STAFF NEWS & ANALYSIS
Connecting the Saudi Dots to Economic Volatility
By Daily Bell Staff - November 18, 2015

Saudi Wahhabi dilemma in spotlight after Paris attack … Saudi Arabia's harsh religious tradition is seen by many outsiders – and some Saudi liberals – as a root cause of the international jihadist threat that has inflamed the Middle East for years and struck in Paris last week. However, while Riyadh has cracked down hard on jihadists at home, jailing thousands, stopping hundreds from traveling to fight abroad and cutting militant finance streams, its approach to religion has raised a dilemma. It assails the ideology of militants who proclaim jihad against those they regard as heretics or infidels, while allying with a clerical establishment that preaches intolerance, although not violence, against exactly those same groups. – Reuters

Dominant Social Theme: The House of Saud is to blame – and no one else – for the upcoming Middle East collapse.

Free-Market Analysis: We wrote this Reuters article! Not really. But we were astonished when we read it, because it makes all the points that we made in a previous article of ours called "Who Is the Enemy Here?"

An article about the House of Saud might seem to have a geopolitical focus but, in fact, many of the ramifications are economic. We'll offer more on that shortly.

But first let us see how this Reuters article corresponds to what we wrote. Here:

Modern jihadist organizations, including Islamic State and al Qaeda, follow an extreme interpretation of the Salafi branch of Islam, of which Wahhabism was the original strain, and whose clergy still enjoy great influence in wider Salafist circles.

The article also makes the point that the House of Saud has less influence over Wahhabism than it used to. In part that is because the movement is much bigger now.

[But] Jihadists often turn to texts written by long-dead Wahhabi scholars and they often adopt a Saudi style of oratory in their religious speeches, but they mock the kingdom's modern clergy as puppets of a corrupt, pro-Western regime.

Insightful! We could have written this ourselves. (And we did.) Our larger thesis – for years – has been very simply that Saudi Arabia and its Western sponsors are the progenitors of Islamic terror and the mainstream media was avoiding this reality.

Another article that was posted just recently is an Antiwar.com analysis entitled "The Saudis Are Stumbling – They May Take the Middle East With Them."

Like the Reuters analysis, this article focuses directly on the Saudi "dilemma" but does so in a more incendiary way. Here, for instance, is the article's "cut" line: "America's leading Sunni ally is proving how easily hubris, delusion, and old-fashioned ineptitude can trump even bottomless wealth."

Here's more:

For the past eight decades Saudi Arabia has been careful. Using its vast oil wealth, it's quietly spread its ultra-conservative brand of Islam throughout the Muslim world, secretly undermined secular regimes in its region, and prudently kept to the shadows while others did the fighting and dying.

It was Saudi money that fueled the Mujahedeen in Afghanistan, underwrote Saddam Hussein's invasion of Iran, and bankrolled Islamic movements and terrorist groups from the Caucasus to the Hindu Kush. It wasn't a modest foreign policy, but it was a discreet one.

Today that circumspect diplomacy is in ruins, and the House of Saud looks more vulnerable than it has since the country was founded in 1926.

The article goes on to cite the various "mistakes" made by the House of Saud – the family that runs Saudi Arabia. Among these are the war in Yemen, the determination to drive the price of oil down to shut off fracking supplies and the overall repression that the Saud family practices.

The article concludes that, "While it's still immensely wealthy, there are lots of bills coming due. It's not clear the kingdom has the capital or the ability to meet them."

Both of these articles are accurate so far as they go. The Antiwar.com article is more thorough and its rhetoric is more pointed, but the general argument being made is that the House of Saud is in trouble and that its reign may be coming to an end.

Strangely, neither of these articles make a larger, more important point, which is that the Saudis' foreign policy is not its own: It is one that is obviously provided to it by the US – and by the anglosphere generally.

This is most important because without understanding it, one's perception of what is going on in the Middle East is liable to be flawed and trying to figure out what is coming next becomes more difficult as well.

What needs to be said (and we have said it) is that the anglosphere is committed to a collapse of the dollar in order to create a more global currency.

This ought to be well known by now. Central bankers and other economic authorities have not been shy about suggesting it. For some reason, however, this analysis is avoided in both of these articles and elsewhere, too. And yet the story of the House of Saud is intimately bound up with Western economics.

It was after all Henry Kissinger who traveled to Saudi Arabia in 1971 with a surprising suggestion: Link the dollar to energy and refuse to release any oil without payment in dollars.

This turned into the foundational element of the dollar reserve currency, the petrodollar that has formed the basis of US foreign policy for decades. It is a policy that is dying as the anglosphere itself – which formerly desired the policy – has evidently decided to discard it.

