Russia Liquidates Its US Treasury Holdings

https://www.zerohedge.com/news/2018-07-17/russia-liquidates-its-us-treasury-holdings

Withdrawing money from US government securities is a half-measure.
Therefore, now the Russians are preparing to switch to hydrocarbon trading only for rubles. Of course, first trade will move to national currencies, excluding the dollar, but later the trade in hydrocarbons is planned only for rubles.
In this case, Russia will be fully independent of any sanctions. The Russians will be able to impose sanctions. But against the Russians - no one can.
However, and sanctions are now against Russia as for elephant a mosquito bite. But in the future and this will be impossible.

What do you think about it?

 

I think **** the petro-anything. Trade or barter with whatever you like.

 

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The world is moving towards elimination of the US dollar as the "SOLE" world reserve currency. The desire has been there for a long time but we are not seeing action. The sanctions and trade war is fueling quicker action. When a genuine competitor (or a number of them) exists this will mark - from a historical perspective - the end of the US economic empire.

 

No, it will be the end of the US with the exclusive world reserve currency. Our economy will operate just fine, like every other economy in the world that never had the reserve currency.

 

True. The US will not cease to be a major player and a major economy. What will end is the economic "empire" - from a Historical perspective. In other words this will be a historical demarkation point .. when folks in 2100 ask "when did the US economic empire end" .. the answer will be "when it lost SOLE reserve currency status".

What will end is complete dominance of the US over world economic affairs as it has been able to do over the last 50 years or more.

This may be one of the best things that could happen to this nation .. and will be IMO. We spend way too much money and resources trying to maintain the unmaintainable "global economic hegemony". This is the reason why we try to police the world.

The reason total military spending in this nation exceeds 1 Trillion/year is to try and defend economic hegemony. FULL STOP.

"Defending the Homeland" "Spreading Democratic Values and the Principles of Liberty" are just platitudes.

 

Head of Russian central bank claims funds were used to diversify reserves, yet can’t explain where the money went:

https://m.newsru.com/finance/18jul2018/ruofflist.html

It could be that Russians are going so broke that they are breaking their piggy bank. Raising of the retirement age during soccer World Cup also comes to mind.
Anyway, this is major news to Russians, not Americans.
Business as usual here.

 

Just hypothetically speaking, if Russia had US Treasury holdings and the US froze those Russian assets, I wonder what that would do to the interest rates on the National Debt.
Would the US dare to do this? Would the politicians even realize what the fallout could be?

 

What you are saying makes no sense.

 

If you were a foreign country, would you want to continue to lend money to the US knowing they might refuse to pay you back if you got on their bad side?
More uncertainty necessitates higher interest rates to justify the risk.
Higher interest rates of course make it more costly to maintain the National Debt.

Did you ever see the film Mary Poppins?
If you don't pay back one depositor it can trigger a run on the bank, so to speak.

See, if YOU didn't realize that and had trouble figuring it out, I doubt the brain dead politicians would either.

 

You seem to know nothing of how this works. The US debt is traded on secondary market. That’s all I’m going to say.

 

I think Putin knows he can't keep blackmailing Trump forever and is cashing out.

 

He's trying to insulate "his" money from american reach. I also suspect he's moving his hundreds of billions around in an effort to shield as much of it as he can.

Good thing Trump is president and he has so much time to do so.

 

More likely they are broke and have to spend the reserve. It’s a win-win to Pootin: blow $100B on your military pet projects and claim you hurt US economy by denying Americans credit, no matter how miserably small your investment is.
It’s like someone being pissed at their local bank and withdrawing the last $10 from their savings account hoping that it will teach the bank a lesson.

 

Money is money and a hundred Billion is considered a chunk o dough in everybody's book.

 

The money didn't GO anywhere. Their reserves remain approx. the same at the equivalent of $457 billion. During April and May this year they bought one million troy ounces of Aurum. Russia is diversifying their assets out of dollars and into other currencies and assets classes including gold as per above.

It strikes me that this is not necessarily just political in nature, but may reflect concerns about the longer-term value and security of the dollar.

 

Likely Russia is taking all funds out of U.S. reach as a precaution.

 

Could be that too. Most probably it was a number o reasons that together made a compelling case to pull out of the dollar.

 

Even more so in an economy that's tanking.

 

Nah. Our economic empire will continue just fine. Likely with expanded exports and diminished imports.

 

Sorry, I don't agree. You economy is green paper printing and buying goods for it. What will you do, if nobody wants to take dollars?

 

Why do you think that? While you were building your hegemony you lost your production. You have to build it again. It's very hard.

 

Of course you have evidence of it. Or you are an American and always write nonsense only?

 

One million Troy ounces of Aurum is less than $ 2 billion. We've sold over 100 billion. I believe that they have just started lending to our economy.

 

That's right. But problem for the USA is that Russia started to build economy without dollar. With China together