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Russia sold US bonds and replaced them with good ol' gold



US debt is stable after the Russian exit. There is no impact on the market and there is no rush for sale the US assets.



31.Jul.18 10:47 AM
By Shawn Highstraw
Photo Forgotten

   352

Russia sold US bonds and replaced them with good ol' gold
United States was long into position of helping other countries to get rid of excessive money. No joke, it is a huge problem for the oil-rich countries like the Gulf States and Russia, or for the World Factory #1 - People Republic of China. These states have routinely reinvested in the US foreign debt to keep their money working outside of their own economy and to support the import to the United States.

What if it changes? We will soon discover it, at least for small scale as Russia is dumping their holdings in US treasures going out for  gold. It makes sense for Russia as it becomes less dependent of the good will of the debtor. Something that Qaddafi has taught us is not to rely on.

Russia has rapidly sold off the majority of its part of American debt. It has stored $102.2 billions back to the end of 2017. It is only 14.9 billions left. There is a question, however - where do they plan to use the money and would others follow?

US debt is stable after the Russian exit. There is no impact on the market and there is no rush for sale the US assets. Russia has not done it of some punitive measures.

It’s only China with more than one trillion of USD stored that may disrupt the debt pyramid. However China will not do it until provoked by some events of the colossal scale. The so-called «Trade War» is not one of these.

Instead China can use their debt as a leverage by gradually exit from the market. In this case the US will suffocate without the new money inflow while the older bonds will mature. It is not in the best interests of the PRC, but it can be used as an argument in the tariff talks. The only reason to not to use this tool is that it will backfire heavily as US is - and will remain - the number one trading partner for the PRC. World Factory needs World Shopper anyway.



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