You are here
Was that Russia transferring dollar holdings offshore?
By: Patti Domm
CNBC, New York
Friday, March 14, 2014
http://www.cnbc.com/id/101495837
The Fed's custody holdings report is usually a sleeper, but this week there was a whopping withdrawal by some central bank. And while there's no evidence, speculation is that it was Russia.
Foreign central banks' holdings of U.S. marketable securities fell in the week that ended Wednesday by a record $106.1 billion, and that was mostly Treasurys. The holdings of U.S. securities held by the Fed for other central banks fell to $3.21 billion, the lowest level since December 2012.
While traders say they suspect it was Russia, they don't know for sure, and it has not shown up on Russia's balance sheet.
... Dispatch continues below ...
Safe and Private Allocated Bullion Storage In Singapore
Given the increasing risks in financial markets, it is more important than ever to own physical bullion coins and bars and to store them in the safest vaults in the world in the safest jurisdictions in the world. Gold advocates Jim Sinclair and Marc Faber have recommended Singapore.
Now, with GoldCore, you can own coins and bars in fully insured, segregated, and allocated accounts in Singapore with the ability to take delivery. Learn more by downloading GoldCore's Essential Guide To Storing Gold In Singapore:
http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore
And for more information call Daniel or Sharon at +44 203 0869200 in the United Kingdom or at +1 302 635 1160 in the United States. Or email them at info@goldcore.com.
However, Marc Chandler, chief Treasury strategist at Brown Brothers Harriman, said everything points to Russia, starting with the timing of Sunday's Crimean referendum and the potential for Western sanctions. He said rather than selling the Treasurys, Russia simply transferred them out of the U.S.
"Everything (Russian President Vladimir) Putin is doing is being extra cautious about retaliation, like bringing troops right to the Ukraine border," said Chandler. "The other reason I say it's most likely Russia is you look at the countries that have the largest reserves. It doesn't feel like it's China because China has enough on its plate."
Chandler said about half of Russia's foreign currency reserves are held in dollar-denominated instruments, and this would be about 80 percent of those dollar holdings. At the end of 2013, Russia had $138 billion in Treasury securities.
"It could be somebody else, but it does seem circumstantial just on the timing alone," said Chandler.
He also said there are precedents for this type of behavior by Russia.
He pointed to the birth of the Eurodollar market—dollars outside the U.S. In 1956, when the Soviet Union invaded Hungary, it feared the U.S. would retaliate with financial muscle, and Russia-based Narodny Bank shifted dollars from the U.S. and deposited them in its London branch, he noted.
* * *
Join GATA here:
Mines and Money Hong Kong
Hong Kong Convention and Exhibition Centre
Monday-Friday, March 24-28, 2014
Hong Kong Special Administrative Region, China
http://www.minesandmoney.com/hongkong/
Porter Stansberry Natural Resources Conference
AT&T Performing Arts Center
Margot and Bill Winspear Opera House
2403 Flora St., Dallas, Texas
Saturday, May 31, 2014
Canadian Investor Conference 2014
Vancouver Convention Centre West
1055 Canada Place, Vancouver, British Columbia
Sunday and Monday, June 1 and 2, 2014
http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc...
* * *
Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:
http://www.goldrush21.com/order.html
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
