News broke over the weekend that the Saudi Kingdom had detained 11 princes, four ministers, and 34 other senior officials, former ministers, and prominent business owners as part of an anti-corruption campaign. All are apparently being held at Riyadh's Ritz Carlton Hotel and sleeping on thin mattresses placed on the floor in a ballroom – including billionaire investor Prince Al-Waleed bin Talal, who is well known in the West for investments in such companies as Citigroup Inc. (NYSE: C), Twitter Inc. (NYSE: TWTR), and Apple Inc. (Nasdaq: AAPL).
The Western media has reported this move as part political shakeup, part coup prevention, and part power play by the young, ambitious Crown Prince Mohammed bin Salman.
As usual, they're missing the real story.
It's all about the money.
What's happening in Saudi Arabia is all about money – who's had it and, more importantly, who will have it very shortly.
Make no mistake about it, this is a big story, perhaps even the story of a generation. It's also a phenomenal opportunity for savvy investors.
Which is, of course, why we're talking about this today.
What You Need to Know to Be One Step Ahead
Most folks are vaguely familiar with Saudi Arabia if for no other reason than it's played a hugely important role as one of the world's primary oil suppliers. Not surprisingly, they view it as a "modern" influence.
In reality, the House of Saud stretches back centuries to its earliest recorded ancestor, Mani' ibn Rabiah Al-Muraydi of Diriyah, around 1450. Its history is filled with intrigue, powerful people, and even more powerful influence.
"Modern" Saudi Arabia really didn't come into its own until 1945, when King Abdulaziz bin Abdul Rahman – known in the West as Ibn Saud – solidified a relationship with the United States revolving around oil reserves discovered by American surveyors near Dammam in 1937.
That relationship would prove critical in the 1970s when the U.S. government abandoned the Bretton Woods gold standard in favor of a military alliance protecting Saudi Arabia's oil fields.
The exchange, of course, would be that all oil sales were to be priced exclusively in U.S. dollars by 1974, and that surplus proceeds would likely be invested in U.S. debt. All other OPEC nations were on board only a year later in 1975.
The relationship did three things that are important to what we're going to discuss because they set the stage for the changes I see ahead:
- Dollars for oil ensured artificial global demand for U.S. dollars tied to a commodity priced by market conditions rather than strictly by economic requirement, as had been the case with gold.
- Petrodollars, as they would become known, enabled the United States to grow its monetary base exponentially using a currency – the dollar – that could be created out of thin air when needed. Or convenient.
- Other countries had to tag along because selling their exports to the United States meant dollars that they could, in turn, use for oil.
Which brings us to today.
By all reports, Crown Prince Mohammed bin Salman is exceptionally intelligent and progressive.
He's watched the old guard build Saudi Arabia into what it is today while also understanding that the age of oil is ending. He's also a strong proponent of extending current OPEC production cuts.
Most investors cannot reconcile the two, yet I think there's a very clear path ahead.
Crown Prince Mohammed bin Salman – "MBS" for short – is a reformer who wants to reduce the Kingdom's dependence on oil and diversify its economy by moving Saudi Arabia away from oil through non-oil related industry trade, infrastructure, and consumer products development as part of a plan called Vision 2030.
More immediately, he's already undertaking a $500 billion future city referred to as NEOM – which is an abbreviated contraction of the Latin "neo" – meaning new – and the Arabic "mustaqbal" – meaning future.
We're going to be talking about this a lot in the months ahead, but for now what you need to know is that all of the world's top players are already involved.
The prince commented to Bloomberg recently, for example, that his representatives are in discussions with Amazon.com Inc. (Nasdaq: AMZN), Alibaba Group Holding Ltd. (NYSE: BABA), Airbus, and Alphabet Inc. (Nasdaq: GOOGL), just to name a few of the companies we talk about all the time by virtue of the Unstoppable Trends we follow.
Now, here's the twist.
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.