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ECONOMIC SHOCK: BEIJING IS TIRED OF UNCLE SAM AND THROWS ITS BONDS INTO THE MARKET AS IF THEY WERE RADIOACTIVE WASTE
In a move that smells of financial revenge, China has begun to massively dispose of U.S. Treasury bonds, and not precisely with affection. Beijing, tired of the tariff war, digital espionage, and seeing its economy hanging in Western headlines, has decided it no longer wants to finance Washington's inflated lifestyle.
Historically, China was one of the largest financial sugar daddies of the U.S., buying its debt like one buys toilet paper during a pandemic. But all of that has changed. Now, in the midst of escalating geopolitical tensions and with more gold than a fantasy dragon, the People's Bank of China has made it clear that it prefers bars of gold to promises of payment made in the USA.
What’s the result? A tremor on Wall Street and a cold whisper in the neck of the Treasury Department. If the bond supply surges as expected, interest rates will rise faster than egg prices, making borrowing in the U.S. almost as expensive as living in San Francisco. Mortgages, student loans, and credit cards could become an extreme sport.
And not only that: the dollar — that sacred symbol of capitalism — could be hit. A disorderly collapse, one that gives no warning, could trigger a global domino effect. Meanwhile, free market advocates will continue to repeat mantras, ignoring that the international financial system is a game of chess in which China is already moving its queen.
Oh, and if the dollar crashes, Americans might rediscover what it’s like to pay 10 dollars for an imported avocado. Inflation, baby! Because nothing says "crisis" like having to choose between gas or dinner.
In summary: China is sending a clear message “Thanks for the memories, but we no longer want to be your bank.” And the world, as always, watches from the sidelines, hoping that this titanic fight doesn’t end with us.
In a move that smells of financial revenge, China has begun to massively dispose of U.S. Treasury bonds, and not precisely with affection. Beijing, tired of the tariff war, digital espionage, and seeing its economy hanging in Western headlines, has decided it no longer wants to finance Washington's inflated lifestyle.
Historically, China was one of the largest financial sugar daddies of the U.S., buying its debt like one buys toilet paper during a pandemic. But all of that has changed. Now, in the midst of escalating geopolitical tensions and with more gold than a fantasy dragon, the People's Bank of China has made it clear that it prefers bars of gold to promises of payment made in the USA.
What’s the result? A tremor on Wall Street and a cold whisper in the neck of the Treasury Department. If the bond supply surges as expected, interest rates will rise faster than egg prices, making borrowing in the U.S. almost as expensive as living in San Francisco. Mortgages, student loans, and credit cards could become an extreme sport.
And not only that: the dollar — that sacred symbol of capitalism — could be hit. A disorderly collapse, one that gives no warning, could trigger a global domino effect. Meanwhile, free market advocates will continue to repeat mantras, ignoring that the international financial system is a game of chess in which China is already moving its queen.
Oh, and if the dollar crashes, Americans might rediscover what it’s like to pay 10 dollars for an imported avocado. Inflation, baby! Because nothing says "crisis" like having to choose between gas or dinner.
In summary: China is sending a clear message “Thanks for the memories, but we no longer want to be your bank.” And the world, as always, watches from the sidelines, hoping that this titanic fight doesn’t end with us.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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