Differing Viewpoints: Moscow Believes The US Defaulted On Its Debts To Russia

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Nikolay Patrushev, the Secretary of Russia’s Security Council has said that he believes that Washington effectively defaulted on its liabilities to Russia, saying that “Russia’s financial assets denominated in US dollars and euros were simply stolen”. The United States holds about US$120 billion of Russian financial assets it has confiscated. Other assets such as properties and bank accounts held by Russian nationals also amount to about the same.

He also said that he believes that the United States may default on its other debt in the near future, making the comments with the ASEAN countries on Monday (August 22). Patruschev noted that the US national debt has now exceeded US$30 trillion, while Japanese debt has reached almost US$10 trillion. He said that “Taking into account such dynamics, there is every reason to believe that in the foreseeable future these countries will have problems with servicing this debt.”

The Russia situation as Patrushev describes is feasible – the US orchestrating a similar scenario in imposing sanctions, backed up by military force. Patrushev also drew attention to the fact that food and energy prices in the world have risen mainly because of “the printing press operating in the US and Europe. During the Covid pandemic, the largest printing of money in 40 years took place. The United States printed US$5.9 trillion.  That has triggered an inflation burden which has now merged into a situation, whereby the West shifts the blame to other countries, while developing countries are especially badly hurt” he stated.

The United States has a habit of keeping other people’s money and not returning it. The US holds over US$7 billion of Afghanistan’s Central Bank reserves and has refused to return it because they do not recognise the Taliban Government – despite the fact that they are in effective rule. This is money the Government need to help with the redevelopment of Afghanistan and the damage left behind – by the US military.

Getting around the problem of exposure to US debt is to reduce holdings in US dollars, and gradually replace them with a basket of other currencies to reduce the political and sanctions risks. China has been offloading billions of US dollars over the past few months while Russia has reduced its holdings to practically zero. Increasing trade in national currencies instead of using the US dollar will also have an impact.

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