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Where will KSA find $100BN to pay for arms?

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Where will KSA find $100BN to pay for arms?

Unread postby misterno » Mon 22 May 2017, 10:26:09

I don’t understand where Saudis will find the money to pay for this. Even without this 100BN dollar deal, KSA is in the projection to go bankrupt in 5 years so where is the money coming from?
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Re: Where will KSA find $100BN to pay for arms?

Unread postby misterno » Mon 22 May 2017, 10:53:13

GASMON wrote:Oil


oil? Their oil is not enough to fill their budget gap yet alone for arms...

Their budget deficit is like $7-8BN per month.

What are they gonna use these arms for? The war with Yemen is miniscule. Iran?
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Cog » Mon 22 May 2017, 11:05:17

This is why Trump is president and you are not.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby misterno » Mon 22 May 2017, 11:20:14

pstarr wrote:
misterno wrote:
GASMON wrote:Oil


oil? Their oil is not enough to fill their budget gap yet alone for arms...

Their budget deficit is like $7-8BN per month.

What are they gonna use these arms for? The war with Yemen is miniscule. Iran?

They are going to use the weapon purchases to shore up relations with the US military . . . . industrial complex. The Saudi's need us to defend their royal butts from the Yemenese people. And their own slaves. And also from chem trails.


Chem Trails in Saudi Arabia?

What are you talking about?
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Cog » Mon 22 May 2017, 11:49:40

This deal can easily be financed through Goldman Sachs or any other large investment banking firms. I believe our Treasury Secretary knows a few guys over there. *wink*. Maybe some Aramco stock, after their IPO, as collateral.

Trust me on this. People are going to make a wad of cash on this deal. Which is why Trump is the right guy in office to make this happen.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Plantagenet » Mon 22 May 2017, 11:54:08

misterno wrote:I don’t understand where Saudis will find the money to pay for this..... where is the money coming from?


Cog is right---you must've missed the news that KSA is planning to sell off shares of ARAMCO on the stock market in 2018? This sale is projected to be the largest IPO in world history and will bring in hundreds of billions of dollars to KSA---much more then the cost of the arms purchases.

Glad to help!

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Re: Where will KSA find $100BN to pay for arms?

Unread postby ROCKMAN » Mon 22 May 2017, 16:46:00

Does anyone bother to read the ENTIRE KSA balance sheet? Bankrupt? LMFAO

http://www.tradingeconomics.com/saudi-a ... ebt-to-gdp
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Re: Where will KSA find $100BN to pay for arms?

Unread postby peripato » Mon 22 May 2017, 22:40:42

misterno wrote:I don’t understand where Saudis will find the money to pay for this. Even without this 100BN dollar deal, KSA is in the projection to go bankrupt in 5 years so where is the money coming from?

They will borrow the money from the US Treasury. More money that will simply never get repaid, but that's not the point. Got to keep the Ponzi circle jerk going at all costs...
"Don’t panic, Wall St. is safe!"
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Antaris » Mon 22 May 2017, 23:15:38

Lots of dumb ass people like cog to give money away.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby EdwinSm » Tue 23 May 2017, 00:30:47

Rockman, thanks for the link. That is a low debt to GDP ratio. So it looks like they would be able to borrow lots of money if needed.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby EdwinSm » Tue 23 May 2017, 06:42:17

According to the EIA the oil export revenues for Saudi Arabia for the last few years are:-

2010 $ 229 billion
2011 $ 336 billion
2012 $ 353 billion
2013 $ 334 billion
2014 $ 297 billion
2015 $ 157 billion
2016 $ 133 billion.

Quite a drop, but still lots of money, but they must be hurting.

Link:- https://www.eia.gov/beta/international/regions-topics.cfm?RegionTopicID=OPEC, and link within page for data pre-2015
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Outcast_Searcher » Tue 23 May 2017, 15:35:09

EdwinSm wrote:According to the EIA the oil export revenues for Saudi Arabia for the last few years are:-

2010 $ 229 billion
2011 $ 336 billion
2012 $ 353 billion
2013 $ 334 billion
2014 $ 297 billion
2015 $ 157 billion
2016 $ 133 billion.

Quite a drop, but still lots of money, but they must be hurting.

Link:- https://www.eia.gov/beta/international/regions-topics.cfm?RegionTopicID=OPEC, and link within page for data pre-2015

Hurting sure -- and their budget deficit and need to cut spending reflects that.

