아래 영문의 글은 두어 주 전인 6월 6일에 Finance Yahoo에 실렸던 글이다. 필자가 한국사람의 이름인 Sangwon Yoon의 도움을 받았다고 적었으나 정작 본인이 누군가는 밝히지 않고 있다.

내용이 매우 중요하다. 얼마 전에 트럼푸가 말하기를 "미국의 빚은 딸라를 더 찍어내어서 해결하겠다"고 해서, 내가 지금까지 그리 해왔는데 새삼스러울 것이 없다는 해설을 했었다.

그 해설의 글이 아직도 남아있으리라 믿는데 제2차대전 막바지에 종전 후에 전쟁을 일으키게 된 금본위제도를 대체할 국제무역결제 화페를 딸라로 정하기로 하고 1944년 뉴햄푸샤의 Bretton Woods라는 곳에서 IMF와 그 시행기관으로 IBRD(International Bank for Reconstruction and Development)를 결성했었다.

IMF를 현실화하기 위한 조처로 독일과 일본의 상품을 미국이 수입하다가 보니 세계의 금덩이 70%가 살금살금 이들의 중앙은행으로 옮겨졌던 바라, 1 달라가 금 35oz를 보장하지 못할 지경으로 금값이 뛰면서 상대적으로 딸라의 가치가 형편없이 떨어지고 말았다.

1974년 당시에 집권하고 있던 Richard Nixon이 당시의 재무부장관 Simon을 사우디 아라비아로 보내서 석유파동으로 미국딸라의 홍수 속에서 허덕이는 석유자금을 미국의 장기공채로 사주어 달라는 교섭 끝에 드디어 성공하여 오늘에 이른다.

다시 말해서 미국의 빚을 사우디와 중국이 고스란히 떠맡고 있는데, 이러한 천문학적인 부채가 미국의 입장을, 나아가 미국자본주의의 장래를 불안하게 하고 있는 것이 현실이다. 여기에 도표나 사진이 실리지 않는 고로 그 금액이 얼마나 심각한 가를 가늠할 수가 없다. 사우디 한 국가만 125 billion이고 여타의 OPEC 국가들을 합산하면 몇백 trillion의 미국의 treasury bond를 이들이 깔고 앉아있다.

한 두어달 전에 911사태의 배후에 사우디의 입김이 서려있으니 그 희생자들이 사우디를 미국법정에 세우겠다고 했던 바, 사우디 曰...만일에 그럴 작정이면 자기네가 41년 간에 축적해온 빚을 국제 환시장에 풀겠다고 으름장을 놓았다. 이에 트럼프가 나서서 딸라를 더 발행해서 문제를 해결해겠다고 맞 삿대질을 한 것을 골빈친구들이 이해를 못하더군...

심지어 중국과의 무역역조,즉 국제수지의 경상계정에 중국이 4 trillion을 가지고 있다. 미국이 중국에게 유완의 가치를 높이라고 아우성을 치는 이유도 같은 맥락의 고민에서 하는 말이다. 물론 한국과 일본도 거기에 해당하지만.

이런 내역을 이해하는 데에 도움이 되는 아래의 영문기사임을 아시고, 내가 일일이 해석해주지 못함을 미안하게 생각합네다. 눈이 있어도 보지 못하고 귀가 있어도 듣지 못하는 분들은 얼마나 답답한 인생을 살겠오이까? 스스로 자신을 돕지 못하면 이런 세계의 움직임을 어찌 다 파악하고 살리오. 내가 그나마 해설이라도 해주니 고맙다고 하지는 못할 망정 배알이 꼴려서는 쓰겄오이까?

禪涅槃

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President Nixon walks with Saudi King Faisal in Saudi Arabia in June 1974. © Dirck Halstead/Liaison via AP Photo President Nixon walks with Saudi King Faisal in Saudi Arabia in June 1974.

Failure was not an option.

It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin.

Officially, Simon’s two-week trip was billed as a tour of economic diplomacy across Europe and the Middle East, full of the customary meet-and-greets and evening banquets. But the real mission, kept in strict confidence within President Richard Nixon’s inner circle, would take place during a four-day layover in the coastal city of Jeddah, Saudi Arabia.

The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize America’s financial health but could also give the Soviet Union an opening to make further inroads into the Arab world.

