Maybe these guys prop us up because, dumb and brawny as we are, the US is the hired cop, the tough but not too dangerous guy who will make the world safe for business even if you have to fool him into it by not correcting him when he says he is making it safe for democracy. It is an inversion of the relationship we used to have with minor satellite nations: proxyhood. We use to ship money and arms and the occasional adviser to places like Afghanistan and Israel and the actual fighting and dying to advance our interests would be done by our proxies. Now we spend far more money and send OUR brigades and fleets. Who's interest is served? The business-as-usual flow of oil from the middle east and money to the oil producers is clearly being protected. And it is breaking our bank to do the dying that enables the Saudis to make a living. If I look at it that way, then what are normally poor choices by financial criteria are still taken by oil billionaires because, geopolitically, they prop up a proxy in a fight that affects them. The terms of this relationship are not even so different from foreign aid in the form of loans that we used to hold over the heads of countries whose Marxist guerrillas we did not want to tangle with personally. We gave military aid to our proxies. The sheiks LOAN money via investments, a bargain compared to the deals we struck with our proxies. When its all over, if it ever is over, the sheiks will own us lock stock and 6 million barrels per day.
Relationships based on power, the uneasy dance where one party has a greater ability to dictate behavior, do not flip unless the relative power of the parties that underly their relationship also reverses. We still sell arms to the Saudis but they also buy Bentleys and Lamborghinis and they aren't getting those scratched up either. Wouldn't our lives be so much simpler if we didn't give a shit about oil? We are not completely upside down yet but all signals point to our continuing to borrow until someone else cuts us off. The prime is 2% today and the fed is auctioning to make life easier for the banks...debt will just keep going up. When you borrow money, you lend power. If you are wondering what mechanism will turn the dollars held by oil sheiks into an ability to dictate behavior, it might go something like this. I had heard rumblings of oil producers decoupling from the US dollar but I had no understanding of what the consequences would be.