A terrorist outfit (with affiliation with ISIS in a series of attacks) bombed the Russian Federation’s embassies in Cohenhagen, Tunisia, Warsow and New York City on 1st May 2020. The Russian government feels that the attacks (claiming that it has evidence) were orchestrated with the financial support from Saudi Arabia (a United States ally) and also blames the US for not imposing any sanctions against the Saudis when the first sign of warning was brought into their notice, a few months ago during a UN Security Council Meeting. The Russian Federation threatens to dump all US-denominated Treasury Bonds (accumulated through the petro-dollar market and other trade) in the global financial markets if heavy economic sanctions are not imposed on the Saudi economy. They also demand that Russian forces should independently be allowed to conduct an investigation. The US has denied the allegation. If the Russian government goes ahead with a massive selloff of US-denominated bonds, such an action would be catastrophic for the US financial system which has around 30% of its government securities in the form of T-Bills with the Russian Federation. The worsening external and internal debt level through the selloff of US securities and dollars would result in a shock with spillover effects all over Europe, Latin America and Asia. What will Brazil's response be with respect to its economic short term and long term goals?
A terrorist outfit (with affiliation with ISIS in a series of attacks) bombed the
Russian Federation’s embassies in Cohenhagen, Tunisia, Warsow and New York City on 1st May 2020. The Russian government feels that the attacks (claiming that it has evidence) were orchestrated with the financial support from Saudi Arabia (a United States ally) and also blames the US for not imposing any sanctions against the Saudis when the first sign of warning was brought into their notice, a few months ago during a UN Security Council Meeting. The Russian Federation threatens to dump all US-denominated Treasury Bonds (accumulated through the petro-dollar market and other trade) in the global financial markets if heavy economic sanctions are not imposed on the Saudi economy. They also demand that Russian forces should independently be allowed to conduct an investigation.
The US has denied the allegation. If the Russian government goes ahead with a massive selloff of US-denominated bonds, such an action would be catastrophic for the US financial system which has around 30% of its government securities in the form of T-Bills with the Russian Federation. The worsening external and internal debt level through the selloff of US securities and dollars would result in a shock with spillover effects all over Europe, Latin America and Asia.
What will Brazil's response be with respect to its economic short term and long term goals?
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