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The US will become insolvent by trying to prop up Japan. "The Insane US-Japan Currency Bailout" - https://youtu.be/yh18YXKMk3g https://youtu.be/yh18YXKMk3g Wh

The US will become insolvent by trying to prop up Japan. "The Insane US-Japan Currency Bailout" - https://youtu.be/yh18YXKMk3g https://youtu.be/yh18YXKMk3g Why does the US need to prop Japan? Because they are the biggest holder of US treasuries ...and if they need to prop up their own currency, they will need to sell them. <Insert Pearl Harbor reference...>

thephyber 2mo ago
Yes, and... The US sold Euros to do the propping of Japanese bonds without telling the EU. Not only did we spend a lot to save our biggest sovereign buyer, but we undermined our relationship with another. And we didn't buy the Japanese much time. Worth mentioning that lots of buyers is jumping into Chinese bonds over the past week. It feels like the BRICS are taking over as of this month.
- deleted 2mo ago
  [deleted]
- ericmay 2mo ago
  > Worth mentioning that lots of buyers is jumping into Chinese bonds over the past week. How many? > It feels like the BRICS are taking over as of this month. Taking over what?
  - thephyber 2mo ago
    The news about Chinese bond attractiveness today: https://x.com/macropaperr/status/2089255200918007854?s=46 https://x.com/macropaperr/status/2089255200918007854?s=46 Obviously we don't measure it in "how many traders", but what the effect their trading has on the instruments they buy. The US Dollar is slipping from the world's reserve currency status and the US treasury is slipping from the default safe haven for liquid assets. The BRICS countries bonds are becoming more attractive as of this month.
    - kasey_junk 2mo ago
      Brazil, India and South Africa all have 5 year bond yields that are higher now than 5 years ago. Russia is obvious outlier you can’t price well. If there is any news this month in Chinese bonds it’s a) a crazy upward move that corrected and b) the Chinese authorities have upped the quota on foreign bonds that their asset managers are allowed to buy.
      - bluGill 2mo ago
        High bond yields are a sign of low trust - if you trust a currency will be stable you need less yield to risk investing in it.
        kasey_junk 2mo ago
        Correct, so the BRICS angle I'm responding to is not what the market is showing.
        brazukadev 2mo ago
        it was a tongue-in-cheek comment, I think. China is doing well and will try to prop up its BRICS partners as long as it benefit China. It doesn't help that current US government is actively attacking those countries' economies.
    - piva00 2mo ago
      It's not BRICS as a whole, it's China and a little bit of India. Brazil is a major risk given political turmoil and generalised corruption; Bolsonaro attempted a coup in a country already plagued in history by coups, his son is going to run for presidency and has a chance to win it. South Africa's economy is in shambles, their electricity grid can barely function, the country is going backwards socially and economically. Russia I don't think we even need to talk about. That leaves China and India, China has capital controls and is notoriously difficult to invest in. I don't think there's much in common with BRICS as it was in the early 2000s when the acronym surfaced, as of now they are very dissimilar societies and economies.
ericmay 2mo ago
> The US will become insolvent by trying to prop up Japan. No, it won’t. The worst case we are looking at is paying more interest on debt. It’s not great but we aren’t in danger of becoming insolvent because of Japan.
- IsTom 2mo ago
  It's already ~20% of US government revenue. Every percentage point more of yield on bonds is going to be tough.
  - root-parent 2mo ago
    No, its 39%....
- thephyber 2mo ago
  There's a non-zero chance that actually following through on Bessent's statements about support for the largest sovereign buyer of US bonds would push us towards insolvency. You are just stating an opinion that we would stop short of it becoming such a large support program that it would push the US past the tipping point towards inevitable insolvency.
  - ericmay 2mo ago
    Then they would just take a different action than go into insolvency. This doesn't make any sense at all. > You are just stating an opinion that... You don't say?
spott 2mo ago
“Biggest holder of us treasuries” 3.1 percent. Just for context.
- _heimdall 2mo ago
  If Japan were to quickly unload a meaningful chunk of their $1.2 trillion in treasuries it would wreck the treasuries market. If I'm not mistaken, $1.2T is roughly the year-to-date trading volume of the treasuries market [1]. [1] https://www.sifma.org/research/statistics/us-treasury-securities-statistics https://www.sifma.org/research/statistics/us-treasury-securi...
  - spott 2mo ago
    Sure. It would also wreck Japan.
    - _heimdall 2mo ago
      That would depend on why they do it and what theoney is reallocated to. Though yeah I'm sure they'd be wrecked, I don't think they'd dump treasuries I'd the risk of being wrecked was already very high.

