Russia to Reduce US Debt Holdings- That's what happens when you print, no one wants y
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Wondering how many of http://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_sovereign_wealth_funds are divesting US debt & equities.
It all has to do with the debt ceiling in the US. Russia is actually late to the party. China has been reducing Treasury holdings for over half a year now.
http://www.businessweek.com/news/20...reasury-holdings-as-debt-ceiling-debated.html
You can't. The last portion was settled in 2010.
http://www.marketoracle.co.uk/Article16810.html
It's a common misconception. As I explain in this post Russia did not default on its international dabt. In fact, Russia maintained the schedule of payments on actual Russian debt even at the peak of 1998 crisis.
Very good concise explanation of what Quantitative Easing is about.
A detailed explanation can be found in this video: http://www.youtube.com/watch?v=PTUY16CkS-k
That's because Russia mainly borrows in international markets and Russian central bank can't print US Dollar or Euro.
your logic is bankrupt. :eek:
the same people who are willing to lend to Iceland.
GLOBAL EXCHANGE
Icelandâs âno bailoutâ stance hasnât chilled investors
ERIC REGULY
ROMEâ Globe and Mail Blog
Posted on Tuesday, June 14, 2011 12:04PM EDT
91 comments
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Icelandâs method of coping with the financial crisis had a brutal charm about it. In essence, the country hoisted its middle finger to the owners of bank bonds, and a few other people it owed money to, and walked away.
It worked. For evidence, note that Iceland made a triumphant return to the international bond markets late last week, and that its tiny economy is growing at a fair clip, both remarkable achievements when you consider its punishing economic and banking collapse in late 2008.
And therein lies a lesson. Make that two. The first is that bond holders of clapped out banks can, and should, take losses for the greater good of the recovery. The second is that keeping your own currency is a terrific idea when youâre going through economic hell -- it gave Iceland the fiscal freedom that Greece, Ireland and Portugal entirely lack.
Icelandâs sale of 5-year bonds raised $1-billion (U.S.) at 5 per cent, not cheap but a bargain compared to the outrageous yields of comparable Irish and Greek bonds (though neither is able to borrow and is relying on emergency European Union and International Monetary Fund loans stay afloat).
I never saw post so ridiculous in my life.
Gosh where to begin.
So you are saying because FED can print US dollars, that is why dollars are being printed to pay the bills.
And Russia can't print US dollar so they don't bother printing ruble to cover their bills.
Lets simplify because I fear I will lose you, this might be too complicated for you
Why do you assume that if Ruble was world class currency, Russia would devalue it by printing it. Maybe they would realize this would end in eventual collapse of their money and thus them.
You make it seem like printing whatever amount of money your country needs is perfectly legitimate and correct thing to do.
Oh those poor Russians they are so unlucky, they can't print US dollar and Euro so they are doomed.
While western system of central banking will simply print money and solve every problem. So lets get hammered tonight, life is good.
LOL
Let me spell it out for ya in new age English you i-pod kids understand now a days
Russian Central bank is not a scam, they serve their country. Fed is a scam perpetrated on United States.
http://www.bloomberg.com/news/2011-...owing-as-oil-prices-trim-2011-deficit-1-.html
Quote from AK100:
Don't worry the US government will soon make it mandatory for its citizens to buy their debt, via retirement funds or something like that.
But don't worry because a) it's patriotic and more importantly b) it's to help preserve your freedom
I feat this is true. They will stop at nothing to keep their overspending/vote buying going.
It will probably start as 401k enrollees are automatically set to buy treasuries as a default setting. Then they will change it to you are mandated to put a certain percentage of your 401k allocation toward something "rock solid" like US Treasuries........then they will seize the entire enchilada at some point.
I wrote nothing like that. You are just interpreting what I said while applying strong bias you seem to have.
What I am saying is Russia didn't have budget deficit in 2001-2008 (link). Russia paid out all of the Soviet Union debt and accumulated substantial "sovereign wealth" fund. The ruling party doesn't need to increase spending in order to attract votes. They have next election covered via different means.
So, the only thing the Russian political elite needs money for is buying luxury items, property and businesses abroad... and these are not bought with Roubles.
So, if more Roubles is printed, these will just buy less Dollars or Euro or gold in effect defeating the purpose of printing money.
I don't assume anything here. We don't know what would happen if the world was very different than it is today. We don't know what the world economy would be like today if instead of attacking Soviet Union Hitler made pact with Staling to bring down the UK and the US. All of it is a matter of pure speculation.
It's you who assumes that if the world was very different, a lot of purely cicumstantial factors would stay the same.
It is legitimate because laws allow it and citizens don't object. If at any point there was a desire to deprive printing money of legitimacy, it was gold standard. As long as money doesn't have to be backed up by scarse physical commodity, printing money is intended by design if not clearly stated.
Whether it's a "correct" or should I say "right" thing to do, it's a classic argument Keynes vs. Hayek http://www.youtube.com/watch?v=GTQnarzmTOc
Economics is not experimental science. So, no one actually knows what economic measure has what exact effect.
"Western" system is fractional reserve system... and Russia has completely bought into it. So did China.
One thing you seem to miss is "printed" money (or as economists call it M1) is a small part of the actual money in circulation. Most money is created via "fractional reserve system" by private banks. So, in the US with 10% reserve rate every 1bln printed ends up in bank accounts. Banks are allowed to lend 90% or 900mln, which also ends up in bank accounts. And so on. As a result for every 1bln originally issued, banks up to lend 9bln which end up in current accounts. So, every 1bln printed created 10bln in the monetary system out of which 9bln is debt with interest attached payable to private banks.
So, decreasing reserve rate is another very powerful means to increase the amount of money in the system. The government doesn't even have to print money.
Now, look at these figures from Federal reserve. http://www.federalreserve.gov/releases/h6/hist/h6hist2.htm. The money supply has been steadily increasing since 1960.