It “wasn’t a question of whether it could be done or it couldn’t be done,” said Parsky, 73, one of the few officials with Simon during the Saudi talks.
Treasury Secretary William Simon, left, sits with Nancy Kissinger and Secretary of State Henry Kissinger as they listen to former President Nixon talk to his staff prior to leaving the White House for the last time, August 9, 1974. © Source: AP Photo Treasury Secretary William Simon, left, sits with Nancy Kissinger and Secretary of State Henry Kissinger as they listen to former President Nixon talk to his staff prior to leaving the White House for the last time, August 9, 1974.

At first blush, Simon, who had just done a stint as Nixon’s energy czar, seemed ill-suited for such delicate diplomacy. Before being tapped by Nixon, the chain-smoking New Jersey native ran the vaunted Treasuries desk at Salomon Brothers. To career bureaucrats, the brash Wall Street bond trader—who once compared himself to Genghis Khan—had a temper and an outsize ego that was painfully out of step in Washington. Just a week before setting foot in Saudi Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the time, calling him a “nut.”

But Simon, better than anyone else, understood the appeal of U.S. government debt and how to sell the Saudis on the idea that America was the safest place to park their petrodollars. With that knowledge, the administration hatched an unprecedented do-or-die plan that would come to influence just about every aspect of U.S.-Saudi relations over the next four decades (Simon died in 2000 at the age of 72).

The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.

-- OPEC: What does Saudi Arabia really want?

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It took several discreet follow-up meetings to iron out all the details, Parsky said. But at the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the country’s Treasury purchases stay “strictly secret,” according to a diplomatic cable obtained by Bloomberg from the National Archives database.

With a handful of Treasury and Federal Reserve officials, the secret was kept for more than four decades—until now. In response to a Freedom-of-Information-Act request submitted by Bloomberg News, the Treasury broke out Saudi Arabia’s holdings for the first time this month after “concluding that it was consistent with transparency and the law to disclose the data,” according to spokeswoman Whitney Smith. The $117 billion trove makes the kingdom one of America’s largest foreign creditors.

Yet in many ways, the information has raised more questions than it has answered. A former Treasury official, who specialized in central bank reserves and asked not to be identified, says the official figure vastly understates Saudi Arabia’s investments in U.S. government debt, which may be double or more.

The current tally represents just 20 percent of its $587 billion of foreign reserves, well below the two-thirds that central banks typically keep in dollar assets. Some analysts speculate the kingdom may be masking its U.S. debt holdings by accumulating Treasuries through offshore financial centers, which show up in the data of other countries.
Drivers line up for fuel at a U.S. gas station during the worldwide fuel shortages caused by the oil embargo imposed by OPEC, circa 1974. © Pictorial Parade/Archive Photos/Getty Images Drivers line up for fuel at a U.S. gas station during the worldwide fuel shortages caused by the oil embargo imposed by OPEC, circa 1974.

Exactly how much of America’s debt Saudi Arabia actually owns is something that matters more now than ever before.

While oil’s collapse has deepened concern that Saudi Arabia will need to liquidate its Treasuries to raise cash, a more troubling worry has also emerged: the specter of the kingdom using its outsize position in the world’s most important debt market as a political weapon, much as it did with oil in the 1970s.

In April, Saudi Arabia warned it would start selling as much as $750 billion in Treasuries and other assets if Congress passes a bill allowing the kingdom to be held liable in U.S. courts for the Sept. 11 terrorist attacks, according to the New York Times. The threat comes amid a renewed push by presidential candidates and legislators from both the Democratic and Republican parties to declassify a 28-page section of a 2004 U.S. government report that is believed to detail possible Saudi connections to the attacks. The bill, which passed the Senate on May 17, is now in the House of Representatives.

Saudi Arabia’s Finance Ministry declined to comment on the potential selling of Treasuries in response. The Saudi Arabian Monetary Agency didn’t immediately answer requests for details on the total size of its U.S. government debt holdings.

“Let’s not assume they’re bluffing” about threatening to retaliate, said Marc Chandler, the global head of currency strategy at Brown Brothers Harriman. “The Saudis are under a lot of pressure. I’d say that we don’t do ourselves justice if we underestimate our liabilities” to big holders.
President Nixon shakes hands with Saudi King Faisal in June, 1974, in Saudi Arabia. © Dirck Halstead/Liaison via AP Photo President Nixon shakes hands with Saudi King Faisal in June, 1974, in Saudi Arabia.

Saudi Arabia, which has long provided free health care, gasoline subsidies, and routine pay raises to its citizens with its petroleum wealth, already faces a brutal fiscal crisis.

In the past year alone, the monetary authority has burned through $111 billion of reserves to plug its biggest budget deficit in a quarter-century, pay for costly wars to defeat the Islamic State, and wage proxy campaigns against Iran. Though oil has stabilized at about $50 a barrel (from less than $30 earlier this year), it’s still far below the heady years of $100-a-barrel crude.

