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US Treasuries Have Become Unappetizing for Foreign Central Banks and Governments
- 1over137 16d agoUS everything has become unappetizing for everyone outside the US.
- toomuchtodo 16d agoExorbitant privilege is a gift that lasts only as long as the trust does. https://en.wikipedia.org/wiki/Exorbitant_privilege https://en.wikipedia.org/wiki/Exorbitant_privilege https://news.ycombinator.com/item?id=47635834 https://news.ycombinator.com/item?id=47635834 covers this succinctly: > America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe... from Gold overtakes U.S. Treasuries as the largest foreign reserve asset - https://news.ycombinator.com/item?id=47635056 https://news.ycombinator.com/item?id=47635056 - April 2026 (250 comments)
- ProjectArcturis 16d ago[dead]
- rayiner 16d agoThis argument fundamentally does not make sense. Look at a chart of U.S. GDP per capita growth: https://substackcdn.com/image/fetch/$s_!zSCw!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fafa99d7e-749e-4e36-bf66-b4a7a043613e_2048x1249.png https://substackcdn.com/image/fetch/$s_!zSCw!,f_auto,q_auto:... The U.S. was growing at the same rate or faster as the UK from 1830 to 1930, when the UK had an empire and the U.S. didn’t. Then, in the second half of the 20th century when the U.S. had an empire and the UK didn’t, the growth rates were more or less the same in both places in the long run trend (ignoring the UK’s step change hit from WWII).
- dixie_land 16d agoThe £ was backed by UK's (perceived) military might just as $ is by the States'. The the war on Iran (and many years of war on terror) showed we have anything but
- rtkwe 16d agoThere are other backers to that as well. The main ones being oil trades being settled largely in USD and the need to acquire USD to pay for US goods/services. It's not all military might there's a lot of economic might in there too.
- toomuchtodo 16d agoThis is the important point. Oil was/is settled in dollars. The world is rapidly moving away from oil. China has already hit peak oil. China is 1/3rd of global manufacturing capacity. If you're leaving oil behind, and buying solar, batteries, and EVs from China, your need for dollars declines, and need for yuan goes up. Also, stocks vs flows. You have to keep buying oil every day from petrostates, while the clean tech you buy is yours for its entire service life (a decade or more for EVs, decades for solar and stationary battery storage). The US did well when the Saudis required dollars for oil as part of the US-Saudi security and military arrangement, and that arrangement is declining in value over time as the value of oil to the global economy declines. The US loses investors in US treasuries when folks who sold oil for dollars do not have dollars from oil sales. Shades of theta decay. China Adds Currencies to Central Clearing in Yuan's Global Push - https://news.ycombinator.com/item?id=49736124 https://news.ycombinator.com/item?id=49736124 - September 2026 The Iran War Just Broke the Petrodollar - https://www.bloomberg.com/opinion/articles/2026-04-06/the-petrodollar-loop-supporting-the-treasury-market-is-broken https://www.bloomberg.com/opinion/articles/2026-04-06/the-pe... | https://archive.today/RyJA8 https://archive.today/RyJA8 - April 6th, 2026 > "The petrodollar loop requires two moving parts: dollars earned and dollars invested. Both have stopped." > The standard reassurance is that there is no alternative to Treasuries — no other market offers the depth, liquidity and legal infrastructure that central banks require. This remains true. Foreign central banks will not abandon Treasuries wholesale. But “no realistic alternative” and “unquestioned safe haven” are not the same thing, and the Iran war is clarifying the difference. https://ember-energy.org/data/china-cleantech-exports-data-explorer/ https://ember-energy.org/data/china-cleantech-exports-data-e... > As the world’s largest manufacturer of clean technologies, data on China’s cleantech exports provide an important early insight into the pace and scale of the energy transition. In 2024, China produced around 80% of the world’s solar PV modules and battery cells, and 70% of electric vehicles. (as of this comment, China is exporting EVs at a 12M unit/year annualized run rate, with the capacity to build 50M EVs/year; they are only constrained by not enough marine vessels to keep up with export demand; every 24 months of EV production destroys ~1M barrels/day of oil demand at current run rates, which continue to increase) China growth straining global auto shipping capacity - https://news.ycombinator.com/item?id=49553327 https://news.ycombinator.com/item?id=49553327 - September 2026 (0 comments) China's Manufacturing Advantage, Explained [video] - https://news.ycombinator.com/item?id=49451076 https://news.ycombinator.com/item?id=49451076 | https://www.youtube.com/watch?v=OgYKVpOsMJs https://www.youtube.com/watch?v=OgYKVpOsMJs - August 2026 (think in systems)
- rpdillon 16d agoAnd many of us inside the US as well, tbf.
