As Russia Dumps A Record Amount Of US Treasurys, Here Is What It Is Buying

Tyler Durden's picture

Last week we commented that based on TIC data, while "Belgium's" unprecedented Treasury buying spree continues, one country has been dumping US bonds at an unprecedented rate, and in March alone Russia sold a record $26 billion, or 20% of its holdings.

So as Russia is selling record amount of US paper, what is it buying? For the answer we go to Goldcore which tells us that...

Russia Buys 900,000 Ounces Of Gold Worth $1.17 Billion In April

The Russian central bank has again increased its gold reserves by another 900,000 ounces worth $1.17 billion in April.

Russia's gold reserves rose to 34.4 million troy ounces in April, from 33.5 million troy ounces in March, the Russian central bank announced on its website yesterday. The value of its gold holdings rose to $44.30 billion as of May 1, compared with $43.36 billion a month earlier, it added.

The following is a summary from Bloomberg of the April data template on international reserves and foreign currency liquidity from the Central Bank of Russia in Moscow:

Russia's gold & foreign exchange reserves remained virtually unchanged at USD 471.1billion in the week ending May 9. Russia’s reserves have fallen since the crisis began but remain very sizeable. The reserves include monetary gold, special drawing rights, reserve position at the IMF and foreign exchange.

The 900,000 ounce purchase is a lot of physical gold in ounce or tonnage terms but as a percentage of Russian foreign exchange reserves it is a very small 0.24%.

Gold as a percentage of the overall Russian reserves is now nearly 10%. This remains well below the average gold holding as a percentage of foreign exchange reserves of major central banks such as the Bundesbank, Bank of France and the Federal Reserve which is over 65%.

The Russian central bank has been gradually increasing the Russian reserves since 2006 (see chart above). On average they have been accumulating 0.5 million troy ounces every month. Therefore, the near 1 million ounce purchase in April is a definite increase in demand.

This was to be expected given the very pronounced geopolitical tension with the U.S. and west over Ukraine. Indeed the TIC data shows that Russia has been aggressively divesting themselves of U.S. Treasuries.

Russian holdings of U.S. Treasuries fell very sharp, by nearly $50 billion, between October and March 2014 or nearly a third of Russia’s total holdings. Over half of the plunge came in March, when $26 billion was liquidated as western sanctions were imposed. TIC Data for April won’t be available until June and will make for very interesting reading.

Especially given the mysterious huge U.S. Treasury buying that is being done by little Belgium. This has analysts scratching their heads and has aroused suspicions that the Fed and or the ECB may be behind the huge Belgian purchases.

Russian Gold Reserves in Million Fine Troy Ounces - 1995-2014 - Monthly Chart (Bloomberg)

Russia has already made their intentions regarding gold very clear. Numerous high ranking officials have affirmed how they view gold as an important monetary asset and Putin himself has had many publicised photos in which he very enthusiastically holds large gold bars.

On May 25th 2012, the deputy chairman of Russia's central bank, Sergey Shvetsov, said that the Bank of Russia plans to keep buying gold in order to diversify their foreign exchange reserves. 

"Last year we bought about 100 tonnes. This year it will be less but still a considerable figure," Shvetsov told Reuters at the time.

The World Gold Council reported yesterday that central bank purchases were 70% above their 5-year quarterly average, led by Iraq and Russia. The Eurozone actually became a net buyer thanks to Latvia joining the single currency union, adding its gold to the Eurozone reserves as part of the Euro treaty.

Russia may be planning to give the ruble some form of gold backing in order to protect the ruble from devaluations and protect Russia from an international monetary crisis and the soon to return currency wars.

Russian central bank demand and indeed global central banks demand is set to continue as macroeconomic, monetary and geopolitical uncertainty is unlikely to abate any time soon. Indeed, it may escalate substantially in the coming months as we move into the next phase of the global debt crisis.

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FinalEvent's picture

<- my name

<- not my name


We are close to the end

Headbanger's picture

Yeah.. Sanction THIS Barry you moe-ron!

kill switch's picture

Let's get this right class, the fucking Belgium’s have an extra $20,000.00 per person to buy fucking toilet paper of U.S. T's ???? This is the biggest kiting scheme in history, thanx Yellen...Proves their NOT tapering...