Saudi Arabia’s situation has become so acute the kingdom is now selling a piece of its crown jewel—state oil company Saudi Aramco.

What’s more, the commitment to the decades-old policy of “interdependence” between the U.S. and Saudi Arabia, which arose from Simon’s debt deal and ultimately bound together two nations that share few common values, is showing signs of fraying. America has taken tentative steps toward a rapprochement with Iran, highlighted by President Barack Obama’s landmark nuclear deal last year. The U.S. shale boom has also made America far less reliant on Saudi oil.

“Buying bonds and all that was a strategy to recycle petrodollars back into the U.S.,” said David Ottaway, a Middle East fellow at the Woodrow Wilson International Center in Washington. But politically, “it’s always been an ambiguous, constrained relationship.”

Yet back in 1974, forging that relationship (and the secrecy that it required) was a no-brainer, according to Parsky, who is now chairman of Aurora Capital Group, a private equity firm in Los Angeles. Many of America’s allies, including the U.K. and Japan, were also deeply dependent on Saudi oil and quietly vying to get the kingdom to reinvest money back into their own economies.

“Everyone—in the U.S., France, Britain, Japan—was trying to get their fingers in the Saudis’ pockets,” said Gordon S. Brown, an economic officer with the State Department at the U.S. embassy in Riyadh from 1976 to 1978.

For the Saudis, politics played a big role in their insistence that all Treasury investments remain anonymous.

Tensions still flared 10 months after the Yom Kippur War, and throughout the Arab world, there was plenty of animosity toward the U.S. for its support of Israel. According to diplomatic cables, King Faisal’s biggest fear was the perception Saudi oil money would, “directly or indirectly,” end up in the hands of its biggest enemy in the form of additional U.S. assistance.

Treasury officials solved the dilemma by letting the Saudis in through the back door. In the first of many special arrangements, the U.S. allowed Saudi Arabia to bypass the normal competitive bidding process for buying Treasuries by creating “add-ons.” Those sales, which were excluded from the official auction totals, hid all traces of Saudi Arabia’s presence in the U.S. government debt market.

“When I arrived at the embassy, I was told by people there that this is Treasury’s business,” Brown said. “It was all handled very privately.”

By 1977, Saudi Arabia had accumulated about 20 percent of all Treasuries held abroad, according to The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets by Columbia University’s David Spiro.

Another exception was carved out for Saudi Arabia when the Treasury started releasing monthly country-by-country breakdowns of U.S. debt ownership. Instead of disclosing Saudi Arabia’s holdings, the Treasury grouped them with 14 other nations, such as Kuwait, the United Arab Emirates and Nigeria, under the generic heading “oil exporters”—a practice that continued for 41 years.

The system came with its share of headaches. After the Treasury’s add-on facility was opened to other central banks, erratic and unpublicized foreign demand threatened to push the U.S. over its debt limit on several occasions. An internal memo, dated October 1976, detailed how the U.S. inadvertently raised far more than the $800 million it intended to borrow at auction. At the time, two unidentified central banks used add-ons to buy an additional $400 million of Treasuries each. In the end, one bank was awarded its portion a day late to keep the U.S. from exceeding the limit.

Most of these maneuvers and hiccups were swept under the rug, and top Treasury officials went to great lengths to preserve the status quo and protect their Middle East allies as scrutiny of America’s biggest creditors increased. Over the years, the Treasury repeatedly turned to the International Investment and Trade in Services Survey Act of 1976—which shields individuals in countries where Treasuries are narrowly held—as its first line of defense.

The strategy continued even after the Government Accountability Office, in a 1979 investigation, found “no statistical or legal basis” for the blackout. The GAO didn’t have power to force the Treasury to turn over the data, but it concluded the U.S. “made special commitments of financial confidentiality to Saudi Arabia” and possibly other OPEC nations. Simon, who had by then returned to Wall Street, acknowledged in congressional testimony that “regional reporting was the only way in which Saudi Arabia would agree” to invest using the add-on system.

“It was clear the Treasury people weren’t going to cooperate at all,” said Stephen McSpadden, a former counsel to the congressional subcommittee that pressed for the GAO inquiries. “I’d been at the subcommittee for 17 years, and I’d never seen anything like that.”

Today, Parsky says the secret arrangement with the Saudis should have been dismantled years ago and was surprised the Treasury kept it in place for so long. But even so, he has no regrets.

Doing the deal “was a positive for America.”

—With assistance from Sangwon Yoon