U.S. Bond Market Under Threat: China’s Divestment & 2023 Corporate Debt Crisis.｜AsianQuickTake

In this episode, we explore a concerning trend that’s been sending shockwaves through the financial world: China’s divestment of US Treasury bonds. Join us as we delve into the implications for the US bond market and the broader global financial landscape. On November 26th, US Treasury bonds experienced significant sell-offs, driven by investor concerns about a potential interest rate hike by the Federal Reserve in December. Short-term bond yields surged, prompting investors to offload Treasury bonds to protect against potential losses. Meanwhile, foreign investors’ purchases of US Treasury bonds have declined by a staggering 90%. The US federal budget deficit for fiscal year 2023 reached nearly $17 trillion, with interest payments on the national debt surging. This growing deficit and rising interest rates could lead to a total deficit of approximately $20 trillion over the next decade. The US federal debt has skyrocketed in recent years, raising concerns, especially as anticipated corporate debt defaults in 2023 may surpass last year’s total. The US Treasury might need to issue new bonds of nearly $20 trillion, potentially creating turbulence in the banking sector and exacerbating corporate debt defaults. As global central banks consider selling off US Treasury bonds due to the escalating cost of US debt borrowing, the value of these bonds is at risk. Despite declining US inflation rates, the nominal yield on US bonds remains negative when adjusted for inflation, posing challenges for investors. China and Japan have been leading the divestment of US Treasury bonds, with China’s holdings falling below $800 billion, the lowest since 2009. China’s strategic increase in gold reserves suggests a calculated move to diversify assets and reduce reliance on US bonds. The offloading of US bonds, coupled with China’s gold strategy, raises questions about the future perception of US Treasury bonds as a safe haven. As the US faces economic uncertainties and credit risks, how will policymakers safeguard the credibility of these bonds? Share your insights in the comments below. Do you foresee a significant shift in the role and value of US Treasury bonds on the global stage? Subscribe for more updates and join the conversation. Your perspectives matter! Tags: China, US Treasury Bonds, Bond Market, Janet Yellen, Corporate Debt Defaults, Federal Reserve, Interest Rates, Budget Deficit, Federal Debt, Global Central Banks, Inflation, Gold Reserves, Financial Risks, Economic Uncertainty, US Bonds. 💯TOP 3 Video China Shocks Yellen With Massive Selling of U.S. Bonds and Buying of Gold ▶ China to Accelerate Dumping of Up to $800bn U.S. Debt ▶ Swiss Sells $36.4 billion U.S. Treasuries ▶ ━━━━━━━━━━━━━━━━━━━━━ ✅ COPYRIGHT DISCLAIMER Asian Quicktake Doesn’t Fully Own Some of the Materials Compiled in Its Videos. It Belongs to People or Organizations Who Ought to Be Respected. If Used, It Falls Under the Following Provisions: Copyright Disclaimer Section 107 of the Copyright Act 1976. “Fair Use“ is Allowed for Purposes Such As Criticism, Comment, News Reporting, Teaching, Scholarships, and Research. ━━━━━━━━━━━━━━━━━━━━━ ✅ If You Are the Owner of the Materials Used in This Video, Let us Know in the Comments or Send a Email to me. We Will Follow Your Request Immediately. ━━━━━━━━━━━━━━━━━━━━━ ✅ FINANCIAL DISCLAIMER This Channel’s Content Should Not Be Interpreted or Construed As Financial Advice. We Are Not, and Do Not Claim to Be, an Attorney, Accountant, or Financial Advisor. This Channel’s Content is Not a Substitute for Financial Advice and is Solely for Entertainment Purposes.