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Countries avoid investments in US public debt
More and more countries avoid investments in US debt obligations. Is the hegemony of the US dollar coming to an end? Over the past few years, the dollar has been supported by demand from foreign central banks, but now everything has changed. Now even Japan reduces the amount of treasuries in its reserves - according to the table, the state debt of the countries of the world in 2017 the country is on the first place.
Countries avoid investments in US public debt
In February 2018, Japanese investors sold a record amount of US debt - $ 36.68 billion. Since last October, the Japanese have sold Treasury at $ 71.72 billion. Apparently, they decided to move into the euro, because in February they bought such securities for 8 , 06 billion, and this is the fifth consecutive month, when Japanese investors bought bonds in euros.

In addition, most recent auctions of US debt securities are held with extremely low demand from non-residents, and this is an extremely serious signal.

Apparently, the world financial system is changing before our eyes.

At the same time, Treasury yields continue to grow. Ten-year securities are traded now with a yield of 2.96%, this is even higher than before the February collapse of the stock markets. So, the US government bonds are getting cheaper, the dollar is not growing, and the cost of swaps is that foreigners investing in Treasuries with hedge accounting become unprofitable.

If the fall in the value of bonds continues, and the yields in turn will break through the 3% mark first, and then other important technical levels, then, quite possibly, we will see yet another wave of weakening the dollar.

The probability of such a scenario is quite high, however, if you plunge into the theory of conspiracies, we can assume that this option is quite suitable for American elites, and all problems can be attributed to Trump.

In the rest, the situation in the US is extremely unpleasant. Some reforms the American president has conducted, but so far there has been no tangible result, while the Fed continues to raise rates. At some point, the regulator can start accelerating rates to support the dollar, but in this situation, economic growth will be finally destroyed.

The situation in itself is unique. Never before in history, fiscal and other incentives have gone through the tightening of monetary policy, that is, in fact, we see two opposite processes.

Against this background, the American economy is already experiencing certain problems, and the prospects are only worsening due to the recent events and the possible "trade war" with China.

It is also worth adding that the US has moved to a direct struggle with its competitors, but this struggle is conducted with the use of force, that is, sanctions, and this may not yield the fruits that the Americans are counting on. The introduction of duties is one example of such a struggle. In other words, if an American manufacturer loses fair competition, then he just needs to create conditions under which competitors will not have a place. But such an approach, as already mentioned above, is not entirely suitable for modern realities, and even the allies may not like it.
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    «    Октябрь 2020    »

    GDP of the world's countries 2019

    List of the IMF in billion. $.

      1 USA - 21482
      2 China - 14172
      3 Japan - 5220
      4 Germany - 4117
      5 India - 2957
      6 France - 2844
      7 Great Britain - 2809
      8 Italy - 2112
      9 Brazil - 1929
      10 Canada - 1820
    GDP per capita world countries 2017 (table)

    List of the IMF in $

      1 Luxembourg - 108004.9
      2 Switzerland - 79347.76
      3 Norway - 72046.29
      4 Qatar - 67269.64
      5 Macao - 61365.29
    The state debt of the countries of the world 2017

    Public debt of 2017 countries as a percentage of GDP

      1 Japan - 250,91
      2 Lebanon - 147,62
      3 Italy - 131,71
      4 Eritrea - 127,5
      5 Portugal - 127,33
      6 Cape Verde- 122,25
      7 Bhutan - 122,12
      8 Jamaica - 116,07
      9 USA - 107,48
      10 Barbados - 106,58
    Gold and currency reserves of the countries of the world 2017

    International reserves, billion USD

      1 China - 3080,7
      2 Japan - 1260,0
      3 Switzerland - 773,1
      4 European Union - 745,9
      5 Saudi Arabia - 492,9
      6 Taiwan - 444,4
      7 Russia - 419,9
      8 Hong Kong - 413,3
      9 India - 393,6
      10 Republic of Korea - 383,8

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