Any objective scrutiny of the dollar's demise should begin (in the modern era) with the administration of George Bush, for here the greatest damage was done. Bush pursued hugely expensive domestic policies and then embroiled the US in at least two major, costly wars.

The upshot was to destabilize the finances of the US and to undermine the credibility of the dollar. One couldn't have done a better job if one intended to do so …

This had several ramifications, most notably to generate rising distrust in the dollar around the world. Nowhere was this distrust greater than in BRIC countries that began to make an effort to remove themselves from a dollar-denominated world.

The struggles of the BRICs to create a post-dollar world has been written about a great deal but as with analyses of Saudi Arabia, the full story is usually not revealed.

In truth, the dominant Anglosphere entity that wields enormous power around the world is perfectly content to allow the BRICs to create an alternative monetary pole. This is how one internationalizes currency after all. First the dollar must be delegitimized and other currencies must become more powerful.

It is no accident that the BRICs economies are modeled after Western ones. From public schooling, to central banking, to fiat money printing, the BRICs operate in an entirely Western manner. Their paradigm is a Western one. They are surely still subject to considerable Western influence behind the scenes.

The Saudis are subject to Western influence as well. Kissinger didn't ask the Saudis to link the dollar to oil; he told them to do it. What he didn't tell them was that when the West wanted to move beyond national currencies, the House of Saud would become expendable.

It is this fundamental insight that is missing from most – if not all – analyses of what's going in the Middle East and indeed the world when it comes to economics, monetary policy and the petrodollar.

This explains why there are so many negative articles about Saudi Arabia in the Western media these days. It explains why Reuters would write such a blunt and critical article about Saudi Arabia.

Of course, the Reuters article doesn't take it to the next level of accuracy and comprehension by explaining that the Saudis are basically order-takers. It is the US that calls the proverbial tune to which the Saudis dance. And then, of course, there is the larger monetary mafia that controls US foreign policy.

If one understands these crucial linkages, what's going on in the Middle East becomes a great deal easier to comprehend. It has little or nothing to do with oil or pipelines or any of the other reasons trotted out by the mainstream media and much of the alternative media. In fact, there is plenty of oil around the world, as we can see with the (convenient) rise of fracking.

What is going on in the Middle East is a surgical expansion of Anglosphere power predicated on creating and expanding a world currency and concomitant facilities – a world central bank, etc.

Understand this and you will understand how and why events are unfolding as they are. And once you understand you will be better positioned to figure out what you need to do to secure your wealth and your family's security.

The dollar is headed for its demise. As it dies, equities markets shall fall and monetary volatility increase. Gold and silver will become more in demand. The Middle East will see further chaos and it is certainly possible that Saudi Arabia itself will fall or at least become Balkanized.

There are a number of potential scenarios that occur once one accepts that Middle Eastern chaos and financial volatility is part of a broader strategy of sociopolitical and economic reconfiguration by the monied interests of the West.

After Thoughts

Here at The Daily Bell, we've been consistent in advancing this analysis of The Middle East for years. Our message – a part of it – can now be seen in the two articles mentioned above. But there is a great deal more of it and we would urge you to look beneath the surface of current events, especially when it comes to articles in the mainstream media. We're here to help.

Posted in STAFF NEWS & ANALYSIS
  • Pecos Bill

    Grateful for another brief but consice recap. DB – you say you’re here to help – could you also consider crafting more advice and sharing best practices that allow someone like me – a young married man in the USA working and making a “middle class wage” with a wife and a baby – to save as much as I can to store the tiny bit of wealth I earn and save it…generate more wealth…and keep a portion out of the fiat digital dollars that get deposited in my bank account every month?

    So many times I read articles on here and on other alternative websites and an left wondering…”great…so what’s the next step for me?”

    I hardly have any extra captial to go out and acquire assets and residencies in other counties…stacks of precious metals, investments in cannabis…

    I’m working diligently to be debt free – to save what I can and i don’t expect the government or anyone else to take care of me when I’m old – but how does someone like me go that next step with a tight income, bills to pay, and hardly anytime at night after work and after spending time with my family?

    What would be you and the readers advice for young people like me?

    • Ross

      Pray! Then work like heck to save enough to purchase a silver eagle every once in awhile. Get an extra job, unless you are already working 60 hours a week. Work on Saturday. Go to church on Sunday, pay tithing and EXPECT that your Heavenly Father will take care of you and your family.

    • Praetor

      I’m working diligently to be debt free, good start, and than stay out of debt, never, ever own anyone anything ever again, especially in todays world. Spend more time with your family, the best time you will ever spend. Debt free is freedom and liberating. When you owe no one anything and I mean anything, everything changes, your outlook, your thinking, everything changes. No one has a claim on anything you own, nothing, than your option are many. Live below your means, not above your means, to live above your income is debt, and you be their slave, but once your free of debt, you are truly living free. Then all options are on the table!!!

