Saudi Arabia amazingly said that Lebanon had declared war against it, blaming attacks against the Kingdom by the Hezbollah.
…and it’s only getting worse. Bin, by the way, means “son of” in Arabic.
This is why there are “Bins” here, there, and everywhere scattered across the Middle East. And some of them are having a rough week. In particular:
Shock and awe Vin Diesel style!
Adding fuel to the fire we have declarations of war.
Saudi Arabia amazingly said that Lebanon had declared war against it, blaming attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.
As reported by Reuters:
Saudi Gulf affairs minister Thamer al-Sabhan told Al-Arabiya TV that Saad al-Hariri, who announced his resignation as Lebanon’s prime minister on Saturday, had been told that acts of “aggression” by Hezbollah “were considered acts of a declaration of war against Saudi Arabia by Lebanon and by the Lebanese Party of the Devil.
That’s quite a threat and declaration. But wait… there’s more!
As reported by Al Jazeera:
Saudi Arabia blames Iran for missile attack
Saudi Arabia has accused Iran of being responsible for Saturday’s ballistic missile launched from Yemen that targeted Riyadh airport, warning that it could be “considered an act of war”.
Now, if you remember what I said earlier this year when discussing Qatar, which was a trial balloon as I said:
The real issue here isn’t Qatar.
They are merely a pawn in this. The target here is Iran, and now that Chairman Trump just gave the Saudis a “we’ve got your back” pledge, it’s time to move things forward.
So to summarize:
The arrests had been decreed by the monarch, King Salman, and carried out by his increasingly powerful son and heir, Mohammed bin Salman, who, for the sake of brevity, I’ll call MBS. MBS is in the process of completely upturning the established order so this promises to be more exciting than a Hitchcock thriller.
But first some background.
Tribal Society – A Gang of Thieves
Saudi Arabia is a tribal society where order has been, up until last week, maintained by a consensus amongst the various branches of the Royal family. Up until now it’s been unthinkable to publicly shame, humiliate, and imprison other members of the ruling family, and so fracturing this established order is a big deal. A really big deal!
This is not like admitting at a family gathering to having snuck into auntie’s beach house for a quickie with the cute waitress at the corner coffee shop.
Rather, it’s like telling them you’ve already burnt down their homes after becoming a transvestite. It’d be a huge shock, and that’s exactly what the families are experiencing right now.
You see, the way it’s worked is that the families all have a stake in the system, and this in turn helps secure their loyalty. What MBS has just done is to completely shatter the way things have always worked and in so doing destroyed any loyalty and trust.
So what the hell is happening?
To understand what’s likely taking place let’s follow the money.
Here’s what we do know.
Oil makes up 90% of Saudi government revenue, and the entire place is a giant welfare state. So the price drop has been very painful and they’re bleeding through their reserves.
Source: tradingeconomics.com
In fact, according to the IMF, Saudi Arabia is set to burn through all of its cash within five years.
This is why the market is putting more pressure on their currency peg than at any time in its history. I wrote about this back in May when I said the Saudi sheikhs only have two options.
This is also why they need to list Aramco — in order to shore up their finances.
Not only have weak oil prices hurt them. They’ve been engaging in futile silly wars… and these things cost billions. Yemen, Syria — both of which they figured would be easily won and over in months. Oops!
So their expense column looks horrible due to their losing billions in wars and welfare, while their revenue column has been under severe pressure due to the price of oil.
Here’s brent:
In fact, their status as swing producer just ain’t what it used to be either. They’ve the US to thank for that.
Here’s US oil production:
What else do we know?
We know that the house of Saud is Sunni in a country predominantly Shia. They are, therefore, the minority. Thus far, they’ve managed to keep the populace at heel with a combination of brutal crackdowns on dissent and, as mentioned, a giant welfare system. People who’re fed well tend not to complain.
Importantly, the Wahhabi sect tolerates other religious or ideological beliefs in the same way you and I’d tolerate a cockroach on our kitchen bench: Not so much.
For instance, in all its 50 years, there has not been a single non-Sunni Muslim diplomat in the embassy. These guys are so radical that the branch of Imam Mohamed Bin Saud University in Fairfax, Virginia instructs its students that Shia Islam is a Jewish conspiracy.
It goes without saying therefore that if you’re the ruling elite and you rule over a Shia population, you’re not really liked that much. Less so with views like this.
So with that backdrop: Finances in turmoil, a bunch of rich (15,000 odd) squabbling family members, being a minority, which has ruled brutally over a minority whose religious beliefs aren’t tolerated, what would you be thinking?
I know what I’d be thinking.
I’d be thinking that the House of Saudi is like an expiring option contract and it’s out of the money. Some in the family realise that, namely MBS.
This is why he’s been pushing forward to liberalise the economy. It’s not hard to look across the pond to the success Dubai has seen to realise that Wahhabism is antithetical to economic growth. And so if Saudi Arabia is to survive and the Royal Family to survive, by default, they need a plan. And fast.
This requires getting rid of some of the clerics and old tribal establishments. This has been taking place ever since MBS moved into the gilded rooms 6 months ago.
What you’ve got to remember is that the old guard don’t want change, and these guys have depended 100% on oil revenues.
It looks to me like MBS sees this for the expiring option contract that it is. My best guess is that he realises that if they wait too long, by the time the welfare money has run out, they’ll all be overthrown. The old guard probably don’t want to hear that, but it is the truth. And because they don’t want to hear it, you need to get rid of them.
So why all the noise about war with Lebanon and Iran?
Certainly, the enemy of my enemy is my friend applies, and Israel and Saudi have formed some sort of unholy alliance.
