Putin Advisor Threatens With Dumping US Treasurys, Abandoning Dollar If US Proceeds With Sanctions

Tyler Durden's picture

While the comments by Russian presidential advisor, Sergei Glazyev, came before Putin's detente press conference early this morning, they did flash a red light of warning as to what Russian response may be should the west indeed proceed with "crippling" sanctions as Kerry is demanding.  As RIA reports, his advice is that "authorities should dump US government bonds in the event of Russian companies and individuals being targeted by sanctions over events in Ukraine." Glazyev said the United States would be the first to suffer in the event of any sanctions regime. “The Americans are threatening Russia with sanctions and pulling the EU into a trade and economic war with Russia,” Glazyev said. “Most of the sanctions against Russia will bring harm to the United States itself, because as far as trade relations with the United States go, we don’t depend on them in any way.

From RIA:

"We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.”

...

 

US Secretary of State John Kerry on Saturday warned that Russian military interventions in Ukraine, which have been justified by the Kremlin as protection for residents in heavily ethnic Russian-populated regions, could result in “serious repercussions” for Moscow.

"Unless immediate and concrete steps are taken by Russia to deescalate tensions, the effect on US-Russian relations and on Russia's international standing will be profound," Kerry said.

 

Kerry mentioned economic sanctions, visa bans and asset freezes as possible measures.

 

Former deputy energy minister and lively government critic Vladimir Milov slammed Glazyev’s remarks, saying they would put further downward pressure on the ruble, which was pushed down Monday to a record low of 36.5 against the dollar amid fears about the possible outbreak of war.

 

“That idiot Glazyev will keep talking until the dollar is worth 60 [rubles],” Milov wrote on his Twitter account.

To be sure, a high-ranking Kremlin source was quick to distance his office from Glazyev’s remarks, however, insisting to RIA Novosti that they represented only his personal position. Glazyev was just expressing his views as an academic, and not as a presidential adviser, the Kremlin insider said.

That said, putting Russia's threat in context, the Federation held $138.6 billion in US Treasurys as of December according to the latest TIC data, making it the 11th largest creditor of the US, which appears to conflict with what the Russian said, making one wonder where there is a disconnect in "data." This would mean the Fed would need just two months of POMO to gobble up whatever bonds Russia has to sell.

The bigger question is if indeed, as some have suggested, China were to ally with Russia, and proceed to follow Russia in its reciprocal isolation of the US, by expanding trade with Russia on non-USD based terms, and also continue selling bonds as it did in December, when as we reported previously it dumped the second largest amount of US paper in history.

... especially when one considers the latest news released by the Kremlin:

PUTIN, XI DISCUSSED UKRAINE BY PHONE, KREMLIN SAYS
RUSSIA, CHINA SHARE SIMILAR POSITIONS ON UKRAINE, KREMLIN SAYS

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yogibear's picture

QEen Yellen loves to print.  She'll double or tripple QE That's music to Wall Street.  Monster bonuses.

elwind45's picture

No I think its Liverpool football club over hear. I rather think it should be Suarez football club. In Europe next season so budget should improve and Rogers is a good manager. If it gets tight then lineup is worth its transfer fees anyhow winning the cup now that is the pot o gold

DaddyO's picture

The Ruskies are playing for Realz...

DaddyO

pods's picture

The FED can eat em, but, with treasuries being concentrated, there is little use for the dolla.

And that is no good for Uncle Sam.

Credit=Talk

Resources=Walk.

Which one are we?

pods

DaddyO's picture

Much has been made of how manly Putin and his image are in this whole media play.

Even Mrs. Palin has made much of this, in fact she commented here

Are we all so starved for a leader with conviction and balls willing to stand up for their beliefs that we are willing to overlook what those convictions are?

Look, this whole affair is nothing more than some very wealthy, influential players moving pieces around on a chessboard to see what falls out.

Who will be the losers in this powerplay. The Ukrainians? The US .gov, The Europeons? The list is long!

In all reality, it's the pawns, you and me, the everyday joe, who gets the short stick. We Pay!!!

So think long and hard about what's at stake.

Freedom, Liberty, Sovereignty, just to name a few. This whole destabilization is contagious!

Egypt, Libya, Irag, Afghanistan, Ukraine, who's next?