    • Invest in yourself and your family, build your intellectual and cultural capital like it is gold in the vault. Chuck out the TV, read, play music, act, dance, be creative. Keep away from the illusions of consumerism and make sure your family learn why you are striving to live well but always be spending AT LEAST 20% less than you earn (and support you in that). There are many grand things a family can enjoy which do not include spending cash. Work on obtaining second passports. Develop your career – ask for help and advice (I wish I had as a younger fellow – because I was good at my work, smart enough, and too polite, I just waited for my big opportunity to come to me, thinking that was how it happened for too long. It does not; you have to ask for it, you have to make it happen). Consider running your own business. Fiddle tax where so ever you can without getting found out. Buy second-hand and make-do. Sell everything unnecessary on eBay. Work on an international angle to the business you are in, build overseas commercial contacts and business friends so there is one good rainy day insurance potential – (export to them, import from them, go and ask them to find you work overseas, etc). Look after, love and cherish your wife for the rest of your life – work at it every day. Make sure your relationship is built on rock. This is the right way to happiness and essential to raise a family (plus divorce is nothing but failure and a massive financial black-hole).

      • gabe

        I am 42…I have 3 kids…I think the part about being honest with your wife is the most important. If you don’t have emotional honesty with her some every day then you are f***ed. I learned from experience. When I was 25 I cared about all this political crap and was obsessed with it…I used it as a excuse to to not fix my life that was right in front of me.

    • alaska3636

      Second the education thing: you can beat all kinds of people for things by simply out-working them in the long run. Classic tortoise maneuver. If your work has certifications, start working on them. Once you get them, find other bodies of knowledge that will be useful for what you do and get certified in those.

      Online classes are easy and cheap.

      As below, ask for help and advice; people are not going to give it to you without asking.

      There is no guarantee the hard work alone will get you where you want to be, but then one might ask themself: is being where I want to be going to do me any good? make me happy?

      Hard work is its own reward but to be maximized one needs to know how to “network” people in order to leverage knowledge and experience. There’s no good answers these days for those people who don’t luck into a bunch of money or security. Keep the faith and treat people well – basically, all of those aphorisms that people tell you don’t apply to “today’s world”. They may not bring you what you thought you wanted but nothing buys a clear conscience when Mr. Grim is over your shoulder. Plus, it will start your kids on the right track – might not help you but will probably help them. Plus the world doesn’t need more A-holes.

      Finally, be thankful that you were able to start a family; many working class people find it out of reach for themselves today.

  • Praetor

    Saudi Arabia, part of the clique!!!

    • Dimitri Ledkovsky

      You mean the Israeli clique? The House of Saud was once Jewish. They converted to Islam out of expedience.

  • The trick has been to drain the oil from across the Middle East and meanwhile see the despots, who have been put in charge, squander the proceeds (rather than invest it meaningfully into building the economic power of their nations). This is not because there is no alternative to oil, there is, it is because there is not presently a cheaper, easier alternative to oil and if the Middle East has such plentiful oil that if they are free to act on that advantage they would (and yet could) become the economic power-house of the world (by virtue of having the cheapest most accessible energy reserves and petrochemical industry raw materials). The game-plan for the last one hundred and eleven years has been to keep them out of the great-game now and so forever.

  • acudoc1949

    The power wielded by fractional-reserve bankers is immense—the ability to create purchasing power out of signatures on bogus promissory notes.

    The present system of debt-based currency issuance by fractional-reserve banks is inherently flawed and dishonest. When the people of the world finally see this, they will throw off the chains placed on them by the bankster class.

    No revolution is necessary. Revolutions typically just replace one gang of thieves with another. Simply withdraw support from this system of neo-feudalism, which amounts to nothing more than citizens of the world assuming fictitious debt to fraudulent moneychangers.

    Instead, let each government guarantee the quantity and fineness of gold/silver coinage and let banks be true 100% reserve depositories of these coins. Any national paper currency is backed up 100% by gold/silver reserves. Any debit cards are backed up by 100% reserves of gold/silver as well. All credit card charges, however, are backed up by actual surrender of gold/silver by people fully informed of the nature of that type of transaction and who are willing to take the risk of real, honest lending. In this way all loans arise solely from previous savings and only at interest rates set by capital markets, not by power-hungry individuals at central banks sitting around mahogany tables in $5K shit-stained suits who think they know what they are doing!

    And finally—very importantly—LET PRICES EQUILIBRATE FOR AS LONG AS REQUIRED. In the modern electronic economy this will be a turbulent ride initially but in a matter of weeks it will be settled at levels of price and cost that truly reflect the true state of the economy and of the structure of production.

