US national Debt is very large and is constantly growing, the fed is increasingly funding the budget deficit directly by simply printing money, despite the fact that the experience of many countries showed reckless emission leads to inflation and currency devaluation. One of the main relevant risks of investments in treasuries – the possibility of default in the medium term or the repayment of a debt of the heavily discounted money, the report of the Agency. Today buying long-term US government bonds will result in losses. American public debt has a negative real yield (nominal yield in most long securities 1.5% inflation is 2%) and the expected fall in the price of US treasuries continues to fall in oversupply and lack of demand from non-residents. Finally, the report says, the sanctions policy of Washington is a real risk to Russian investors the likelihood of arrest of the asset or address refusal of service the debt, as entered in 2015, Ukraine.
Russia because of the risk of sanctions has reduced the volume of investments in government securities of the United States. According to the latest data of the U.S. Treasury, in April, he made up 6.85 billion.
National and Bank reserves can only be stored in hard currencies and liquid assets. This is the whole point of reserving money supply: country translates it into a form from which at any moment (in a matter of days or even hours) can be converted back and used for other purposes (e.g. for interventions). And we are talking about amounts in the tens and hundreds of billions of dollars, that is, it should be the markets with the maximum in the world trade, the Chairman of the Board of “freedom Finance” Gennady Salic. Under the criteria best suited debt securities of the United States. This explains why Central and commercial banks in times of crisis continue to buy treasuries even in the face of negative real rates: the best conditions for saving reserves just nowhere to be found.
alternatively, could act as a portfolio of bonds of countries with the classic reserve currencies (Germany, Britain, Switzerland, Japan) and the States of the second and third tier, say, Turkey, Brazil, South Africa, said Gennady Salic. “The only reason why nobody does that: it is technically very difficult to manage such edifice of assets scattered around the world,” he says.
Quite possible that even in ten years the dollar will lose its unique status as the main storage reserves. “In the end, it is rather anomalous situation that the States lend each other money loss and nothing can do about it, says Calich. – Financial technologies are now available to make cheap packaging in one action several thousand TSEelectronically the securities or to perform OTC transactions directly with hundreds of counterparties, which share a single large lot of currency. Sooner or later the magnitude of these innovations will grow. Commercial banks will be among the first who will be able to invest conditional “in all of the assets of the world” at the click of a mouse. Behind them will start doing it and the banks. Reserve currency status will disappear by itself. Any asset any amount you can invest in anything from gold and real estate anywhere in the world to bond some farm in New Zealand. Of course, in microscopic fractions for each of these assets in order not to bear the risk on the individual paper, whether it is the US government or farm on the edge of the world”.
