- The Russians are pretty astute when it comes to managing their reserves. They have been dumping US treasuries and building their hoard of gold monthly. It is the Chinese who are in trouble. With US$3T of reserves and as much as US$2.0T denominated in USD, they are going to have difficulties disposing of their USD hoard quickly without hurting themselves in the process. The Chinese know that any large moves by them to dump the USD-treasuries will result in a sharply rising CNY. This will crater their main export sector. They are still relying heavily on America for their exports based economy.
Russia Dumps Treasurys For 14 Consecutive Months; China Slashes Holdings To Lowest In Over A Year!
by Tyler Durden, http://www.zerohedge.com/
Today’s disappointing TIC report confirmed what Zero Hedge reported back in January, namely the record dumping of Treasurys by foreign entities as tracked by the Fed’s custodial account. And while we will spare you the details of the report (found here), two things bear pointing out: the very demonstrative selling of US paper by Russia continues, and is now in its 14th consecutive month (as has been reported here consistently), as total USTs in Putin’s possession declined to a fresh multi-year low of $88.4 billion, half of the $176 billion in October 2010.
Also confirming that the Asian anti-USD axis is now one which consists of at least Russia and China (and certainly Iran), was the stepwise dump of US paper by Beijing which sold $32 billion in US bonds in December, bringing its total to a new post 2010 low of $1100.7 billion. And lastly, this was not isolated to just these two: in December the grand total of US Treasury holding by foreigners declined from $4.75 trillion to $4.732 trillion. The question then is: just what are China and Russia buying (ahem stockpiling) with all the dollars that are not recycled back into Treasurys?
… for more click here!