- cyanydeez 16d agoWe're basically in some rendition of planet serenity, where 20% of the population absolutely is eating this shit up.
- fhdkweig 16d agoI'm not getting the reference. Is "planet serenity" a reference to the 12-step program for addiction or the planet Miranda from the film Serenity, or something else entirely?
- carefree-bob 16d agoThis is nonsense. The rest of the world holds 9.7 Trillion in Treasuries and this amount increased by $500 billion over the last year. So the opposite of this article is true. You can get all the data from the Z.1 release. Please don't take these types of flame bait articles seriously or try to spin up an entire world view based on them as you will end up not only directionally wrong, but believe in the exact opposite of reality. FYI, that $500B increase in treasury holdings is not the whole picture, there are also the agencies (housing mortage backed securities guaranteed by the govt) and foreign holdings of those also increased by $70 billion over the last year, and are about 1.5 Trillion.
- bflesch 16d agoInstitutional investors are very slow to adapt, so I wouldn't take their continued investment as a positive signal. The sentiment shift is real, and a lot of goodwill has been spent. It's basically divide and conquer on a national scale tearing down the democratic world police and the democratic systems it supported.
- carefree-bob 16d agoThe point is that the entire article is wrong, factually. In terms of institutional investors and sentiment, I think you are fundamentally not understanding why the rest of the world holds US debt, it is to support running trade surpluses. That is a core economic need of much of the world, and as long as there is that need, you will see foreign government accumulation of dollar denominated assets. For some reason people either refuse to understand simple balance of payment accounting constraints or they are deeply offended by them, and want to live in a world in which moral outrage determines things like global capital flows. But we do not live in that world. The reason why the rest of the world accumulated a trillion of dollar denominated assets last year, split roughly 50/50 between private and public, is solely because China needed to run a trillion dollar trade surplus. And next year it will also need to run an even bigger surplus. That forces everything else.
- lokar 16d ago
- isodev 16d agoImagine, even Apple is moving itself to the shitlist.
- glimshe 16d ago[flagged]
- josefritzishere 16d ago[dead]
- rconti 16d agoNo single alternative has to be better in all cases. Any diversification will end up reducing demand for treasuries. It's not a black and white issue.
- gradus_ad 16d agoThere must always be a hegemon. Will it be Europe? No, too weak and divided..will it be China? No, too authoritarian.. The US remains the best option among a mixed field of weak, corrupt, divided and authoritarian alternatives.
- JumpCrisscross 16d agoWe’re seeing a return to multilateral regional hegemony. Russia, China, India, a new Persia, Israel and Turkey duking it out in Asia. The edges of those conflicts trying to bring war back to Europe. And America getting potentially balanced by China and Europe in the Americas, with the Pacific theatre figuring out its own balancing game plan. The wild card being this will be the first time the world has entered this sort of unstable state since the invention of nuclear weapons. I expect to see a total failure of non-proliferation and the first nuclear civil war in my lifetime, if not the first nuclear war of territorial conquest. (I do not expect to see the first nuclear extermination.)
- daymanstep 16d ago> America getting potentially balanced by China and Europe in the Americas I can't figure out a way to parse this sentence that makes sense. Are you saying that "Europe" will "balance" the USA in the Americas? As in, European influence will counteract US influence in the Americas?
