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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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Wed, 05/21/2014 - 09:42 | 4780924 Old Man River
Old Man River's picture

Dark, my friend

Wed, 05/21/2014 - 09:47 | 4780947 BobPaulson
BobPaulson's picture

The Road.

Wed, 05/21/2014 - 10:51 | 4781222 lakecity55
lakecity55's picture

The Dystopian street scenes from Blade Runner.

Wed, 05/21/2014 - 12:36 | 4781725 ParkAveFlasher
ParkAveFlasher's picture

It'll look like Willy Wonka's chocolate factory ... to me

 

That's cuz I stackz, bitchez.

Wed, 05/21/2014 - 10:41 | 4781183 Panafrican Funk...
Panafrican Funktron Robot's picture

It depends partly on which country you choose to reside in, but assuming you're asking about the United States, I would suggest that a substantially higher valuation of gold in USD terms would be significantly less disruptive to import/export market function than is often imagined.  The idea that gold would only be valuable in a TEOWAWKI/armeggedon scenario is demonstrably false via the historical record, but lets think it through a sec:

1.  It has to be known at this point that the "unfucked with" USD price of gold is anywhere from 5x - 8x current price (some have suggested much higher, but it's relatively easy to back into this number via the Fed reserve balance)

2.  No credible person believes the Ft. Knox gold is still there.  The USD is not backed by gold at all.

3.  The value of the USD is based entirely on our combined productivity (industrial + service).

4.  Foreign governments buy UST paper/USD on the basis of our combined productivity (industrial + service), for the purposes of trade  They also buy it because of the petrodollar scheme, but that is quickly coming to an end.  We still have our combined productivity backing.

5.  Ergo, if gold was, say, $10,000 an ounce, I don't think this will have much of an effect on the price of, say, bread, or televisions.

Wed, 05/21/2014 - 12:24 | 4781666 Hongcha
Hongcha's picture

L.A. and San Francisco will look like even more like Mexico City.

Wed, 05/21/2014 - 17:53 | 4782812 A82EBA
A82EBA's picture

lol :)

Wed, 05/21/2014 - 09:07 | 4780755 semperfi
semperfi's picture

Only 10% of reserves?  I think not.  They have over 20,000 tonnes. 

Wed, 05/21/2014 - 09:09 | 4780759 Brokenarrow
Brokenarrow's picture

the media needs some simple speak: when other countries conclude that the us is nothing but a cancer on the world, they will stop deliverng food, oil, technology, and other certain essentials for life. When this occurs one of two things happen. The standard of life will drop in half.Or, we go to war. Imagine a nuke going off over Denver. Or, imagine 100k chinese troops in LA. Or, imagine the internet stops working along with banking, stock trading, and all records that pertain to you---for starters. "Cant happen here?" You're watching it happen in slow motion now.

Wed, 05/21/2014 - 09:13 | 4780791 NDXTrader
NDXTrader's picture

A lot of that is right, but why would Russia or China bomb or invade? If the standard of living drops in half we will tear ourselves apart. We are seeing the first moves in a war alright - Russia, China and likely other countries we would never suspect see the West's weakness and are moving their pawns. China dumps all of its Treasuries and/or Russia cuts off gas/oil to Western Europe and we will know the bigger pieces are getting played

Wed, 05/21/2014 - 09:20 | 4780823 LawsofPhysics
LawsofPhysics's picture

Correct.  I see america going the way of South America, India, or Afghanistan, not Nazi Germany.  The calories available for consumption simply are not available and nukes only end up polluting what is left. 

Wed, 05/21/2014 - 09:36 | 4780894 Uchtdorf
Uchtdorf's picture

All good analysis, guys, except you need to add to the mix the overarching plan of elite control of every country. The Chinese and the Russians will come, but it will be spun as a humanitarian effort to help deliver services to destitute Americans and to restore civil order due to all the nasty domestic terrorists (that's you and me). Only later will it be revealed (to those who cannot see) that we are being overtaken by an occupying enemy force.

Wed, 05/21/2014 - 10:22 | 4781077 LawsofPhysics
LawsofPhysics's picture

Again, what you propose requires tremendous energy and resources.  Sorry, this is not available as these countries must deal with their own chaos as well.

Wed, 05/21/2014 - 12:17 | 4781627 Herd Redirectio...
Herd Redirection Committee's picture

China will invade Taiwain, Vietnam, parts of Thailand and Malaysia, LONG before California.  Vancouver, OTOH, is slowly becoming an extension of China.

Wed, 05/21/2014 - 09:40 | 4780911 forwardho
forwardho's picture

"The calories available for consumption simply are not available"

And that ladies is the absolute bottom line reality.

Which will reassert itself despite mans best efforts at denying it.

Hedge accordingly indeed.

Wed, 05/21/2014 - 11:04 | 4781272 Meatier Shower
Meatier Shower's picture

Long on long pig.

Wed, 05/21/2014 - 10:29 | 4781136 TheFutureReset
TheFutureReset's picture

Our 300 million private weapons will ensure no one invades for the foreseeable future. But that doesn't preclude the Chinese "liberating" California from an oppressive gov in Washington, in say 20 years. 

Wed, 05/21/2014 - 11:26 | 4781384 FeralSerf
FeralSerf's picture

China and Mexico already have enough people in California to liberate it.

Wed, 05/21/2014 - 11:05 | 4781276 semperfi
semperfi's picture

China & Russia have been dumping everything U.S. but sloooowly so as to not rock their own boats.

Wed, 05/21/2014 - 11:34 | 4781420 Panafrican Funk...
Panafrican Funktron Robot's picture

"If the standard of living drops in half we will tear ourselves apart."