However, that's a LOT different than near bankruptcy, and unable to pay $100 billion in the short term, as the OP implied.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Cog » Tue 23 May 2017, 18:55:42

As long as their check clears, the USA will be happy with the result. Much better than the deal of handing the Iranian's $150 billion in electronic cash and $400 million in pallets of real cash on a tarmac.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby misterno » Wed 24 May 2017, 10:06:06

Would you spend 20% of your total reserves to arms and guns when it is shrinking so fast that you will be penniless in 5 years?

Nobody with the right mind would do that

The Saudis know something that we don't or someone or some country promised something behind the doors?

Does anyone here think oil price will ever be above $100/brl which is what Saudis need to balance the budget?

I don't think so.

So what is going on here?

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Re: Where will KSA find $100BN to pay for arms?

Unread postby Cog » Wed 24 May 2017, 10:26:34

The Saudi's know the price of oil won't stay at $50ish long enough for them to run out of cash reserves. And lets not forget the 2 trillion that Aramco is going to be worth when they have their IPO. Two trillion buys you a lot of time for the price of oil to go back up. Which of course it inevitably will.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Outcast_Searcher » Wed 24 May 2017, 14:28:05

misterno wrote:Would you spend 20% of your total reserves to arms and guns when it is shrinking so fast that you will be penniless in 5 years?

Nobody with the right mind would do that

The Saudis know something that we don't or someone or some country promised something behind the doors?

Does anyone here think oil price will ever be above $100/brl which is what Saudis need to balance the budget?

I don't think so.

So what is going on here?



I do. Maybe not for long periods of time, but at least now and then. The volatility of oil prices over time isn't going away (at least not for several decades), since supply and demand isn't going away.

Global demand for oil continues to grow as third world growth continues apace. That doesn't appear at ALL likely to end any time soon.

Green energy will grow in the first world. But it is starting from a tiny base, and it will take TIME. Math is something the greens seem to insist on a very one-sided (and unrealistic) application when they claim that, for example, EV's will be completely dominant within a decade.

Also, the KSA is working to diversify its economy and move toward green tech itself. So it's a horse race, not an intractable situation.

Will it be easy for them? NO, IMO.

Will they be successful in the transition, given the problems and human nature? I don't know. But the spikes in oil prices will help buy them time -- if they're not stupid and during the spikes decide all is well re long term oil revenues and stop moving away from total dependence on oil revenues.

....

Could I be wrong? Sure. Easily. But that's how I see the big picture. And no, I'm not dumb enough to try to make specific predictions by year -- anyone looking at the history of many volatile commodity charts, or volatile market charts in general should be able to see why such predictions are futile.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Where will KSA find $100BN to pay for arms?

Unread postby Zarquon » Sun 20 Aug 2017, 08:13:57

https://lawfareblog.com/110-billion-arm ... -fake-news

"Last month, President Trump visited Saudi Arabia and his administration announced that he had concluded a $110 billion arms deal with the kingdom. Only problem is that there is no deal. It’s fake news.

I’ve spoken to contacts in the defense business and on the Hill, and all of them say the same thing: There is no $110 billion deal. Instead, there are a bunch of letters of interest or intent, but not contracts. Many are offers that the defense industry thinks the Saudis will be interested in someday. So far nothing has been notified to the Senate for review. The Defense Security Cooperation Agency, the arms sales wing of the Pentagon, calls them “intended sales.” None of the deals identified so far are new, all began in the Obama administration.

An example is a proposal for sale of four frigates (called multi-mission surface combatant vessels) to the Royal Saudi navy. This proposal was first reported by the State Department in 2015. No contract has followed. The type of frigate is a derivative of a vessel that the U.S. Navy uses but the derivative doesn’t actually exist yet. Another piece is the Terminal High Altitude Air Defense system (THAAD) which was recently deployed in South Korea. The Saudis have expressed interest in the system for several years but no contracts have been finalized. Obama approved the sale in principle at a summit at Camp David in 2015. Also on the wish list are 150 Black Hawk helicopters. Again, this is old news repackaged. What the Saudis and the administration did is put together a notional package of the Saudi wish list of possible deals and portray that as a deal. Even then the numbers don’t add up. It’s fake news.

Moreover, it’s unlikely that the Saudis could pay for a $110 billion deal any longer, due to low oil prices and the two-plus years old war in Yemen. President Obama sold the kingdom $112 billion in weapons over eight years, most of which was a single, huge deal in 2012 negotiated by then-Secretary of Defense Bob Gates. To get that deal through Congressional approval, Gates also negotiated a deal with Israel to compensate the Israelis and preserve their qualitative edge over their Arab neighbors. With the fall in oil prices, the Saudis have struggled to meet their payments since."
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