China is beginning to sell off the U.S. Treasury bonds they own. The significance of this is that it is ultimately going to make it more difficult for the U.S. to continue to maintain its debt and will increase inflation of the U.S. dollar. China's ownership of U.S. Treasury debt reached a peak in August 2017 of 1.2 trillion dollars. But now, as of August 2023, China's ownership of U.S. debt has hit a 14-year low of 835 billion. (That's 69% of the peak) China has been slowly selling off U.S. Treasury debt. It's believed the reason China is doing this is because of their recent economic slump. China is trying to prop up the yuan, to stabilize it. Historically China kept their own currency weaker by buying U.S. bonds, in order to help promote exports, but the situation now appears to have reversed. But with China selling off U.S. Treasury debt, it's going to flood the marketplace and then the world will not be buying more debt that the U.S. Treasury is selling. This is going to make it more difficult and expensive for the U.S. to continue to service their debt. This is all part of the so-called "run on the dollar", with other countries around the world beginning to dump the dollar due to the high rates of inflation. Which will contribute to even more inflation when there is less international demand for the dollar. The American public has been warned about this before, that it's dangerous for China to hold so much of the U.S. debt. If China suddenly dumped a large portion of it, it could cause shockwaves in the market. Beijing selling off US Treasurys is a sign of China's economic weakness as it tries to prop up the yuan, Matthew Fox, August 25, 2023, Business Insider - India
Yes, exactly. This is all part of "dumping the dollar", a trend that has recently begun. China beginning to sell off significant amounts of the US Treasury debt it holds is a very significant signaling point in the timeline.
It may have to do with speculation around Saudi Arabia and the UAE joining BRIC in January. If SA starts selling oil in BRIC currency instead of USD it would mean the end of the petrodollar.
Biden requires that any country trading with Russia do so in a currency other than the US dollar, so given the amount of international trade Russia is involved in, that required setting up another medium of exchange.
And that is how Biden helped set up international trade using something other than US dollars. He wants to end the Petrodollar and the Eurodollar, has made real progress with ending the Petrodollar, and has produced the beginning of the end for the Eurodollar. You guys probably know more about it than I do, but I associate the origins of the Petrodollar with our relationship with Saudi Arabia, which Biden trashed, and the Eurodollar was created by the USSR in the mid 1950s and rescued the dollar from a solvency problem at that time. Biden forbade Russia from using USD in trade and stole 300 billion of USD Russia had in reserves. Think it is pretty clear that Biden is destroying the USD. He might also run up the deficit and that will help in his aim. Why does Congress go along with what he wants?
Some may remember how from about 1995 to 2011 the U.S. was importing all sorts of cheaply made goods from China, and how practically every consumer item sold in the U.S. had a "made in China" label on it. The U.S. ran a big trade deficit with China at that time. So that's how China got so much money from the U.S. After some point in time, more oil from Saudi Arabia began going to China than going to the U.S. ... China has the money to buy it now. As of 2020, 77% of Saudi Arabian oil being sold was going to other countries in Asia. Just for comparison, in 1990 the U.S. imported about 1.5 million barrels of oil from Saudi Arabia a day. After 2020, that was down to only 450,000.
My simple understanding of the early basis of the USD as the world exchange currency and reserve currency, rested on two main foundations, initially Saudi Arabia would sell oil in dollars, mainly accepting treasuries in payment, the Petrodollar was the first foundation and included other petroleum exporting nations. In a quick look at the Internet I could not find the total value of the petrodollars. And in the mid 1950s the USSR moved it's dollars into a European bank and or a British one, to ensure the US would not confiscate the money, and other dollars kept in overseas banks are also referred to as 'Eurodollars'. The Eurodollar was another foundation of the dollar, and I found In 2016, the Eurodollar market size was estimated at around 13.833 trillion. If someone has better data that would be great, but it looks like Biden has been playing with fire by having a bust up with the Saudi family and also one with Russia. I'm thinking this must be a deliberate plan to reduce the value of the dollar but I can't work out why?