That is inaccurate.  Consider how far our standard of living has already dropped in the past (fill in the blank) number of years, yet, we seem to get increasingly more complacent.  Internet + TV + cheap, subsidized calories available to any human being with a pulse living in the US ensures this complacency.  

Ie., as long as we have a very addictive distraction available to us 24/7/365, that is location independent (mobile smartphones), along with absurdly easy to consume food products, what the fuck are we actually going to do, really?

Wed, 05/21/2014 - 09:16 | 4780808 therover
therover's picture

'Can't happen here'

1981 song but the words and video still resonate

http://www.youtube.com/watch?v=IWgmT0lRG9M

Wed, 05/21/2014 - 09:59 | 4780987 Bemused Observer
Bemused Observer's picture

I can't see the 100k foreign troops here...why would they do that? They know we are a heavily armed nation, and nuts to boot.

There's no need. All they'd have to do is cut us off, quarantine us, so to speak. Naval and air power from the other major military nations against us. Nothing in, nothing out, and just wait. The internal chaos would do much of the 'dirty work' for them, then they could come in a few years later and clean up what's left. And who knows? After a few years of Mad Max, the people left might be glad to see them.

Of course Canada and Mexico might not be happy with us being quarantined, but what would THEY do about it?

But I never thought the whole 'boots on the ground' invasion of America was realistic. Geographically, it seerms easier to just isolate us and let nature take it's course than to pay the heavy price of a physical occupation.

Wed, 05/21/2014 - 10:51 | 4781102 813kml
813kml's picture

Very true, an invasion of the US would be almost impossible and essentially pointless.  Alaska is the only piece worth taking, maybe Hawaii.

Wed, 05/21/2014 - 10:41 | 4781184 Zadig
Zadig's picture

I don't see a foreign invasion as likely either.  No one has ever "taken over the world" before since it's logistically impossible. I'll assume most European and Asian decision makers are aware of this even if most American ones are not.

Much easier to wait for the country to fracture and then compete to put their own puppets in charge of their favorite piece. The puppets can be told to request assistance if their owners deem it practical.

Wed, 05/21/2014 - 11:40 | 4781449 Panafrican Funk...
Panafrican Funktron Robot's picture

You are correct; China already did this with Bill Clinton, note who funded him.

Wed, 05/21/2014 - 11:51 | 4781504 Ghordius
Ghordius's picture

please, do strike your faithful european allies from that list of foreigners even dreaming of invading the US

and I agree on the whole premise that holding America down would need at least 8 million troops and would be a logistical nightmare

for all purposes, your strategic defensive position has always combined the best sides of an island and a continent

where do all those fears of being invaded come from, anyway? and in what kind of pieces could the US fracture?

Wed, 05/21/2014 - 12:23 | 4781654 Herd Redirectio...
Herd Redirection Committee's picture

Balkanized America:

Pacific Northwest

Mexicali

Greater Texas (includes NM, Colorado, Kansas, OK, etc)

Midwest/Flyover Country

United States of DC and NY

I think I have accounted for the better part of the country, and the most likely scenarios. (just missing the South East, and its unclear where the borders for 'the US of DC and NY' would be)

Wed, 05/21/2014 - 10:28 | 4781127 MeMongo
MeMongo's picture

Yes Sir Brokenarrow! Mongo can attest to a 2lb bag of sackeye salmon for 32.99 last night at Sam's Club(:-(

No inflation to see though

Sarc/off

Wed, 05/21/2014 - 09:09 | 4780764 RealityCheque
RealityCheque's picture

If Gemany and France's gold holdings are over 60% but they don't actually possess the gold within their own borders in their own vaults, does that mean they own any gold at all??

Stack on Ivan, you're ahead of the game.

Wed, 05/21/2014 - 10:58 | 4781243 Kirk2NCC1701
Kirk2NCC1701's picture

"When it comes to gold, possession is ten tenths of the Law" - Kirk.

Wed, 05/21/2014 - 11:29 | 4781398 FeralSerf
FeralSerf's picture

America can confiscate the Saudi gold (and oil) anytime it wants to. There's nothing the Saudis can do to stop them if they decide it's time for a "regime change".

Wed, 05/21/2014 - 11:44 | 4781479 Panafrican Funk...
Panafrican Funktron Robot's picture

Incorrect, the Saudis are the ones that have us by the balls. If we pull anything, OPEC shuts down the petrodollar completely, and we are well and truly fucked.  This is already happening anyways, but we are currenty still "in the game" insofar as they're looking at a multi-currency system currently, with anywhere from 25-33% of the USD still in it (along with Euro / Yuan / potentially Ruble).

Wed, 05/21/2014 - 12:24 | 4781665 FeralSerf
FeralSerf's picture

Bullshit! I suppose you thought that Saddam and Ghadiffi had the Americans by the balls too?

Why do you think America spends as much on its "defense" as all the rest of the world combined? America, like England, has always used its military primarily to invade other countries and steal its assets.

Wed, 05/21/2014 - 09:11 | 4780776 Dr. Engali
Dr. Engali's picture

Russia reduced their bond holdings by $50 billion between October and March?  Pfffftt... the BerankenYellen prints that much in one month.

Wed, 05/21/2014 - 09:15 | 4780800 semperfi
semperfi's picture

yep - $50 billion is chump change these days

Wed, 05/21/2014 - 09:29 | 4780850 forwardho
forwardho's picture

Agree, While the exchanging of US bonds for Gold is prudent, the  $1.17 converted to Gold represents only 4.5% of the total bond liquidation.