Arius's picture

"The 900,000 ounce purchase is a lot of physical gold in ounce or tonnage terms but as a percentage of Russian foreign exchange reserves it is a very small 0.24%."


Yes, but month to month is an increase of 4% ... not small change excatly.


if they can do it for few more months, it becomes 20% increase in few months ...

guess what: END of the road, i dont believe they will be allowed to accumulate that much

Citxmech's picture

WTF is all this physical supposedly coming from? (They are buying physical, right?)  I just don't understand how the Russia and China can be soaking up this amount of the world market, yet my local dealer can still get supply for today's prices without a ridiculous premium over spot. 

dark pools of soros's picture

They always say who's buying and rarely say who sold here

Just like all these outlets pimping gold... If it is so important to buy it NOW why are they offering to sell it to you?

Arius's picture


how many are lining up at your local dealer?  i would bet not that many ... most of people went the other way and sold what they had a few years ago with all these Cash for Gold that were all over the World ...


I wonder who was stupid enough to buy it when everyone was selling .... it seems like a repeat of infamous Waterloo fiasco ... people never learn ... dahhhh

SMG's picture

To quote a  thoroughly brainwashed relative of mine "I don't believe in gold".   Basically anyone who has been convinced to sell physical has been scammed.  In the near future after the dollar finally dies it's well deserved death, they will see this truth.


saveandsound's picture

Be careful what you wish for. If Gold exceeds 5000 US-$/once, the world will be a diffrent place. Actually, in case we see gold going north of 1500 US-$/once, you better get food and ammo as well.

Arius's picture

"Be careful what you wish for."

like we have any say on it ... lol

strannick's picture

Russias buying gold? That explains why its down today....

dontgoforit's picture

Obama is a Russian plant.  We've been duped.  And our own system protects him while the system itself is destroyed.  What a country (we used to be)!

economics9698's picture

Is the tribe intentionally selling gold and silver futures to buy their way over to Singapore when they ditch the USA?

Will Russia and China accept this traitorous behavior from the tribe and allow them to set up shop in Singapore, Hong Kong, and Moscow?

Or will they do what has been traditionally done to traitors, kill them by firing squad?

My bet is they take advantage of the cheap gold as long as the tribe lets them and then set up the firing squads.

Kirk2NCC1701's picture

The real question isn't what will other countries do to our traitors, but what will 'Mericans do about it?  Will we hang traitors?  Are we, are YOU making a list, checking it once, checking it twice, to see who's been naught or nice?

Hell, you can't even get people to demonstrate/protest in DC or our cities -- much less take a Revolutionary stand.  Given that other countries don't have the guns & ammo that 'Mericans have, they got a helluva lot more balls than we do.  We're all talk.  A nation of well-fed, well-armed pussies -- who are too worried about a bad credit score or job review/loss than taking to the streets.

History shows us times and again, that revolution only comes when a people have their backs to the wall, and there is no food or hope.  We're light years from that.  So, in spite of all the ego and testoterone-driven chest beating on blog sites, I suggest you plan accordingly:  Moar shit, different day.

Save_America1st's picture

so 34 million ounces comes to 1,057 metric tons of gold, right?  Are they really saying that Russia only has a little over 1000 tons of gold reserves? 

Does that seem right?  I guess I thought it was much higher than that.  They've got some stackin' to do, big time...and you know that means competition with China, India...

and us!!!  We better keep stackin' folks before the paper farce finally collapses and true valuation explodes to the moon. 

economics9698's picture

Kirk the only thing that is certain is change.  Change will come and I do not look forward to it.  Not because of me, I am worthless, but my children who must go through the inevitable civil war that will engulf some areas of the former USA.

john39's picture

coming soon to a pm dealer near you:

"The dying days of a regime: This photo, taken in Shanghai in 1949, shows a queue to exchange worthless paper money for gold"

MagicHandPuppet's picture

All y'all need to settle the fuck down.... and report to your nearest mega mall for consumer therapy!  Then go home and watch a minimum of 2 hours of mainstream teevee.

