Following a dramatic deterioration in official diplomatic channels between the US and Saudi Arabia when over the weekend the Saudis threatened the U.S. with dumping billions in Treasuries if Congress were to pass a bill probing into their alleged support of Sept 11 terrorists in the aftermath of last weekend's 60 Minutes report on the classified "28 pages" from the Septemeber 11 commission, moments ago the Obama administration made a stunning admission, when for the first time it revealed on the record that the Saudis were the original source of funding for Al Qaeda.

As Politico reports, Obama's deputy national security adviser, Ben Rhodes, while speaking to David Axelrod in Monday's edition of "The Axe Files" podcast said that the government of Saudi Arabia had paid "insufficient attention" to money that was being funneled into terror groups and fueled the rise of Al Qaeda when he was asked about the validity of the accusation that the Saudi government was complicit in sponsoring terrorism.

Deputy National Security Adviser For Strategic Communications Ben Rhodes



At first, he tried to tone down what amount to the first official admission of Saudi involvement in September 11, saying "I think that it’s complicated in the sense that, it’s not that it was Saudi government policy to support Al Qaeda, but there were a number of very wealthy individuals in Saudi Arabia who would contribute, sometimes directly, to extremist groups. Sometimes to charities that were kind of, ended up being ways to launder money to these groups."

But moments later the truth came out when he said "So a lot of the money, the seed money if you will, for what became Al Qaeda, came out of Saudi Arabia," he added.

And then the punchline came out when Axelrod asked if "that happen without the government’s awareness?" To which Rhodes responded that he doesn’t believe the government was “actively trying to prevent that from happening."

In other words, the Saudi government knew that "a number of very wealthy Saudi individuals" were funneling funds into what would become the organization blamed for the attack on the twin towers.

As Politico adds, "the remarks from Rhodes come as Obama prepares to head to Saudi Arabia on Wednesday and confront the strained relations between the two allies. The Saudis are still fuming over an Atlantic magazine article that described Obama's frustrations with Saudi Arabia's religious ideology, its treatment of women and its rivalry with Iran. Obama also suggested in the piece that Saudi Arabia and other Gulf Arab states are "free riders" who rely too much on the U.S. military."

Friction has also been created by a push from relatives of people who died on 9/11 and a bipartisan group of lawmakers to allow U.S. courts to hold the Saudi government responsible if it is found to have played a role in the 2001 attack.

Deceased Saudi King Abdullah bin Abdul Aziz al-Saud presents

Barack Obama with the King Abdul Aziz Order of Merit

The conversation turned even more awkward when Axelrod, who as Obama's former senior advisor, knows very well of Saudi involvement with both Al Qaeda and Sept 11, pushed Rhodes on at-times awkward dynamic between the U.S. and Saudi Arabia, asking, "How do you explain that to Americans, that, you know, on the one hand we call them an ally on the other hand they have these deep roots in these extremist elements?"

"I would stop short of saying that there was any willful government intention from Saudi Arabia to support Al Qaeda,” Rhodes said. “I think the difficult thing that Americans need to understand is we forge these relationships with governments because we have some shared interest with them.”

In other words, the state which even the U.S. government admits is behind Al Qaeda gets a pass because "we have some shared interest with them" - a shared interest that is clearly over and beyond revealing the government's role in the biggest terrorist attack on U.S. soil.

Rhodes added that for a long time the main interest was oil and security which meant that the U.S. was “slow to pay attention to that [connection to extremist groups] because the way the relationship was set up was we just kind of thought about security and oil and didn’t kind of go that other layer down.”

But now that the U.S. has its own shale industry which incidentally is being crushed due to Saudi overproduction policy, the shared interest no longer exists.

And yet, as White House spokesman Josh Earnest reported earlier, Obama is still refusing to pass the one Bill that could finally reveal just how extensive Saudi involvment truly was in the September 11 attack.

So while we watch in shock as yet another conspiracy theory becomes conspiracy fact, we wonder how much longer will Americans tolerate a president - whether republican or democrat - who puts national interests measured in barrels of oil and avoids exposing rogue foreign billionaire murderers, above the lives of thousands of Americans killed by terrorists funded by this same government.

President Obama at a Sept. 11 ceremony in 2015.

We also wonder if today's dramatic official admission of Saudi involvement in the Sept 11 attacks will not only infuriate even more Americans disenchanted with the fake left-right political divide, but also whether it will be grounds for US bond yields to tick up a few basis points tomorrow if Saudi Arabia finally decide to make good on its threat launch a warning salvo to the Obama administration to end the very "undiplomatic" revelations by selling a few billions in 10 Year bonds.