- JumpCrisscross 16d ago> European influence will counteract US influence in the Americas? Yes. If you’re Canada or Mexico or frankly anyone else in the Americas, you probably don’t want all your weapons systems to be dependant on American supply chains. And then if you think about it, you probably don’t want all your energy imports dependent on Washington’s noblesse. Et cetera. American exceptionalism was built on the trust the world put in us getting so unilaterally powerful without being balanced.
- nostrademons 16d ago
- qwerpy 16d agoOn the bright side, if enough people agree with this, I could finally buy a house in my neighborhood for <$3M. Prices remain stubbornly high and no amount of "America sucks" on HN and reddit are convincing these (mostly foreign, wealthy) people to sell their houses :(
- jopsen 16d agoYes, but if you happen to have a few million spare dollars laying around that have become unappetizing to you, it won't be hard to find someone who thinks they are appetizing :)
- paulsutter 16d agoI was dismissive when I saw the title, but they have real statistics: foreign holdings are at 2012 levels while total treasuries outstanding are 3x larger.
- freefolks 16d agotreasuries are the same as cash. All that means is there is still too much USD Money supply from QE and rates will continue to go higher to reduce the supply.
- carefree-bob 16d agoHoldings have increased by $500 billion over the last year. Why cherry pick 2012? Because that was in the aftermath of QE from the great recession and foreign holdings of treasuries were enormous as they rotated out of US private debt and sought the safety of treasuries. Today it is risk on, relatively speaking. These go up and down based on cash management needs and portfolio allocation choices between public and private debt, and so you can pick one year when cash management needs were high or appetite for riskier were low. And then count on people being dupes, LOL.
- NewJazz 16d agoThe trouble is the US never paid down the debt for those years, they just rolled it over and incurred new debt. If foreign holdings decrease further, it doesn't matter if it is simply for cash management reasons -- the US will be rolling over historic debt at historic interest rates.
- carefree-bob 16d agoBy paying down the debt, you mean issuing less debt over time? The US government is not an uncle that pays off his debt so he can retire and move to Florida. An individual does that, but the household sector as a whole does not pay down debt, because for every uncle moving to Florida, there is an Aunt borrowing for a new house. So instead, we talk about things like sectoral debt ratios and do not use language like "when will people in Maine finally pay down debt, I'm sick of seeing people in Maine owing debt". The government is a sector of the economy. You can argue that we are borrowing too much, and I would agree, but you are not gonna fix that until you address the foreign capital inflows. That means rolling back the investor rights agreements. As long as foreign nations can print money and use it to buy dollars in order to stimulate their exports, the US is going to have a problem with excessive debt loads. The flipside of that is that the US will not have a problem of foreign investors decreasing their holdings. It will increase every single year, in line with foreign export demands. If anyone tells you the opposite, just look for the error or the lie, because I guarantee you there is one. This article has both.
- lvl256 16d agoI think RoW is trying to send a message to certain US constituents. Edit: so much hate for something so benign.
- apercu 16d agoRoW = Rest of World? If so, those constituencies are immune to facts and common sense.
- arcanemachiner 16d agoGood guess. I'm usually pretty good with acronyms, but this one's got me stumped.
- pnut 16d agoPlease don't make us decode your acronym https://www.acronymfinder.com/ROW.html https://www.acronymfinder.com/ROW.html
- techdmn 16d agoI've been hesitant to talk about this too much, because it's such a bad joke, but personally I'm waging a War On Acronyms (WOA). They really don't save much time or effort, but make communication much more opaque. They can be a way of in-group signaling, which just makes it harder for newcomers / outsiders to come up to speed. And so many collisions.
- lvl256 16d agoRoW is not opaque. It’s widely used especially in academia. Acronyms exists for a good reason. If you like everything spelled out please stop using apostrophes while you’re at it.
