It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
June 10 (Bloomberg) -- Russia may switch some of its reserves from U.S. Treasuries to International Monetary Fund bonds, the central bank said today. The comment drove Treasuries and the dollar lower.
Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said some reserves may be moved from Treasuries into IMF debt, reiterating comments made last month by Finance Minister Alexei Kudrin. Ulyukayev’s remarks were confirmed by a Bank Rossii official who declined to be named, citing bank policy.
Treasuries fell, pushing 10-year yields toward the highest level in seven months, in response to Ulyukayev’s statement. The dollar fell against the euro on speculation that Russia will reduce its holdings of U.S. debt.
The problem is that we need external financing and the only means by which we can force foreign interests to do as we wish is to remove some of our 6,000 nuclear weapons and point them at somebody.
Sadly, some governments (cough-China-cough) have created economic systems that are absolutely dependent on our idiocy. Those economies incapable of consuming their own production have become inextricably tied to the credit junkie - US!
The dynamic here is interesting in a macabre sort of way, and unfortunately "barbell" sorts of systems tend to only look stable - they aren't, and any disruption to the status quo has a nasty habit of showing up "fast and vast".
Whether Russia is a warning shot or the first crack in the dam that leads to a clean break and crash in the Treasury market is an unknown, but this much is certain - in terms of mortgage rates, which were sold to everyone as the linchpin of any economic recovery, Bernanke and his merry men have one again had their projections and intentions turned into a bad joke - a joke that, unfortunately, is on you.