Saudi Arabia rarely jokes about money. So investors can't easily dismiss a threat that the kingdom will dump its American assets if the US Congress passes a bill allowing victims of the September 11, 2001 attacks to sue it for damages. Though a fire-sale would be devastating, it suggests the alternative - an Iran-style freezing of assets - would be an even worse outcome.
The warning to Washington lawmakers that the kingdom would sell its US securities portfolio to prevent it from being seized was delivered by Foreign Minister Adel al-Jubeir, according to The New York Times. The report claimed Saudi would be forced to offload up to $750 billion of dollar assets if a bill became law that would strip immunity from foreign governments in cases "arising from a terrorist attack that kills an American on American soil".
The holdings, mainly in Treasury securities, represent Saudi Arabia's last line of economic defence to lower oil prices, which have weakened its finances. Last year the kingdom ran a budget deficit equal to 15 per cent of gross domestic product. If oil prices average $30 per barrel over the next five years, it would need to borrow $580 billion to cover losses, Citi estimates. That's almost equal to the remaining reserves at the Saudi Arabian Monetary Agency (Sama), or central bank.
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That is why Al-Jubeir's threat is not to be taken lightly. Sure, jettisoning assets on this scale in a hurry is incredibly risky. The Saudi riyal is tied to the dollar, and a rapid exit would test the central bank's ability to maintain the currency peg. A hurried sale could also freak out global financial markets, too, which might further squeeze demand for oil.
That Riyadh is willing to ponder such a messy outcome suggests just how existentially it needs money to keep its hold on power. That's perhaps the scariest message from the whole kerfuffle.
