Saudi Arabia threatens to dump French debt

Bolstered by its recent integration into the BRICS bloc, Saudi Arabia is flexing its muscles by threatening to sell European debt if Russian reserves are seized.

Europe's default on its debt

Bloomberg reports that Saudi Arabia is threatening to stop investing its reserves in European debt if the G7 decides to seize Russian reserves (around 255 billion euros).

The reason being that Russian reserves consist mainly of euros invested in the debts of France, Italy, etc. On the contrary, the United States has seized only five billion dollars and therefore does not risk much in the event of a seizure.

The Saudi threat was conveyed by the Saudi finance ministry shortly after the G7 decided to use Russian reserves to benefit Ukraine. France's debt is particularly in Riyadh's sights, according to Bloomberg.

These warnings date back to April and were accompanied by those from China and Indonesia. Despite these warnings, the G7 has finally crossed the Rubicon in recent weeks.

Meeting in Italy from June 13 to 15, the conclave decided to grant Ukraine a loan of 50 billion dollars guaranteed by the interests generated by Russian assets. This is why the price of insurance against a default by France (CDS) recently flew away.

France's signature will be worth little when Ukraine decides not to repay the fifty billion and the interest generated by Russian assets has to be seized for good.
The European Commission is talking about interest of about 3 billion euros per year. At this rate, Russian reserves will have to remain frozen for 16 years…

THE Council on Foreign Relations He is talking about 5 billion euros, or even 9 billion dollars depending on the evolution of rates and the way in which the reserves will be reinvested when the bonds reach maturity.

MBS's Revenge

It is not clear how much European debt Saudi Arabia holds. We do know, however, that its central bank reserves are equivalent to $445 billion, of which 135 billions of dollars in U.S. Treasury bonds.

The kingdom will not hesitate to leverage its economic clout to help Russia. This loyalty stems from the fact that Vladimir Putin rescued Crown Prince Mohammed bin Salman in 2020. At the time, US President Joe Biden promised to make Saudi Arabia a “ pariah » following the elimination of columnist Jamal Khashoggi.

Mr Putin used the opportunity to court Saudi Arabia in an effort to reconcile it with its Iranian neighbour. The two regional powers have since burst the boil and joined the BRICS, an organisation that openly calls for ditching the dollar.

Like other Gulf states, Saudi Arabia sells its oil exclusively in dollars. This is the famous petrodollar system. The latter allows the United States to enjoy a strong dollar despite a chronically negative trade balance.

But times are changing. In January 2023, Saudi Arabia declared itself ready to accept other currencies such as the euro and the yuan. China is ready. For several years, it has been inviting the Gulf countries to sell part of their oil on the Shanghai markets, in yuan (convertible into gold).

However, Arab countries fear Western sanctions. That is why Saudi Arabia is shedding US debt and is taking a keen interest in new international payment network projects (mBridge) that would offer an alternative in the event of a disconnection from the SWIFT network.

Peace or chaos?

We will see the result of the American election (November). Knowing that Joe Biden again made bellicose remarks at the last NATO summit:

Fortunately, Hungarian Prime Minister Viktor Orban is keeping alive the hope of a cessation of hostilities. He recently visited Kiev, Beijing, Moscow, Washington and Mar-A-Lago…. Here is an excerpt from his statements at his press conference with Vladimir Putin:

“Peace is what Europe needs most. We see the fight for peace as the main task of the next six months of our presidency of the European Council. […] We have been living in the shadow of war for two and a half years now. […] This war is already affecting our economic growth and competitiveness. Generally speaking, as I have already said to Mr. President [Poutine]Europe needs peace.”

To which the Russian president responded:

“Russia supports a complete and final end to the conflict. As I have already said, the conditions for this are set out in my speech at the Foreign Ministry. One of the conditions is the complete withdrawal of all Ukrainian troops from the Donetsk and Lugansk People's Republics and the Zaporozhye and Kherson regions.”

Faced with these pledges of goodwill, even though conditions are tough for the Ukrainians, the United States has responded with escalation. Secretary of State Anthony Blinken said on Wednesday that F-16 fighters were on their way to the front.

British Prime Minister Keir Starmer gave him permission to fire his missiles deep into Russian territory. At the same time, Zelensky and Polish Prime Minister Donald Tusk announced that Poland would intercept Russian missiles directly from Polish territory.

Polish General Wieslaw Kukula said that “The Polish army must prepare for a large-scale conflict”…

“The biggest risk would be that Russia wins in Ukraine; we cannot allow that”the NATO secretary general said on Wednesday.

Let's hope that the old continent will soon come to its senses.

From petrodollar to bitcoin

It is important to understand that the wars in Ukraine and Palestine are not just territorial conflicts. They are only the military part of a broader struggle. Russia, provoked by the Maidan coup and the promise to bring Ukraine into NATO, took advantage of the opportunity to sound the BRICS revolt against US imperialism.

The strategic goal now is to hit where it hurts, that is, by getting rid of the dollar. It is possible that the United States will have to agree to give up its “exorbitant privilege” for peace to return in a lasting way.

The fact that Donald Trump rejects the unipolar world order and the plans of the globalists is a reason for optimism. A multipolar world is exactly what Russia and China are demanding.

This is where bitcoin comes in. It offers a solution for all nations to trade on a level playing field. Bitcoin could be the pivot/standard currency in which all countries settle their trade. Trade surpluses would then be placed in bitcoin.

In this regard, the about-face of Donald Trump is a good omen. Here is what he said this week:

“They hate Bitcoin because they can’t control it. I’m a big fan of Bitcoin. I will support the US dollar with Bitcoin.”

The world wants a stateless reserve currency and a payment system from which no one can be expelled. This is what bitcoin represents, which also has the advantage of being an absolute store of value (21 M).

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