China Learns From Russia’s Financial Setbacks

The Russian army has been preparing for its invasion of Ukraine for some time.

But the war does not go on as planned.

Now, we know to expect it in military operations.

Field Marshal Prussia noted in the 1800s that no plan of action extends with certainty beyond the first encounter with major enemy forces.

Military units know they will have to adapt as soon as the battle begins.

However, bankers may not understand this.

Russian bankers seemed well prepared.

In recent years, Russia has accumulated foreign exchange reserves of more than $ 640 billion.

She intended this pile of money to help stabilize the economy after the U.S. and the EU imposed economic sanctions.

But sanctions have exceeded expectations.

as per The New York Times:

Americans are not allowed to take part in any transactions concerning the Russian central bank, the Russian National Wealth Fund or the Russian Ministry of Finance.

All of the Russian central bank assets held in U.S. financial institutions are now stuck, and non-U.S. financial institutions holding dollars for the bank are unable to transfer them. Because the United States acted in coordination with European allies, Russia’s ability to use its international reserves to support its currency was halted. Japan has joined Western allies in imposing central bank sanctions, while freezing Russia’s foreign balances denominated in between.

Now, Russia is facing an army and Financial failures.

China is learning from Russia’s failures

This lesson is not lost on China.

The chart below shows the amount of securities of the US Treasury that China holds.

China’s holdings grew from about $ 59 billion in 2001 to almost $ 1.3 trillion by 2014.

Since then, even as Chinese exports increased, its holdings in finance ministries declined.

This chart shows the results of a deliberate decision: China has reduced its exposure to the dollar for almost eight years.

Remove: It is important that we observe this data in the coming months.

If China accelerates the trend, lower demand for Treasury securities will cause the US The interest rate will go up.

Michael Carrhe The editor of Masters of True Options, One Trade, Peak Velocity TraderandPrecision gains. He teaches technical analysis and quantitative technical analysis at the New York Financial Institute. Follow him on Twitter@MichaelCarrGuru.

knock Here join True Options Masters.

China Learns From Russia’s Financial Setbacks Source link China Learns From Russia’s Financial Setbacks

Related Articles

Back to top button