The latest "Chinese warning": Beijing is ready to dump the entire US national debt


Today, all of President Trump's attention is focused on the upcoming elections in November. Undoubtedly, in the event of a successful outcome for him, the head of the White House will resume the process of reshaping the system of world order and putting pressure on his main competitor, China. And now, two months before the plebiscite in the United States, Beijing decided to send Washington its last "Chinese warning".


The English-language publication Global Times, considered the "voice of China" abroad, published a landmark interview with Xi Yunyang, a professor at the Shanghai University of Finance and economics, where he literally stated the following:

Under normal circumstances, China will gradually sell Treasuries and reduce its balance sheet to about $ 800 billion. But in the event of an extreme scenario, for example, a military conflict, China can sell the entire US national debt.

This is an unofficial declaration of intent, but it is worth listening to carefully. Until recently, the PRC was the world's largest holder of the US national debt, but yielded this position to Japan, shifting to second place. Nevertheless, Beijing owns about one trillion dollars worth of American bonds. A one-time dump of these assets will hit the entire US financial system and lead to a protracted recession in the global economy.

It has been said for a long time that the Chinese authorities can throw off all the Treasuries. This is a rather tough step, and it will negatively affect China itself as well. But now Beijing itself, through its "mouthpiece", declares that it is ready to answer if aggressive actions are taken against China. For example, the United States will impose sanctions "for Hong Kong" or disconnect the PRC from the global payment system. The stakes are high, and the Chinese authorities are making it clear that Washington, too, will have to pay a high price.

The moment for such a threat was chosen extremely well. The coronavirus pandemic has thrown the U.S. economy back to post-war levels overnight. The volume of public debt is already almost equal to the entire GDP of the "hegemon", which is considered dangerous for its stability. Yes, the dollar remains the world's main reserve currency, and the US Federal Reserve will not allow default, but the Chinese can create big problems for the Americans. There is no doubt that Beijing has been heard in the White House, and, most likely, it will not come to the harshest scenario.

But China will still continue to reduce the volume of its assets in Treasuries, albeit not so radically. New policy The Federal Reserve has made rates close to zero, and this devalues ​​investments in US securities. At least 20% of the US $ 200 billion in government bonds will be sold. Most likely, Beijing will follow the example of Moscow, which has been increasing its assets in gold, euro and yuan over the past few years. Russian gold and foreign exchange reserves are constantly growing, their value exceeded $ 600 billion, which is 20% higher than the national public debt.

Gold is constantly growing in price, and if China throws the released assets to buy it, quotations will rise even more. The European currency will also benefit, as it continues to rise on the back of the depreciating dollar.
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  1. gorenina91 Online gorenina91
    gorenina91 (Irina) 7 September 2020 11: 52
    -1
    Beijing owns about $ XNUMX trillion in US bonds. A one-time dump of these assets will hit the entire US financial system and lead to a protracted recession in the global economy.

    Gold is constantly growing in price, and if China throws the released assets to buy it, quotations will rise even more.

    - First of all, all this will "hit very hard" on Russia ... - China knows this and, as always, tries to hit Russia and make the weak-willed and submissive Russia even more dependent on itself ...
    -There, somehow, in the topic about the sale by Russia of a solid part of its gold, "some" are already like a nightingale with delight ... - they say, how great and good it is for Russia ...
    - This is the topic:

    Why it is dangerous for Russia to become a major exporter of gold

    - Personally, I already said in this thread that:

    - Americana through the Central Bank of the Russian Federation is not a state entity and belongs to ... the USA ...
    - And today, when the dollar needed a solid reinforcement ... - the Americans began to "play off" (sell) Russian gold for "their own needs" ... - for this, the "price bar" for gold was raised ... - And expensive nowadays gold, or not very expensive ... - for Russia it is not important ...; since having its gold in the Central Bank of the Russian Federation ... - Russia formally cannot dispose of this "its gold" ... - Well, here ... - today Russian gold in this way also "supports" (saves) ... the dollar ...
    - And from the outside it looks like this ... - Russia itself allegedly "hand over" its gold; and buys paper dollars ... - That's all ...

