The news of the growing crisis of the US fiscal deficit and the rapid sell-off of US bonds by China has caused global attention and shock. Not only China, but many other countries are also accelerating the pace of their US debt, which makes the US economic outlook even more worrisome.
First, let's take a look at China's actions. According to the latest data, China's total U.S. debt holdings fell to $700 billion at $160 billion in November. In addition, China will ship 7,280 tons** from overseas back to China in batches. This series of actions shows China's concern about US debt and its wariness of economic risks. As the largest creditor of the United States, China's actions have undoubtedly put tremendous pressure on the American economy.
Not only China, but other countries have also taken US debt. According to reports, nine major countries holding U.S. debt sold $109 billion in U.S. debt in September. This means that global confidence in the U.S. economy is declining, and countries are looking for other investment avenues to reduce the risk of U.S. debt. In addition, the US itself is not optimistic about its own fiscal situation and the deficit is widening, which makes the US debt crisis even more serious.
The problem of the US fiscal deficit goes back many years. The United States** spends too much, causing spending more than it earns, and has to borrow to cover its budget deficit. Although the United States is one of the richest countries in the world, it has borrowed more and more over the years, resulting in debt levels that have reached unsustainable levels. In order to repay the principal and interest of the debt as it matures, the United States can only continue to issue new bonds, creating a vicious circle of debt.
The problem now, however, is that the United States has been unable to find enough buyers to buy the new bond issue. Not only that, but many countries have begun to sell off their previous holdings of US bonds. This has brought tremendous challenges and pressures to the U.S. economy. In this case, the United States** can only keep issuing more bonds in an attempt to find people willing to buy them, which undoubtedly exacerbates the worries and panic about US bonds.
This time, China's ** action has obviously caused a huge shock to the US economy. In the past, China has repeatedly increased its holdings of U.S. bonds during U.S. economic crises, playing a rescue role. But now China has become more cautious about the United States, and it has also played an exemplary role for other countries while improving its U.S. debt. This has caused other countries to start to ** US debt, exacerbating the crisis and trap of US debt.
Not only is it a shock to the U.S. economy, but it has also had a profound impact on global financial markets. U.S. Treasuries have long been seen as a safe-haven asset in global financial markets, but now the sell-off in various countries has plunged the entire market into chaos and uncertainty. In this case, many investors have shifted their sold funds to other investment channels, which explains why the US has been strong recently.
Overall, the record U.S. fiscal deficit and the rapid sell-off of U.S. debt in many countries, including China, mean that global concerns about the U.S. economy are growing. The United States is facing a huge dilemma, and it has become more and more difficult to issue new bonds, while more and more countries have US debt. This creates significant instability and risk for global financial markets. The outlook for the United States is worrying, and how to solve the fiscal deficit and debt problems has become an important issue at present.
Looking back at the article, we can see the impact of the US fiscal deficit crisis and China's rapid sell-off of US bonds on the global economy. At the same time, we need to recognize that this problem is not just a problem for the United States, but a common challenge on a global scale. Countries need to work together to find solutions and address economic risks and uncertainties. The sustainable development of the global economy can be achieved only through cooperation and coordination.