Pretty sure they will find a good home for the rest.

 

Thu, 05/22/2014 - 07:49 | 4784177 dontgoforit
dontgoforit's picture

I wished they'd chunk a little change to this chump.

Wed, 05/21/2014 - 09:16 | 4780809 Winston Churchill
Winston Churchill's picture

Love to see the FedRes's 'other' set of books.
We can't even see the 1st set.

Wed, 05/21/2014 - 10:31 | 4781141 813kml
813kml's picture

I'm not sure that even the Fed knows how much red ink they are drowning in.

Wed, 05/21/2014 - 09:14 | 4780795 DoolieDoink
DoolieDoink's picture

Where did they buy it ?

Certainly not COMEX !

Can't see USA obliging to sell - or does it ?

Wed, 05/21/2014 - 12:55 | 4781169 813kml
813kml's picture

At a pawnshop in DC located at 1600 Pennsylvania Avenue.

Wed, 05/21/2014 - 09:17 | 4780815 Itchy and Scratchy
Itchy and Scratchy's picture

'They didn't build those gold mines!' - The Kenyan

Wed, 05/21/2014 - 09:18 | 4780817 Bryan
Bryan's picture

Someone owns the gold they are buying.  Who are they buying from?

Wed, 05/21/2014 - 09:25 | 4780843 SpanishGoop
SpanishGoop's picture

Not from me, that's for sure.

It is not for sale.

 

Wed, 05/21/2014 - 09:22 | 4780830 Azannoth
Azannoth's picture

China must be getting anxious about their pile of USTs, just w8 till they pull the plug.

Wed, 05/21/2014 - 10:56 | 4781234 lakecity55
lakecity55's picture

What if....the PRC has a liquidity crisis?

What if....hey we can cash out those USTs, comrades!

Wed, 05/21/2014 - 09:24 | 4780838 SpanishGoop
SpanishGoop's picture

"thanks to Latvia joining the single currency union, adding its gold to the Eurozone reserves as part of the Euro treaty."

 

Now i get it why the gold was swiftly removed from the Ukrain by the US.

I could have fallen in the hands of the EU.

 

 

Wed, 05/21/2014 - 09:28 | 4780859 Ghordius
Ghordius's picture

not the EU, the ECB. one of the many differences between the two clubs is the UK, which has different ideas about gold

Wed, 05/21/2014 - 09:25 | 4780844 Fix-ItSilly
Fix-ItSilly's picture

like we truly know what Russia is doing, whether it be military jaunts or gold vaulting.

Gold price hasn't moved to confirm any acts of hoarding.

Wed, 05/21/2014 - 09:27 | 4780849 esum
esum's picture

china and iran are doing business with gold and most likely russia and china also. the goal of r and c is to offer their currency BACKED WITH GOLD..... for international trade...... dolla or gold backed currency sir? 

Wed, 05/21/2014 - 09:44 | 4780934 yogibear
yogibear's picture

Sweet, buy loads of gold, then have traders buy loads of paper gold, leveraged maybe as high as 30:1,  perhaps even more with the US Federal Reserve's naked shorts.

The huge buyers ask for delivery... Kaboom!

What a financial disaster.

Wed, 05/21/2014 - 09:29 | 4780867 unknwn
unknwn's picture

RE: Belgium is buying all the US treasuries, omg!: http://en.wikipedia.org/wiki/Euroclear

Euroclear is a Belgium based financial services company that specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. Euroclear also functions as an International Central Securities Depository (ICSD). A Central Securities Depository (CSD) is a specialist financial organization holding securities such as shares either in certificated or uncertificated (dematerialized) form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates. This allows brokers and financial companies to hold their securities at one location where they can be available for clearing and settlement (added emphasis). This is usually done electronically making it much faster and easier than was traditionally the case where physical certificates had to be exchanged after a trade had been completed.

Wed, 05/21/2014 - 10:10 | 4781023 unknwn
unknwn's picture

Now why would European players be gobbling up so much UST, you ask? http://www.ft.com/intl/cms/s/0/b050f19c-dd17-11e3-ba13-00144feabdc0.html...

“We believe this represents the beginning of a trend across Europe,” said Daniel Davies, an analyst at Exane BNP Paribas, in a note. “The European ‘loophole’ allowing zero risk-weighting of government bonds is on its way out.”

Wed, 05/21/2014 - 09:34 | 4780889 Terminus C
Terminus C's picture

 

So... they sell $26B UST and buy $1B gold... 

What is the point of this article?  It tells us nothing new.  We know the Russians and Chinese are buying gold (taking delivery? we shall see...) and we know they are selling UST (gogo "Belgium")... Where is the "news"?

Wed, 05/21/2014 - 09:36 | 4780891 Focushawk72
Focushawk72's picture

This trade proves how stupid Russians are.  Bonds rallying and gold sinking.  Good luck to mother Russia.

Wed, 05/21/2014 - 09:40 | 4780906 yogibear
yogibear's picture

LOL, it ain't over until the fat lady (Yellen) sings.

Paper gold is probably leveraged at unbelievable rates. Russia and China can call on the paper and demand delivery.  Oh what fun.

Wed, 05/21/2014 - 09:41 | 4780898 yogibear
yogibear's picture

Buy loads of paper gold afterwards and demand delivery.

The paper gold is levered more than 10 to 1. Watch the COMEX market blowup. 

Calling the commodity  market and the Federal Reserve on their sham would be good for Russia and China. 

