Russia threatens default to U.S. banks, dumping of U.S. bonds

Section:

US Sanctions May Lead Russia to Default on US Debts, Official Says

From the Russian Legal Information Agency, Moscow
Tuesday, March 4, 2014

http://rapsinews.com/news/20140304/270858142.html

MOSCOW -- As the United States considers imposing sanctions against Russia, concerns loom that Russia may be forced to declare its inability to pay off loans issued by US banks, presidential aide Sergei Glazyev told RIA Novosti.

"Economic sanctions are a double-edged sword, and if the US will freeze our assets, that means our companies' dollar assets will be frozen too. That means Russian banks and organizations won't be able to pay off loans to our American partners," Glazyev said.

... Dispatch continues below ...



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According to US Treasury data from the end of 2013, Russian investments in US government bonds total around $139 billion out of a total of $5.8 trillion of US debt held in foreign hands.

Officials in the United States and Europe have told Russia that its actions in Ukraine could lead to economic sanctions and asset freezes.

The Russian ruble hit a record low Monday as stock markets in Moscow fell more than 11 percent after trading began.

Such a crash was widely predicted by experts when Russia's upper house of Parliament approved the use of military force in Ukraine on Saturday, which was criticized by the US and a number of European countries. Notably, US Secretary of State John Kerry told NBC's "Meet the Press" show Sunday that the United States and some of its allies were "prepared to go to the hilt to isolate Russia."

Speaking before the UN Security Council, Russian Ambassador to the UN Vitaly Churkin said that Russia is authorized to place up to 25,000 military personnel in the autonomous republic of Crimea upon bilateral agreement with Ukraine. According to Churkin, the personnel are used for security measures to resist extremists whose actions may put civilians under threat.

On Monday Russian investigators initiated a terrorism case against the leader of ultra-nationalist, far-right Ukrainian movement "Right Sector," Dmitry Yarosh. He is accused of having made a public call to anti-Russian forces to engage in terrorist acts and extremism on Russian territory.

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Putin Adviser Urges Dumping US Bonds in Reaction to Sanctions

From RIA Novosti, Moscow
Tuesday, March 4, 2014

http://en.ria.ru/business/20140304/188081405/Putin-Adviser-Urges-Dumping...

MOSCOW -- An adviser to Russian President Vladimir Putin said Tuesday that authorities would issue general advice to dump US government bonds in the event of Russian companies and individuals being targeted by sanctions over events in Ukraine.

Sergei Glazyev said the United States would be the first to suffer in the event of any sanctions regime.

"The Americans are threatening Russia with sanctions and pulling the EU into a trade and economic war with Russia," Glazyev said. "Most of the sanctions against Russia will bring harm to the United States itself, because as far as trade relations with the United States go, we don't depend on them in any way."

Glazyev noted that Russia is a creditor to the United States.

"We hold a decent amount of treasury bonds -- more than $200 billion -- and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner," he said. "We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency, and leave the US market."

According to US Treasury data from the end of 2013, Russian investments in US government bonds total around $139 billion out of a total of $5.8 trillion of US debt held in foreign hands.

US Secretary of State John Kerry on Saturday warned that Russian military interventions in Ukraine, which have been justified by the Kremlin as protection for residents in heavily ethnic Russian-populated regions, could result in "serious repercussions" for Moscow.

"Unless immediate and concrete steps are taken by Russia to deescalate tensions, the effect on US-Russian relations and on Russia's international standing will be profound," Kerry said.

Kerry mentioned economic sanctions, visa bans, and asset freezes as possible measures.

Former deputy energy minister and lively government critic Vladimir Milov slammed Glazyev's remarks, saying they would put further downward pressure on the ruble, which was pushed down Monday to a record low of 36.5 against the dollar amid fears about the possible outbreak of war.

"That idiot Glazyev will keep talking until the dollar is worth 60" rubles, Milov wrote on his Twitter account.

A high-ranking Kremlin source was quick to distance his office from Glazyev's remarks, however, insisting to RIA Novosti that they represented only his personal position.

Glazyev was just expressing his views as an academic, and not as a presidential adviser, the Kremlin insider said.


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