Manthong's picture

..if godless commies are buying the barbarous shiny stuff, we need to step up to the plate and counteract their solid resource investments with genuine, un-backed, un-insured 100% USA  bank debt.’s the only patriotic thing to do.

Manthong's picture

crud.. maybe going postal is patriotic if you can find 49 cents between the sofa cusions.

FEDbuster's picture

A few people stood up when they came for a rancher's cattle.  A few more are going to have to stand up when they come for your savings and retirement accounts.  Everyone will have to stand up when they come for your guns.  That was the trigger point for the first Revolution, and I beleive it will be the trigger point for the next one.  CT is their testing ground.  Molon Labe.

Dr. Destructo's picture

Yeah, that's what makes the coming revolution bittersweet. It gives us a chance to free ourselves from the shackles of debt, tyranny, and lies, but TPTB will not go quietly or willingly. I am prepared and have been active for quite some time in nonviolent protests, but I truly worry about the children since the government has shown that it will resort to violence without provocation and will have no problems using children as one of many cards in their hand. However, this revolution must happen for their sake so they won't become enslaved like we are today. I have no children, and I don't plan on having any, but I will fight for the children's chance (including yours) to live in peace and liberty.

magnumpk's picture

A little over 1,000 tons sounds right.  They, along with China (and others) are trying to reach parity with the US and other major powers.  The threshold is probably around 3-4% of a given nation's GDP.  Russia and China need more - speculation is that China hits the mark in early 2015.  I'd guess Russia would like to get where they need to be by that time as well.  Get's them a good seat at the table when the international monetary system is reconfigured. 

Sirius Wonderblast's picture

And here in the UK, Gordon "is a moron" Brown sold off a load of our gold at  the bottom of the market.

Four chan's picture

mericans still think we are on the gold standard, thats why step one was to destroy the basic education system last century.

Xibalba's picture

yeah...let's pick a fight with these guys:



Makes perfect sense if you believe in ameriunexceptionalism

Monty Burns's picture

Will we hang traitors? 


No siree.  All they need is about 90% of the people to be sheep blinded by endless brainwashing.  The actual figure in America imho is well in excess of that. I'm told that Lucky Larry ('pull it') Silverstein was an honored guest at the opening of the 9/11 Memorial.

Midas's picture

I don't know about that.  When gold was $270 an ounce the thought of $1000+ for an ounce was in a near doomsday scenario.  We have quickly adapted to $1200 being the result of a "crash" and evidence that gold is not a good store of value.  I think we could make the transition to $5000 just as easily.  Just my opinion, which isn't worth much, even in fiat.

Quus Ant's picture

The difference between a managed rise to $5K and panicked free for all to $50K.  I'm sure TPTB have pulled hair out tying to find a way to de-monitize gold.  Convince everyone gold isn't competing currency and letit can goo to the moon.

DaveyJones's picture

it's kinda a slef feeding circle isn't it? As the dollar continues to circle the toilet, inflation might take gold higher and because everything else is circling the toilet, it might take gold higher

magnumpk's picture

Well, I'd say it will be a different world, because it will be a world with a new intermational monetary system.  $5,000 or more per ounce simply means that the new system will be at least partially gold backed.  In order to do it in a non-deflationary manner, you would need a price north $5,000.  Simply a function of existing money supply (growing as we know) and supply of gold.  Right now, 40% gold backing gets you around USD$9,000/ounce.

new game's picture

gold will NOT be in any future currency. these leaders/rulers/traitors/fuck heads will have nothing to do with a currency they can't manipulate. wish/think and wake the fuck up!

admit they are in complete control of our monetary system, and anything new willbe moar of the same, no matter what group decides what is next...

UselessEater's picture

what about a gold backed trade note between nations?

that wouldn't be applicable to we the serfs, just at the level of the "nation" that we pay taxes to, paving the way for a new global currency form at a global-national trade level...and of course more fiat currency for us serfs with inexplicable debt increases despite austerity policies /sarc.

something along the lines of Jim Willies guess-timation??

