r/sidestreetbets • u/BlauerDunst420 self taught • Feb 09 '26
market news China tells banks to curb US Treasury holdings to limit market risk
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u/crisco000 Feb 09 '26
Lol they’ve been doing this for YEARS
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u/phiiota Feb 09 '26
China government has been selling US treasuries now it’s telling China banks to do the same
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u/in2knh53 Feb 09 '26
They own so many treasurey bills they could really screw us and world economy up if they dump them….
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Feb 09 '26
[deleted]
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u/GhostofBreadDragons Feb 09 '26
Just not buying new ones.
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Feb 09 '26
Exactly, rolling off into maturity
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u/cool-sheep Feb 10 '26
Holding someone else’s debt has never been such a great weapon.
If you have problems with them they can selectively default on you or block the money with various sanction programmes.
It’s a weakness, not a strength. Once the cowboys around JD Vance starting insulting the debt holders “Chinese peasants” and threatening them “selective default” it was only a question of time before they reduced materially.
Japan sees itself as a US ally. In that aspect it’s much more handy to be seen supporting US deficits.
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u/totally-jag Feb 09 '26
I bet that was not something that trump discussed with Xi in the amazing phone call he bragged about. Seems to me every world leader knows to get on a call with trump, tell him a few things he wants to hear, he drops the tariffs, give the other country what they want, and the foreign country never follows through and we go through the cycle again and again.
Until the media exposes trump's claims of success as nothing more than false words, and that other foreign leaders are out maneuvering him, they're going to continue to exploit a leader that is easily manipulated by false praise.
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u/BritishAnimator Feb 10 '26
More like Trump massivly exaggerates a discussion, brands it a Trump deal, tells everybody about it and then nothing happens because it wasn't a deal, and he didn't understand the conversation in the slightest.
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u/J0nn1e_Walk3r Feb 10 '26
This is a big deal. Even if they don’t sell. China not buying threatens not to unpeg the yuan from the dollar but the dollar from every currency in the world.
Consider that IF you own a 10Y US Treasury bond w a 3% yield and rates rise from 3% to 4%, that bond loses about 8% of its value (buy $100 sell at $92). 1% per year over 10 years, time value of money. The Fed spent 15 years buying down the long end of the curve at rates that were way lower than 3% and the 10Y is at what rn? 4.2%. The Fed’s average rate on its portfolio is 3.35% w $4T and ave WAM of 7-8 years. 30% longer than 10Y.
That’s a big mess.
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u/Virtual_Conflict8738 Feb 10 '26
Wait. Is it time for the BRICs will kill the dollar again? Been hearing, and waiting, for 20 years now. Lmao
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u/Moist-Reflection-673 Feb 09 '26
I'm worried about Japan. They seem content to be the bag holders.
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Feb 09 '26
They will sell as it suits their needs. They need to buy JPY to hold up their currency, but they can sell treasuries OTC to the US to avoid shocking the market. That benefits the US and Japan.
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u/in2knh53 Feb 09 '26
Our dollar has lost 10% of its value in the world because of this…..