According to the latest international capital flow report TIC released by the US Department of Finance in December 16th, two months ago, in October this year, 18 overseas central bank holders of the US debt sold the US debt in varying degrees.
At the same time, the Central Bank of the world has sold treasury bonds for 14 consecutive months.
During this period, the total selling of US debt by the global central bank amounted to US $348 billion.
This further confirms that the BWC central bank has recently mentioned that the global central bank is raising the tide of US debt selling. There are several phenomena worth noticing in the latest selling list of US debt in October. First, the 5 authorities in Belgium, Germany, Holland, Italy and Poland announced that they had already transported some of the gold from the overseas treasury of the Federal Reserve and England bank or planned to return to the gold.
Among them, Belgium, one of the top ten holders of US debt overseas central bank, sold $10 billion of US debt. Germany sold 2 billion 300 million US debt in September and October. Holland also sold 2 billion US debt for two consecutive months. Poland also sold 3 billion 100 million US debt for two consecutive months, while Italy sold 100 million US debt.
In the recent central bank that shipped overseas gold, we take Poland as an example. It is reported that Poland successfully returned from abroad to Poland in November, with a total of 8000 gold bars weighing 100 tons. Combined with Poland's massive reduction of US debt for two months in a row, we can see that Poland is replacing the US dollar core assets with physical gold and other non US dollar currencies, and this has almost become the epitome of the many central banks' reduction of US debt in the past.
This shows that we are approaching the end of the US dollar led global monetary system 48 years after the complete separation of the US dollar and gold. This may come from the biggest monetary change since Nixon closed the gold window in 1971 and unilaterally abolished the gold standard of the Bretton Woods system.
On the other side, in the list of global central banks selling U.S. debt in October, oil and Saudi Arabia and Kuwait also showed a continuous sell-off of US debt. For example, Saudi Arabia sold two US dollars in September and October for a total of 4 billion 900 million US dollars in debt, while Kuwait began in July, and there were 3 selling cases in the 4 months ended October. Although September has not been reduced, it has been flat with August and sold 600 million US debt. We know that the US dollar has the status today. In the 70s of last century, the oil and dollar agreement signed between Saudi Arabia and the United States played an important role.
Since then, the global oil trade is not only the US dollar, but also has become an anchor for the global monetary authorities including a series of oil countries. This means that once the global oil companies no longer favor us debt, the foundation of the oil dollar seems to be shaken. We have mentioned that in recent years, Russia, the world's main oil producing country, has accumulated a total of about 94% of the US debt, which is the highest point. Combined with the signs of continuous debt reduction in Saudi Arabia and Kuwait, it is not ruled out that the oil dollar is facing a bigger wall. The McGill International Review columnist Nick Chao analyzed several weeks ago that the oil dollar agreement could be concluded ahead of schedule. This will also become a potential risk for the US dollar to be liquidated.
Compared with the previous series of selling off the US debt, another change in the global central bank in October was the holding of us and China's two major overseas holders of US debt. We note that Japan expanded this position in October, after Japan surpassed China in June this year to become the largest holder of US debt. Japan issued a sharp sell-off of $28 billion 900 million in September, and became the largest US short seller in the month. In October, it increased 22 billion 200 million US debt in October. At present, Japan holds 1 trillion and 168 billion U.S. debt. Now it has returned to the largest gap between China and the United States since July 2008.
While Japan increased its US debt in October, China continued to sell US debt.
Although China (mainland) sold $800 million in U.S. debt in October, it should be noted that the US financial website Zerohedge reported that the current US $1 trillion and 101 billion 600 million debt is the lowest and the lowest level of US debt since April 2017 (30 months). Moreover, we noticed that between June last year and September this year, China (mainland) reduced its US debt by about 91 billion 100 million US dollars. That is to say, after accumulative reduction of 91 billion 100 million US debt, China will sell US debt again. The total number of US $100 billion debt sold has exceeded the US $84 billion 200 million debt currently held by Germany.
Dario, founder of the world's largest hedge fund bridge and billionaire ray Lei, recently predicted that he would not rule out the possibility of China's larger and larger cuts in US Treasury bonds. I think or become a reality. According to a recent report by Russian satellite news agency, according to observers, it is entirely possible that China will sell US Treasury bonds with a scale of up to US $700 billion.
Russian media further explained that if the market has become accustomed to the reduction of US Treasury bonds, then a large number of major buyers in a short period of time will cause market turbulence. This also means that the US debt economic model, which relies solely on the Fed itself, seems to be difficult to maintain, and its continuous expansion of the US dollar also breeds the risk of the US financial and debt crisis.
After all, as of December 17th, the total amount of US federal debt has reached 23 trillion and 100 billion US dollars (as shown above). In the past three years, the total amount of US federal debt deficit has increased by US $3 trillion and 200 billion, and the deficit of the US economy will not enter into a hollow state without the attention of many buyers. At that time, the US dollar will also face liquidation. (end)