- arcanemachiner 16d agoVery solipsistic take. Most people don't live in your bubble.
- reenorap 16d agoYes, that's called Quantitative Easing after the Global Financial Crisis. The peak in the graph was 2008 after which the US issues a shit ton of debt which was bought by the Fed. China used to be the biggest holder of US Treasuries but now it's the Federal Reserve and Japan. But the idea that you look at that graph as say it's "unappetizing" is dumb. Most foreign governments besides China have INCREASED their UST holdings. The only reason why the % is dropping is because of the massive amount bought by the Fed which messed up the %.
- method_capital 16d agoYeah ... and exactly how many of our treasury auctions have failed? Zero. Overbid by foreign parties, all of them.
- reenorap 16d agoExactly. Same as when Bessent wanted to buy 6B in long bonds but only bought 5.XB, people said that it failed but anyone who understands knows that it's the opposite. The oversubscription rate is normally 3X or more but this time it was 2X which means that people would rather keep their long bonds, which shows confidence in them.
- reenorap 16d agoEvery graph of foreign ownership is up and to the left over the last 10 years https://tradingeconomics.com/united-states/foreign-treasury-holdings-canada https://tradingeconomics.com/united-states/foreign-treasury-... https://tradingeconomics.com/united-states/foreign-treasury-holdings-uk https://tradingeconomics.com/united-states/foreign-treasury-... https://tradingeconomics.com/united-states/foreign-treasury-holdings-belgium https://tradingeconomics.com/united-states/foreign-treasury-... Only China has gone down: https://tradingeconomics.com/united-states/foreign-treasury-holdings-china https://tradingeconomics.com/united-states/foreign-treasury-... I stand corrected about Japan it looks like they've been flat over the last 10+ YEARS https://tradingeconomics.com/united-states/foreign-treasury-holdings-japan https://tradingeconomics.com/united-states/foreign-treasury-... Basically the article linked above is dumb, and they either are stupid and don't understand what they're talking about or trying to cast a false narrative
- llmslave 16d agoUS policy: 1. print money 2. suppress wages by shipping in cheap labor 3. reassure the population you arent doing the above
- tastyfreeze 16d agoStep 3 is profit. As in, "we are robbing you blind but that's not my hand in your pocket".
- llmslave 16d agounreal that they are still doing it too
- csomar 16d agoThe issue (real issue?) is that it’s unclear whether these governments reduced their holdings or switched them to these opaque structures (tether can be considered one). The idea is, it would be hard for the US to untangle true ownership. I wonder if UBO was getting undone blue or red because it’s a real threat for such a system but the US needs this “second” lifeline.
- deleted 16d ago[deleted]
- sidewndr46 16d agoAre their sovereign states dumb enough to invest in Tether?
- kelnos 16d agoLooking at the graphs in the article, I don't think the overall picture supports the headline...
- thechao 16d agoYeah. The headline is utterly divorced from the reality of the charts?
- iamnothere 16d agoHow so? Foreign official holdings are flat since 2012. The headline specifically refers to central bank and government holdings.
- JumpCrisscross 16d agoThe only real dumping has happened from Japan, which is fighting to defend the yen, and China, which is obviously repositioning though to a way lesser degree than a nation dumping an adversary’s bonds would. The story is just another way of saying we’re issuing more debt. Central banks aren’t reducing exposure. They just didn’t increase them with our own finances, which makes sense, our finances don’t increase their reserve requirements.
- iamnothere 16d agoHoldings by France, Taiwan, and India have also decreased year over year. Based on the charts, it could be the start of a reversal, but charts are charts and we’ll just have to see. Brazil is on a long term downtrend although they may be bottoming out. Norway just proposed reducing bond holdings in its sovereign fund. It’s not as clear cut as you’re making it out to be. I think the headline may be overstated, but the article does a reasonable job of making the point.