thephyber 2mo ago

Yes, and... The US sold Euros to do the propping of Japanese bonds without telling the EU. Not only did we spend a lot to save our biggest sovereign buyer, but we undermined our relationship with another. And we didn't buy the Japanese much time. Worth mentioning that lots of buyers is jumping into Chinese bonds over the past week. It feels like the BRICS are taking over as of this month.

deleted 2mo ago
[deleted]
ericmay 2mo ago
> Worth mentioning that lots of buyers is jumping into Chinese bonds over the past week. How many? > It feels like the BRICS are taking over as of this month. Taking over what?
- thephyber 2mo ago
  The news about Chinese bond attractiveness today: https://x.com/macropaperr/status/2089255200918007854?s=46 https://x.com/macropaperr/status/2089255200918007854?s=46 Obviously we don't measure it in "how many traders", but what the effect their trading has on the instruments they buy. The US Dollar is slipping from the world's reserve currency status and the US treasury is slipping from the default safe haven for liquid assets. The BRICS countries bonds are becoming more attractive as of this month.
  - kasey_junk 2mo ago
    Brazil, India and South Africa all have 5 year bond yields that are higher now than 5 years ago. Russia is obvious outlier you can’t price well. If there is any news this month in Chinese bonds it’s a) a crazy upward move that corrected and b) the Chinese authorities have upped the quota on foreign bonds that their asset managers are allowed to buy.
    - bluGill 2mo ago
      High bond yields are a sign of low trust - if you trust a currency will be stable you need less yield to risk investing in it.
      - kasey_junk 2mo ago
        Correct, so the BRICS angle I'm responding to is not what the market is showing.
        brazukadev 2mo ago
        it was a tongue-in-cheek comment, I think. China is doing well and will try to prop up its BRICS partners as long as it benefit China. It doesn't help that current US government is actively attacking those countries' economies.
  - piva00 2mo ago
    It's not BRICS as a whole, it's China and a little bit of India. Brazil is a major risk given political turmoil and generalised corruption; Bolsonaro attempted a coup in a country already plagued in history by coups, his son is going to run for presidency and has a chance to win it. South Africa's economy is in shambles, their electricity grid can barely function, the country is going backwards socially and economically. Russia I don't think we even need to talk about. That leaves China and India, China has capital controls and is notoriously difficult to invest in. I don't think there's much in common with BRICS as it was in the early 2000s when the acronym surfaced, as of now they are very dissimilar societies and economies.

ericmay 2mo ago

> The US will become insolvent by trying to prop up Japan. No, it won’t. The worst case we are looking at is paying more interest on debt. It’s not great but we aren’t in danger of becoming insolvent because of Japan.

IsTom 2mo ago
It's already ~20% of US government revenue. Every percentage point more of yield on bonds is going to be tough.
- root-parent 2mo ago
  No, its 39%....
thephyber 2mo ago
There's a non-zero chance that actually following through on Bessent's statements about support for the largest sovereign buyer of US bonds would push us towards insolvency. You are just stating an opinion that we would stop short of it becoming such a large support program that it would push the US past the tipping point towards inevitable insolvency.
- ericmay 2mo ago
  Then they would just take a different action than go into insolvency. This doesn't make any sense at all. > You are just stating an opinion that... You don't say?

spott 2mo ago

“Biggest holder of us treasuries” 3.1 percent. Just for context.

_heimdall 2mo ago
If Japan were to quickly unload a meaningful chunk of their $1.2 trillion in treasuries it would wreck the treasuries market. If I'm not mistaken, $1.2T is roughly the year-to-date trading volume of the treasuries market [1]. [1] https://www.sifma.org/research/statistics/us-treasury-securities-statistics https://www.sifma.org/research/statistics/us-treasury-securi...
- spott 2mo ago
  Sure. It would also wreck Japan.
  - _heimdall 2mo ago
    That would depend on why they do it and what theoney is reallocated to. Though yeah I'm sure they'd be wrecked, I don't think they'd dump treasuries I'd the risk of being wrecked was already very high.