This week marks the annual MAKS air show that is held each year in Moscow and surrounding regions, and there is a very interesting lineup of attendees that are coming to this year’s event. Among them are several leaders from the Middle East and from OPEC nations, and it will bring together several parties that have the power to direct energy and military policies going forward for their countries.
But what is of strategic importance, and what could possibly end up being a monumental sea change in the global energy spectrum, is that this week’s event could bring about the plans for an end of the petro-dollar, and a rise of oil and natural gas being sold primarily in Yuan, or even perhaps gold.
The lineup of officials in Moscow tomorrow:King of Jordan, King of KSA, Crown Prince of Abu Dhabi, Egypt’s President, Iranian Vice-President
#Breaking: Saudi King Salman will visit Russia on August 25. He’ll attend the MAKS air show along with Putin. An arms deal may be on its way
Significant detail: Looks like Saudi &Jordanian Kings as well as Iranian & Syrian officials will all be in Moscow at the same time next week
And then imagine that Egypt’s Sisi is visiting Moscow on August 26-27. Russia is up to something – Yuri Barman
By pulling together several Arab and Islamic leaders, many of whom are currently at odds with one another, is extremely significant and suggests that there is much at stake for the participants attending this event. For example, discussions over Syria and Iran could be in play, but more than likely, talks on what to do over the price of oil, especially as Saudi Arabia finds itself having to cut its budget because of the global drop in prices, is an extreme probability.
Saudi Arabia is seeking to cut billions of dollars from next year’s budget because of the slump in crude prices, according to two people familiar with the matter.
The government is working with advisers on a review of capital spending plans and may delay or shrink some infrastructure projects to save money, the people said, asking not to be identified as the information is private. The government is in the early stages of the review and could look at cutting investment spending, estimated to be about 382 billion riyals ($102 billion) this year, by about 10 percent or more, the people said. Current spending on areas such as public sector salaries wouldn’t be affected, the people said.
The Arab world’s largest economy is expected to post a budget deficit of almost 20 percent of gross domestic product this year, according to the International Monetary Fund. With income from oil accounting for about 90 percent of revenue, a more than 50 percent drop in prices in the past 12 months has put pressure on the nation’s finances. The country has raised at least 35 billion riyals from local bond markets this year, the first time it has issued securities with a maturity of over 12 months since 2007. – Zerohedge
With the global economy spiraling towards recession, and nations everywhere devaluing their currencies to protect their remaining lifelines for exports, the countries that rely upon supplying producing nations with commodities such as oil and natural gas are at the precipice of a crisis. And a solution to this may just be a divestiture from the dollar, and the key to unshackling themselves from a future of massive inflation, and from remaining under the thumb of a U.S. foreign policy that less than five years ago, led to an Arab Spring, and chaotic civil unrest.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.