Recently, there has been a shocking situation in the U.S. bond market: the world's three largest overseas buyers, including Japan, China and the United Kingdom, have sold off U.S. bonds. Among them, China has become the biggest "pick-up man". According to the latest data, China's cumulative sales of U.S. bonds have reached $89 billion so far this year. This figure is equivalent to the total number of UK and Japan sold in the past month. Such a large-scale sell-off has put more pressure on the US debt problem, and it has also made the US and Yellen even more worried.
However, it is undeniable that the current US Treasury market is not gloomy for individual investors. The decline in Treasury yields has given hope to investors who were previously at high levels and their losses have gradually narrowed. From an investment perspective, this is good news. However, if we look at the fiscal situation and debt crisis in the United States from a broader perspective, we can see that America's problems are getting worse. According to the U.S. Treasury Department, the size of the U.S. debt has reached 339 trillion US dollars, and some analysts even believe that before the expiration of the suspension ceiling, the size of US debt may exceed the 40 trillion mark. Such a large scale of debt and a growing fiscal deficit are worrying.
As one of the allies of the United States, Japan has long been the largest overseas buyer and holder of U.S. bonds. However, the development of events has taken people by surprise. Currently, Japan's holdings of U.S. bonds are only 1$09 trillion and is expected to fall below the $1,000 billion mark soon. This is undoubtedly a huge blow to the United States. Japan's behavior shows that they are worried about the U.S. economy and debt situation, which shows that the U.S. debt problem has attracted global attention and vigilance.
However, the U.S. debt problem is far beyond what Japan, an overseas creditor, can solve. In fact, apart from Japan and China, foreign investors hold only 22% of the total U.S. debt, according to the data. In other words, the vast majority of U.S. bonds are actually held by domestic investors in the United States, and the real majority are individual investors and various institutional investors in the United States. Over the past two years, retail investors have increased their holdings by 1The $7 trillion in U.S. debt, plus pensions and local sector purchases, together accounts for more than 70 percent of the new debt issued. In the face of such huge purchasing power and demand, there are still analysts and strategists who continue to call on the American people to buy US bonds. For example, an analyst named Ganlak warned investors when the 10-year Treasury yield fell below 4% that he would move further to around 3% for the 10-year Treasury yield next year, which means that Treasuries may earn more returns now in the future. He further pointed out that holding long-term U.S. bonds is an effective risk hedge in the face of the growing risk of recession. ** It also constantly emphasizes the safety and stability of U.S. bonds, hoping to attract more investors to buy.
However, there is a deeper problem behind the calls to encourage Americans to buy US bonds. The biggest risk of buying U.S. bonds is not the rise and fall of **, but the ultimate default risk. In the U.S. bond market, while the U.S.** has always claimed that they will never default, the reality remains a matter of concern. As the debt problem intensifies, the increasing risk of default makes overseas creditors begin to waver and no longer hold US debt unconditionally.
In this case, it is likely that the institutions that encourage the American people to buy US bonds are looking for individual investors to take over as future receivers. In order to solve its own debt problem, the United States** may have taken a considerable risk on this point. Therefore, it is not an easy task for ordinary investors to buy US bonds. In addition to knowing when to sell, it is more important to know when to sell. For ordinary investors, it is not easy to obtain high returns in the short term, while holding US bonds for a long time is subject to huge risks.
In the face of an increasingly complex global economic environment and the severity of the U.S. debt problem, Yellen and the U.S. must rethink their response to changes in global markets and stabilize U.S. debt. This is an unprecedented challenge, but also a moment that requires timely action. The United States** should take more aggressive measures to stabilize markets and promote economic growth to avoid potentially catastrophic consequences.
Judging from the current situation, the world's three major overseas buyers sold US bonds at the same time, and China has become the biggest taker. This phenomenon has made the United States** and Yellen very anxious and confused. In fact, the debt problem in the United States has intensified, with a growing debt and a growing fiscal deficit. Faced with this daunting challenge, the United States** must take more aggressive measures to respond to it in order to stabilize the market and promote economic growth.
However, for ordinary investors, buying U.S. bonds is not an easy task. It is not easy to achieve high returns in the short term, and holding US Treasuries for the long term is a huge risk. Against the backdrop of the current global economic instability, investors need to choose carefully and make informed decisions. As for the United States** and Yellen, they need to think seriously and take corresponding measures to protect the country's economic security and interests.
Finally, as an important player in the global economy, the debt problem of the United States is not only its own problem, but also related to the stability and development of the global financial system. Countries should strengthen cooperation to jointly address and resolve the debt problem to ensure the stability and sustainable development of the global economy. Only through cooperation and efforts can we resolve this dilemma and achieve common prosperity and development.