Wed, 05/21/2014 - 09:57 | 4780982 GrinandBearit
GrinandBearit's picture

"The paper gold is levered more than 10 to 1. Watch the COMEX market blowup" 

 

I keep waiting, waiting and waiting.  It never seems to happen though.

Wed, 05/21/2014 - 11:29 | 4781400 WAMO556
WAMO556's picture

That's because anyone who has done it, has committed suicide by drowning in their bathtubs or shooting themselves twice in the back of the head.

This happens to reporters too!

Or their children become homocidal psychopaths and either shoot up schools or theaters.

The nail that stands up is quickly hammered down.

Just saying.

Wed, 05/21/2014 - 10:35 | 4781161 headhunt
headhunt's picture

you do not get to 'demand' delivery of actual gold - that is a myth

Wed, 05/21/2014 - 09:49 | 4780950 ratpack1968
ratpack1968's picture

Trading increasingly worthless paper for something tangible and a historical store of value seems pretty smart regardless of % exchange reserves.  Over time, this is what many key Central banks have been doing in preparation of a major currency regime shake up that is on the horizon.  Prepare accordingly. 

Wed, 05/21/2014 - 09:57 | 4780980 El Hosel
El Hosel's picture

Great, Moar motivation for the gold riggers.

Wed, 05/21/2014 - 10:04 | 4781011 Took Red Pill
Took Red Pill's picture

So let's see, Russia and China are stockpiling gold, dumping US treasuries, agreeing to trade in their own currencies and not the dollar. What could they be planning?

Wed, 05/21/2014 - 10:13 | 4781053 overdrive
overdrive's picture

1.17 Billion in gold purchases only represents less than 5% of the 26 billion.

I think zerohedgers would love to know where else the 95% is being invested?

Wed, 05/21/2014 - 10:14 | 4781059 Wahooo
Wahooo's picture

Was just going to ask the same. I want to know what they really bought.

Wed, 05/21/2014 - 10:22 | 4781089 LongOfTooth
LongOfTooth's picture

At least some of it on other PMs perhaps?

 

 

Wed, 05/21/2014 - 11:05 | 4781281 Grouchy Marx
Grouchy Marx's picture

Bitcoins.

Wed, 05/21/2014 - 10:39 | 4781178 F.A. Hayek
F.A. Hayek's picture

ICBMs, bundled along with Chinese satellites - driven by the technology sold to them by Slick Willy Clinton, in exchange for Clinton library donations. It was a win-win all around. Now we can truly say we have armed all global enemies with the means to strike against us.

Wed, 05/21/2014 - 21:24 | 4783403 bilejones
bilejones's picture

Gas pipelines to China?

 

You do remember the concept of tangible assets.

Wed, 05/21/2014 - 10:15 | 4781060 earleflorida
earleflorida's picture

'the "Golden Yuan"'

thank god that Chiang Kai-shek was such an asshole?

Wed, 05/21/2014 - 10:21 | 4781093 UTICA CLUB XX PURE
UTICA CLUB XX PURE's picture

Obama's going to the Cooperstown baseball Hall of Fame tomorrow. Right down the road from me. yawn... I won't be there... 

Wed, 05/21/2014 - 10:24 | 4781111 Itchy and Scratchy
Itchy and Scratchy's picture

He must be getting the MLB M.V.P award!

Wed, 05/21/2014 - 10:23 | 4781101 NoWayJose
NoWayJose's picture

The Russians are so 1990's... Don't they know that in today's markets you always dump 100% of your large positions into thinly trade off hours markets. Spreading your sell orders out and trying to get the best price is so, so, so un-American!

Wed, 05/21/2014 - 10:23 | 4781103 MFL8240
MFL8240's picture

American economy and equity markets a circus act let by the fool in chief and the troll at the Fraudulent Reserve Bank.  Historic deal between Russia and china and news Russia bout 900,000 ounces of Gold last month and the Wall Street filth is slamming the VIX and buying equities while the dollar is manipulated up and Gold manipulated down. 

Wed, 05/21/2014 - 10:32 | 4781124 Central Wanker
Central Wanker's picture

So they sold $26B debt and bought $1B gold. Big deal.

The Chinese buy that much every week.

Wed, 05/21/2014 - 10:34 | 4781150 813kml
813kml's picture

The $25B was spent on vodka for the dollar wake.

Wed, 05/21/2014 - 10:46 | 4781202 the grateful un...
the grateful unemployed's picture

if the stock market loses 26B in value this month we have a story, thats QE - 26B, maybe if you could figure out how much the stock market loses you could put a real number on how much QE goes directly into equities. i'll leave that to the smart guys

Wed, 05/21/2014 - 10:28 | 4781130 morning
morning's picture

has anyone considered that the US might want to revert the USD to a gold standard, effectively raising the price of dollars AND of gold in dollars to new highs, thus becoming able to pay off their colossal debt pile? am I missing something?

Wed, 05/21/2014 - 10:40 | 4781182 the grateful un...
the grateful unemployed's picture

no. a gold standard puts a collar on the money supply, which is what feeds the CIA corporate america and the corrupt political establishment. we can win wars by printing money. you want us to lose? are you some kind of traitor, or worse a monetary terrorist?

Wed, 05/21/2014 - 13:50 | 4781989 813kml
813kml's picture

Also, there is likely only dust and cobwebs in Fort Knox.

Wed, 05/21/2014 - 10:29 | 4781131 nah
nah's picture

Russia, China, and Europe will Unite of of necessity.  OPEC will be forced to index to the new volume of customers and crude, the US Federal Government will falter and there will be 50 independant states

.

