EU and U.S. Plan to Steal Russian Assets. No One Is Ready for The Blowback.

It’s ironic that sometimes the most important story in the world is also the least talked about. It’s not clear if that’s because it’s too technical, or too scary, or that those who control the media are trying to bury it. Regardless, here’s the story.

As of late 2021, Russia’s reserve position consisted of about $300 billion in U.S. Treasury securities, $200 billion in gold bullion, and $100 billion in other hard currency assets. U.S. Treasury securities are in digital form (the last paper Treasury note was issued around 1979), and that digital ledger is maintained by the U.S. Treasury.

The securities can be held in custodial form with titles registered in the name of clearinghouses such as Euroclear, the largest custodian in Europe. When the Russian special military operation in Ukraine started in February 2022, the U.S. froze the Russian Treasury securities.

That’s not unusual. The U.S. has put freezes on Iran, North Korea, Venezuela, Cuba and Syria at various times. In a freeze, Russia still owns the notes but they cannot sell them, pledge them or receive the interest.

Now the U.S. and EU want to go further and actually seize the assets. Seizing is different than freezing. It means the U.S. will steal the securities from Russia and use them for their own purposes.

Proposals are on the table to steal the entire $300 billion and use the money to pay for the war against the Russians. Other proposals are to steal the interest only, about $6 billion accrued over the past two years.

Another hare-brained scheme is to issue $60 billion in Ukrainian bonds collateralized by Russian securities. When Ukraine defaults (which they will), bondholders can seize the Russian collateral.

These structures are all just different forms of theft. If the U.S. follows through on this plan, Russia will seize an even greater amount of European assets in Russia.

What the warmongers are missing is that stealing the Russian assets will destroy confidence in U.S. credit and the U.S. rule of law. Bonds of Germany, Italy, France and Japan will fare no better because large holders such as China, Taiwan and Saudi Arabia will lose confidence in the entire collective Western financial system.

If all of those bonds suddenly become unattractive due to the risk of theft by the issuers, where can investors turn? There’s only one place left to go – gold.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.