US public debt is still exploding, but the portion of it held by foreigners is flat. The continued financial stability of the US depends upon a steady supply of new suckers to buy its treasuries at negative real yields. Who are these domestic suckers and why haven't they switched to bitcoin yet?
Who is buying this trash?
- Thread starter ScroogeMcDuck
- Start date
I have NO idea. Its like literally one of the mysteries of the modern world. Why are laws of the universe so finely tuned to be conducive to galaxies, stars, planets, and life? Who are the Denisovans? Who the fuk is still buying Treasuries with negative real yields and inflation about to explode?
When you realize debt is not real, it's only an illusion to transform goods from China into treasury bonds, you will finally wake up and learn to trade.
The Fed is the "domestic sucker." It is printing money and buying the debt. Duh.
I've been debating this with a friend. In the context of SUPPLY and DEMAND, both sides are being manipulated. The supply side is infinite, because the Fed can print as much money as it wants. The demand side is also infinite, because the Treasury can create as many bonds as it wasnts.
So, there's an endless flow of USD
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•China companies need a lot of dollars to settle trades like purchases of oil and raw materials,... at one time, have you heard the news that China was running out of dollars.
•owning a lot of dollars give their currency the "prestige and stability"
•if Chinese companies want to sell dollars gained thru exports, and buy the yuan to pay their workers ... then that would increase the demand for the yuan, and make their exports more expensive. China just wants to buy dollars to keep their currency low, which in turn makes their exports cheaper, and creates more jobs for her people.
•owning a lot of dollars give their currency the "prestige and stability"
•if Chinese companies want to sell dollars gained thru exports, and buy the yuan to pay their workers ... then that would increase the demand for the yuan, and make their exports more expensive. China just wants to buy dollars to keep their currency low, which in turn makes their exports cheaper, and creates more jobs for her people.
I was told that China requires all its companies to exchange dollars for Yuan.
In other words, Chinese companies that collect dollars do not keep them; they must give them to Xi & Co. in exchange for Chinese currency.
The reason is simple, foreigners/foreign governments are no dummies. They quickly exchanged their US $ into US assets. Just look at ownerships of many of Los Angeles' properties, hotels, office buildings and US stocks.... Everyone is following Norway and Singapore, setting up sovereign wealth funds and buying up US assets. China has a huge wealth fund buying up assets everywhere. Theoretically, the end game if we keep printing money buying foreign goods, one day all US assets will be owned by foreigners.