Wow, talk about perfect timing.
The other day I posted this, asking (perhaps rhetorically) what the heck is going on?
My hunch: Saudi Arabia not a bit happy with President Biden's decision to flood the USA with SPR oil.
Link here. Foreign Exchange Reserves.
During the last three months, the price of oil has surged, and Saudi production has maintained. Is anyone asking why Saudi's foreign reserve assets are falling, and not by a little? I assume gold is not included in these assets.
I posited two possible explanations:
- with uncertainty for the ruble, and concern about yuan / dollar jawboning, perhaps Saudi is replacing some cash with gold in its vaults? Or,
- Saudi has a lot more expenses for something not being talked about; upgrading military defense against Yemeni rebels?
A reader suggested something else:
Saudi Arabia may be stockpiling huge amounts of grain. And spending a lot of money doing it.
That may explain it.
Look at this from twitter this evening:
Saudi has a huge, huge problem with civil unrest. It has lived through Arab Spring. The reader may be correct. Saudi is front-loading, at great expense, huge grain stockpiles.
It makes me wonder if the Biden administration is thinking this through? What US farmers are going to need is a lot of moral support, a lot of diesel, and a lot of fertilizer.
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