160 sats \ 4 replies \ @kr OP 18 Jul 2022 \ on: Foreign Holdings of US Treasuries Down 4.2% in 2022 bitcoin
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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