No need to sell off, just the thought of it raised the US treasury yields when Trump did his stupid 10% tariffs threat on countries sending officers to Greenland for a NATO exercise planning. If states would sell off a couple of percentage, and announcing they were doing it, that would be panic
As I already said, but you seem to ignore, the trend sell America is not a political movement, it’s funds reducing their risks and getting higher returns on other markets. Any lower confidence in the US treasury increases the yields. Why do you think Trump did a TACO so quick this time? Because he was hungry or because he was scared?
Trump wants to reduce the FED interest rates, but FED only sets their rates, the actual yields are set by the market where one of the inputs are FED rates
This is what you said. So I’m responding to it. Selling off would be punished by the market.
But your followkng point This conflates short term market repricing with sustained leverage.
Yes, uncertainty or bad policy headlines can temporarily push yields higher, that’s normal risk repricing. But that is very different from Europe having a usable “bond weapon.” Treasuries are ultra-liquid: selling pressure raises yields, which immediately attracts buyers and clears the market. There is no runaway effect.
More importantly, this is a one-shot action, once assets are sold, the leverage is gone. And the idea that Europe or its institutions would permanently stop buying U.S. Treasuries is comically absurd given dollar funding needs, collateral requirements, and reserve management.
If bond selling were real coercive power, China would have used it already.
Also, I can’t think of any Asian bond market besides China (I think) that is priced independently of U.S. Treasuries, some are tightly linked, others more loosely, but Treasuries remain the reference rate for all of them.
You can rebalance away from Treasuries, but you can’t really replace them as you’ve said. That’s why “sell America” is just rhetoric, not structural reality.
I said start, I didn’t say finishing it. Maybe I was unclear, sorry in that case
Actually China has been using it, they had much more before, they have trimmed it down. Latest war they used REE’s instead where they have cornered the market while the west was growing mushrooms, so an even easier punitive action to stop export
This is true partly, US treasuries are important and will continue to be important as one reference as long as USD is the reserve currency of the world. But Trump is a bit divided on this, in one way he want to remove US from being the world leader like a large navy keeping the trade routes free, but on the other hand he gets upset when China and India are trading in local currencies and not USD. Trump is trying to eat the apple without paying for it. And why is the USD as a reserve currency so important? As it keeps the USD yields lower, an estimated 0.5-1% which is huge benefit for US economy… So Trump needs to decide if he wants it or not, he can’t have it both ways
I’ve mentioned this above somewhere. Both China and Russia have done this. Letting them mature and not buying many new issues.
This is a rebalancing strategy, not a weaponization of the bond market as we are discussing.
But to me, “Sell America” just means investors trimming U.S. stocks after a big run and looking elsewhere. It’s not countries dumping U.S. bonds or losing faith in Treasuries, those are still the backbone of the system.
I believe this has cycled through in the 2000s, 2010s as well. I don’t really see it as some concerning thing.
The US really does have asymmetrical leverage in many ways. I think this is where a lot of resentments come from when it’s said in plain language instead of political talk. That’s why I said way above that a healthier relationship needs to happen sooner or later. The US is still the backbone of both the global economy and security, but it needs a rebalancing on how much. I see it as both beneficial long term for the US and its allies. Not so dramatic as US is no longer the leader and everyone is going to abandon this world order.
Food from the corn belt is certainly most of the ag lobbying pitch (throw in something about small family farms and it’s basically the whole pitch), but reality is a little different. might be surprised how much of that is not the case. California leads in ag production, and more to the point, ag production to feed people. States like Iowa and Nebraska have a massive percentage of its production go to export, biofuels, and animal feed; some 40% of corn and soy grown in the US goes to biofuels..
It does, in a normal world. In a world where the US is abducting leaders and threatening allies, I’m not sure one would assume the normal “rules” hold.
I don’t think anyone imagines that everyone would unload all at once.
Even if they did, it’d be a one shot action with lasting consequences that could have long term pain (for everyone - it would, undoubtedly, be a drastic action, almost a last resort tactic).
What about the notion that countries stop until.th3 US shows that it’s interested in having grown ups in charge? Maybe workable.
China is undoubtedly trimming it’s US securities, and it’s usually reported that they’re selling, not just letting them mature. I don’t know of a definitive source of this info, but given the amount they’ve reduced since their peak holdings, I’d wager they’ve actively pared down their holdings.
I see it as a strategic rebalancing something more than just rebalancing their portfolio, but something less than weaponization. Certainly more for strategic and political reasons than for financial ones..
They are – or were, before they essentially melted into the MAGA party – probably the closest thing to an anti-federalist party. Very much a fan of “small government” which sounds nice until reality hits and you’re ruled by corporations instead of governments.
Agreed. We already have enough issues with cross state communication, infrastructural shortcomings from regional (much less state) incomes, etc. it’d be taking the inner city vs. suburb education quality (funding) differences and making it statewide, and not exclusive to education.
It sounds good til you think about it. Which is how most libertarian ideas are, really.
they clearly think about it, but the methods are backwards. It’s not look at this thing, determine if good or bad, it’s look at it and do all the legwork to justify dear leaders newest, stupidest plan.
Putting the conclusion before the rest of the scientific method, if you will.
president BONE SPURS launched a sneak attack on a weaker opponent with help from Israel, apparently doesn’t know the definition of cowardice (although the american government now epitomizes it, as embodied in his self)
I hope the american people are enjoying those higher gas prices they voted for
TDS is seeing the checkmate in Iran and seeing 4D chess where somehow this isn’t bad for america and the free world. This is good for China, Russia, the IRGC, and Dump insiders getting rich