Russia liquidates almost all of its holdings in US Treasury securities during run up to Helsinki

[PubliusEnigma]

The Russian government has sold off the vast majority of its holdings of US Treasury securities for reasons that remain mysterious, in a dramatic move that experts are calling unprecedented.

A US Treasury report released on July 18 shows that Russian holdings of Treasury securities declined by 84 per cent between March and May, down to just $14.9 billion from March holdings of $96.1 billion.

The report was issued quietly amid the controversy surrounding President Donald Trump's July 16 meeting with Russian President Valdimir Putin in Helsinki, dropping Russia from the list of major Treasuries holders without comment.

http://www.dailymail.co.uk/news/article-6003457/Mystery-Russia-LIQUIDATES-holdings-Treasury-securities.html

[PufPuf23]

1. Russia selling off US Treasury securities like that is troubling.

Also for it not to be noted in domestic media to my awareness.

Thanks.

[Duppers]

4. Very.

Do they have the power to interrupt your whole economic system? Where did I read that?

[2naSalit]

2. Well that smells fishy...nt

[RockRaven]

3. They knew Trump would cower before Putin and were concerned about the consequences...

but they underestimated the spinelessness of Congressional GOPers. They didn't really need to liquidate their portfolio before November, it seems...

[fierywoman]

5. Somethng else that spanky has more of than Obama.

[SergeStorms]

6. Putin might have thought....

that Trump was going to get tough on him, tell him to stop farting around with our elections, stop killing people all over the world, stop buying Republican politicians, get the hell out of Crimea etc. But then Trump did his fat, old, orange lap dog impersonation, licked Putin's.........face and everything was right in Putin's world again. What could he have been thinking? Donald Trump stand up to someone who isn't our ally? Trump only comes down hard on our allies. He coddles and strokes autocrats, dictators, oligarchs, etc. as if they're long lost relatives who are always happy to give you money.

Never any worries there, Vlad. Trump is comfortably in your pants pocket, right between your pocket comb and your nuts, and there he shall stay. You can't buy loyalty like that.

[Hekate]

7. Power play by Putin? Rocking our boat all to hell? When Trump sold US out...

...it really has consequences we cannot even see yet.

[PatrickforO]

8. In 1850 the only currency that was accepted throughout the world, and the

currency of choice for international trade was the British Pound Sterling.

In 1950 the only currency that was accepted throughout the world and was the currency of choice for international trade was the US Dollar.

It is still the dollar. According to the motives set forth in this article movement up relative to the dollar has not materialized in any other currency.

Maybe the Russian hackers have such a stranglehold on our power and financial grids, not to mention our voting rolls, that they divested from US Treasuries in anticipating of a precipitous drop if our government falls. Scary thought.

Fucking Trump. Fucking traitor.

[Scruffy1]

9. I don't think 15 Billionwill have much affect.

Sound like they think the dollar will take a hit. Maybe from the trade war.

[Princess Turandot]

10. There's an interesting article about this in Bloomberg from a week ago..

It may be that the Putin Pals are worried that some of their 'socks' might just disappear in their go-to laundromats' dryers..

Bloomberg's guess is that the Russians are concerned about asset seizure, since they began liquidating dollar assets in April, when additional sanctions hit them. And of course, their election shenanigans are being increasingly revealed. (At the end of last year, 29.9% of the Bank of Russia's assets were in the US.)

And Russia has done this before:

The last time Russia pulled such a large sum out of the U.S. was just after the annexation of Crimea in 2014, when the central bank withdrew about $115 billion from the New York Fed, Reuters reported last year, citing two former Fed officials. Most of that money was returned a few weeks later, after it became clear that the scope of initial U.S. sanctions would be narrower than the Kremlin expected, according to the news service.

Since then, the U.S. has deepened its sanctions and widened the reasoning behind them to include election meddling and Putin’s generally “malign” actions. Some 700 Russian citizens and companies now face travel limits and asset freezes, while some state banks and companies are effectively barred from obtaining financing through U.S. banks and markets.
...
“The obvious way to limit a country’s exposure to U.S. sanctions is to shift foreign-exchange reserves out of dollars,” said Brad Setser, who worked at Treasury from 2011 to 2015 and is now at the Council on Foreign Relations in New York. “I would never underestimate the reach of U.S. sanctions. That said, it would be a major step for the U.S. to contemplate blocking a country’s dollar reserves as opposed to sanctioning a bank or a firm.”

https://www.bloomberg.com/news/articles/2018-07-20/putin-hedges-trump-bet-by-dumping-treasuries-to-safeguard-assets

Most of the mainstream financial press seems curious about these events rather than alarmed. (The Daily Mail, of course, isn't part of the financial press.)

[Squinch]

13. So who are they going to invade now? This is very disturbing.

[Trust Buster]

15. Interest rates.

[Squinch]

16. And Baltic states. And then we can make a little rhyme about it.

[h2ebits]

11. Russia from 7/20/2018

"The release caused a stir in the markets because neither the Treasury nor the Bank of Russia will comment on the transactions. And the data is murky, so it’s hard to know if Russia actually offloaded the bulk of its U.S. assets or simply transferred custodianship to a foreign entity to disguise ownership.

But for Sergey Dubinin, Russia’s central bank chief from 1995 to 1998, there’s no mystery at all -- the sales were simply a prudent “hedge” against confiscation, a possibility that looks more likely every day. Russia, he said, has learned from Iran’s experience and is converting its dollar assets into other currencies to safeguard its reserves against any attempts at seizure.

“It would be silly to sell U.S. debt and then keep it in dollars somewhere else,” said Dubinin, who’s now on the supervisory board of state-run VTB, Russia’s second-largest lender. “They most likely bought other hard currencies like euros and yen.”

The central bank won’t update details of its foreign holdings until later this year, but there are already some clues that suggest Dubinin may be right. Monthly statistics posted on the Bank of Russia’s website show that deposits in other central banks, international institutions and foreign lenders jumped by the equivalent of $47 billion in April and May."

More:
https://www.thewealthadvisor.com/article/putin-hedges-trump-bet-dumping-treasuries-safeguard-assets?mkt_tok=eyJpIjoiTVRJd1ptVmtORE13Wm1WayIsInQiOiJCakxBRVlYdkxObWtieW10VWRkeDhIUFhaak9hUTFBWjgxZW5yVXFPcUJ1dUVUVjlwcTNiNkppelZYSWZcL1ozaEV0Uys0MHZ0VXpYTnZGUktUaEhrOHpjcWV1cjExSGlzOVdkTFAwOHhDTkg3eldlUTR4NEhyWTJhU1wvQUdxMDh0In0%3D

[duforsure]

12. Putin's scared

Their money would be frozen. He's also pissed at trump for not doing what he's wanted, and scared of Mueller.

[Trust Buster]

14. China can do the same with much more devastating effect on interest rates.

[PubliusEnigma]

17. Maybe China gave Russia a wink and a nod about their own plans.