Russia and Turkey Diversifying Into Gold As The U.S. Borrows Faster Than Entire World Saves | WHAT REALLY HAPPENED


Russia and Turkey Diversifying Into Gold As The U.S. Borrows Faster Than Entire World Saves

The Russian reduction of Treasury holdings, to $48.7 billion in April 2018 from $102.2 billion in December 2017, has been nothing short of dramatic, though it wasn’t a huge blow to the U.S. Russia’s holdings of American government bonds have long been dwarfed by those of China and Japan, as well as Brazil and some European countries. The U.S., with a debt of almost $21.2 trillion, can afford not to notice fluctuations in the tens of billions of dollars by an authoritarian state’s damage-control efforts and attempts to get away from the dollar.

U.S. Borrowing Faster Than the World Saves

The U.S. can lull itself into a certain sense of security as it watches the foreign-owned stock of its debt securities increase in absolute terms and as the dollar slips only slowly as a share of official foreign exchange reserves. The U.S. currency, according to the International Monetary Fund, made up 62.7 percent of these reserves in the fourth quarter of 2017, down from 64.59 percent in 2014 — but then the share of the next biggest reserve currency, the euro, has also dropped to 20.15 percent from 21.57 percent. This is hardly a tectonic shift.

And yet the U.S. does have a few things to worry about when it comes to its dominance of other countries’ official international reserves. In relative terms, governments and central banks are less and less interested in the ballooning U.S. debt.

Wary of U.S. Debt

U.S. debt, of course, is growing faster than global international reserves, and that partly explains the declining role of foreign countries in keeping the U.S. government solvent.

Webmaster's Commentary: 

This impending insolvency is going to hit this country like a ton of bricks, and nothing can be done to stop it, except for its potential confiscation of corporate, and private financial accounts; but even that won't be able to duck this insolvency completely.

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