Russia, Russia Russia! In the U.S. just about everything bad or evil is blamed on the Russians, so whatever they do, it just must be wrong. BUT, let’s not forget, they are pretty smart in the financial arena. Over the last year, Russia liquidated virtually all their U.S. Treasury holdings, using most of the proceeds to buy GOLD. They also loaded up on the Chinese Yuan as well as other currencies while dumping the dollar. NOW, they seem to replacing some dollar reserves with….. BITCOIN. Use BITCOIN to circumvent sanctions? Of course. Makes perfect sense and it’s most likely unstoppable. Looks like Russia is also bearish on the U.S. and very bullish on “the main crypto”. So, seems there’s now a new use for BITCOIN. Store of value, digital currency AND NOW sanction buster, too. More details below.
Bill Taylor/Fintek Capital
“While the market has been increasingly focused on the rising headwinds in the global economy in general, and China’s economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.
As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spring and early summer, in the process sparking a major repricing of the 10Y US Treasury, whose yield jumped from 2.70% at the start of April to a high of 3.10% in May, a move which economists were struggling to explain at the time.
The obvious next question is what did Russia do with the proceeds, and it came as little surprise that, as we wrote back in July, as Russia was selling nearly $100BN worth of Treasurys, it was aggressively buying gold…”