The Observer reported that the recent high-level sell-off for seven consecutive monthsU.S. TreasuriesThe news has attracted widespread attention. According to a report released by the U.S. Treasury Department on December 19, China held in OctoberU.S. TreasuriesThe size decreased by $8.5 billion from the previous month, totalPositionThe size fell from $778.1 billion in September to $769.6 billion, which was held during the yearU.S. TreasuriesThe scale decreased by nearly 100 billion, which is the lowest point since 2009.
So why the continuous sell-off at the topU.S. TreasuriesWhat about it?There are three main reasons for this. First of allGeopoliticsFactor. In recent years, the global situation has changed rapidly, and if we continue to hold a large amountU.S. TreasuriesIn the event of an accident, if the United States refuses to repay, then we hold itU.S. TreasuriesIt could be doneWaste paper。Second, the Fed's continuous interest rate hikes have caused the United States to face a serious fiscal deficit crisis, and there is a risk of a thunderstorm. Sell appropriatelyU.S. TreasuriesIt is to avoid risks. Third, in order to optimize the investment structure. The current international financial landscape has changed, and we need to allocate new assets, and we can't bet all the treasures on itU.S. Treasuries, so there is a need to increase the allocation to other assets such as the euro and ** to better hedge risk.
At first glance, the state is selling continuouslyU.S. TreasuriesProbably to the United StatesEconomyMake a big difference. However, from an international perspective, China and Japan are the largest in the worldU.S. TreasuriesHolding countries, in the past few years, China and Japan have been invariably **U.S. Treasuries。This kind of behavior will undoubtedly affect the capital marketU.S. Treasuriesconfidence and thus to some extent causedU.S. TreasuriesDepreciate. However, it should be noted that the Sino-Japanese holdingsU.S. TreasuriesThe number does not occupyU.S. TreasuriesThe majority of the total size. Held by our countryU.S. TreasuriesThe number is only in the United StatesU.S. Treasuries2. of the total size4%, while Japan has a slightly higher holding, but only 32%。Even if both China and Japan sell offU.S. Treasuries, the impact on the United States as a whole is also limited. In addition, it is worth mentioning that in fact, the United States itself holdsU.S. TreasuriesThe largest number is more than 70%. theseU.S. TreasuriesIt is mainly held by households, individuals, companies and ** organizations in the United States, such as the three major US asset management companies - Vanguard Navigator Investments, Fidelity Asset Management and BlackRock**, which hold $525.9 billion, $461.5 billion and $314.3 billion, respectivelyU.S. Treasuries。In terms of the holdings of these three institutions alone, they exceed those held by most overseas countriesU.S. TreasuriesSum. To sum up, although China has been selling continuouslyU.S. Treasuries, but the overall impact on the United States is limited.
However, this does not mean that the United States can rest easy. Although the United States was able to digest a large amountU.S. Treasuries, but in reality it is a dangerous gamble. To know,U.S. TreasuriesofInterestRelatively high, if AmericanEconomic growthSpeed can't pay for theseInterest, then AmericanEconomyThere is a risk of thunderstorms. LikeEvergrandeSame,EvergrandeThe reason for bankruptcy is that the company's revenue cannot cover its debtsInterest, which eventually leads to the breaking of the capital chain. Therefore, once the United States of America's ownEconomic growthStagnation,U.S. Treasurieswill become a potential minefield with the potential to completely crush the United StatesEconomy。Of course, the United States has a strong military and can print and distribute an unlimited amount of currency, but it is still unknown what will happen if it does get to that point.
To sum up, there was a continuous sell-off at the topU.S. TreasuriesThe motivation behind it is mainly to avoid risks. This kind of behavior is against the United StatesEconomyThe impact is limited, but that doesn't mean the U.S. doesn't existEconomic risk。Both China and other countries need to be cautious in their asset allocation and seek a more stable investment structure to protect their interests. Only with the joint efforts of all countries in the world can the world be safeguardedEconomystable and healthy development.
In summary, the top has sold for 7 consecutive monthsU.S. TreasuriesThe initiative is mainly due to:Geopolitics, risk aversion and asset optimization. While the overall impact of this action on the United States is limited, it also highlights the impact on the United StatesEconomic riskof concerns. However, both China and other countries need to manage their investments prudently and seek a more robust asset allocation to ensure national and global securityEconomystability and prosperity.