Since China began to raise US debt with lightning speed, countries have followed suit, exacerbating the deficit crisis in the United States. According to the latest data, China has accumulated about $160 billion in U.S. debt in just two months, and its holdings have fallen from more than $860 billion to $700 billion. And China also shipped back 7,280 tons** from overseas, unleashing distrust of the dollar. In addition to China, other countries such as Japan, the United Kingdom, Canada, and Switzerland have also sold US bonds. This has put the United States in an unprecedented predicament.
In the face of China's rapid sell-off and other countries' follow-up, the United States ** fell into great anxiety. In November, the U.S. monthly budget deficit reached $314 billion, up 26 percent from the same period last year. This is just one month's worth of data, which shows how difficult the fiscal situation of the United States is. The United States is not short of funds, but because of excessive consumption, spending far more than income. They are like a family with an annual income of 10 million, but they have spent 15 million, resulting in insufficient funds that need to be borrowed to make up. So, with the help of its credibility and position, the United States issued Treasury bonds to obtain funds and paid higher interest rates. However, the United States has been in debt for many years, and the debt has become impossible to repay. In order to cope with the principal and interest of maturing debts, the United States can only repay old debts with new debts and increase the scale of debt, which makes the United States have to lift the debt ceiling and issue treasury bonds at will. The problem, however, is that the United States cannot sell its bonds now, and even others are selling old ones. U.S. allies, including Japan and the United Kingdom, have seen the huge crisis and pitfalls of U.S. Treasury bonds and have sold off U.S. bonds one after another. This is the root cause of the deficit crisis and the debt crisis in the United States.
China's sell-off of U.S. bonds has sparked panic among investors about U.S. bonds, and funds have begun to shift away from the bond market. This is also the reason why the United States has risen sharply recently. Investors saw the instability of Treasuries and began to sell Treasuries and redirect their funds. At the same time, the Fed is also playing behind the scenes, creating false tailwinds for the US economy in order to attract more investors to buy US bonds. However, this is only a short-term measure and will not solve the problem of the debt crisis and fiscal deficit in the United States.
The problem for Biden is that they have found no effective way to solve the debt crisis and the fiscal deficit. The U.S. fiscal situation remains worrisome, and the situation is even more complex and severe. Perhaps, Biden will be the trigger for the collapse of the United States, which will eventually lead to the loss of the United States its status as the richest man in the world. We have witnessed the collapse of the United States in a deficit crisis and a debt crisis, and the outlook for the future is worrying.
China's decisive sell-off of U.S. bonds has completely changed the situation that has been fooled in the past. Unlike during the 2008 financial crisis, when China actively increased its holdings of U.S. bonds, China is now aware of the risks of U.S. debt and is no longer willing to take on the role of a snake farmer. This action has caused a domino effect in which other countries have followed suit and sold US bonds, including US allies such as the United Kingdom, Canada, Japan and South Korea, have also followed China's **US bonds. With its unique wisdom and resolute actions, China has dealt a heavy blow to the United States.
China's decision to sell US bonds was not a spur-of-the-moment move, but a deliberate effort. China has taken note of the severity of the U.S. fiscal deficit crisis and debt crisis and decided not to increase its holdings of U.S. debt. This action was made in the light of China's interests and the international economic situation. China wants to protect its interests through rational asset allocation and debt management, while also reminding other countries to be wary of the risks of US debt. As the world's second largest economy, China has an important influence and responsibility for international financial stability.
This article describes China's rapid sell-off of U.S. debt and the current situation of the U.S. deficit crisis. Through the analysis of this situation, we can see that the global economic landscape is undergoing profound changes. As the world's second largest economy, China is no longer blindly increasing its holdings of U.S. bonds, but paying more attention to its own interests and risk control. This action not only had a significant impact on the United States, but also sounded alarm bells for other countries.
For China, the sell-off of U.S. bonds is to protect its interests and reduce risks. Against the backdrop of current uncertainty and global economic recession, China is paying more attention to protecting its own property security in asset allocation and risk management. Moreover, China also took the opportunity to remind other countries to be vigilant against the risks of US debt and jointly safeguard international financial stability.
For the United States, the sell-off illustrates the enormous distress and unsustainable fiscal position facing the U.S. economy. The United States, which has long been over-consuming and heavily indebted, has now reached the brink of a debt crisis. Even if the debt crisis was alleviated by issuing additional Treasury bonds, it could not be sold now, and even allies were selling US bonds one after another. This makes the United States have to face an even more difficult situation.
Overall, China's sell-off of U.S. debt has had a significant impact on the global economic landscape and international financial stability. It is also an important signal to remind countries to be vigilant and manage debt risks. At the same time, we should also realize that China's actions are based on its own interests and risk control considerations, rather than a purely political means. The future global economic landscape will become more complex and uncertain, and countries should strengthen cooperation to jointly safeguard international financial stability and economic development.