Russia wins cold war

Wed, 05/21/2014 - 10:37 | 4781165 the grateful un...
the grateful unemployed's picture

the fed only needs to divert a little of their monthly QE to pick up Russias bonds on the market. 26B is nothing really. and the Fed will gladly trade them gold for their Tbonds, (if they are willing to wait for delivery - like those cheap furniture stores with no interest for two years or like Germany) there is no problem trading one rehypothecated asset for another. why doesn't russia repatriot those bonds directly? just dump them at the feds door, and make Ben give them helicopter dollars? well you see where all this is going. a few years ago China threatened to repatriot their US bonds, and the FED printed the cash, Mogambo Guru picked it up in his analysis of Fed business, the Fed saw them and raised them, sure you want cash for bonds? we have it right here. and watch the value of those dollars plummet, the more bonds you bring us the less dollar value you are getting. this gambit doesnt require that kind of bold move. if the Russians demand gold thats alright too, Ben just takes helicopter dollars and buys gold to pay the Russians. always some other sucker gets stuck with devalued dollars. the flim flam on the macro level is a game of hot potato, and we're always handing it someone else.

Wed, 05/21/2014 - 10:46 | 4781200 novictim
novictim's picture

I'm sure that gold will be very helpful in benefiting the Russian population and for fighting rampant corruption.

/sarc

Wed, 05/21/2014 - 10:56 | 4781235 RMolineaux
RMolineaux's picture

One can speculate that the difference between the proceeds of Treasury bond sales and gold purchased was needed to fund the capital flight that is occuring among the Russian oligarchic thieves looking for a safer place to keep their loot.

Wed, 05/21/2014 - 10:58 | 4781248 kchrisc
kchrisc's picture

Another thing that must make Putin laugh. He needed cover to get out of the TP dollar and the DC US' "cookie coup" in the Ukraine has given it to him. LOL

Wed, 05/21/2014 - 11:00 | 4781253 Youri Carma
Youri Carma's picture

Ennio MORRICONE live a Fenis dirige "Ecstasy of Gold" (con Susanna Rigacci) https://www.youtube.com/watch?v=EUNVBGHiBY0

Because Ennio MORRICONE ain’t crappy and doesn’t fall apart like some other Italian, let’s say …Ponzi products.

Wed, 05/21/2014 - 11:09 | 4781296 begintowin
begintowin's picture

The article states that Russia sold 26 billion of US Treasury debt.

My question is, who was the buyer of the debt?

Wed, 05/21/2014 - 11:43 | 4781468 dumbStruck
dumbStruck's picture

 

"mysterious huge U.S. Treasury buying that is being done by little Belgium" ...  most likely the fed doing it behind the scene I think.

Wed, 05/21/2014 - 12:59 | 4781813 unknwn
unknwn's picture

It's not being done BY Belgium, it's being done IN Belgium. Big difference. See my comments above.

Wed, 05/21/2014 - 12:18 | 4781629 ThisIsBob
ThisIsBob's picture

Janet.  Click "print."  Click "buy."

Wed, 05/21/2014 - 11:12 | 4781312 orangegeek
orangegeek's picture

Spot gold is not looking that strong.

 

http://bullandbearmash.com/chart/spot-gold-daily-continues-consolidating...

 

USD is at near term lows and ready to break out as the Euro sinks.

 

Not even Putin is this stupid - he's worth $70B and he didn't amass this by selling low and buying high.

Wed, 05/21/2014 - 11:31 | 4781406 icanhasbailout
icanhasbailout's picture

So.... what about the other 24.83 billion? Where'd that money go?

Wed, 05/21/2014 - 11:48 | 4781493 khaproperty
khaproperty's picture

New business - not only gas and raw materials - with China and the Yuan may be the new favorite currnecy for Russia and by the way some others in Asia, Africa and Australia.

 

Wed, 05/21/2014 - 11:51 | 4781507 Paddylock
Paddylock's picture

-Gold is what sits behind the glass in the REAL money black box...
-Over time paper gold holders will wise up and realize they don't actually own gold and that they can be cashed out without notice (read comex contract)
-There is more paper dollars in the world then there are goods and services to buy in the entire US!
-Historically (1000's of years) people have held 25% of their wealth in gold; today it's .05%
-The only way out is a surgical reset with gold not to upset every other world price; if dollars backed by gold it will suck up the worldwide dollars back to US
-NOBODY will see or hear reset coming...Monday morning surprise.

*3 biggest market risks: 1) debasement 2) default 3) counter-party
**Gold carries non of these risks.

You would be a FOOL to sell gold at this price.
1-3 years is my guess for reset.
You would rather be 10 years early than 1 minute late!!!

According to a very large dealer, one bullish indicator is long term holders beginning to capitulate, which he is seeing for the 1st time in many years...

A large hedge fund bought $500m physical held in NY vault strictly as inflation hedge...

Wed, 05/21/2014 - 12:10 | 4781578 hoist the bs flag
hoist the bs flag's picture

gold down, dow up, baltic dry ships sinking in a toilet...somebody thinks it's tuesday.

Wed, 05/21/2014 - 12:11 | 4781602 Winston of Oceania
Winston of Oceania's picture

If any of you think for a minute that Russia and China will go on a gold standard you have rocks in your head. No Government would hamstring themselves in such a manner when they can steal outright from their populations. Inflation at any rate is theft. If you want to sit around and pray for the end of the US that's your business entirely but even a gold peg is beyond question, you see behind every Gub'ment are the oligarchy and stealing is just what they do.

Wed, 05/21/2014 - 12:14 | 4781615 q99x2
q99x2's picture

Janet Yellen sent the rats to Belgium to buy US treasuries on the ugly.

