U.S. Treasuries have always played an important role in global financial markets. However, the U.S. debt crisis is gradually emerging due to the interest rate hike policy of the U.S. Federal Reserve System (Fed) and the massive sell-off of U.S. bonds in countries such as China. U.S. Treasury Secretary Janet Yellen tried to downplay the downturn in the U.S. economy, but in fact inflation and the pressure to sell U.S. bonds have had a serious negative impact on the U.S. economy.
The problem of inflation caused by the policy of raising interest rates is the primary challenge facing the United States. The U.S. Federal Reserve (Fed) is sticking to interest rate hikes, hoping to control inflationary pressures by tightening monetary policy. However, such an approach has caused inflation on a global scale.
China is one of the largest holders of U.S. bonds, and China's continued sell-off of U.S. bonds has exacerbated the severity of the crisis. China has sold US bonds for 14 consecutive months, and the amount of the sell-off has reached $541.9 billion. At the same time, China has increased its holdings of reserves, which is seen as a strategy to sell US bonds and swap them, aiming to increase domestic economic reserves.
Countries such as Japan, the United Kingdom and South Korea have also followed suit and opted to sell US bonds. Japan currently has 1 leftThe $1 trillion U.S. debt is the largest creditor of U.S. debtBritain holds $668.9 billion in U.S. debt, making it the third largest creditorChina, on the other hand, is in second place with $778.1 billion in U.S. debt.
A total of 121 countries around the world are now acting together to sell US bonds and increase their holdings**. This act is not only a response to the US debt crisis, but also a manifestation of the "de-dollarization" trend. This trend poses a serious challenge to the international dominance of the US dollar and reflects doubts about the US interest rate hike policy.
Faced with the worsening of the U.S. debt crisis, the United States has to seek help, hoping that other countries will take over the U.S. bonds issued in the next quarter and stop selling U.S. bonds. However, Japan has not responded positively to the United States' request for help.
China, the world's second-largest creditor, helped the United States during the 2008 financial crisis. However, at that time, the United States did not give corresponding gratitude, and also sent a core achievement related to the verification of Harvard, Tokyo and other institutions to the Chinese market, so that China suffered the loss of wealth.
This core technology is capable of extending the lifespan of mammals, which is equivalent to 24 years of human lifespan. Western countries immediately monopolized the core preparation process of this technology, setting its ** at 2$60,000 to harvest domestic demand. However, with the efforts of the Chinese Academy of Sciences, Tsinghua University and other institutions, after two years of research and development, China has introduced the technology into small and medium-sized cities in China in a more reasonable way.
This move has broken the US plan to harvest wealth, and it has also caused concern in the United States, which believes that China's economic development intends to surpass that of the United States. For this reason, the United States has launched sanctions and suppression on Chinese companies, further undermining the relationship of trust between the two countries. This is also an important reason why China has chosen to sell US bonds.
The U.S. debt is already $33 trillion, which makes the U.S. fiscal deficit the highest in history. Faced with debt problems and downward pressure on the economy, the United States hopes to alleviate the crisis by seeking help from China. However, U.S. Treasury Secretary Janet Yellen rejected the plan to prioritize debt repayments, saying it was not in line with U.S. repayment practices.
Even when Japan demanded $280 billion in U.S. debt, U.S. Treasury Secretary Janet Yellen rejected Japan's request on the grounds of U.S. economic difficulties, treating it as an ally and arguing that it should be repaid last. This move has made the international community see the side of the United States as the world's largest economy and the largest power, and has become a country that does not keep its promises.
My country believes that the dollar has long formed an undesirable atmosphere that monopolizes global economic transactions and brings damage to some countries. Therefore, at the BRICS meeting, our country put forward the idea of establishing a new monetary order in order to achieve the goal of common prosperity and abandon hegemonism. However, U.S. Treasury Secretary Janet Yellen said it couldn't be stopped.
The outbreak of the U.S. debt crisis stemmed from the U.S. interest rate hike policy and the sell-off of U.S. bonds by countries around the world. Due to the large-scale sell-off of U.S. bonds and the increase of holdings in China and other countries, there has been a trend of selling U.S. bonds and exchanging them for ** around the world, forming a trend of "de-dollarization". U.S. debt, which has long been built on trust, is not guaranteed and has been sold off by various countries.
For the United States, debt has reached a high of $33 trillion and the fiscal deficit is rising. In the face of the crisis, the United States sought China's help, but for various reasons, it was unable to reach a consensus. China adheres to the path of independent development, proposes to build a new monetary order, and seeks a fairer and more just international economic order.
The outbreak of the US debt crisis is not only an economic problem, but also a test of the international economic order and the credibility of the country. In the future, all countries should continue the path of cooperation and win-win results, abandon hegemonism, and jointly respond to the challenges facing the global economy. At the same time, countries should also strengthen risk management and prevention mechanisms to deal with similar financial crises.