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SW Ontario | I don't think the Saudi's are sweating yet. Their debt to GDP is around 10%. They have been as high as 100% as recently as 1999. It seems to fluctuate a lot. The bonds should be good as they are one of the lowest cost producers and there is enough oil in their wells to pay off those bonds. They are trading a few hundred basis points higher than 10 and 30 year U.S. treasuries but for still pretty measly returns. I would be issuing bonds too if I could go into debt for next to nothing and pay them off at a future date after the bonds have crashed and then pay down in a highly inflationary environment with petro dollars or some other currency. | |
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