    - I will say "in a nutshell" ... - when China starts shaking out "its paper dollars" to the Americans, then ... then ... then the Americans will simply put up Russian gold for sale again to provide support for their dollar ... - And .. if we take into account the fact that Russia itself has a fairly substantial part of its funds in American securities, which will significantly lose in value after the "Chinese dump" of American assets; then Russia "flies into money" twice already ...
    - Personally, I would not be at all surprised if, after such Chinese speculative manipulations ... - Russia will suddenly again put up solid lots of Russian gold for sale ... - And ... most likely ... - they will again sell to the British ...
    - Oh, what a joy for Russia ... all these "Chinese pranks" ...
    - Such is China ... - our "eternal friend", "good neighbor", "partner" and "brother" ...
    1. Accidentally Offline Accidentally
      Accidentally 8 September 2020 10: 51
      +1
      Thank you, Irina. Clearly, clearly, clearly explained.
      1. magma Offline magma
        magma (Tatyana) 9 September 2020 13: 35
        0
        You won’t praise yourself ...
        1. Accidentally Offline Accidentally
          Accidentally 10 September 2020 07: 05
          -1
          Praise yourself.
  2. steelmaker Offline steelmaker
    steelmaker 7 September 2020 13: 53
    +1
    When China bought the US government debt, the US moved its production to China instead. And I bought products from China. Otherwise, where does China get $ to buy US debt? If you remember, Trump started a trade war with China on this issue. How much you sell, buy from us! But why is Russia buying US debts? Openly financing a hostile state! China and the United States are highly dependent on each other for trade. And no one will let China drop so much $ at once. The USA simply won't allow it! These are all Chinese "show-offs".
    1. gorenina91 Online gorenina91
      gorenina91 (Irina) 7 September 2020 17: 18
      -1
      The USA simply won't allow it! These are all Chinese "show-offs".

      - Ha ... - "He will eat something ... - but who will give him" ... - You shouldn't really count on this either ...

      China and the United States are highly dependent on each other for trade. And no one will let China drop so much $ at once.

      - If Trump comes (and he may well be re-elected) for the second term of the presidency, then everything will be very bad for Russia ... - This is personally I think so ...
      - Trump ... is an "American Erdogan" (I already wrote about this) and this "American Erdogan" can dramatically change its foreign policy and aggravate relations with China so much that China will actually start dumping "American debt assets" ... - And the Americans will take a substantial part of Russian gold ... - allegedly to strengthen the dollar; and then just this "American Erdogan" will declare a default (Trump has nothing to lose) ... - There will be a global scandal ... - so what ... - The USA will start printing dollars again ...
      - China, of course, will fly in great; and then Russia ... - generally goes bankrupt and leaves the world game and finally leaves the United States and China "one on one" ... - And here the Americans will have enough trump cards ... to fight China ... - Yes, figs with them ... - with the USA and China ... - about them later ...
      - I feel sorry for Russia ... - Once upon a time ... - in the last century, in the 80s, in approximately the same way (well, a little differently), the USA ruined the USSR (then the USSR did not have just some kind of pathetic 50 billion dollars to improve the situation ... - It's just a laugh ... - but nevertheless ...) ...
      - Well, what will Russia do in this situation ??? - Russian oligarchs will not even lead to save the Russian economy (they will begin to save and withdraw their assets that are stored in Russia) ... - And Russia only has to ... - sell the Kuril Islands (and Sakhalin at the same time) ...
      - And China in this situation will not buy anything from Russia ... - China will simply offer Russia to create at Dal. In the east, a "territorial free trade zone" under the protectorate of China ... - something like the FER (which was in 1920-1922) ... - with the aim of its subsequent complete annexation from Russia ... - Well, and there is much more what is "chopping off" from Russia ...
      - So in Russia a lot today depends on the election of the American president ... - It would be better if the reactionary American democrats won ... - they are at least predictable in their hostility to Russia ... - But that's just ... my personal opinion .. ...
      1. Oyo Sarkazmi Offline Oyo Sarkazmi
        Oyo Sarkazmi (Oyo Sarkazmi) 7 September 2020 18: 10
        +1
        Quote: gorenina91
        And the Americans will take a solid part of Russian gold ... - allegedly to strengthen the dollar

        You would have eaten, of course, but who will give you?

