Yellen expressed concern about the outlook for US bonds, and China continued to cut US bonds and returned 297t.
Against this backdrop, two important questions inevitably arise: Why should China continue to accumulate its foreign exchange reserves? Why is U.S. ** Yellen worried about U.S. bonds?
The future of the U.S. bond market is not optimistic, and when I mention the "U.S. Treasury Debt Limit", I have a feeling of being in a different world, as if I was arguing one moment and the next second! At the beginning of 2024, the United States will face many major problems, including elections, domestic economic recovery and development, international geopolitical chaos, and so on.
But, in addition to these, the debt problem of the United States has become a thorny problem for the United States.
According to data released by the US Treasury, the US national debt has reached a record level, and the total number of US national debt has now reached 34 trillion.
At first glance, many would think that this number is even larger.
But, for example, if this huge debt were to be distributed among every American, each person would have to be burdened with more than $100,000 in debt. Even if you pay $1,000 a month to make repayments, it will take 22 years.
From this, we can imagine how terrible the problem of the US national debt is! Yellen's worries exposed the United States** Yellen (Yeanet Yellows) also said that the debt of 34 trillion is very worrying, and the "rising tide" of US debt will inevitably increase the risk of bankruptcy in the US banking industry.
After that, Yellen went on to demand a series of practical measures to ensure that the budget can be controlled.
As the saying goes, the ideal is plump, but the reality is skinny. The U.S. must continue to issue new bonds to bridge its fiscal shortfall to cover its rising interest rate burden. However, doing so will allow the amount of US debt to continue to grow, and thus the number of US Treasury bonds to continue to grow.
As a result, the U.S. economy has entered a "dead loop", and the federal budget is still heavily indebted.
Sending 297 metric funds to China In this case in the United States, many investors have lost confidence in U.S. bonds and either sell them.
China, which plays a pivotal role in the world economy, has also been affected.
Looking back at 2022, China made two "seven consecutive declines" to avoid risks, and quickly sold US bonds. China now limits its holdings of U.S. bonds to $800 billion.
In the meantime, China has added 297 tonnes of ** to its stockpiles over the past 15 months and is being gradually repatriated to its home country. This move shows that China is preparing in advance and taking the initiative to deal with external uncertainties.
In general, in the face of the U.S.-US debt crisis, China did not hesitate to withdraw when it should be.