is it true that there are countries such as saudi arabia, that have so much money invested in the usa?

Question

for example if the saudi's one day decided to take their money out of the usa and put in euro's instead, basically usa closes down.

Answer 1

The US has been running huge budget deficits for the longest time - although B Clinton did nearly fix things. It's very simple, nobody can spend more than what they earn for ever. Fruthermore the US tends to import more goods and services than it exports, so has to sell some assets to balance the books.

A very visible aspect of this imbalance was the space of Japanese acquisition of major US assets in the 80s, including icons of hollywood and the music industry.

The way the US governemnt finances its deficits this is by issuing bonds. The biggest purchasers of US government bonds are outside the US, China, Japan, and likely Saudi Arabia.

It is unlikely that, say Saudi Arabia, would want to or even be able to take their money out of the US. If a major shareholder in a company decides to sell on the open market, the shares immediately crash and the major shareholder is a major loser. Furthermore, especially for Saudi Arabia who has US bases and whose regime depends heavily on US 'protection', this will not happen.

The US enjoys a privileged position with the US$ being the currency most economies use to keep in reserve. This allows the US to virtually print bonds for ever since there will always be a demand for them. This reserve currency status is what basically protects the US$.

However, this need not be the case. If, say Iraqi oil, starts being traded in Euros instead, then the US economy would be in huge trouble, just as you mentioned.

Answer 2

No, it isn't true. In fact the Saudi Riyal is directly tied to the USD, when the dollar goes down, so does the Riyal. Directly tied 3.75 to 1. Baharaini Dinar to Riyal 10 to 1. Hasn't changed in all the years I've been here. The Saudi Royal family may have investments in the USA but not enough to collapse the economy. Besides the USA has a back-up in case they need to bail themselves out of an economic crisis, it's called Fort Knox. Largest gold reserve in the world.

The only this could happen is if oil started trading in Euro's, and this will never happen because the european economy not only couldn't handle the strain and fluctuations, they don't want the headache. Mind you, then Europe could be the most hated and give the USA a rest. Gotta protect your interests and your economy.

Answer 3

To an extent yes.

In very layman's terms the USA can spend above and beyond its means as there is always a flow of money coming in from overseas.

However, if overseas investors lost confidence in the USA and decided to invest in the "Euroland" instead then the flow of money coming in would lessen and the federal government would have to start finding the money to pay its bills from elsewhere.

Worst case scenario would be something like the 1920s depression.

Answer 4

yes the Saudi Arabia has 2 trillion dollars invested in America.and people don't know.that America.is in debt to the rest of the world.and if the rest of the world has for there money.not only will.America collapses.so will the the rest of the world.like the old saying gose.if you owe the bank a thousand pounds the you are worried.but if you owe the bank a million pounds the bank is worried.

Answer 5

No surprise there. When you have so much money, in the Billions and Trillions, have nowhere to spend - what are you going to do? Put it in a safe place, right?

Why would anyone pull that out, So quit worrying. They will not and Cannot pull it out that easy. They are so deeply entrenched in US economy.

Put it this way: If everyone in this land demand money from their bank all at one, what will happen to the bank?

a. This will not happen. Though it happens in some rare instances.
b. People put it in the bank because it is a safe haven. They are not about to pull out all their money. If they do, the bank will go bankrupt.

Answer 6

The largest foreign investor in the U.S. is Britain. Japan is catching up though. Saudi Arabia is not even on the map in any meaningful way.

Official and private holdings of U.S. Treasury securities by the entire contingent of Asian members of OPEC (including Saudi Arabia) were about $60 billion at the end of 2005; Taiwan and Korea each hold about $67 billion, Britain, $99 billion, Japan, $659 billion.

Private holdings of U.S. corporate and agency bonds by all Asian countries (including Saudi Arabia) were $399 billion, of which $264 billion were held by Japanese investors. Private holdings of U.S. corporate and agency bonds by British investors were $522 billion.

Private holdings of U.S. stocks by all Asian countries (including Saudi Arabia) were $264 billion, of which $186 billion were held by Japanese investors. Private holdings of U.S. stocks by British investors were $304 billion.

Answer 7

nicely that does no longer make experience to attempt and attraction to international places who're enemies now could it? we've performed that interior the previous with the French revolution, and WWI, permit's only say it wasn't distinctly. Now its good you have observed Bush truly has been beating around himself and not explaining why we are sending our troops to easily provide their lives up pointlessly and improve our tax and debts. With analyze from political books and foreign places assets I surely have observed that 3 important aspects come into play for turning out to be this conflict. money invested from Saudi Arabia and Israel is only part of the priority. the biggest issues are a million.) Christian Zionist, only watch seven-hundred club and you gets the message, have this thought that Jesus is coming back off yet in basic terms while the Jews are of their Holy Land, (i'm through no skill claiming this as a holy conflict even yet it comes it performs an significant place) 2.) Like Vietnam, regrettably, while a rustic is vulnerable it somewhat is the final time to drill your political critiques of their device in hopes of securing a political best pal (regrettably its no longer determining too nicely) subsequently comes variety 3.) while they positioned their forces interior the middle east they found accessible is a few discontent, now dropping the conflict will teach to have drastic effects subsequently as a fashion to circumvent the middle east from uniting and proving deadly to our wellbeing. So it somewhat is a vicious cycle that we've been given our selves into to easily positioned our political impacts in a vulnerable usa like Vietnam. I concern that, like Vietnam, we ought to have a similar effects. My suggestion, we ought to continuously try to unravel our differences peacefully like Gandhi or King. i understand this could be a mouthful yet this ought to motivate you to study greater approximately why we are hurting our usa further and added with this stupid conflict.

Answer 8

yeah for sure they'd be stuffed, right up **** creek without a paddle.