        What a dull life it is to edit obscure texts in the basement. crying
  3. 123 Online 123
    123 (123) 7 September 2020 20: 57
    +1
    The Chinese with the whole collective farm hunched over for so many years to accumulate this trillion, while those who did not spend several times more in a month just printed it and that's it. There are practically no consequences, the dollar is 10% of the cost, and they promise about the same before the end of the year. That's all. The casino director is crazy, the chips are not real. Maybe the Chinese should start printing their dollars? Tea, copy skills are not lost. winked
  4. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 09: 48
    -1
    Quote: 123
    The Chinese with the whole collective farm hunched over for so many years to accumulate this trillion, while those who did not spend several times more in a month just printed it and that's it. There are practically no consequences, the dollar is 10% of the cost, and they promise about the same before the end of the year. That's all. The casino director is crazy, the chips are not real. Maybe the Chinese should start printing their dollars? Tea, copy skills are not lost. winked

    This is how it looks at first, simplified glance. In reality, everything is much more complicated. They printed a trillion, of course, but they printed it for promissory notes that need to be serviced. There are no free pies. The Americans are failing to depreciate debt in dollar form versus the yuan, China depreciates its yuan faster ...
    If China is already ready to replace the American market with its domestic one (and the market should develop in this direction according to the logic), then the two world economies will disperse with the world, if not ...
    There is much more logic in Trump's actions towards China than it seems.
    1. 123 Online 123
      123 (123) 9 September 2020 15: 55
      +1
      This is how it looks at first, simplified glance. In reality, everything is much more complicated. They printed a trillion, of course, but they printed it for promissory notes that need to be serviced. There are no free pies

      You will probably laugh, but apparently, there are yes in the spring, the demand for these same obligations sank, people somehow did not have time for them, the coronavirus after all ...
      And then the FRS came to the rescue, he bought these very obligations. Subsequently, a metamorphosis happened to the report like the program of the Belarusian opposition, however, there is a difference, the program was deleted and they said that nothing had happened, but a change was made to the report. I could be wrong, but in my opinion, the text of the report has been slightly corrected. As far as I remember, it was previously written that they spent 2 trillion and will spend as much as necessary. Something like everyone .... money is not measured. Now the wording is more streamlined and there was a postscript that this, it turns out, is the personal opinion of Richard Clarid.

      https://www.federalreserve.gov/newsevents/speech/clarida20200521a.htm

      The Americans are failing to depreciate debt in dollar form versus the yuan, China depreciates its yuan faster ...

      Everyone is trying to devalue their currency - both Trump and comrade SI, and something tells me ... they will not fight for the ruble exchange rate any further. winked This stimulates the economy, as costs are reduced and products are more competitive in the external market. But for obvious reasons, this measure is not popular among people. On the site you can easily find numerous confirmations of this point of view.

      If China is already ready to replace the American market with its domestic one (and the market should develop in this direction according to the logic), then the two world economies will disperse with the world, if not ...

      The fact of the matter is that no, moreover, it seems that the United States is no longer able to maintain demand at the same level. For many, especially China and Europe and Japan, this is not very good news.

      There is much more logic in Trump's actions towards China than it seems.

      It is difficult to argue with this statement, you cannot deny it logic even when acting at home. By inflating the capitalization bubble, he prevented the buy-up of depreciated shares of American companies. True, it remains to figure out what to do with the bubble ... while the air is deflated from it, devaluing the dollar. hi
  5. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 09: 51
    0
    Quote: Oo sarcasm
    And the Americans will take a solid part of Russian gold ... - allegedly to strengthen the dollar

    This is not subject to revision ... buying gold for dollars to strengthen the dollar - I won't drink that much.
  6. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 09: 59
    -2
    Quote: steel maker
    When China bought the US government debt, the US moved its production to China instead. And I bought products from China. Otherwise, where does China get $ to buy US debt? If you remember, Trump started a trade war with China on this issue. How much you sell, buy from us! But why is Russia buying US debts? Openly financing a hostile state! China and the United States are highly dependent on each other for trade. And no one will let China drop so much $ at once. The USA simply won't allow it! These are all Chinese "show-offs".

