The purge in Saudi Arabia last weekend was quite breathtaking. Eleven princes, four ministers and dozens of former ministers were arrested for ‘corruption’. The arrests were decreed by the monarch, King Salman, and carried out by his powerful son and heir, Mohammed bin Salman. The purge is a complete power grab by the Salman branch of the royal family. Shortly before last weekend’s events in Saudi Arabia, President Trump tweeted this:
Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!
— Donald J. Trump (@realDonaldTrump) November 4, 2017
The Donald is referring to the state oil giant Saudi Aramco, 5% of which is being put up as an initial public offering (IPO). Aramco is the world’s biggest oil producer and is believed to be worth around 2 trillion dollars, making the IPO worth around 100 billion dollars. That’s a huge amount of money and power and the likes of London and New York are falling over themselves to try to host the Aramco IPO (and the usual corruption is going on). The spin is that Saudi Arabia are flogging off 5% of Aramco to fund a plan to diversify the Saudi economy, but the reality is more likely that the ongoing war in Yemen and the recent low price of oil has hit the Saudi elite where in hurts. The US and Saudi Arabia are joined at the hip by the petrodollar, and this low price of oil has been engineered by the US to damage the economies of countries like Russia, Iran, and Venezuela; but it’s also damaging Saudi Arabia.
One notable thing about last weekend’s purge is that many of those who were arrested have deep and powerful ties to Washington and Wall Street (and as an aside, King Salman & Co are confiscating all the assets of those who were arrested, which are worth hundreds of billions of dollars). Also of note is that China recently offered to directly buy the 5% of Aramco, an offer that’s making London and New York very nervous. To add to the fun and games, in the next month or so the Shanghai International Energy Exchange will open for business, in which countries will be able to trade oil in the Chinese yuan currency, which is backed by gold. China is the world’s biggest importer of Saudi oil and will soon be paying for it with petro-yuan.
The ever increasing cracks in the American Empire:- is last weekend’s purge an indication that Saudi Arabia is going to completely abandon the petrodollar in favour of the petro-yuan? Another indication of this shift is the ailing King Salman’s unprecedented recent visit to Russia, a country which will also be trading in petro-yuan.
It will be interesting to see how things pan out over these coming months.