The Massive Drop In The Fed’s Custody Holdings Of Treasuries This Week Reminds Us Of The Russian Invasion Of 1957

Talk that Russia could be behind the bulk of the more than $100 billion drop in the Federal Reserve’s custody holdings for foreign central banks in the week ending Wednesday has many observers scratching their heads. This would represent about eighty percent of their dollar holdings.

As we noted earlier, rather than selling the Treasuries, Russia simply transferred them from the Federal Reserve out of the U.S. The incentive would be the threat of sanctions following this week’s Crimean referendum.

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