Saudi Arabia Replaces Oil Minister Ali al-Naimi
QUEST: A 19 trillion problem and Donald Trump tells CNN he is the man who can solve the U.S. debt problem. Now Mr. Trump told us that basically the debt of the United States was $19,188,102,413,248. It's probably gone up a couple of pennies since then. He said the U.S. will never default because it can always print more money. He said he'd try to buy back U.S. government debt at a discount if interest rates went up. He won't ask debt holders to take a haircut. What does it all mean? This is an extremely unusual situation in a political campaign. You talk about deficits and debt, but nobody ever really talks about finagling the debt management issue. Which is highly technical.</s>RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: And I'm going to make it easy for you.</s>QUEST: What did you make of what Trump said?</s>FOROOHAR: It's amazing for starters. No presidential candidate in U.S. history has ever said, you know what, we just may not pay back our debt. You're coming out and saying we may break a contract. What's ironic is that what he's proposing to do, this buying back debt at a lower rate, because presumably we would be downgraded and defaulting is ridiculous. because then your borrowing costs would go up and you'd have to keep borrowing at higher rates.</s>QUEST: Well Rana, I going to put his point of view. He said he's not talking about renegotiating, he's not talking about default, he's talking about exactly what you and I would do -- or a corporation would do -- you buy back the debt at a lower level. You take your money and you buy back the debt.</s>FOROOHAR: But again, the U.S. government has to borrow just to keep its daily business going, right? We run a deficit. We have to borrow to pay that back over time. History shows in 1979 we had a brief technical glitch where we were a little late paying back. We had to pay many billions of times what that amount of money was in interest payments, because interest rates go up, borrowing costs go up. You cannot become a debtor nation and not pay for it.</s>QUEST: Do you think he doesn't understand --</s>FOROOHAR: I think this was a very off-the-cuff remark.</s>QUEST: But you can't make off-the-cuff remarks about --</s>FOROOHAR: Well, actually the whole campaign has been about off-the-cuff remarks which is worrisome.</s>QUEST: What about this thought that you can print money, therefore you can't default if you're the</s>U.S. FOROOHAR: Well first of all, think about what does that, Zimbabwe, the Weimar Republic in the 1930s. This is not a club you want to be in. But putting that aside, what you're really talking about, if you just say, hey, we'll just print tons of money, you can only do that within a certain amount of time within the Treasury Department, and then you have to start asking the Fed to do it. One of the reasons that we're not still in a recession is that the Fed was not political. When Washington was gridlocked, the Fed came in acted rationally, helped to get us out of the great recession. God forbid you should have a political Fed acting just as crazy as the rest of Washington.</s>QUEST: Janet Yellen is gone according to -- at the end of her term. President Trump will not -- it's very interesting, though, isn't it, even suggesting and saying he would not reappoint. Effectively if it looks like he's the president, she's a lame duck.</s>FOROOHAR: Think about how worrisome this is to foreign governments. Because we look around, and you know, as Mohamed El-Erian that you had on earlier, says, central bankers have been the only game in town. They're the only rational actors in a crazy world. You get rid of them, bad news, very bad news.</s>QUEST: Good to see you as always.</s>FOROOHAR: And you.</s>QUEST: Oil prices down more than 3 percent today. New uncertainty seems to be hitting the oil market after Saudi Arabia replaced its energy minister. He wasn't just any energy minister. Traders are also trying to weigh upon what impact Canada's catastrophic wildfires will have on the global supply of oil price down to 43.60. The firefighters in Alberta say the battle against fires could soon turn a corner. Temperatures dropped on Sunday and that helped slow down the fire. It still hasn't been brought under control. Fort McMurray is the central of Canada's oil sands region, and firefighters there say they have stopped the blaze from reaching oil camps north of an evacuated city. In Saudi Arabia, which sacked its long-serving oil minister on Sunday, now his replacement says the kingdom will remain the world's most reliable supplier of energy. CNN money's emerging market editor John Defterios reports from Abu Dhabi.</s>JOHN DEFTERIOS, CNN MONEY EMERGING MARKETS EDITOR (voice-over): Ali Al- Naimi was the most powerful man in the oil business for two decades. He was the de facto leader of OPEC, the club of oil exporters, since he controlled the largest proven crude reserves in the world. Since late 2014, he has been leading a tough battle, putting market share ahead of higher prices, challenging U.S. shale producers and others to a showdown.</s>ALI AL-NAIMI, FORMER SAUDI MINISTER OF ENERGY: If they want to cut production, they are welcome. We're not going to cut. Certainly Saudi Arabia is not going to cut. And this is a position you'll hold for the first six months of 2015?</s>AL-NAIMI: The position will hold forever.</s>DEFTERIOS (voice-over): But many saw the minister's position waning. Since last month's meeting of OPEC and non-OPEC ministers in Doha. DEFTERIOS (on camera) Al-Naimi was forced to change course on a plan to freeze production to help lift prices. The Deputy Crown Prince, Mohammad Bin Salman said the kingdom wouldn't budge unless Iran did the same. So by decree the young power broker reshuffled the cabinet and also the 80-year- old minister out of a job.</s>DEFTERIOS (voice-over): The changes are part of a wider plan to shake up the economy, called vision 2030. It includes floating up to 5 percent of the country's crown jewel, Saudi Aramco. The newer prime minister with a wider portfolio, Khalid Al-Falih, is well known. He's the current chairman of the Energy Behemoth having spent three decades there. Back in January he told a CNN energy roundtable at the World Economic Forum, that the kingdom was well prepared for the Saudi-led fight for market share.</s>KHALID AL-FALIH: If prices continue to be low, we will be able to withstand it for a long, long time.</s>DEFTERIOS (voice-over): investors will appreciate his steady hand as Saudi Aramco make a move to go public. But perhaps more importantly, internally he's trusted by the Deputy Crown Prince, the man calling all the shots. John Defterios, CNN, Abu Dhabi.</s>QUEST: As we continue our nightly conversation on business and economics, to North Carolina where the Justice Department threatens to sue the state. And now the state is suing the federal government. And it's all about the bathroom bill.