Sacramento, Calif. Mayor Kevin Johnson applauded the NBA's relocation committee after the panel voted unanimously Monday to recommend that owners reject the application for the Kings to relocate to Seattle. (April 29)
Jim: All presidential administrations are going to oppose this bill for one reason - petrodollars. When Richard Nixon took the Unites States off the gold standard, countries could no longer exchange their US cash for US gold. Nixon was worried that this would hurt the US dollar on world markets. So he came up with a brilliant idea. He came to an arrangement with Saudi Arabia whereby the Saudis would only sell their oil for US dollars. If, say, Sweden wanted to buy Saudi oil they would have to first buy US dollars on the world market to pay for the oil. This ensured that there would be continued demand for US dollars, keeping the dollar strong. The Saudis also agreed to invest all this US cash that they were accumulating into US Treasury bills, which was a very safe investment. With the Saudis buying US T-bills, the US could continue to run large national deficits. As part of this agreement, the US was also obligated to protect Saudi Arabia, and its Cartel allies, against foreign aggressors. The US is worried that Saudi Arabia and the other Cartel members will stop using US dollars as the medium of exchange for their oil. So they don't want to do anything to #$%$ off the Saudis.