The selling of US treasuries has been wildly popular and widely reported. China has been a seller for 3 months now. Japan has flipped to selling in August, now having the lowest amount since 2011. It should be of no surprise that Russia finally has no US treasuries, having sold off their remaining holdings as of August.
Russia chooses to invest in gold instead. They are not alone, many countries are. Including most recently Poland and Hungry. Hungry has increased their domestic gold reserves ten-fold, to 31.5 tonnes in just the two weeks starting October 2018!
However, Russia has been a buyer for quite some time now. Russian gold reserves increased to 1998.5 tonnes in the third quarter of 2018, up from 1909.8 in Q2. While these numbers are official, the real amount may be much higher.
Russia never owned much US debt but there’s still a great impact. The treasury need sells $1.5 trillion of debt per year to fund spending deficits, who’s going to be the buyer?
Ironically The Federal Reserve is a big player in the US Treasury market.
It’s a nightmare scenario of the snake eating it’s own tail. The central bank holds about $2.39 trillion of federal debt, much purchased during the last 10 years via QE programs. Maybe they will go back to buying government debt to keep the dollar circle-jerk flowing?
Or maybe central banks are finally trading their dollars for gold, in anticipation for a new global gold standard. Besides central banks purchasing gold at a record pace, some countries are planning to issue their vaulted gold on blockchain. Gold that is stored in treasury vaults, physically redeemable gold, with no storage fees, traded 24/7, 365 days a year. Sounds like new monetary systems are being put in place for the collapse of fiat around the world, because once no one wants dollars, what’s next?
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