DaddyO

pods's picture

Yep, and I heard on the radio this morning that we (well, our kids) have agreed to give $1 billion to the Ukraine for energy.

I feel so much better knowing that.

pods

ncdirtdigger's picture

They have long since gone through your kids' money, they are well on their way to enslaving your grandkids.

11b40's picture

Agreed, Daddy-o, but where is the bad guy?

Is it the Macho Putin or the Whimpy Obama?  Where has Putin been sticking his beak around the world, other than to defend Russia's traditional interests?  How about the US?  What are we up to?  How can it be determined that our adventures are preserving freedom, liberty, or sovereignty for anyone, including ourselves?  From where I sit, whatever we touch, we seem to make worse.

DaddyO's picture

How 'bout the IMF, BIS and the other NWO enforcers?

Did the IMF not just agree to give Putin, through his call for tougher and higher payments for oil, his extra money?

This was all planned in advance.

Again, everyone has said Putin is playing chess, right?

I think this shows some discord amongst the NWO players.

NWO Factions anyone?

DaddyO

matrix2012's picture

DaddyO,

just apply the Occam's Razor

 

one side has SO UGLY the attitude for SO LONG the time that we are needless to deem any further ....

the bad guys are living on the extended terms, a long overdue one!!!

 

'ugly' is so soft here, wicked or even diabolic fits much better!

imbrbing's picture

We have a printer that can put out more PPM than most other countries, does that count? :)

Never mind the printer was probably actually "made in china" and the paper comes from mexico or somewher

else.

 

but once we get the first note printed off we can use those notes to buy more printers and make MOAR NOTES!

 

mrdenis's picture

throw one on the barbie'.......

superflex's picture

Janet is tightening her chinstrap.

LMAOLORI's picture
The red flags the West ignored about Putin’s Russia

snip...

1. Look at the Kremlin’s gold reserves

It is a little-known fact in the West, but Putin has been stocking up on gold bullion for years. In five years he has doubled Russia’s bullion reserves to just over a thousand tons, one of the largest holdings in the world, valued at $44 billion.

Why? What possible reason could the Russian government have for holding gold, an “unproductive” asset, instead of, say, U.S. Treasury bonds or other financial assets? It isn’t to make jewelry. Gold is the only currency in the world controlled by nobody else. It’s something you buy when you want to have complete freedom, if needed, to defy the rest of the world.

Ar-Pharazôn's picture

"Gold is the only currency in the world controlled by nobody else"$

 

the gold market is deeply manipulated.

Kayman's picture

The paper gold market -"trust me, it's in the vault"- is manipulated. If everyone wanted delivery, no one would get physical gold.

_ConanTheLibertarian_'s picture

correction: The paper gold market is deeply manipulated which will only help the physical market.

silvermail's picture

"the gold market is deeply manipulated."

But all the gold price manipulation will end, after Russia will announced prices for oil and gas, in physical Gold.

Ar-Pharazôn's picture

that would be a really interesting moment in mankind's history

matrix2012's picture

The point #1 and THE COMMENTS there are what interesting from the article run by the Wall Street Journal's MarketWatch.... it draws 400++ comments there and many there have eyes and minds too

silvermail's picture

Putin can isolate the United States from around the world faster than you can spit. To this end, Putin needed only to declare that Russia sells oil and gas only for gold.
After that, the U.S. is becoming a third world country immediately. Check and mate.

Life of Illusion's picture

 

Ha all Ukraines pipelines will blow up.

silvermail's picture

Ha! Without oil and gas Europe will fall to the stone age.

Life of Illusion's picture

 

Exactly who will Europe support?

 Europe should have never allowed energy dependence from such source in the first place.  

China next door isn’t that stupid to source only Russia energy.

page 10

https://www.usrbc.org/pics/File/Russia_Infrastructure_WhitePaper_Eng.pdf

silvermail's picture

The world can not survive without Russian oil and gas. In the world begin crises and wars for energy resources. Everything else - it's just blah blah blah about "to diversify supplies".

Kirk2NCC1701's picture

If the EU falls, and the EUR breaks into national currencies, the US and UK laugh their asses off.

The USD and GBP win.  And London stays Europe's banking center, rather than taking heat from Frankfurt.

