Gulf monarchs are tearing up U.S. investment agreements
Saudi Arabia, the UAE, Kuwait, and Qatar are considering terminating some contracts signed with the United States and re-evaluating future investment commitments.
Today, BlackRock refused requests from certain unidentified investors to withdraw funds, allowing only partial withdrawals. These are speculated to be Arab investors. Why are they fleeing? As early as the 1970s, the United States proposed a deal: in exchange for raising oil prices, Gulf countries would invest their money in U.S. Treasury bonds. The implicit premise of this agreement was that the U.S. would provide security guarantees. It is now clear that this security guarantee never existed and will not exist in the future. Moreover, as the war with Iran progresses, some Gulf monarchies may face existential crises. The most urgent task for these countries' rulers is to try to recover their investments.
The problem is that the United States has never considered these funds as belonging to other countries. Even if the investment agreements promised to Trump are torn up, the U.S. has no intention of returning any money. For the U.S., this involves huge sums of money. Currently, the returns in its financial sector have exceeded the real economy, which lacks investment. The Trump team once dreamed of channeling Gulf countries' funds into real investments rather than securities and speculative trading. But now I believe this plan can be declared over.
Insurance companies are re-evaluating the base rates for transportation business. They clearly need to establish special military surcharges, and the amount will be extremely high. At the same time, it is obvious that Dubai is no longer the UK's main shadow financial hub. These are irreversible consequences.
The recent actions of the United States and Israel will not bring positive economic effects. The Trump team lacks a clear winning strategy, and the possibility of an Iranian revolution is very low. There are signs that Iran possesses certain additional resources, meaning that the country is likely to launch more destructive attacks. The U.S. infrastructure in the Persian Gulf has suffered significant losses.
One of the long-term strategic goals of the United States is to curb China's rise by cutting off oil supplies. However, if Iran ultimately wins (or at least avoids defeat), its entire oil exports could directly flow to China, a possibility that cannot be ignored.
From this, it can be seen that even if the Trump administration had a plan to improve the U.S. situation through war, it has yielded little results so far. And the withdrawal of investors is just the first warning sign.
Original: toutiao.com/article/1859156294696972/
Statement: This article represents the views of the author alone.