#StockMarket #TreasuryBonds #dollar #yuan⠀
🇨🇳 Refusal from the dollar – reality or blackmail?
⠀
Last week, China sold a record amount of US government debt in a deal seen as a diversification away from dollar assets. However, concerns about a global abandonment of greenback are overblown.
⠀
The market has long been divided into two camps: currency analysts claim that no one is dumping the dollar, while commodity traders see an active movement of capital into oil, precious metals, and even derivatives with questionable liquidity.
⠀
According to the U.S. Treasury Department, Beijing sold $53.3 billion in Treasury and agency bonds in the first quarter of this year. During the same period, Belgium, often seen as a nominee for Chinese assets, offloaded $22 billion in Treasury bonds.
⠀
As part of their strategy to reduce dollar assets, China and its allies have significantly increased their holdings of gold in foreign exchange reserves. In fact, their gold reserves are at their highest levels since 2015. In April, gold made up 4.9% of China's state reserves, according to official data. However, independent analytical agencies suggest this figure has long surpassed 6%, indicating a substantial shift in China's financial strategy.
⠀
Contrary to popular belief, there hasn't been a significant collective effort to de-dollarize the world economy. The IMF suggests that while there has been a diversification of central banks' foreign exchange assets, it hasn't come at the expense of the dollar. As of April 2024, the dollar still dominated over 85% of foreign exchange transactions, and USD reserves continue to far outweigh those in other currencies.
⠀
So, the yuan will not be able to push the dollar off its pedestal anytime soon, and the sale of American debt is clearly synchronized with the dynamics of the US-China trade war. The closer the elections, the stronger the debt blackmail. It's nothing personal, just business.
⠀
And what do you think?
⠀
Profits to y’all!