The latest US Treasury Department data shows that foreign investors slashed their holdings of American debt in November by $105 billion, from a year earlier, to $6.2 trillion.
Fri, 01 Feb 2019 09:36 UTC
China, the largest foreign holder of US debt, slashed its holdings for a sixth straight month in November. Beijing had $1.12 trillion in US Treasuries, down from $1.138 trillion in October. The decline brought China’s Treasury holdings to the lowest level since May 2017, the data showed.
The two largest foreign creditors of the US – China and Japan – have both been unloading US Treasury securities. China’s holdings fell by $55 billion from a year earlier, Japan’s by $47 billion to $1.04 trillion. Tokyo has now reduced its stash by 16 percent since the peak of $1.24 trillion at the end of 2014.
Russia, which is no longer a leading creditor of the United States after an unprecedented dumping of the US Treasury bonds in April and May, has slashed its stockpile by $1.815 billion in November to $12.814 billion.
Since last year, Russia has slashed around 85 percent of its US Treasury holdings, from $96.9 billion in January 2018 to $12.8 billion in November.
Over the past 12 months, the US gross national debt has ballooned by $1.5 trillion to $22 trillion as of January 30, according to the Treasury.
Comment: RT reports Russia is instead investing in areas like gold:
Russia leads global gold purchases to reduce reliance on US dollar
The amount of gold bought by global central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). The report noted that Russia bought the most gold last year.
The industry research firm said that central banks bought the most gold by volume since 1967. It was the largest amount since former US President Richard Nixon’s decision to end the dollar’s peg to bullion in 1971.
According to the WGC, central bank net purchases reached 651.5 metric tons in 2018, 74 percent higher than in the previous year when 375 tons were bought. It has estimated that they now hold nearly 34,000 tons of gold.
“Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets,” said the report.
It noted that Russia was leading the way as it looks to reduce reliance on dollar reserves. The Russian central bank (CBR) sold almost all of its US Treasury stock to buy 274.3 tons of gold in 2018, the WGC said.
Other big central bank buyers were Turkey, Kazakhstan, India, Iraq, Poland and Hungary.
Earlier this month, the CBR reported purchasing 8.5 million troy ounces of gold in the period January-November 2018. With its 67.6 million ounces of gold Russia became the world’s fifth largest holder behind the US, Germany, France and Italy.
It also said that Russia has cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating reliance on the greenback.