Countries have abandoned American debt.
American debt is the largest sovereign bond in the world, with a history of more than 200 years. It is famous for its low risk and high liquidity. In the past, many countries bought American debt one after another, but now they seem reluctant to buy it. What kind? Will the building collapse? Feeling. Because all countries are selling American debt, it also shows that the economic situation in the United States is very serious.
Although the Fed is also taking some other measures, the effect is not very satisfactory. In order to reduce the pressure of holding American debt, it is the most direct and effective way for other countries to sell American debt. In response to this method, the United States directly printed money on a large scale, which led to the depreciation of the dollar. Relatively speaking, it will also transfer some risks to other countries, which will aggravate other countries' distrust of the United States.
affect
For the United States, the continuous selling of US debt by many countries will also lead to a gradual decline in the price of US Treasury bonds. Faced with the tight capital chain, there may be a shortage of money, which will lead to a sharp decline in the stock market, which may affect other fields. At present, many countries around the world have started? Dedollarization? Increase other foreign exchange reserves to cope with the impact of the US economic recession.
For these countries that sell American debt, they can also stabilize the exchange rate and prevent their currencies from depreciating. In fact, selling US debt is not uncommon in some countries. The Russian government has already done it on a large scale, and the allies of China, Japan and the United States are also selling American debt on a large scale. I believe it will have a great impact on the global economic crisis.