You guys need to think more than ONE chess move ahead. [sigh] Amateurs!

silvermail's picture

You talk like a child. Your mind can not go beyond the paradigm of fiat currencies. For whom will be need your fiat currency of the United States or London? Do you really do not understand what's happening?
You really do not understand, that China has just refused to sell their goods for U.S. dollars?
You do not really understand what it means China's statement: "We stop accumulating assets denominated in U.S. dollars"?
Well , I'll translate for you as for a child: This means, that China has announced that they stop sale of their goods, in exchange for U.S. dollars .
Right now, China use dollars only as an intermediary for the purchase of gold.
If you know about the trade deficit between the U.S. and China, then maybe you can understand this phenomena, that occurring in the world right now.

Greater Fool's picture

Har, that would be funny. What, they won't even take their own currency in trade for their gas? Ludicrous.

Russia knows just how thin their FX war chest is: It's almost run out at several points in the past decade. Without dollars you cannot defend your currency.

This is an empty threat.

silvermail's picture

This is not an empty threat, it is gold instead of the dollar and blank the U.S. budget = zerro+debt.

pacboot's picture

At the end of the day, Russia is still a developing world kleptocracy with a nuclear arsenal.  Same with China. There is a lot that the US could do to crush the russian, or even the chinese currencies and economy if we had to.  The purchase power of the average American welfare clod is higher than most middle class citizens of either country.  It isn't until you you get to oligarch status that borders evaporate and people with the fuck-you-money become equals.

The question is, does our "ruling" class have the sack to do it?  I doubt it, but you turn off the American consumer class to certain imports and the chinese middle class evaporates.  Internal revolts blow up all over. Same goes with the Rus.  Start pumping $$$$ yel-bucks into europe (more than we have) and let our grand kids will come up with some kind of fucked-up derivatives scheme we can shlep off on the rest of the world. 

Remember world war II?  A bunch of ex-flapper housewives filled our factories and everyone dumped their metal for the war effort.  Did't make a difference but they did it anyway.  Same thing would probably happen again.  They would call it a "Peace Bond" or something and we would all buy some just to show we're on the Team America, Fuck Yeah!! sheet of music.  Maybe we'll wrap 'em around our girl scout cookies or something.

Kayman's picture

"There is a lot that the US could do to crush the russian, or even the chinese currencies and economy if we had to."

Are you serious ?  What would Obama do when Walmart starts laying off their "associates" ?

matrix2012's picture

@ pacboot

just to remind you that back then the great USA has the best manufacturing plants intact; however, what's left today is just a service economy: the FIRE is the largest sector, second only to MICI (Military-industrialized Complex Intelligence) related industries.

When the veil is revealed and the mirage is made known, the world will see all the underlying lies and deceptions!!

Chief KnocAHoma's picture

We still have a military. He isn't dumb enough to do that until our military is fully degraded. Good thing we have a Prez dedicated to keeping the US strong.

Ar-Pharazôn's picture

Putin cant do this without expecting a disproportionate reaction from US

Sinnedi's picture

I don't think Obama cares, I think the american people should care.

TaperProof's picture

I called this yesterday, his Advisor must read ZeroHedge.  hah

Alpo for Granny's picture

200 Billion? Is that all you got? Shiiiiiit...Ol' Yellen can print that with one toner tied behind her back.

Come at her comrade..

 

Urban Redneck's picture

$200 billion might be an important detail... If the number was intentional, and a consolidated figure for the CB and major commercial banks, as opposed to a simple overstatement of $138B (or whatever the official holdings actually are).

SteveNYC's picture

The dynamic here is that Russia is pushing the agenda, the West is reacting. Classic "keep your opponent off balance/on the back foot" tactic.

This is going to get much more interesting before it is over. Anybody who thinks Putin did not anticipate the "sanction" threat and have this morning's subsequent response prepared, well, go to cnn.com for your news.

 

pacboot's picture

Thats not Surprising.  Putin is a Student of Judo, Chess and Shirtless Tiger Wrestling. The "O" is a student of throwing like a girl and holding your bong pull until you see spots.  I bet Romney is sitting in a hot tub with a highball watching this and laughing his ass off.  Ok maybe a glass of Nesquick.  Don't you hate it when you are right?