Monday, April 18, 2016

Steve's Barking; Saudia Arabia threatens to sell it's US bonds and.....

It's in the news, Saudi Arabia is threatening to sell it's US bonds if the United States congress allows
victims of the 9/11 attacks to sue Saudis for that attack.
If the Saudis sell their $700,000,000 in bonds all at one time it would a disaster for them.
The price that they would get would be at a deep discount, hurting their welfare programs now that oil is selling at a very low price. If they sell at slow and steady, well that's what there suppose to do, supplementing their oil based revenue so they keep up their welfare.
Would the selling of The Saudi bonds hurt the U.S. bond market, don't bet on it. Because of the deep discount the bonds would be gobbled up.
The aftermath probably  will be slightly higher treasury notes with no real damaging effect.

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