6 ms·

The title should say "50 year old petrodollar pact between Saudi Arabia and US expires." Anyways, I'm curious to see what happens next. I can't see Saudi Arabia

The title should say "50 year old petrodollar pact between Saudi Arabia and US expires." Anyways, I'm curious to see what happens next. I can't see Saudi Arabia ditching the dollar overnight.

wazoox 2y ago
Nobody's ditching the dollar. However Saudi Arabia and China significantly reduced their investment in US bonds lately. Also notice that the interests on US debt come dangerously close to the whole of US discretionary government revenue. "May you live in interesting times" as the (apocryphal) Chinese malediction says. edit : added missing "discretionary". My mistake (you know, a simple honest error, not a "lie" or whatever).
- malfist 2y ago
  > Also notice that the interests on US debt come dangerously close to the whole of US government revenue. That is no where close to true, interest on debt last year was 985b, tax revenue was 3.29t
- supplied_demand 2y ago
  ==Also notice that the interests on US debt come dangerously close to the whole of US government revenue.== This is not true. Revenue was $4.44 trillion in 2023 [0] and debt interest was $650 billion [1]. [0] https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/ https://fiscaldata.treasury.gov/americas-finance-guide/gover... [1] https://www.crfb.org/blogs/2023-interest-costs-reach-659-billion https://www.crfb.org/blogs/2023-interest-costs-reach-659-bil...
- iamthirsty 2y ago
  > Nobody's ditching the dollar. However Saudi Arabia and China significantly reduced their investment in US bonds lately. Also notice that the interests on US debt come dangerously close to the whole of US government revenue. Revenue for 2023 was $4.4T[0], debt servicing cost was $624B. This year it's projected to be in the ~800s. [0]: https://www.statista.com/statistics/216928/us-government-revenues-by-category/#:~:text=In%202023%2C%20the%20total%20revenues,payroll%20taxes%20and%20other%20taxes https://www.statista.com/statistics/216928/us-government-rev....
  - ReptileMan 2y ago
    I'll bite - how much of this 4.4T revenue is non discretionary spending and how much is the discretionary? Because I think that roughly 25% of USG income was discretionary. Which is quite close to the 800 figure.
  - drivebyhooting 2y ago
    Does the debt servicing include repaying the principal of maturing treasuries or just the interest? I haven’t been able to figure out if the principal is not counted in these numbers because it is getting refinanced by rolling over to new treasuries. If so, it’s like continuously rolling over an Interest Only loan and taking more and more out over time to refinance the ballooning principal.
    - iamthirsty 2y ago
      It's both, although an extremely low percentage of people, IIRC, actually "cash out", most just roll the funds into a new bond once the previous one matures.
      - drivebyhooting 2y ago
        So you mean 800B includes the principal repayment?
        iamthirsty 2y ago
        It does, but like I said most people just automatically buy new bonds, instead of actually removing the money from the Government.
        deleted 2y ago
        [deleted]
        csomar 2y ago
        As far as I know, only the interest is considered as an expense. The principal is not accounted but I might be corrected.
- tekla 2y ago
  Why do people lie about trivially disprovable things?
  - wazoox 2y ago
    Because you never make mistakes or misremember, I suppose? How graceful of you.
- JumpCrisscross 2y ago
  > Saudi Arabia and China significantly reduced their investment in US bonds lately They’re both massively deficit spending.
westcort 2y ago
Made this change

The title should say "50 year old petrodollar pact between Saudi Arabia and US expires." Anyways, I'm curious to see what happens next. I can't see Saudi Arabia ditching the dollar overnight.

wazoox 2y ago

Nobody's ditching the dollar. However Saudi Arabia and China significantly reduced their investment in US bonds lately. Also notice that the interests on US debt come dangerously close to the whole of US discretionary government revenue. "May you live in interesting times" as the (apocryphal) Chinese malediction says. edit : added missing "discretionary". My mistake (you know, a simple honest error, not a "lie" or whatever).

malfist 2y ago
> Also notice that the interests on US debt come dangerously close to the whole of US government revenue. That is no where close to true, interest on debt last year was 985b, tax revenue was 3.29t
supplied_demand 2y ago
==Also notice that the interests on US debt come dangerously close to the whole of US government revenue.== This is not true. Revenue was $4.44 trillion in 2023 [0] and debt interest was $650 billion [1]. [0] https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/ https://fiscaldata.treasury.gov/americas-finance-guide/gover... [1] https://www.crfb.org/blogs/2023-interest-costs-reach-659-billion https://www.crfb.org/blogs/2023-interest-costs-reach-659-bil...
iamthirsty 2y ago
> Nobody's ditching the dollar. However Saudi Arabia and China significantly reduced their investment in US bonds lately. Also notice that the interests on US debt come dangerously close to the whole of US government revenue. Revenue for 2023 was $4.4T[0], debt servicing cost was $624B. This year it's projected to be in the ~800s. [0]: https://www.statista.com/statistics/216928/us-government-revenues-by-category/#:~:text=In%202023%2C%20the%20total%20revenues,payroll%20taxes%20and%20other%20taxes https://www.statista.com/statistics/216928/us-government-rev....
- ReptileMan 2y ago
  I'll bite - how much of this 4.4T revenue is non discretionary spending and how much is the discretionary? Because I think that roughly 25% of USG income was discretionary. Which is quite close to the 800 figure.
- drivebyhooting 2y ago
  Does the debt servicing include repaying the principal of maturing treasuries or just the interest? I haven’t been able to figure out if the principal is not counted in these numbers because it is getting refinanced by rolling over to new treasuries. If so, it’s like continuously rolling over an Interest Only loan and taking more and more out over time to refinance the ballooning principal.
  - iamthirsty 2y ago
    It's both, although an extremely low percentage of people, IIRC, actually "cash out", most just roll the funds into a new bond once the previous one matures.
    - drivebyhooting 2y ago
      So you mean 800B includes the principal repayment?
      - iamthirsty 2y ago
        It does, but like I said most people just automatically buy new bonds, instead of actually removing the money from the Government.
      - deleted 2y ago
        [deleted]
      - csomar 2y ago
        As far as I know, only the interest is considered as an expense. The principal is not accounted but I might be corrected.
tekla 2y ago
Why do people lie about trivially disprovable things?
- wazoox 2y ago
  Because you never make mistakes or misremember, I suppose? How graceful of you.
JumpCrisscross 2y ago
> Saudi Arabia and China significantly reduced their investment in US bonds lately They’re both massively deficit spending.

westcort 2y ago

Made this change