No smooth over in a few days; if Russia's BFF-China gets involved. And something tells me Putin has other means of punishing us economically he is not stupid enough to show his commie hand.
China isn't Russia's BFF - the Chinese and the Russians have a relationship of convenience and I've no doubt that China would be perfectly happy egging Russia on with promises that it would also sell off treasuries, and then reneg at the last minute, after Russia had already sold.
Also, the Chinese reputedly hold about $1 trillion US treasuries, which is about the same as Japan's holdings. Don't forget that the size of the US debt represents US treasuries held by someone; the debt is about $16 trillion, and the Fed holds about $2.3 Trillion right now, so that leaves about $13.7 trillion in someone else's hands.
There's a list of all major foreign holders of US treasuries here:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD
Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
Country 2014 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
China, Mainland 1273.5 1270.0 1316.7 1304.5 1293.8 1268.1 1279.3 1275.8 1297.3 1290.7 1270.3 1251.9 1214.2
Japan 1201.4 1182.5 1186.4 1174.4 1178.1 1149.1 1135.4 1083.3 1103.7 1112.7 1114.3 1105.5 1103.9
Belgium 310.3 256.8 200.6 180.3 172.5 166.8 167.7 176.2 175.2 185.5 188.4 187.3 185.6
Carib Bkg Ctrs 4/ 293.3 294.3 290.9 292.0 300.9 301.9 286.6 286.3 281.3 285.0 286.9 284.2 274.5
Oil Exporters 3/ 246.4 238.3 236.2 236.8 245.7 246.5 257.7 256.9 264.5 271.7 265.1 256.8 261.7
Brazil 246.0 245.4 246.9 246.7 249.2 252.9 256.4 253.7 255.2 253.1 257.9 256.5 254.1
Taiwan 179.1 182.2 183.7 184.5 185.9 183.6 185.8 186.1 188.8 185.7 188.9 190.0 192.7
Switzerland 173.7 176.7 176.6 174.3 177.2 181.2 178.2 180.3 182.6 185.8 183.6 186.9 190.0
United Kingdom 2/ 162.9 163.7 161.5 158.5 158.3 159.2 157.0 162.6 155.8 160.2 159.1 138.6 139.4
Hong Kong 160.3 158.8 141.7 137.3 126.5 126.5 120.0 124.2 136.4 141.2 146.6 144.7 142.9
Luxembourg 135.3 134.4 130.4 133.3 141.1 143.8 146.8 150.5 143.2 149.7 154.5 151.2 147.6
Russia 131.8 138.6 139.9 149.9 140.5 136.0 131.6 138.0 143.4 149.4 153.0 164.9 164.4
Ireland 108.8 125.4 116.9 110.9 111.3 120.0 117.9 121.2 120.5 120.5 113.5 109.6 108.5
Norway 88.2 97.2 82.3 78.4 72.2 71.7 74.6 75.7 73.7 74.9 76.4 77.0 76.5
Singapore 85.9 86.2 87.2 86.3 80.3 79.4 81.5 85.4 85.8 92.3 98.0 109.5 103.7
India 68.1 68.5 63.9 59.9 56.8 57.0 58.9 61.2 59.9 55.8 55.0 56.8 58.5
Mexico 67.2 65.1 59.5 61.8 63.8 60.4 63.3 61.8 58.4 57.0 57.1 64.3 62.6
Germany 63.9 67.3 64.3 60.7 61.9 58.7 56.3 58.9 61.9 62.2 64.2 65.1 60.5
France 57.5 53.8 51.6 57.7 54.5 51.9 49.8 51.8 60.2 50.6 56.4 53.1 52.2
Korea 55.6 54.0 46.4 50.6 55.5 50.0 51.4 51.2 52.9 53.1 53.1 50.6 48.1
Canada 55.3 55.8 57.0 58.0 62.4 60.4 65.6 65.0 60.7 66.2 64.4 65.5 61.7
Turkey 48.9 52.2 53.4 51.5 54.3 58.4 55.0 59.1 60.2 60.4 56.7 55.9 57.7
Thailand 47.8 51.7 49.8 44.5 38.9 40.1 43.7 50.2 54.4 59.3 68.4 65.3 61.6
Philippines 38.7 40.2 40.0 39.2 38.1 38.6 38.9 37.1 39.0 39.3 39.7 39.6 39.6
Sweden 34.9 33.9 33.6 32.6 32.6 33.4 32.5 32.7 32.4 32.1 32.8 30.2 28.6
Colombia 32.9 33.0 34.0 32.9 33.4 33.0 33.1 32.7 32.0 30.9 31.2 29.5 30.3
Netherlands 32.3 37.0 29.9 30.4 32.2 31.0 30.4 31.4 30.0 27.3 30.4 30.3 31.7
Poland 31.2 30.9 31.4 31.2 30.8 32.0 32.1 31.4 31.4 31.6 31.2 31.2 31.8
