Debt between Japan, China, and the US

The Extreme Investor Network is excited to bring you the latest insights into the world of economics, providing you with unique and valuable information that sets us apart from other sources. Let’s dive into the current landscape of US debt ownership and how it is shaping global economic trends.

As of May 2024, Japan continues to hold the title as the largest holder of US debt, with a staggering $1.186 trillion in Treasury securities, representing 14.7% of all foreign-owned US debt. On the other hand, China has been actively reducing its holdings of US debt, currently standing at approximately $767.4 billion as of March 2024.

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The shift in China’s stance towards US debt is a notable development in global economics. In a span of just four years, China has sold off over $250 billion, amounting to a 30% reduction in its US debt holdings. This strategic move has not only impacted the US dollar but has also influenced China’s currency exchange rate, particularly in favor of the yuan.

The changing dynamics of US debt ownership reflect broader geopolitical tensions and economic strategies. While Japan has significantly increased its holdings of US debt in 2023, the negative interest rates have posed challenges for the nation. Consequently, Japan sees US debt as a safer investment option, given the higher yields and a strong alliance with the US.

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One intriguing strategy that was suggested to Japan to alleviate trade frictions was to buy gold in New York and sell it in London, emphasizing the nuances of trade accounting practices. Understanding these intricacies is crucial in navigating the complexities of global trade dynamics and economic relationships.

Moreover, the ongoing offloading of US Treasuries by China presents a looming challenge for the US debt market. As China continues to reduce its holdings, there arises a concern about the sustainability of US government debt sales. The Federal Reserve’s reliance on perpetually rolling over debts highlights the urgency of addressing the escalating debt crisis.

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At Extreme Investor Network, we provide you with unparalleled insights and analysis on critical economic trends and developments. Stay tuned for more exclusive content that will enhance your understanding of the ever-evolving world of economics. Join us as we explore new frontiers in investment opportunities and economic strategies, setting the stage for informed decision-making in today’s dynamic financial landscape.

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