    The end result—-an honest banking system with all of the present conveniences without the serfdom, run neither by private central banks nor by federal governments. A worldwide currency based on grams of silver and gold and a flourishing of trade…without paternalistic trade agreements or cronyist, corporate influence.

    The financial system is going to collapse anyway, as it did in the Weimar Republik of Germany in the early 1920s, but this time on a much more massive scale. Why don’t the citizens of the planet seize the moment and direct the collapse?

    If, when the crisis does hit, we go to a commodity-backed, ethical monetary system outside of the control of governments and bankers, the financial class will no longer be able to create this fantasy currency at will and their lifestyles will suffer, BUT AT LEAST THEY WILL HAVE THEIR LIVES AND THE ILL-GOTTEN GAINS THEY PRESENTLY HOLD.

    From that point on a free capital market will force them to operate within the same set of constrainsts as everyone else in any loan transaction, only they will still be living in their McMansions. We will leave them their McMansions!

    I really hope we can prevent extreme violence a la WWIII, and I sincerely want people to see through the banksters’ ruse of funding devastating wars with their fake currency as a distraction from their own craven fraud of debt-based currency creation, in order to save their own skins.

    It is true that after such a transition to an honest commodity monetary system, the financier banking class will still hold am outrageously disproportionate percentage of wealth in the form of silver and gold. Central bankers are not stupid, they have plenty of back-up stores of that very money which they presently disparage in order to keep the rest of the population unbalanced and on an eternal treadmill of using their fiat paper currencies. But one of the advantages of commodity money is this: whenever gold and silver is actually spent, OWNERSHIP CHANGES HANDS IRREVOCABLY, WHETHER YOU ARE RICH OR POOR. They cannot hold onto it forever as transactions proceed and they are most definitely NOT allowed to continue to create their paper wealth out of nothing but fake debt on our backs!

    In the present system fiat currencies also exchange hands, of course, but eventually, in a sequence of exchanges, that money must go to paying off the principal of some ‘loan’ somewhere which created that currency to begin with, at which point the currency is extinguished (believe it or not!), necessitating further ‘lending’ by these sharks. Most people are unaware of this extinguishing mechanism because it is the slight of hand of the fractional-reserve banking community when currency is only created via debt.

    With an honest, commodity-based money everyone can begin saving again IF prices of labor, resources, capital, and land are allowed to adjust, absent the influence of fake credit issuance by an elite. (Forget about the notion of nominal prices as they now exist. Those prices will essentially become meaningless. Their present meaninglessness is hidden from view by the actions of central banks worldwide. Concentrate instead on the advantages of a money which does not lose purchasing power, held firmly in the hands of the citiznery and which represents the honest exchange of value.)

    This is a complicated topic. I don’t think I have done it justice, BUT AT LEAST I HAVE TRIED, and my motivation has been solely to prevent more mass bloodletting, more paper money-financed wars, more spiritually-deadening conquest by powerful nation states. In effect, I am letting the bankster elites of the world off the hook in exchange for an honest currency to be used worldwide by ordinary men and women, the real producers. Politicians may have to go out and get real jobs.

  • acudoc1949
  • acudoc1949

    A seminal essay by Gary North: http://www.garynorth.com/public/12619.cfm

  • Q46

    The Angloshpere in Britain, Ireland, USA, Canada, Australia, New Zealand. So these Countries are committed to the collapse of the US Dollar with its ‘dominent entity’… which would be the USA… leading the charge.

    What?

    And the Anglosphere is content for the BRICS to create an alternative monetary pole? What interest would that be to the UK, with its own ‘monetary pole’ Pounds Sterling, and Ireland with the euro?

    And speaking of the euro, what is the EU’s position on ‘monetary poles’… wasn’t the euro supposed to challenge the USD as reserve currency?

    • The IMF has already called for global bancor currency. Note, please that the US (and the West) effectively controls the IMF: Research it for yourself. Here is just one link from dozens. The White Paper proposal was made in 2011.

      http://www.dailykos.com/story/2011/11/9/1034814/-

      From the article:

      “Back in November, 2010, I wrote a diary because I caught wind that China was using $50Billion to buy a new IMF issued SDR and other countries were following suit. I couldn’t figure out how this could work, until now. It turns out Yves was correct. An open world economy needs a world currency. An international currency called the BANCOR is being discussed by the IMF:”

      Reserve Accumulation and International Monetary Stability

      “This is how owners of bonds in the basket, the SDR, can “cash out”. They can use their dollars to buy IMF SDRs, and then receive BANCORS to trade with the world. This move would eliminate the US Dollar as the world’s reserve currency. To save you time, I have posted the IMF BANCOR language below.”

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