Posted on 04/05/2022 10:22:44 AM PDT by marcusmaximus
The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars.
Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen.
But the Treasury Department had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments came due, including a $552.4 million principal payment on a maturing bond, the U.S. government decided to cut off Moscow's access to the frozen funds, according to a U.S. Treasury spokesperson.
An $84 million coupon payment was also due on Monday on a 2042 sovereign dollar bond .
The move was meant to force Moscow to make the difficult decision of whether it would use dollars that it has access to for payments on its debt or for other purposes, including supporting its war effort, the spokesperson said.
Russia faces a historic default if it chooses to not do so.
"Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default," the spokesperson said.
JPMorgan Chase & Co (JPM.N), which had been processing payments as a correspondent bank so far, was stopped by the Treasury, a source familiar with the matter said.
(Excerpt) Read more at reuters.com ...
Consider what happens when CHINA is no longer willing to deal in dollars, or deposit assets in the US banking system.
Consider who supplies goods and services to the US: China, India Indonesia, Vietnam, various OPEC countries. All of them can see themselves having issues with some future US administration. How enthused will they be to keep money in any Western bank?
Good post.
Exactly. It’s like trying to argue with a telemarketer. They are paid to follow a script and to not understand.
“This is basically the exact same thing the Canadian government did to a bunch of truck drivers who were engaged in peaceful protests last month.”
And the exact same thing that we did to Al Qaeda after they blew up office buildings full of thousands of civilians. I guess you were outraged on their behalf as well, eh?
So hilarious, watching liberaltarians defending one of our primary enemies, even when they are warmongering and invading and attacking civilians to acquire land.
Exactly right. Our credibility and confidence in the U.S. financial system is being undermined by Biden, along with everything else he’s destroying. We may never recover from this assault against our once great country.
“He was provoked by an Eastward expansion of NATO, growing from a dozen original members to it’s current 30 members.”
Yes, the bully was provoked into beating up the scrawny kid, because the scrawny kid had become more popular and the bully found that threatening.
“This is the same kind of crap we did to the Japanese in the 1930s, and look what that bought us.”
Becoming the leading economic, diplomatic, and military power in the world for 50+ years?
The scrawny kid acted out because he was standing behind a promise of NATO membership. Please, follow along.
I could see China making a move to have other nations use THEIR banking system as a more secure place to deposit payments. China is big enough to displace us.
If I had a lot of confidence in ability of the diplomats to work toward a peaceful outcome, I'd say that this is a good move. But, based on the track record, I'm not sure how we can trust the US government, especially when it is led by far leftists, to accomplish the goal.
Al Qaeda was financed by wealthy Saudis and other Arabs.
I don’t recall our freezing all Saudi and Kuwaiti assets after 9/11.
The odds of that happening are increasing by the day.
“Becoming the leading economic, diplomatic, and military power in the world for 50+ years?”
Yup—and the only country to drop nuclear weapons on civilians.....
It’s SO nice on Truth Social where Derp State Clowns and Bidophiles are in such remarkably short supply. (A couple that tried got laughed at and mocked.)
Either normal people are FAR more common than our enemies would have us believe, or they are keeping most derps out somehow.
Wow. You are going to re-litigate WWII?
And your friends in Russia would nuked Every city from Warsaw to Berlin. Don’t kid yourselves. We can’t help it that they were too stupid and purged to come up with it themselves.
The Democrat Party would love a great, long-lasting
economic Depression in America. In fact, I think
that their policy is to cause one, and of course blame
it all on those evil capitalist corporations, greedy
White Americans, or White christian "racists."
The Democrats are in their glory in a Depression.
Just like they were in the last Depression.
It's their great chance to tear up the social fabric
of America and impose their weird, strange social
thinking on Americans. And to throw out the Constitution
and install a Communistic, tyrannical type of government
in the land. They want to be our overlords, taskmasters,
... our Rulers. What they'll get instead is Civil War II.
My point is that Americans have a habit of virtue signaling—I am simply pointing out that there are no clean hands—and the selective outrage is not appropriate.
Russia absolutely went to town on My Lai. The US gets away with little. People IN the US didn’t care.
I don’t particularly care about Ukraine. But I am amazed at how poorly Russia is dealing with this. Their propaganda is 1960’s style. Haven’t they had anyone in Russia go to a western university to learn this stuff.
The truth is out there. Both sides exaggerate. Both sides lie. The Russians are just hamfisted about it.
Russia does not control Western media—but they do control their internal media and Putin remains very popular there.
This shows the power of the mass media to manipulate public opinion—on both sides.
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