Squid-puppets a-go-go's picture

you'd be a fool, though, to think that there is only 1 power-that be. The oligarchy is as hopelessly factionalised as any country or region - and while it looks like a united seamless front now, when TSHTF they will fracture

this is why people have come back to gold for 6000 years - its not the great unwashed clamouring for monetary fairness, its the ELITES WHO HAVE LOST TRUST IN EACH OTHER

Syrin's picture

How does this relate to the IMF's SDR?

813kml's picture

My cousin is a VP at Zion's Bank, he looked at me like I had three heads when I told him at Xmas that China was hoarding gold in attempts to launch a gold-backed yuan.  He agrees that the economy is still in rough shape but all that is needed is more liquidity.  According to him, gold is unimportant in the grand scheme of things and its only value is for jewelry and coins. 

I was a little surprised that he wasn't more aware of what's going on in the world, but he also dismissed me when I told him in 2007 that the mortgage market was close to imploding.  American bankers have myopic mindsets, I would expect a mad rush to the exits when the SHTF.

BrosephStiglitz's picture

Similar problems here.  A few family members are long in stawx, but not US equities (thankfully).  I was talking about gold & silver and it was generally met with revilement and the Warren Buffett response: "You can cuddle, cajole and caress gold all you want and it will never go to work for you."

I responded, with "Okay, but I don't see any of you buying up tracts of arable land either."  

Sad really. 

813kml's picture

Western bankers still think they are Masters of the Universe, it's going to get ugly when they are marginalized.  That's why I don't see all of this ending in anything but war, power has to be pried from cold dead hands.

john39's picture

they must remain myopic... to see the big picture and understand it would destroy their entire world.  most are not strong enough to let go of the illusions.  they won't wake up until the illusion turns to smoke and blows away.

dontgoforit's picture

Not sure how history is going to write the next few years but you can rest assured it won't be a chapter that we will recognize in hindsight.

Herd Redirection Committee's picture

I've been reading two books about the 16th century.  The time of American silver (although primarily Bolivian at that time).  And a bimetallic standard.

And its VERY amusing to see how both authors treat our 'forefather's obsession with shiny metal'.  LOL.  They just make it seem absolutely ludicrous, and a sign of superstition that India and China traded their spices, silks and pepper for... Wait for it.... Shiny metal!

Oh how different history could have been if India and China had not been obsessed with shiny metal, the implication seems to be. 

Its funny also that they have to absolutely spell it out.  The Spanish sent galleons FULL of silver to Manila.  So the author explains: "It was a ship FULL OF MONEY."  

hot sauce technician's picture

I'd be long real estate as much as I'd be long gold. Cities are overcrowded. There is huge demand. That demand won't disappear; it might only change in nature, according to economic factors (energy costs, social trends, whatever). People will still need places to live. I don't think war is on the table. Humanity has suffered too much from it.

I hope there will be an usurpation of the banker-cronyism complex via a mass refusal to recognize its legitimacy to rule brought about by a mass adoption of a decentralized currency. No guns would be necessary. The oligarchs will then one day wake up and discover that they are vastly outnumbrted and outgunned, and will do whatever possible to survive intact. Power will be yielded to the sheeple, who at that point will be educated by unique individuals who will lead by example. I hope.

A sovereign only has authority where the money he issues is accepted. And that's not a rule I made up.

KnightTakesKing's picture

Hot Sauce: I think that's wishful thinking. If they can kill 4 to 6 billion of us, land will be cheap and they will still have their gold. That's the end game -- kill as many of us as they possibly can. 

Sambo's picture

Sadly, you are right. The aim is to reduce population by 50% by 2020. World war is the only way to achieve this level of mass extermination.

hot sauce technician's picture

Who will eliminate 4 to 6 billion of us? Destruction on that scale won't spare ANYONE. Only a Hitler can be that suicidal in a quest for complete human subjugation. And he was a one time phenomenon. WW2 will never be repeated. That was the birth pains of an ultimately free world. Obviously we haven't gotten there yet, but on the whole I feel much luckier to be alive today than 100 years ago. And it's all Darwinism. Humans who are kind to others have better odds of sutvival than those who aren't. Of course, it's always wise to have weapons around.