It is how the FED is destroying the monetary system of the US. Each State should have its own currency. For chrisesake we have computers now what are you governors waiting for.

Wed, 05/21/2014 - 12:29 | 4781697 the grateful un...
the grateful unemployed's picture

Ellen Brown in CA is running for State Tresurer, she wants a state bank, in order to keep profits the CC companies are making off merchants, but it would achieve these same purpose as a state currency

Wed, 05/21/2014 - 13:11 | 4781867 Ban KKiller
Ban KKiller's picture

State or Public Bank? This is the answer to the question of how to fight the banks. 

Check out "We are people here" a group of folks in NM. Very, active in this action to start a public bank. 

Big Banks will fight as this is their doom. 

Wed, 05/21/2014 - 12:16 | 4781620 thisisjustarand...
thisisjustarandomusernameicreatedforzerohedge's picture

is it the U.S., through a Belgium and also the Fed as agents, the one propping up the USD while repressing Gold?

it would certainly be a sound reaction to RUS and CHN trying to dump USD and stock up GOLD

Wed, 05/21/2014 - 12:26 | 4781661 BBullionaire
BBullionaire's picture

Them Russians must be insane to sell UST's backed by the full faith n credit of the the US gov n buy that barbarous relic..

 

sarc off

Wed, 05/21/2014 - 12:38 | 4781728 CitizenPete
CitizenPete's picture

LMAO

Wed, 05/21/2014 - 12:42 | 4781737 SmittyinLA
SmittyinLA's picture

Sounds like a gold PR move and you want to have spending cash in Africa, Gaddaffi was hip, had a stash of gold, unfortunately he didn't have a stash of nukes.....unlike Putin, who also has the moral authority to use them, 20 million dead Russian reasons to NOT let his people become body donations for 3rd party globalists. 

 

He's hip 

 

this ends one way the EU loses 

Wed, 05/21/2014 - 12:45 | 4781746 silverserfer
silverserfer's picture

shouldn't germany be a little like "W   T   F!?" right now? Its like their leader has absolutely no balls. 

Get z gold ya oh ya ve want our gold too! ya. 

Thu, 05/22/2014 - 01:08 | 4783885 napper
napper's picture

The leader of Germany is a woman (Angela Merkel). Surely you wouldn't expect her to have balls, would you?

Wed, 05/21/2014 - 12:56 | 4781797 teslaberry
teslaberry's picture

the 'belgian' money is just a screen for fed monetization through some form of swap or other derivative of dollars being used to hold down these securities.

face it, if the fed can devise strategies to trap or even destroy securities---for example by lighting a warehouse full of them on fire. then the fed is winning.

the whole game is prevent repatriation of short duration money ( fiat is most dangerous and then short duration treasuries---------they probably don't even want 30 years coming back to the u.s. )

if you have our credit (dollars or treasuries ) just don't bring it back to the u.s. . only buy non u.s. goods with our dollars.

this is how dollars become confetti, when the u.s. no longer wants to sell you its shit with its own money.

Wed, 05/21/2014 - 12:59 | 4781811 madcows
madcows's picture

Our FED should dump all it's US treasuries too!  That'll show 'em!  Yeah, Two can play that game Komrad!  Huh!

Wed, 05/21/2014 - 15:34 | 4782291 hardcleareye
hardcleareye's picture

Blazing Saddles... Cleavon Little...  "Nobody move ...."

https://www.youtube.com/watch?v=Z_JOGmXpe5I

Wed, 05/21/2014 - 23:01 | 4783676 One of We
One of We's picture

Great scene but my favorite has to be Kid Shelleen missing the barn.....

 

http://www.tcm.com/mediaroom/video/221341/Cat-Ballou-Movie-Clip-Kid-Shel...

 

Wed, 05/21/2014 - 13:55 | 4782009 slightlyskeptical
slightlyskeptical's picture

If you cut off the QE drugs, chaos will ensue. Better to just change the prescription. I think we get a hint of that today. Treasuries will be protected from the BRICS under all cirdcumstances. Uncle Janet has your back.

Wed, 05/21/2014 - 14:58 | 4782195 GrinandBearit
GrinandBearit's picture

Pretty interesting how when gold falls below $1285, buyers come in.  When it goes above $1300, it gets knocked down quickly.  Same for silver at $19 and $20 respectively.

Wed, 05/21/2014 - 22:50 | 4783653 One of We
One of We's picture

I wish they'd hammer it down to $10 for a moment so I could unload some dry powder.....

Thu, 05/22/2014 - 02:07 | 4783944 sessinpo
sessinpo's picture

GrinandBearit      Pretty interesting how when gold falls below $1285, buyers come in.  When it goes above $1300, it gets knocked down quickly.  Same for silver at $19 and $20 respectively.

----

Also pretty interesting is there seems to be plenty of demand, but no shortage of supply. I remember all the commercials about gold running out. Now they are running those commercials for silver.

Wed, 05/21/2014 - 15:15 | 4782232 NoWayJose
NoWayJose's picture

Russia is just taking what the Fed is giving - the Fed buys long bonds making the yield drop and the price go up, so the Russians sell their bonds at higher prices. The Fed artificially drives down the price of gold, so the Russians buy gold at lower prices. This isn't rocket science - it's yet another GIFT from the US to Putin.

Wed, 05/21/2014 - 16:10 | 4782415 g'kar
g'kar's picture

The Russians are just trying to trick us into buying gold.