Australia 31.0 33.8 33.7 34.1 34.2 32.9 33.1 35.4 34.6 35.8 29.4 28.9 28.6
Italy 30.4 30.3 30.2 29.4 28.8 28.8 27.5 28.5 27.2 28.1 28.5 28.8 28.4
Kazakhstan 29.8 29.2 29.1 28.2 27.0 27.8 27.6 25.1 24.9 23.1 23.7 30.0 29.5
Chile 27.1 26.1 25.9 26.2 26.7 28.0 29.2 29.6 31.1 32.1 31.9 33.6 32.8
Israel 24.2 23.7 20.0 21.6 21.9 23.1 21.2 24.4 26.6 24.5 23.7 23.1 23.1
Spain 23.2 23.0 22.8 22.6 21.5 22.1 21.9 22.1 23.0 23.0 23.5 24.5 25.1
Denmark 14.1 14.5 12.6 11.5 11.6 13.3 13.0 13.5 13.3 13.7 14.0 13.9 14.1
Peru 13.8 14.8 14.2 14.1 14.5 15.0 15.4 16.2 16.1 15.9 16.0 15.7 15.6
South Africa 11.5 11.3 11.7 10.6 13.8 13.2 13.8 13.7 13.6 13.6 13.4 13.3 13.1
Malaysia 10.8 11.8 11.8 11.8 12.4 13.9 15.9 16.8 17.6 17.6 18.6 18.8 19.3
Vietnam 10.6 10.2 9.8 9.5 9.4 9.6 9.7 9.7 9.6 9.7 9.8 9.9 9.9
All Other 174.9 179.4 182.2 176.2 182.3 176.4 176.9 179.4 179.9 188.4 195.4 198.5 198.1
Grand Total 5832.7 5802.0 5716.9 5655.2 5652.9 5595.8 5592.8 5595.0 5658.1 5709.7 5725.0 5691.1 5622.1
Of which:
For. Official 4067.9 4054.5 4074.2 4052.3 4015.2 3974.5 3996.1 4012.2 4075.9 4080.0 4093.8 4100.4 4048.9
Treasury Bills 393.9 398.3 384.1 378.6 370.5 373.2 363.0 362.7 379.8 399.2 404.0 385.6 377.1
T-Bonds & Notes 3674.0 3656.2 3690.1 3673.7 3644.8 3601.3 3633.2 3649.5 3696.1 3680.8 3689.7 3714.9 3671.8
Department of the Treasury/Federal Reserve Board
March 17, 2014
* Includes holdings of Treasury bonds and notes as reported on TIC Form SLT, "Aggregate Holdings of Long-Term Securities by U.S.
and Foreign Residents"
1/ The data in this table are collected primarily from U.S.-based custodians and broker-dealers. Since U.S. securities held in
overseas custody accounts may not be attributed to the actual owners, the data may not provide a precise accounting of
individual country ownership of Treasury securities
(see TIC FAQ #7 at: http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticfaq1.aspx).
Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes reported under the Treasury
International Capital (TIC) reporting system are based on annual Surveys of Foreign Holdings of U.S. Securities and on
monthly data.
2/ United Kingdom includes Channel Islands and Isle of Man.
3/ Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
4/ Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, former Netherlands Antilles and Panama.
Beginning with new series for June 2006, also includes British Virgin Islands.
All told, foreign holdings account for about $5.8 trillion in treasuries; that would imply that US holders own about $7.5 trillion in US debt.
I'm not saying that it wouldn't have some short term hurt, but it wouldn't crash the US financial system. The Federal reserve, on its current course, could buy up treasuries equal to the Russian holdings in about 2 or 3 months.
And even though the Europeans are a bunch of cowards when it comes to actually imposing sanctions themselves, the more shamed ones amongst them may be willing to buy extra treasuries to further dampen any negative effect from a Russian sell-off.
This is part and parcel of the game of chicken Russia and Putin are playing with the West - so far it's worked perfectly, so they have every chance of bluffing the weak Europeans into pressuring the US to leave off sanctioning Russia.