    It is time to understand that the national debt is bought not for the development of the US economy, but to save its reserves (+ deferred demand) from depreciation. This is a kind of insurance. A Russian, having a million in a pension fund, wants to insure his savings against depreciation, therefore he buys highly liquid guarantees from the state in the form of bonds, the Russian state is trying to insure its risks in the next, more reliable instance - through the purchase of a highly liquid guaranteed (AAA) US government debt. So far it works like this.
    1. gorenina91 Online gorenina91
      gorenina91 (Irina) 8 September 2020 11: 13
      +1
      A Russian, having a million in a pension fund, wants to insure his savings against depreciation, therefore he buys highly liquid guarantees from the state in the form of bonds, the Russian state is trying to insure its risks in the next, more reliable instance - through the purchase of a highly liquid guaranteed (AAA) US government debt. So far it works like this.

      - What do you mean ??? Who are you anyway ... - toastmaster at the wedding table ??? - So everything is smooth and smooth ... - But it was smooth on paper; but forgot about ... about ... about the pension fund (and the retirement age in addition); which for some reason and somehow became by itself ... - a financial "lifesaver" .. It turns out that the flies (import bonds) are separate, and the cutlets (pension fund and age) ... are also separate .. - And how can all this be explained ???

      The Russian government is trying to insure its risks in the next, more reliable instance - through the purchase of highly liquid guaranteed (AAA) US government debt. So far it works like this.

      - Yes, as long as "it works" ... - it protects foreign deposits and foreign real estate of our oligarchs; which they have created for their own good and for eternal use ... - and so this "little chest" is simply opened ... - Just what have pension funds to do with it ??? -Awww ...
      1. Alexzn Offline Alexzn
        Alexzn (Alexander) 8 September 2020 11: 31
        -1
        Urgently at the desk, to learn the basics of the economic world order. Why try to voice an opinion about a system whose nature you have no idea?
        1. gorenina91 Online gorenina91
          gorenina91 (Irina) 8 September 2020 13: 29
          0
          Urgently at the desk, to learn the basics of the economic world order. Why try to voice an opinion about a system whose nature you have no idea?

          - Ah .., that's it ... - Personally, I'm talking about Sparta; and you tell me about ... a desk ... - a pun ... - Hahah ...
          - The desk ... - this is where the little man is put to tell him about everything ... - including the harsh reality of Sparta ... - And Sparta ... - this is the very harsh reality ... - And this the harsh reality (Sparta) is deeply violet what was told about it to the little men who sat at their desks ... - The harsh reality in real life always looks completely different ...
          - So Sparta and school desk ... are two big differences ...
          - I don't know ... - do you understand what I'm talking about ... - or you just don't want to understand .. - well, that's your business ...
      2. gorenina91 Online gorenina91
        gorenina91 (Irina) 8 September 2020 11: 41
        +1
        - Oh, yes ... - I completely forgot about the gold ...

        AlexZN (Alexander) Today, 09:51
        Quote: Oyo Sarkazmi

        And the Americans will take a substantial part of Russian gold ... - ostensibly to strengthen the dollar.

        This is not subject to revision ... buying gold for dollars to strengthen the dollar - I won't drink that much.

        - And what does Russian gold have to do with it then ??? - After all, it is enough for Russia that it is not only buying "American castles in the air" for its own money; which can be called "highly liquid guarantees from the state in the form of bonds", or you can simply call them American government debt ... - as you like ...
        - So little "this" ... - And "this" what ??? - And the fact that these funds spent by Russia simply lie dead weight and do not participate and are not used in the prosperity and development of the Russian economy ... - so Russia is also periodically voluntarily forced to put up its Russian gold for sale; in order to compensate for the shortage of the funds that she invested in the "American papers" ... - This is nice ... - this is what they call ... - we have just arrived ...
        -Yes .., and more ...- here someone somehow very strongly argued that gold ... is a commodity and ... this commodity is to be sold ... - Personally, I do not presume to refute this .. ...
        - Well, and since the goods are sold ... for dollars ... - not for hamburgers and not for a batch of whiskey or tequila (otherwise the author is concerned about drinking) to exchange gold ... - Gold is valued in dollars and is sold for paper dollars ... - this is what keeps the dollar itself ... afloat ...
        1. Alexzn Offline Alexzn
          Alexzn (Alexander) 8 September 2020 14: 39
          0
          What is the problem? Sell ​​gold for tugriks, bunnies, rials, Turkish lira! Or don't sell at all. Buy the public debt of Venezuela, Belarus, Kyrgyzstan. Or don't buy at all. And your future will be comfortable and well-fed!
  7. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 11: 50
    0
    Quote: gorenina91
    -Only what do pension funds have to do with it ??? -Awww ...

