Russia Hedges Trump Bet: Dumping U.S. Treasuries to Safeguard Their Assets

Dump dollars for “safer” (I guess) currencies: Euros and Yen

(“Make America ___ Again” remind me)

Interesting article from Bloomberg.com and this short intro:

“Russian officials are hoping Vladimir Putin’s rapport with Donald Trump will lead to rapprochement with the U.S. But they’re not taking any chances.”

The story: The Treasury Department reported this week that appears to show Russia liquidating dollar assets at a record pace, selling four-fifths of their U.S. debt, some $81 billion, in over just a two-month period. 

That started back in April when the most onerous sanctions were put on allies of Putin (FYI: Putin BTW is reported to have personal wealth exceeding $200 billion).

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.

Sergey Dubinin (Russia’s central bank chief from 1995 to 1998, and who now sits on the supervisory board of state-run VTB, Russia’s second-largest lender) says there’s no mystery at all – that the sales were simply a prudent “hedge against confiscation,” which is a possibility that looks more likely every day. He said Russia has learned from Iran’s experience, and thus is simply converting its dollar assets into other currencies to safeguard their reserves against any attempts at seizure just like Iran. 

He concluded: “It would be silly to sell U.S. debt and then keep it in dollars somewhere else, so it’ most likely they bought other hard currencies and most-likely European Єuros or Japanese ¥en.”

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. There’s no way to tell in which currencies those deposits were made exactly. 

Bank Governor Elvira Nabiullina told Russian lawmakers last month who had expressed concerns about excessive holdings of U.S. debt that she was in the process of diversifying the central bank’s investment portfolio.

My 2 cents: I wonder if Trump’$ “inve$tment$ in Ru$$ia” are $afe or have been converted in other currencie$. 

You know, to keep them safe based Vlad’s financial advice? That is from one BFF to another BFF...  

But, also doesn't this prove that Trump does not Trust Vlad with his money? Hey, just asking.

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