Wed, 05/21/2014 - 16:11 | 4782422 no1wonder
no1wonder's picture

Voice of Russia: Putin checkmates Obama in "gas war"

Energy Union of Russia and China - two great powers - goes against all the plans of the United States and poses a serious threat to Washington. The US hoped to isolate Russia, deprive it of its income, and to strangle China, blocking its access of resources to the Chinese market.

In the future, Russia could continue entering other Asian markets. For example, South Korea and Japan are in desperate need of fuel supply, as they suffer from incredibly limited resources compared to China.

Wed, 05/21/2014 - 16:46 | 4782563 gcjohns1971
gcjohns1971's picture

I am sorry.  I am reading about how Putin has 'checkmated' Obama in the Gas war almost every day, but always in reference to some new or different maneuver.

I do not think that "Checkmate" means what they think it means.

In Chess a "Checkmate" happens only one time and ends the game.

Wed, 05/21/2014 - 16:27 | 4782473 gcjohns1971
gcjohns1971's picture

This is a hopeful sign, that for now at least, the Russians are serious about having a hard-asset backed currency.

That is a very good thing.   It is especially good in contrast to the debauchery the US Fed is engaged in.

However it should not be construed as a true gold standard, nor as a true metallic currency.  It simply means that there appears to be an intention to hold the asset for currency backing. 

We can hope, but not yet know, that Rubles will at least be pegged to a particular quantity of Gold.  The currency swap agreement with China would tend to point in that direction, because each party needs some assurance of the value of the currency they've agreed to accept.

But people ought not be overly optimistic.  Currency arrangements relative to Gold can be changed at the stroke of a pen.  They can often be changed without the stroke of a pen.

Everyone who witnesses these hopeful signs from the East should also color their expectations by the fact that the Dollar, was not simply 'pegged' to a quantity of Gold.  In point of fact the Dollar is at the present moment still defined in statute as a quantity of gold.  The Dollar is defined specifically as 1/42'd of an ounce. 

Thus we can see the inherent contradiction in the use of any national currency - paper or digits - as a proxy for Gold, in the story of the Dollar.   

The currency is presented as 'good as' Gold while being used as a SUBSTITUTE for gold.   The problem is that the quantity substituted can be arbitrarily changed, or - as in the case of the US - simply ignored by an imperial executive.

A person should ask then, "Does the issuer have an incentive to cheat, change, or drop that system?"

But a WISE person should ask, "UNDER WHAT CONDITIONS would the issuer have a SUFFICIENT excuse to cheat, change, or drop that system?"

For, historically speaking, Governments have NEVER been able to resist the temptation to cheat, change or drop a Gold standard even when confronted with ruin for their larcenous ways.

THAT is the whole issue, of course.  It is the realization that THE WHOLE POINT of a National Currency is to cheat that system - because you don't need to have a currency name, issuing authority, or government police powers to offer, authenticate, or accept a quantity of Element Number 79.

Wed, 05/21/2014 - 16:58 | 4782609 Dre4dwolf
Dre4dwolf's picture

The ruble is as good as gold more or less because of Russia's huge gold reserve, it essentially goes to say that Russia will not have any problems paying its debts for the foreseeable future, the U.S.A can hardly make such a statement.

Even if the currency itself is not directly backed with gold, its easy to see where all this is heading.

Wed, 05/21/2014 - 16:39 | 4782535 gcjohns1971
gcjohns1971's picture

For the math challenged,

900,000 troy ounces is:

- 27 Metric Tons

- 5 times the quantity of German Gold the New York Fed has managed to repatriate to Germany.

- 1/10th the size of the big Indian Gold purchase two years ago.

- $38 Million US STATUTE Dollars.

- $1.17 Billion US Federal Reserve Notes.

- etc...

 

Wed, 05/21/2014 - 16:56 | 4782597 Dre4dwolf
Dre4dwolf's picture

We will be on a gold/silver/bitcoin based economy soon enough, cant wait till BTC/GLD matching

Thu, 05/22/2014 - 01:17 | 4783895 napper
napper's picture

Gold is a steal at 1300 USD.

 

I believe China would gladly spend 2-3 Trillion USD to buy gold at 1300. Too bad there aren't enough gold bars to go around.

Wed, 05/21/2014 - 16:44 | 4782554 dojufitz
dojufitz's picture

I was under the impression a much higher Gold price solves more problems than it crates....?

In relation to debt settlement.

Wed, 05/21/2014 - 17:33 | 4782738 Peter Pan
Peter Pan's picture

Can someone tell me what Russia has bought with the proceeds of the dumped treasuries other than some gold?

Wed, 05/21/2014 - 17:44 | 4782776 Latitude25
Latitude25's picture

It's really quite simple.  A country with large gold reserves is a country with a strong export economy and a creditor nation.  

A country with little or no gold reserves is a country with weak exports and a debtor nation.  We can all see clearly which countries are which today. Of course this is all confused by lying about what reserves really are.

Wed, 05/21/2014 - 21:06 | 4783058 g'kar
g'kar's picture

"A country with large gold reserves is a country with a strong export economy and a creditor nation."

 

That's a perfect description of the USA, about 100+ years ago.

 

 

Wed, 05/21/2014 - 23:19 | 4783716 dexter_morgan
dexter_morgan's picture

roughly coincides with the inception of the monster from Jekyll Island.

Wed, 05/21/2014 - 17:54 | 4782816 Chuck Knoblauch
Chuck Knoblauch's picture

Russia doesn't buy toilet paper.

Wed, 05/21/2014 - 18:54 | 4783018 Government need...
Government needs you to pay taxes's picture

The US has a lot of slaves it could sell in lieu of gold, and the nation is working on acquiring another 30 million semiliterate Mexicans.