    The principle of the pension fund - accumulates 40-50 years to be spent in 10-20. The main problem is the preservation of the value of the accumulated in conditions of inflation, devaluation and other dirty tricks. The problem is solved by investing pension funds in funds that allow them to maintain / increase their value (depending on the risks). The system involves investing in the stock exchange in shares according to the degree of risk of the shares of the PF being bought and investing in government securities - low-yield, but guaranteeing safety. The proportions and conditions of investments are strictly prescribed.
    The PF gave an example only as the most illustrative one for the reasons of buying American (to a certain extent global) debt obligations. Once again - the purchase of American public debt - guaranteed preservation of public resources and deferred demand.
    1. gorenina91 Online gorenina91
      gorenina91 (Irina) 8 September 2020 13: 44
      +1
      - In other words ... - you are offered to play roulette ... - with the obligatory condition that if you suddenly win (the probability of which is negligible); then you may be paid in installments over a very long period of time (despite the fact that ... what ... that a person himself is very short-lived by nature, gets old quickly and ... and ... and loses his life .. and may simply not have time to take advantage of this gain ... - We will simply keep silent about inflation and other losses of the entire amount) ... - Well, and if the little man lost (which is absolutely possible); then "no and no trial" ... - this is a voluntary matter ... - no one forced him to play ...
      - I already wrote to you ... - there ... - above ... - about "Sparta and the desk" ... - there is nothing more to add ...
  8. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 13: 44
    0
    Quote: gorenina91
    - Gold is priced in dollars and sold for paper dollars ... - this is what keeps the dollar itself ... afloat ...

    Does it have a meaning?
    Vodka is sold for dollars, candy is sold for dollars, oil is sold for dollars ... even condoms are sold for dollars ... In your system, all this keeps the dollar afloat. So be it.
    The question remained open, why is all this being sold for a dollar? Well, on the little things, related questions - why do you need gold if it as a commodity does not improve the quality of life of the owner? Maybe it makes sense to exchange it for a product that can be consumed? Naturally, leave a part in the form of a reserve product.
  9. Alexzn Offline Alexzn
    Alexzn (Alexander) 8 September 2020 14: 08
    -2
    Quote: gorenina91
    -In other words ... -you are offered to play roulette ... -with the obligatory condition that if you suddenly win (the probability of which is negligible); then you may be paid in installments over a very long period of time (in spite of the fact that ... what ... what ....................

    What roulette are you talking about? The pension system and deferred demand around the world work like this.
    It's never too late at the desk, even for Spartans, but as a Spartan (laconically!) I will once again advise - at the desk!
  10. steelmaker Offline steelmaker
    steelmaker 8 September 2020 15: 11
    0
    Urgently at the desk, to learn the basics of the economic world order.

    You are also an example of Yavlinsky, Kudrin, Ulyukaev, Chubais, Oreshkin as an example !!!
    1. Alexzn Offline Alexzn
      Alexzn (Alexander) 9 September 2020 07: 40
      -1
      Why not? Are they not covered in chocolate?
      Seriously though, Kudrin is more than a serious economist.
      1. begemot20091 Offline begemot20091
        begemot20091 (begemot20091) 9 September 2020 10: 56
        0
        Do not tell my slippers (he was an accountant under Golikova, who served him tea in the morning). They killed me. Ulyukaev was also covered in chocolate and Yaponchik. winked
        1. Alexzn Offline Alexzn
          Alexzn (Alexander) 9 September 2020 14: 25
          0
          The logic is clear - if you serve tea in the morning, you cannot be a good economist.
  11. Rashid116 Offline Rashid116
    Rashid116 (Rashid) 9 September 2020 20: 53
    0
    Come on, Chinese, it's time !!! I hope our leadership is smart enough not to get involved in this fight. And we, like that wise monkey, will sit on the shore and wait.
  12. marciz Offline marciz
    marciz (Stas) 13 September 2020 11: 15
    -1
    China will be ground up as punishment for the coronavirus and they will run to the North (they will not drown in the waters of the South China Sea). Wait for a herd of uncontrollable Chinese of about 200.000.000, you will just raise the demography, they poisoned your own people with drugs, boobies !?))))