The United States continues to harvest the Asia-Pacific region, the "currency defense war" has begun, China continues to increase its holdings of gold, and a large number of U.S. bonds have been dumped, what does this mean? Who is the largest receiver of U.S. bonds?
Recently, according to the latest data released by the People's Bank of China, the gold reserves of the People's Bank of China continued to rise this month, which is also the 18th consecutive month that the central bank has increased its gold reserves, highlighting the important position of gold in the mainland's foreign exchange reserves. As the second largest overseas holder of U.S. Treasuries, China's holdings of U.S. Treasuries have been below $1 trillion since April 2022. What does this move by the Chinese side mean? Some analysts believe that this continuous increase in gold reserves reflects the firm determination of the People's Bank of China to optimize the structure of foreign exchange reserves and improve the safety of assets. Of course, in addition to the above reasons, there are other factors, such as the Fed's aggressive interest rate hikes and the dollar's declining international credibility.
So at the same time that China is selling a lot of U.S. bonds, who will take over the U.S. bonds that have been dumped? On the 10th, data released by the Japanese Ministry of Finance showed that Japan had bought U.S. bonds for the fourth consecutive month, the longest consecutive purchase since 2021. At present, among the top three overseas holders of U.S. Treasury bonds, Japan ranks first. I don't know whether Japan is willing to be the "unjust boss" or whether it is forced by its American "master" to be the "unjust boss." Although Japan has become the largest recipient of U.S. bonds, it seems that the United States has not brought any benefits to Japan, on the contrary, the United States is bent on harvesting the Asia-Pacific region, including Japan, due to the Federal Reserve's continuous interest rate hike policy, which has led to a sharp appreciation of the U.S. dollar, capital from emerging markets, aggravating the risks faced by emerging economies and the world economy, resulting in a significant decline in the currency exchange rates of Japan, South Korea and other countries, and having to let these U.S. allies start a "currency defense war".
Among them, the yen even fell below the 160 mark against the US dollar for a time, hitting a new low in 34 years, which also led to a rise in domestic prices, and many Japanese consumers shouted "can't afford it". The cost of imported raw materials has also increased due to the depreciation of the yen, with an average increase of 31% for more than 400 food items whose prices were raised in May this year. Although the Japanese government and the central bank have intervened in the foreign exchange market on a scale of about 8 to 9 trillion yen, Japanese experts believe that it is difficult to completely reverse the decline of the yen, and it only buffers the speed of the yen's sharp decline. For Japan now, there is no good way to deal with it, and it can only hope that the United States will cut interest rates. But the reality is that the Fed is clearly not going to cut rates for a while.
In addition to Japan, South Korea can also be said to have suffered from this. The decline of the Korean won against the US dollar reached its lowest point in mid-April, and on April 16, the day the won fell below the 1,400 mark, the Korean won fell by 7.3% against the US dollar for the year. For South Korea, whose economic development is highly dependent on import and export trade, the price of imported goods will inevitably rise, and the overall negative impact will be greater. It turns out that it is really "dangerous" to be an ally of the United States.
For a long time, the US dollar is the most important currency in the world today, and about forty percent of international trade is settled in US dollars, which also contributes to the current global hegemony of the US dollar, and because of this, the US dollar has also become a weapon for the United States to harvest global wealth. At present, the size of the U.S. national debt has reached about 34.5 trillion U.S. dollars, and the total scale of the U.S. debt is even more shocking. Of course, the United States certainly doesn't care about this, and in this regard, Japan and South Korea are estimated to be "dumb people who eat Coptis chinensis, and they can't say what they are suffering", or rather, they are more likely to "dare not say it".