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What is next for Saudi Arabia after the Great Purge of 2017. Was it truly a clean up of abusive corruption? What does it mean globally? The Kingdom’s wealthiest are talking to asset managers and banks and Bitcoin has surged. Coincidence?

Saudi Prince Bin Talal

When we think of oil politics we think of power grabs and abuse of human rights. The latter have been glossed over by successive western governments in the Middle East. In particular in the U.S. France and the U.K. What do they have in common, they are all arms manufacturers and are major oil nations. Make no mistake Prince Bin Salman's shifts are pointed, they involve Syria, Lebanon, Yemen and Qatar.

At the same time Saudi Arabia is cosying up to traditional enemy Russia through it's OPEC and Non-OPEC production deals. Given the potential conflicts with Syria alone and Russia and the U.S. chess games one has to be sceptical.

What we do know of since the purge is we have had a number of deaths, a billion dollar 'fine' and house arrests for the weathiest Princes. We know the Kingdom’s wealthiest are talking to asset managers and banks to protect their assets and freedoms. The Russian oiligarchs moved their money largely to the U.K. and bought football teams. The odd plutonium death aside this has proven successful for them. 

Should the anti-corruption drive widen do the wealthy Saudis continue moving assets out of the region and at what point does the U.K. and U.S. stay quiet in their support. One could point to two events, the Aramaco IPO and major arms deals as two events keeping the West at bay. Until then, with little public outcry the west is likely to stay the course of complicit acceptance.

It has been reported that Saudi billionaires and millionaires have been clearing the decks by selling investments in neighboring Gulf Cooperation Council countries and shifting them to the west. One rumor has the Bitcoin explosion fueled by Saudi cash.  Others have money managers entwined putting distance between the Saudis through the cryptocurrencies and purchases all done through blockchains.

Bitcoin Saudi Purge Rally

The amounts aren't small, Saudi Attorney General Sheikh Saud Al Mojeb has said that investigations over the past three years suggest over $100 billion has been misused “through systematic corruption and embezzlement over several decades”. A total of 208 individuals have been called in for questioning so far and seven have been released without charge, he said. The standout was Prince Alwaleed bin Talal, the world's 61st richest man.

The Saud family and its network is said to be in the Trillions of dollars.

Back to all things Bitcoin, rumor and false flags the same Saudi Prince Al-Waleed bin Talal on October 23, just two weeks prior to his arrest when nuclear on his criticism of bitcoin during an appearance on CNBC. He said he agreed with JPMorgan CEO Jamie Dimon's calling the cryptocurrency a "fraud." Bitcoin has risen from around $1,500 to over $20,000 in just a few months since those Dimon comments.

"I just don't believe in this bitcoin thing," Al-Waleed said on CNBC. "I think it's just going to implode one day. It's Enron in the making. "It doesn't make sense. This thing is not regulated. It's not under control. It's not under the supervision [of] any federal – elect – United States Federal Reserve or any other central bank. I don't believe in this whole thing at all. I think it's going to implode."

Perhaps most notable there has been little noise on the matter since the swift crackdown. From an oil point of view should capital outflows force Saudi Arabian Monetary Authority (SAMA) to run down its foreign-exchange reserves at a faster pace. This could have knock on affects to oil production and the Aramaco IPO.

Whatever OPEC leaders and Prince Bin Salman will have us believe the economy is struggling to cope with the slump in oil prices. The Saudi unemployment among Saudis is rising and non-oil gross domestic product is stagnant at best.

The Kingdom has tapped international bond markets and has drawn down on central bank reserves to the tune of tens of billions of dollars finance a budget deficit that reached about 15 percent of gross domestic product in 2015. The whole event is all a huge "Arabian Theater" of the rulers to the underclass, that is the population saying "hey we aren't all bad' and we are looking after the people. If indeed it is a true corruption clean up why has it all gone quiet? 

Saudi Arabia is also trying to duplicate the success of Norway's Oil Fund and create the world’s largest sovereign fund. The also plan to sell hundreds of state assets, it would seem many of those locked up were likely buyers. Internationally non Saudi's don't seem to buy the offical story. You then have the continuing Iran-Saudi Conflict or is that all contrived as the Russia-Saudi conflict appears to be? 

Most of the offshore GCC money sits in Paris, Geneva, Zurich and Singapore. Is that secure enough? Which customers are the bankers loyal to. Is the Bitcoin rumor that far fetched?

What we do know is 2018 will be one of unintended consequences as it always is when oil, money and corruption play in the same room with old friends and new friends. 

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