Quote:
Originally Posted by Zarathustra
"For the Bank of Russia, one of the holders of the agencies' debt, nothing has changed substantially (after the U.S. decision)," the bank's first deputy chairman Alexei Ulyukayev said in an interview at the Reuters Russia Investment Summit.
"However, we are not making any pledges. Most likely we will continue to decrease the share (of U.S. agency's debt) a little but we will look into the situation as a whole," he said at the event, held at the Reuters office in Moscow.
He described the U.S. bailout as "well motivated".
The bad debt in the form of Fannie and Freddie securities held by Russia, China, Saudia Arabia, and Japan, amongst others, was a threat being held over the heads of the U.S. government and the Federal Reserve. Notice in the quote above the implication that had Frannie and Freddie not been nationalized, i.e. foreign losses guaranteed by, the Federal government, the 40% reduction would have grown quickly. The dumping of dollar denominated paper by the aforementioned countries is the knife at the throat of the U.S. economy.
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Excellent post. You are absolutely right. You may want to check out my post about China threatens the US regarding Fannie and Freddie in the Whistleblower section.
The US has pledged to make them whole by the way. No money has transpired yet. It may be a stall tactic?