[Microwind] U.S. debt, now no longer an asset, but a “hostage”!Many people think that China sells U.S. debt to stop losses!The truth is that Beijing is carrying out a “pre-war general mobilization” to systematically liquidate enemy financial assets and turn them into hard currency to win the next war!
This sounds a bit sensational, but if you carefully ponder the recent developments, you may break out in a cold sweat.
Many people think that China's continued selling of U.S. debt is purely to stop the loss of the economy. Because the dollar depreciates, it is worried that the money in its hands will shrink. Wrong! If it's just for this petty profit, the pattern will be too small.
A bolder and even frightening interpretation is that Beijing is carrying out a quiet "pre-war general mobilization" to systematically liquidate financial assets from potential enemy countries and turn them into hard currency that can really come in handy in future conflicts!
Let us first say why US bonds have turned from "shampoo" to "hot potatoes" and even "hostages."In the past, everyone thought that US bonds were the world's safest assets, buying it was like putting money in the most insured closet.
But when the Russia-Ukraine conflict broke out, this myth was instantly shattered. The United States and its allies did not hesitate to freeze hundreds of billions of dollars in overseas assets of the Russian central bank.
This trick simply opens Pandora's magic box.It tells the world, especially those countries that are seen by the United States as "strategic competitors", that the dollar assets in your hands are not yours at the critical moment, it is just a person in the hands of the United States.
China, once holding over a trillion dollars of U.S. debt, is an astronomical figure. This money, in the past, was the “cappuccino” of China-U.S. relations, you have me, I have you, and no one wants to roll the table easily. But now, it is more like a Damocles sword hanging on China’s head.
You want to sell it all at once? Not good either. Because the market capacity is limited, if you sell, the price of U.S. bonds will plummet, and the rest of your hands that have not yet been sold will also depreciate, which is equivalent to cutting your own flesh. This is the dilemma of a "hostage": you cannot use it to attack your opponent, nor can you easily get rid of it, so you can only passively be kidnapped by it.
Therefore, when you say that China is selling U.S. debt to "stop loss", you only see the surface. The deeper logic is a strategic shift of "financial decoupling".
It's like a martial arts master, realizing that his kung fu has been broken by his opponent, and his opponent also knows all your moves. At this time, the most important thing he should do is not to continue to compete with this set of kung fu, but to immediately enter seclusion cultivation, cripple this set of kung fu and practice a new set of his own unique skills that no one can see through. This is what China is doing now.
How was this “pre-war general mobilization” carried out?It was not one-off, but a systematic, multi-organized project.The first step was to reduce U.S. debt in an orderly and continuous manner.
If you look at China's data, it is not selling in a panic, but selling billions or tens of billions steadily month by month. It's like carrying your luggage to a lifeboat in an orderly manner on a big ship that is about to sink, so as to ensure that you can evacuate safely without causing panic among others on board and causing the ship to sink ahead of time.
The second step is to convert the dollar sold in exchange for US bonds to a real “hard currency”.
Over the years, the central bank of China has been crazyly increasing its gold reserves, and each month’s purchases make the market crazy.
In addition to gold, there are also a large number of strategic resources, such as oil, natural gas, iron ore, grain, etc. These things are much more useful than dollars in wartime. You can't make bullets out of dollars, but you can make them out of iron ore.
The third and most critical step is to promote the internationalization of the RMB and establish a trade settlement system that bypasses the US dollar. China does business with countries such as Russia, Brazil, and Saudi Arabia, and is increasingly settling in local currencies. We buy your oil and give you RMB. You can buy our China goods with RMB.
As a result, the dollar is kicked out. We no longer need to desperately earn dollars to buy oil, and the dollars we hoard in our hands are not so important. This is equivalent to quietly digging countless diversion canals under the dam of the US dollar to direct the water to one's own fields.
So, you see, this whole set of combinations, the goal is very clear: to reduce as much as possible the dependence on the US dollar system, to turn the financial assets that could be armed by the United States at any time, into real gold, resources and the mainstream trade network in their hands.
It is preparing for the worst-case scenario, preparing a "financial firewall" where China can maintain basic operations and war capabilities even if the US dollar system collapses and even if the United States launches comprehensive financial sanctions.
