Russia Boosts US Treasury Holdings To Highest Level in Nearly Three Years

[Smaulgld]

https://smaulgld.com/russian-holding...easuries-2017/

[Voluntarist]

xxxxx

[Smaulgld]

The interest on Chinese holdings of same basically pays for their military ... I suppose Russia is just following their lead.

That is a key point most miss- BOE BOJ and many other sovereign debt issues dont pay interest

[Zippyjuan]

The interest on Chinese holdings of same basically pays for their military ... I suppose Russia is just following their lead.

Not even close. China's military spending is about $230 billion a year. http://money.cnn.com/2016/12/12/news...ence-spending/

The US government pays out about $250 billion a year in interest on the debt. http://www.cbpp.org/research/federal...tax-dollars-go

Now if China held all of our debt, then we could say that they get enough money from their US Treasury interest to pay for all of their defense spending. How much do they hold? Latest figures show them with just under $1.1 trillion out of a total debt of $19.8 trillion or 5.5% of our debt. If they get the same share of the interest payments (payments will depend on how long they have had the securities and their maturities). That would give them about $14 billion in interest payments from the US for their Treasury holdings or less than six percent of their military budget.

Russian US Treasury holdings are about $100 billion or less than 10% of what the Chinese have. About one half of one percent of all US debt. That would yield them about $1.3 billion a year. They spend about $70 billion a year on defense.

[Zippyjuan]

That is a key point most miss- BOE BOJ and many other sovereign debt issues dont pay interest

Yes, they do pay interest on their debt. Otherwise it would be difficult to borrow money to fund their debt.

http://realmoney.thestreet.com/artic...overeign-bonds

Even though this seems like a good thing -- after all, few people don't like low interest rates -- it does not bode well for fixed income, especially for U.K. sovereign debt assets. On Tuesday, the 10-year U.K. government bond yield rose, although it was softening a bit on Wednesday morning. Yields move inversely to bond prices.

For a long time, investors in Gilts -- as U.K. government bonds are known -- benefited from rising prices as the yields kept falling. This trend is about to stop, if not even reverse, even though there is no sign of monetary tightening from the Bank of England.