199 sats \ 0 replies \ @cryptocoin 18 Jul 2022
By "net seller", generally what is occurring is that they simply aren't buying Treasures to replace the ones as they expire. If they were doing outright selling, the impact would be even more pronounced.
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160 sats \ 4 replies \ @kr OP 18 Jul 2022
This seems like it's not getting the coverage it deserves. The decline in total foreign debt holdings is significant on its own, but China specifically is also interesting.
China has been a net seller of US treasuries in each of the last 7 months, and now holds fewer US treasuries than at any point in the last 12 years.
If other governments don't want US debt, that could send interest rates higher around the world, and force the US to either hold a larger percentage of its own debt or find other willing buyers. They could also try to stop running a budget deficit, but that doesn't seem likely.
https://upload.wikimedia.org/wikipedia/commons/1/15/US_Federal_Budget_Deficits_as_of_Sep._2020.png
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0 sats \ 0 replies \ @cryptocoin 19 Jul 2022
Here's another article on this, from ZeroHedge:
China Has Dumped Over $100 Billion Of US Treasuries In The Last 6 Months
https://www.zerohedge.com/geopolitical/china-has-dumped-over-100-billion-usts-last-6-months
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0 sats \ 2 replies \ @gmd 18 Jul 2022
Too dumb to understand the implications of this but it sounds bad...
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202 sats \ 0 replies \ @kr OP 18 Jul 2022
The blue line is the expected interest payments that the US will need to make on its debt each year.
This projection doesn't take into consideration:
- the quickly rising interest rates we're seeing today, or
- a world where foreign governments are net sellers of US debt
Both of those could cause the blue lines to get exponentially bigger, leading to the US deficit spiralling out of control.
Currency devaluation seems like the most plausible way out.
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24 sats \ 0 replies \ @shyfire 19 Jul 2022
you and me both!
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1 sat \ 2 replies \ @ln123 18 Jul 2022
France and the UK taking the lead in terms of $USD balance reduction
France is down over 50%!
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101 sats \ 1 reply \ @kr OP 18 Jul 2022
Other way around, the format of the chart is a bit confusing.
France and the UK were net buyers, while China, Hong Kong, and UAE were among the biggest net sellers in the last 12 months.
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0 sats \ 0 replies \ @ln123 18 Jul 2022
Aha - thanks for clarifying.
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0 sats \ 0 replies \ @picco 19 Jul 2022
The US borrow money (by selling treasuries to finance wars, debt, TARP, etc.) and then pay them off by, in essence, printing dollars. US Treasury printing tons of dollars also has the effect of exporting inflation to other countries. No one in the right mind would take that deal.
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