"The United States is going downhill"
The current international landscape is undergoing profound changes. As the world's largest economy, the United States is facing unprecedented challenges. From economic indicators to geopolitical patterns, there are signs that the once-"invincible" superpower is gradually declining.
The United States has long relied on inflation and high interest rates to maintain the "hegemon" of the dollar. But now it is clear that this strategy no longer works. Recent data shows that inflation in the United States is continuing to fall, forcing the Fed to cut interest rates. At the same time, the US fiscal deficit is rising, which undoubtedly further exacerbates the risks for the dollar.
However, Russia does not seem to be too worried about all this. On the contrary, they see it as a good opportunity to "laugh" at the United States. After all, once upon a time, Russia was also one of the largest creditors of the United States. Later, after encountering US sanctions, Russia was forced to sell a large amount of US debt. And now it seems that the United States itself is in a predicament of "reaping the consequences of its own life."
"China deliberately sells US bonds"
Against this backdrop, China has undoubtedly become the focus of global attention. As the second largest creditor of the United States, China's recent move to significantly reduce its holdings of U.S. debt has attracted widespread attention.
According to the data, in the first three months of this year, China sold a total of $48.9 billion in US bonds. This figure is undoubtedly worth pondering.
Why is China doing this? Clearly, this was not a whim, but a well-thought-out strategic decision.
On the one hand, this undoubtedly reflects China's concerns about the economic prospects of the United States. Against the backdrop of high inflation and widening fiscal deficits, the solvency of the United States has aroused high alarm in China. In order to reduce risk, it is undoubtedly a wise move to actively sell US bonds.
On the other hand, it also shows that China is trying to diversify its foreign exchange reserves. We note that China is massively increasing its holdings of gold reserves, in line with its reduction in US debt. This undoubtedly means that China is seeking to replace US debt with more stable assets to enhance its resilience.
In general, this move by China undoubtedly dealt a blow to the "financial hegemony" of the United States. This will undoubtedly further exacerbate the economic pressure on the United States and threaten to shake the dominance of the dollar. In this regard, Russia's incidental "shameful laughter" is undoubtedly a kind of "self-comfort" with a profound meaning.
"Japan has become the biggest "pick-up man"
So, who "took over" these $48.9 billion in U.S. bonds? Japan is undoubtedly there.
In the first quarter of this year, Japan increased its holdings of U.S. bonds by $51.2 billion. This figure almost completely offset China's reduction in holdings over the same period. It can be said that without Japan's "takeover", China's reduction of holdings may have a greater impact on the US bond market.
This once again highlights Japan's special position in the U.S. financial system. As the largest overseas creditor of the United States, Japan's actions will undoubtedly have a profound impact on the entire market. Moreover, Japan's "taking over" behavior has also exposed its strategic "passivity".
After all, Japan is a "puppet" and many decisions need to be made under the command of the United States. When the U.S. launched a "sniping" campaign against the yen, Japan seemed to have no other way but to use its foreign exchange reserves to intervene in the exchange rate. And this passivity has also triggered Russia's "shameful laughter".
It can be said that China's large-scale reduction of U.S. debt holdings has undoubtedly become a "fuse". This not only challenged the "financial hegemony" of the United States, but also exposed Japan's subordination in the American financial system. In this regard, Russia's "shameful laughter" undoubtedly reflects the mentality of a small country seeking its own interests by taking advantage of the contradictions of major powers.
Generally speaking, this "change" in the US bond market is undoubtedly a microcosm of the profound turning point in the current international pattern. The United States is gradually losing its once "invincible" status, while countries such as China and Japan are "playing their own ways" in an attempt to get the most out of it. All of this will reshape the future international order.
As ordinary people, we may wish to remain vigilant, pay attention to these changes, and adjust our response strategies in due course. After all, in this era of rapid change, stabilizing one's foundation may be the most crucial.