- JumpCrisscross 16d ago> it could be the start of a reversal, but charts are charts and we’ll just have to see This is the correct conclusion. Currently, there is no discernable signal. Given American politics, I'd be shocked if we didn't see folks trying to diversify central-bank holdings. But as long as America runs a trade imbalance, we'll be dumping dollars abroad, and those dollars will work their ways into their countries' banking systems from which they'll work into their central banks, and unless their governments want to strengthen their currency (unlikely for an exporter), they're going to hold those dollars, and if you're holding dollars as an asset, holding the currency type versus the pays-a-yield type is just giving free money to Washington. > Norway just proposed reducing bond holdings in its sovereign fund That was explicitly a portfolio-weighting move. They're reducing buying of Treasuries in favour of higher-yielding agency bonds. Their total exposure to U.S. credit isn't being cut. It was just being re-weighted away from Treasuries at a time when they weren't yielding as much as they are now.
- deleted 16d ago[deleted]
- feverzsj 16d agoThanks, Trump.
- buellerbueller 16d agoSoooo tired of all this winning! /s
- jandrewrogers 16d agoI think the more interesting story is the long-term decline in the quality of virtually all sovereign debt. Many things are anchored to the assumption that high-quality sovereign debt is widely available.
- spwa4 16d ago[dead]
- iamnothere 16d agoThis is a great point, it’s not like there’s a good alternative. The idea of “safe” money might be over for a time. It could explain why so many central banks have been moving to acquire bullion.
- general_reveal 16d ago[flagged]
- thehumanmeat 16d agoThe article couldn't be less true. Treasuries are the deepest and most liquid market by far. Foreign CBs hold them so that they can liquidate them when it becomes hard to find dollars. Why else do foreign CBs want to constantly open up swap lines to us when they are hurting?
- Arubis 16d agoDedollarizing the world economy has more net losers than the US (though that's the obvious one). It's not without its benefits -- over the last couple decade, the US has found ways to weaponize access to USD, so if you're not a fan of having a country other than your own able to effectively regulate or sanction you and your business, there's some niceties here. Being able to trade and invest in a stable, highly liquid, easily converted, low risk currency was a net win for most of the world for about half a century. There isn't an obvious replacement, so we'll just see more friction.
- JumpCrisscross 16d agoNothing this article claims or shows de-dollarisation other than the editorialized headline.
- nostrademons 16d agoIt's kind of a prelude to a Thucydides Trap. The problem with replacing the world reserve currency with something else is that nobody can agree on what that something else should be. Expect to see a lot of jockeying for power as people realize the U.S. isn't the world hegemon anymore. Jockeying, on a state level, usually means war.
- tehjoker 16d agoOnly China has the GDP to replace USA. So while the answer isn't written in stone, it looks like it'll be China, or since China favors UN governance, maybe we'll move to an old discarded idea (because it didn't serve American interests) like an international currency system that Keynes favored. https://en.wikipedia.org/wiki/Bancor https://en.wikipedia.org/wiki/Bancor Recall that America is currently attacking Iran without provocation and is aiding a genocide.
- rdm_blackhole 16d agoIt will not be China as it doesn't have a floating currency. That is one of the prerequisites for becoming a reserve currency, that and removing capital controls. Finally there has to be a certain willingness from other countries to accept this new currency and I just don't see the EU countries conducting all their international trade in yuan anytime soon. Finally replacing the USD is just one part. The second part is how to stop the next currency from being weaponized just like the USD is/was. Without the answer to that question, then switching to a new reserve currency is just replacing one problem with another.
- nephihaha 16d agoThere seems to be a strong attempt to unseat the USA and the dollar right now. BRICS has tried to, China and Russia would love to and it looks like the EU may follow suit. The question as always is what to replace it with, and hopefully not something worse.
- octoberfranklin 16d agoTreasuries Have Become Badly Unappetizing for Foreign Central Banks & Governments "Badly" is used to modify participial adjectives ("written", "organized"), not plain property adjectives like "unappetizing". But seeing Wolf Street on HN brightened my day.