$SOL 金狗交流群 The China-US Economic Game: What 'Trump Cards' Does China Hold?
The US always wants to suppress China, but little do they know that China has already grasped the 'vital point' of its economy!
China holds $760 billion in US Treasury bonds, firmly sitting as the second largest creditor of the US, with an additional $3.2 trillion in foreign exchange reserves as a 'safety net'. Once it begins to sell off Treasury bonds in large quantities, US interest rates will skyrocket, the status of the US dollar will be endangered, and the global financial market will be shaken.
Recently, the yield on US 10-year Treasury bonds soared to 4.49%, reaching a 23-year high! Treasury bond prices plummeted, and the cost of government borrowing surged. The Asian trading session saw wild market fluctuations, with many speculating that China was 'making moves' behind the scenes. It’s important to note that the US is set to issue $2 trillion in new debt this year while dealing with $8 trillion in maturing debt; even a slight increase in interest rates means an additional $100 billion payment, so it’s no wonder Trump had to back down.
Amidst dollar turbulence, China has increased its gold holdings for five consecutive months, sparking a wave of 'gold fever', with gold prices rising and the dollar falling. Nowadays, global investors are seeking new 'safe havens', and the dollar's share in global foreign exchange reserves has dropped from over 70% two decades ago to 58%.
China doesn’t even need to truly sell off US Treasury bonds; just making a hint during the Asian trading session can cause sleepless nights for global investors. This economic game without gunfire is more lethal than real weapons!
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