Simplifiedfrisbee's picture

The natural disintegration of our civilization is occurring. This is a simple and natural human development process that history has proven to be completely unavoidable. The term "internal proletariat" and "external proletariat," as coined by a hierarchal British scholar, represent two opposing forces which occur at the infant stages and elderly stages of civilizations. The time of the internal proletariat is upon us and soon after the external aggressor conquers.

What is the fundamental flaw in humanity? The answer is Extremism. Balance is key to longevity. Western and Eastern Nations have lost the fundamental relationship shared by human virtue and the creative nature that surrounds us.

It is no coincidence that humanity has exploded to the magnitude of billions and transformed the landscape of the world as never before in all of human history. Jesus Christ was the internal proletariat who is responsible for humanity to not destroy itself before reaching such heights. These times call for more than your preparation but rather require your virtue. Leave your existence on earth with Love and speak with conviction so to pierce the ego of man and the deceptive nature which has been developed for all of humanity is going to experience this epic disintegration and it is unavoidable.
Yet, that is precisely why it is such a wonderful time in humanity. We are at the epicenter of a shift in civilization. Opposing forces will finally meet at the epitome of of human development! Live and Love. Love and Build. Build and Enjoy.

hot sauce technician's picture

You can argue that the disintegration started already wih the French and American revolutions. They shattered the notions of kingship, a heavenly mandated political rule. Thomas Paine uses the religious argument as his main one in 'Common Sense'. Also qith the industrial revolution that was progressing at the same time, which turned economics on its head; writers like Rousseau, Adam Smith, David Hume and more.

The past 200 years have indeed seen the greatest increase in human population. We are at the end of times. But it didn't start with us, nor will it end with us. We're slowly progessing - Adam and Eve's sin is one tremendous thing to repair...


Read Martin Buber's Gog and Magog. The disciples od the Ba'al Shem Tov knew very well what the events in their time i.e. the Napoleonic wars portended. As did the Gra - his disciples moved to Israel to hasten the "rebuilding of Jerusalem", according to his wishes.

I reiterate though: the practical means to bring about the "love" is a decentralized, severed from politics currency. 

Simplifiedfrisbee's picture

The idea of currency is fundamentally brilliant because the challenge to obtain it also challenges the creative intelligence within humans. This challenge facilitates the growth of civilizations and enhances our quality of life, albeit at the cost of destroying our nature(both environment and human). As reiterated by the saying, "we can not have our cake and eat it too."

Our innate "sin" is for many reasons a destructive force, but no one can argue against the fact that for us humans to become civilized and further distant ourselves from this precipice of human degeneration, we must utilize and apply our intelligence. One can not force another to do so unless by Authoritarian means and that will degrade the human experience not enhance it. So incentives are indeed a necessary component for human development. Again, the counter balance is suffering and we must always contemplate and recognize it no matter how great our achievements are. Hedonism is not balanced.

To separate currency from politics is a foundational rule for the civilized growth of nations. However, I am no advocate of unregulated free markets. A free market society is a horrible concept. The same goes for a completely regulated market society. A balance is once again needed.

The first step for all is to understand what money and currency are and why the human race utilizes it and values it. Second, the people of all civilized communities must participate in their local environments and local governing bodies.

Remember, new ideas are needed in life but they come at a cost. To understand the current problematic condition we are facing in American economic policy and government, is the very internal proletariat that enhances the disintegration of a civilization. This notion leads the dominant minority to usurp the rights of the majority. This is evident today.

You are correct and I agree, the disintegration has begun long ago however, the internal proletariat is blossoming and the ideas that the IP holds are is very force that the current Dominant Minority will fight against at all and any costs.

magnumpk's picture

That doesn't surprise me.  I find it difficult to find people who have even a basic understanding of gold.  I think most people are afraid to contemplate it, and would rather laugh it off and find comfort in the fact that few people understand it, let alone own it.  Just saying "gold bars" seems to be a punch line for most people. However, popular opinon will likely swing the other way in a year or so, probably rapidly and violently.