Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

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It took several months of negotiations after Simon's initial trip, but the US and Saudi Arabia finally reached a deal. The US agreed to buy oil and to provide the kingdom with military aid and equipment, while Saudi Arabia promised to invest billions of its petrodollar surpluses into US Treasuries to finance US government spending.

At the last minute, King Faisal demanded one key final term: that the country's purchases of US Treasuries should remain strictly secret. The US had offended Arab sensibilities just a year before with its military support to Israel, so publicity around this deal might have been embarrassing to the kingdom. The bearer nature of Eurobonds allowed the country to keep its holdings secret, and it sought the same anonymity for its investments in US Treasuries. Under the arrangement agreed between the US Treasury and Saudi Arabia, the Saudis were allowed to bypass the normal competitive bidding process for buying Treasuries and the sales were excluded from the official auction totals. By 1977, Saudi Arabia had accumulated around 20 percent of all Treasuries held overseas. Remarkably, this arrangement remained secret for over four decades until a dogged journalist from Bloomberg News uncovered it through a Freedom of Information Act request in 2016.