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Russia Quits Dollars

Mike

Well-known member
With the amount of debt incurred by the U.S. in the last few months, can't say as I blame them.

WE TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!



Dollar stops being Russia's basic reserve currency
Pravda ^ | 19.05.2009
The US dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote. The dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said.

In accordance with the report, about 47.5 percent of the currency assets of the Russian Central Bank were based on the euro, whereas the dollar-based assets made up 41.5 percent as of the beginning of the current year. The situation was totally different at the beginning of the previous year: 47 percent of investments were made in US dollars, while the euro investments were evaluated at 42 percent.

The dollar share had increased to 49 percent and remained so as of October 1. The euro share made up 40 percent. The rest of investments were based on the British pound, the Japanese yen and the Swiss frank.

The report also said that the reserve currency assets of the Russian Central Bank were cut by $56.6 billion. The losses mostly occurred at the end of the year, when the Central Bank was forced to conduct massive interventions to curb the run of traders who rushed to buy up foreign currencies. The currency assets of the Central Bank had grown to $537.6 billion by October 2008. Therefore, the index dropped by almost $133 billion within the recent three months.

The majority of Russian companies, banks and most of the Russian population started to purchase enormous amounts of foreign currencies at the end of 2008. The dollar gained 16 percent and the euro 13.5 percent over the fourth quarter. The demand on the US dollar was extremely high, and the Central Bank was forced to spend a big part of its dollar assets, experts say.

The change of the structure of the currency portfolio of the Bank of Russia has not affected the official peg of the dual currency basket, which includes $0.55 and 0.45 EUR.

The investments of the Bank of Russia in state securities of foreign issuers have been considerably increased, the report said. About a third of Russia’s international reserves are based on US Treasury bonds.

Russia became one of the largest creditors of the US administration last year, the US Department of the Treasury said. Russia increased its investments in the debt securities of the US Treasury from $32.7 billion as of December 2007 to $116.4 billion as of December 2008.
 

Mike

Well-known member
Silver said:
Your anual budget deficit has for sure. How about national debt?

Gone up. Of course......what did you expect out of a Democrat Admin and Congress? :lol: :lol:

Last time we had a balanced budget, it was a Republican Congress appropriating the money.

Of course Clinton got credit for it, but he can appropriate nothing..............................
 

Broke Cowboy

Well-known member
Silver said:
Your anual budget deficit has for sure. How about national debt?

If memory serves me correctly, the United States ran out of ready cash late last month or early this month - three months earlier than usual due to the increased spending and the increase of financial obligations.

It survives for the remainder of the year on borrowed money - Russia and China are (I believe) the two largest creditors).

So, there will come a time - if nothing changes - when the United States will not be able to service the debt let alone reduce the debt - and the green back will become a piece of paper - nothing more.

You cannot borrow yourself out of debt and you cannot simply turn the speed of the printing presses up another notch or two. More dollars in the system will simply reduce the value of the dollar. Far too many examples of that from around the world.

The chickens are going to come home to roost if things do not change - and from a very personal stand point - propping up companies that will eventually leave due to increased taxation - is not the smartest move.

Prices go up - nobody buys due to increased pricing - corporate taxes increase to cover lost tax revenue - and satisfy the uneducated public - and the cycle continues. Businesses lay off or leave the country for more "profit friendly" nations.

Not a pretty sight.

BC
 

Silver

Well-known member
It's not a pretty site for sure. We've been watching this coming for 8 or 10 years now and sooner or later the piper will need to be paid. To blame it on the last 3 months administration as some are doing is foolish though. All that's happened in the last 3 months is that the train has picked up speed on it's way to the wreck. I was hoping for better things in the post Bush era, but it looks like things are going from bad to worse.
Funny, about 5 years ago on here I stated that the amount of US debt being held by the Chinese and the size of the US national debt was going to be a big problem and I got ridiculed nearly right out of this place.
 
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