REUTERS/Mohamed Al Hwaity
Youths mount their cars on stones in the Saudi city of Duba August 31, 2013. This new art-form trending in Saudi Arabia is called 'Tahjir' or 'Stoning', in which cars are raised atop stacked piles of rocks and bricks.
"Saudi Arabia is economically unsustainable," Schreiber said at the Sohn Investment Conference Wednesday.
The bet is at least partially tied to the oil price. Saudi Arabia's economy is heavily dependent on the price of oil, which is currently trading at around $44, down from above $100 a few years ago.
Schreiber called the oil crash at the Sohn conference back in 2014, saying the price would drop sharply.
Schreiber said Wednesday that while long-term pressures driving the price of oil lower are not going away, the Saudi budget is only going to go up.
Schreiber cited several reasons for lower-for-longer oil: cheaper shale drilling, increasing debt in China that will curtail their demand eventually, and a stronger dollar due to the Fed.
On the other end, Schreiber said the Saudi defense budget will continue to skyrocket since the country is in "the most dangerous part of the world." An aging population will also force social spending on seniors to climb.
Schreiber added that Saudi Arabia has the highest Twitter penetration rate of any country, and that looking at these Tweets shows that social dissatisfaction with the government could boil over.
Add all of this up and you have an unstable situation, he said.
Schreiber suggested going long US Dollar and Mexican peso while shorting the Saudi Riyal.