If we can find this thread in 2 yrs time, it will be interesting to see who was misled.
With the unrest Trump has generated throughout the world, most foreign financial institutions are selling their US debt ..... but who is buying it?
A brief overview:
What is the method buying US debt? That's called the bond market .... not James Bond, US back bonds that pay interest depending on the type of bond. As usual with anything American, the name is misleading
U.S. Treasury bonds are issued by the U.S. government, while savings bonds are issued by the U.S. Treasury and agency bonds are issued by government agencies.
U.S. Treasury bonds
The U.S. government guarantees Treasury bonds if held until maturity
Treasury bonds are issued at auction and can be purchased through a bank or broker
Treasury bonds pay interest every six months and return the principal at maturity
Savings bonds
The U.S. Treasury offers series EE and series I savings bonds
Savings bonds sell at face value and have a fixed rate of interest
Agency bonds
Agency bonds are issued by government-sponsored enterprises (GSEs) or federal agencies
Agency bonds are considered low-risk, but not as safe as U.S. Treasurys
Agency bonds may have a call risk, meaning the issuer can repay the bond before its maturity date
Agency bonds are usually taxable at the federal and state level
Some agency bonds are fully backed by the U.S. government
Other types of bonds include: Treasury bills (T-bills), Treasury notes (T-notes), Treasury inflation-protected securities (TIPS), and Municipal bonds.
So, most investments held by foreign central banks are U.S. Treasury Bonds, because they are backed by the govt.
Because the USD is the world reserve currency, these bonds were considered the safest place to put excess funds that were secure and earned good interest.
Then Trump created huge waves in the once financially stable USD. What was once a very safe investment, has become a much weaker security.
If the alternate currencies gain a big foothold, like Bit Coin and the many foreign backed crypto coins, the Chinese crypto Yaun is emerging as a big mover, and the BRICS currency, get going, while the US in turning inwards rather than being a global player, the USD could lose the reserve currency status and the world would no longer see the US are a good place to invest.
So, if the foreign financial intuitions are selling their US bonds, the price would need to be reduced to tempt others believe that they are a good investment ...... who thinks the US is a good place to invest? Who else but the mega rich in the US itself. They need to back the govt to keep their wealth in proportion to the rest of the world, if the USD drops in value, so does their wealth ....
If you think the US economy isn't in as bad a shape as many predict, look here
https://www.ceicdata.com/en/indicator/u ... Dec%202024.
Keep in mind, this chart ends before Trump took office for the second time, the next lot of figures will come out in March .......
T1 Terry
When do we see Trump explode on his interweb site about that one