When China, Russia, et al come to pick up their merchandise, just tell them to keep repeating 'diversity is good'.  And suggest they beef up their welfare system. . .

Wed, 05/21/2014 - 19:10 | 4783075 freedom5000
freedom5000's picture

Canada has 3 tons and it probably belongs to someone else.

Thu, 05/22/2014 - 01:25 | 4783901 wanderintheland
wanderintheland's picture

They smartly prefer to leave it in the ground for now.

Wed, 05/21/2014 - 19:12 | 4783083 Government need...
Government needs you to pay taxes's picture

Is it fair to state that if the US Federal Reserve conjures $1trillion in currency, it is ACTUALLY taxing exisiting dollar holders by an amount of purchasing power that is initially equal to $1 trillion, but incrementally declines by the rate of inflation created?

Wed, 05/21/2014 - 21:19 | 4783392 bilejones
bilejones's picture

Of course, that's the essence and purpose of Central Bank created fiat currency.

Wed, 05/21/2014 - 20:52 | 4783319 Angry Plant
Angry Plant's picture

So now lets ask what Russia did with the money from sale of 26 billion US tresurys?

1.17 billion into gold what about the other 24.83 billion?

Thu, 05/22/2014 - 01:03 | 4783881 Rock On Roger
Rock On Roger's picture

They gots pipes to build.

Wed, 05/21/2014 - 20:57 | 4783338 kedi
kedi's picture

Russia's reserves are mostly still in the ground, living and growing on the ground. Above ground refined gold is just short term cash. They need far less of it than a lot of other burned out 1st world bogus countries do. When it all falls apart, there are a few contries who will notice it less. Be used to working through it. Not start killing each other. They have reserves.

Wed, 05/21/2014 - 21:33 | 4783431 are we there yet
are we there yet's picture

Really now, really, everyone has been buying gold, china, Russia, India and others is a big way for years now. No one with working brain cells has been selling large ammounts of gold. All the blogs for years have been saying the Fed is as dry as Hillary's womb. Where is the PM coming from? Lepracons?

Wed, 05/21/2014 - 22:35 | 4783593 Quaderratic Probing
Quaderratic Probing's picture

So they sell all 140 billion, now they hold USD. They buy other currencies with the USD forcing them up. Those countries don't want their currency to rise so they sell their own and buy US bonds. All for show no lasting difference

Wed, 05/21/2014 - 22:48 | 4783650 One of We
One of We's picture

The thought of seeing 33 million Krugerrands gives me a boner.....granted that isn't saying much since a strong gust of wind can too since I divorced my dirty two-timing ex-wife acouple years ago.....

Wed, 05/21/2014 - 23:18 | 4783712 Jack Burton
Jack Burton's picture

Rumor mill at work, or real news from reliable Ukraine sources? I am not sure, the chatter says a Kiev offensive is about to kick off at dwan over in East Ukraine. Some heavy rockets reported moving up and Kien itself has said a final offensive to clean out terrorists is about to be carried out. Reports coming out of Russian Ukraine report small scale fighting undeway and some shelling.

Tomorrow will tell. What we do know is that USA foreign policy is now geard towards getting Russia to react in East Ukraine, getting them to use force. If Right Sector and their Ukrainian army supporters kill enough people, then Putin will be  hard pressed not to give the USA what it wants so badly.

Lets hope these second rate thugs can't stand up against defenders, but Ukie gound forces have heavy guns and rocket forces. Time will tell.

Thu, 05/22/2014 - 00:47 | 4783860 Sambo
Sambo's picture

If Kiev attacks and Putin responds by sending the army, the banksters get what they want - WW3.

If Putin does not respond, the Russians in E. Ukraine get wiped out. The CIA then bring about another coup and a regime change. USA/NATO comes out looking like heroes for getting rid of the 'Nazis'.

The evil banksters, either way, get what they want.

Thu, 05/22/2014 - 01:01 | 4783878 dsty
dsty's picture

you sound like some one worth listening to

that's not your picture is it?

Thu, 05/22/2014 - 01:56 | 4783932 Jano
Jano's picture

Do you remember the appointed attorney general for Krim?

Thu, 05/22/2014 - 11:21 | 4784853 dsty
dsty's picture

oh ya, hubba hubba

some contact

Wed, 05/21/2014 - 23:51 | 4783778 El Gordo
El Gordo's picture

Sold $26B treasurys, bought $1.17B gold.  What did the do with the other $24.8B, move it to Putin's personal account?

Thu, 05/22/2014 - 01:58 | 4783933 Jano
Jano's picture

this is what I ask myself.

News would be, if they sell all treausries and buy the equivalent of gold.

Thu, 05/22/2014 - 00:40 | 4783850 Sambo
Sambo's picture

Gold is being retrieved from wrecks sitting at the bottom of the sea floor, purified and recast into biscuits and bars.

Thu, 05/22/2014 - 00:48 | 4783863 devo
devo's picture

Not even the Russians trading bonds for gold can make it rise.

Thu, 05/22/2014 - 02:52 | 4783979 q99x2
q99x2's picture

This article seems to back up my comments in the past that the bailouts of insurance companies and banks and corporations, and the payment of pensions and the payment of my F'n FASFA comes from taxpayers in Germany, France, Canada, Italy and so on. Because the Wests financial system include the US financial system. There is no US budget. And, in fact there is no United States as a nation. It has already been taken over. The US military works for Brussels so to speak.

Time to get real. There be traitors in our midsts.

We will come rejoicing bringing in the thieves...

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