ロシアに続いて中国がニュークリアオプションで米国国債・財務省証券の保有を減らすとどうなるか: ずくなしの冷や水

2019年08月18日

ロシアに続いて中国がニュークリアオプションで米国国債・財務省証券の保有を減らすとどうなるか

ドルの価値はいつまで持つか。不思議ですね。

RT2019/8/17
China prepares its 'nuclear option' in trade war
If there is any further pushback from the US on any of these Chinese projects in Iran, then Beijing will invoke in full force the ‘nuclear option’ of selling all or a significant part of its US$1.4 trillion holding of US Treasury Bills, with a major chunk of the paper due to be sold in September on this basis. This massive holding of these bonds - through which the US finances its economy and is an important factor both in the value of the dollar and therefore in the health of US international companies especially – has been used as a bargaining chip before by China, especially when it feels threatened. Back in 2007, just before the great financial crisis, a number of senior Chinese figures at various state-run think tanks – through which China often signals its big geopolitical threats – stated that the large-scale selling of this massive Treasury Bill holding would trigger a dollar crash, a huge spike in bond yields, the collapse of the housing market and stock market chaos.

Such a tactic would neatly fit into China’s overall strategy to have the renminbi challenge the US dollar’s status as the key global reserve currency and the prime currency for global energy transactions. “The long-planned sequencing for this was inclusion in the SDR {Special Drawing Rights] mix, which happened in 2016, increasing use as a trading currency, which followed that, use as the key currency of an international energy trading exchange, which has occurred with the creation of the renminbi-denominated Shanghai International Energy Exchange in last year, and the calls from big oil producers and other major trading nations to use the renminbi, which has been happening over the past few years,” the head of a New York-based commodities hedge fund told OilPrice.com. Only recently, Leonid Mikhelson, chief executive officer of Russian oil major, Novatek, said that future sales to China denominated in renminbi is under consideration and that US sanctions accelerate the process of Russia trying to switch away from US dollar-centric oil and gas trading and the damage from potential sanctions that go with it. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it... If they do create difficulties for our Russian banks then all we have to do is replace dollars,” he said. “The trade war between the US and China will only accelerate the process,” he added.

The trade war with the US, though, may be the very reason why this policy is not being pushed right now by China, Rory Green, Asia economist for TS Lombard told OilPrice.com last week. “With the renminbi weakening, and set to reach 7.50 to the [US] dollar level if the US imposes 25 percent tariffs on all Chinese exports, it is more difficult for China to persuade the big oil producers like Russia, Iran, Iraq, Venezuela, to make the switch away from the dollar,” he said. “For China as well, the timing is not quite right, as its use of Eurodollar financing is currently significant, it has a lot of dollar-denominated bonds rolling over shortly, and its balance of payments needs a relatively healthy US demand profile, but China wants to get away from the dollar system and that is the overall direction of travel,” he concluded.

SPUTNIK2019/8/17
Till Debt Do Us Part: How and Why Russia is Dumping US Treasury Bonds
Ever since Russia dropped out of the list of the 30 largest holders of US bonds in May 2018, it has been moving towards a gradual reduction of its investment in them.

According to newly released data by the US Department of Treasury, Russia slashed investments in US government debt by $1.2 billion to $10.848 billion in June 2019.

While it remains unclear who is buying its Treasury holdings, Moscow, once a top investor, has been steadily dumping US bonds for months now amid efforts to boost its gold reserves.

US Treasury bonds: risk-free investing?

US Treasury Securities, marketable, fixed-interest government debt issued by the US Treasury Department, are used to finance a country's public debt.

Treasuries, which technically include bills, notes, and bonds, are all backed by "the full faith and credit of the US government", and can all be purchased either directly from the department or via a broker. The major difference among the three varieties is the time investors need to wait to pay the principal: for instance, Treasury bills mature in one year or less; Treasury notes are issued with maturities from two to ten years, while bonds are long-term investments that have maturities of 10 to 30 years from their issue date.

Trading allows the US government to receive additional funds to finance government spending in the event of a large budget deficit - $119.7 billion in July 2019. The total US budget deficit for the 2018 fiscal year amounted to $779 billion - the largest figure in six years, as multiple media outlets noted, and this year it is expected to exceed $1 trillion.

Investors, in turn, ensure the safety of reserve funds. The yield on US securities is relatively low, but since the United States is one of the world's largest economies, this allows it to count on a guaranteed refund under any conditions.

How many bonds did Russia sell?

Russian investments in US bonds peaked in 2010 - at the time they exceeded $170 billion, but have since significantly plummeted as the government moved to diversify its international reserves. At the beginning of 2018, they dropped below $100 billion - to $96.9 billion, while in April investments decreased to $48.7 billion, and in May were cut to $14.9 billion. As of June, Russia's US Treasury holdings amount to $10.85 billion - the lowest figure since the spring of 2007.

Why do countries invest in US public debt?

Public debt, normally in the form of bonds, is often deemed a low-risk investment, whether countries are purchasing government bonds or those issued by a company. One of the biggest pros of bonds is that it's typically a very safe investment, while the biggest downside is a somewhat low yield.

As per usual, the top five major holders of US Treasury bonds in June are led by Japan with investments worth $1.122 trillion and China with $1.112 trillion, even though Beijing dumped bonds earlier this year against the backdrop of a trade war with Washington, having reduced its holdings from $1.171 trillion in June 2018.

The UK, which invested $341.1 billion in American securities, holds third place, while Brazil and Ireland close the top-five list with $311.7 billion and $262.1 billion, respectively.

Why is Russia getting rid of its US bond holdings?

Russia has been buying large amounts of gold as it continues to sell off US Treasury bonds in a move that's motivated by a decision to diversify international reserves, Head of the Central Bank of Russia Elvira Nabiullina said. She has, likewise, explained that these actions mitigate external economic and political risks for Moscow, including sanctions or a potential asset freeze by the US authorities.
Any alternatives?

Russia is steadily increasing its gold reserves, from $60.2 billion at the beginning of 2017 to $101.9 billion in July 2019 amid a clear de-dollarisation drive. In light of its efforts, Bloomberg made an assumption last week that Russian gold and foreign exchange reserves could exceed the reserves of Saudi Arabia for the first time in eight years, which would allow Moscow to occupy fourth place in international rankings. Meanwhile, government bonds in euros and the Japanese yen remain an option as well.
posted by ZUKUNASHI at 11:25| Comment(0) | 国際・政治
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