The game is far deeper than imagined.When the world is still watching aircraft carriers and fighter aircraft test flights, a financial war without smoke has long since broke out.It is no longer about how much money to earn, but about who can survive in the future extreme conflict.
This sounds a bit sensational, but if you carefully ponder the recent developments, you may break out in a cold sweat.
Many people think that China's continued selling of U.S. debt is purely to stop the loss of the economy. Because the dollar depreciates, it is worried that the money in its hands will shrink. Wrong! If it's just for this petty profit, the pattern will be too small.
A bolder and even frightening interpretation is that Beijing is carrying out a quiet "pre-war general mobilization" to systematically liquidate financial assets from potential enemy countries and turn them into hard currency that can really come in handy in future conflicts!
Let us first say why US bonds have turned from "shampoo" to "hot potatoes" and even "hostages."In the past, everyone thought that US bonds were the world's safest assets, buying it was like putting money in the most insured closet.
But when the Russia-Ukraine conflict broke out, this myth was instantly shattered. The United States and its allies did not hesitate to freeze hundreds of billions of dollars in overseas assets of the Russian central bank.
This trick simply opens Pandora's magic box.It tells the world, especially those countries that are seen by the United States as "strategic competitors", that the dollar assets in your hands are not yours at the critical moment, it is just a person in the hands of the United States.
China, once holding over a trillion dollars of U.S. debt, is an astronomical figure. This money, in the past, was the “cappuccino” of China-U.S. relations, you have me, I have you, and no one wants to roll the table easily. But now, it is more like a Damocles sword hanging on China’s head.
You want to sell it all at once? Not good either. Because the market capacity is limited, if you sell, the price of U.S. bonds will plummet, and the rest of your hands that have not yet been sold will also depreciate, which is equivalent to cutting your own flesh. This is the dilemma of a "hostage": you cannot use it to attack your opponent, nor can you easily get rid of it, so you can only passively be kidnapped by it.
Therefore, when you say that China is selling U.S. debt to "stop loss", you only see the surface. The deeper logic is a strategic shift of "financial decoupling".
It's like a martial arts master, realizing that his kung fu has been broken by his opponent, and his opponent also knows all your moves. At this time, the most important thing he should do is not to continue to compete with this set of kung fu, but to immediately enter seclusion cultivation, cripple this set of kung fu and practice a new set of his own unique skills that no one can see through. This is what China is doing now.
How was this “pre-war general mobilization” carried out?It was not one-off, but a systematic, multi-organized project.The first step was to reduce U.S. debt in an orderly and continuous manner.
If you look at China's data, it is not selling in a panic, but selling billions or tens of billions steadily month by month. It's like carrying your luggage to a lifeboat in an orderly manner on a big ship that is about to sink, so as to ensure that you can evacuate safely without causing panic among others on board and causing the ship to sink ahead of time.
The second step is to convert the dollar sold in exchange for US bonds to a real “hard currency”.
Over the years, the central bank of China has been crazyly increasing its gold reserves, and each month’s purchases make the market crazy.
In addition to gold, there are also a large number of strategic resources, such as oil, natural gas, iron ore, grain, etc. These things are much more useful than dollars in wartime. You can't make bullets out of dollars, but you can make them out of iron ore.
The third and most critical step is to promote the internationalization of the RMB and establish a trade settlement system that bypasses the US dollar. China does business with countries such as Russia, Brazil, and Saudi Arabia, and is increasingly settling in local currencies. We buy your oil and give you RMB. You can buy our China goods with RMB.
As a result, the dollar is kicked out. We no longer need to desperately earn dollars to buy oil, and the dollars we hoard in our hands are not so important. This is equivalent to quietly digging countless diversion canals under the dam of the US dollar to direct the water to one's own fields.
So, you see, this whole set of combinations, the goal is very clear: to reduce as much as possible the dependence on the US dollar system, to turn the financial assets that could be armed by the United States at any time, into real gold, resources and the mainstream trade network in their hands.
It is preparing for the worst-case scenario, preparing a "financial firewall" where China can maintain basic operations and war capabilities even if the US dollar system collapses and even if the United States launches comprehensive financial sanctions.
The game is far deeper than imagined.When the world is still watching aircraft carriers and fighter aircraft test flights, a financial war without smoke has long since broke out.It is no longer about how much money to earn, but about who can survive in the future extreme conflict.