOT good.
The moment the Royal Family can’t keep their population fat and happy with welfare, bread and circuses, they’ll turn on them and the place will turn into one giant ISIS camp faster than you can say “fatwa”.
Low oil prices often result in revolutions and blood in the streets. Just not our streets, so no one notices.
The Saudis have been trying for a couple decades to develop new industries, but they are all based on the downstream value added processing of petroleum and its byproducts. Sand is not valuable, dates can be grown in lots of places, and no one is much interested these days in Frankincense and Myrrh.
A Mad Mo vehicle...
The rumor going round was that Saudi Arabia was hoping to starve Iran out by dragging oil prices way down. Not that it really cared about shale oil.
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