The US remains the best option among a mixed field of weak, corrupt, divided and authoritarian alternatives.
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?
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.
https://en.wikipedia.org/wiki/Exorbitant_privilege
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 - April 2026 (250 comments)
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).
The the war on Iran (and many years of war on terror) showed we have anything but
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 - September 2026
The Iran War Just Broke the Petrodollar - https://www.bloomberg.com/opinion/articles/2026-04-06/the-pe... | 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-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 - September 2026 (0 comments)
China's Manufacturing Advantage, Explained [video] - https://news.ycombinator.com/item?id=49451076 | https://www.youtube.com/watch?v=OgYKVpOsMJs - August 2026
(think in systems)
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.
The correct metric is price. If there is decreased demand, it will show up in the yield. And it does.
It's the vindication of Gaullism half a century after De Gaulle's death, the concept of strategic autonomy is getting traction in the rest of Europe. It's not that we can't be friends, but that we shouldn't let our future be gambled in the hands of Wisconsin voters every two years.
It's basically divide and conquer on a national scale tearing down the democratic world police and the democratic systems it supported.
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.
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.
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.
https://en.wikipedia.org/wiki/Bancor
Recall that America is currently attacking Iran without provocation and is aiding a genocide.
The headline specifically refers to central bank and government holdings.
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.
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.
They are bracing us for Taiwan situation where a standoff will probably lead to China making an aggressive financial move.
Cheers :)
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.
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.
1. print money
2. suppress wages by shipping in cheap labor
3. reassure the population you arent doing the above
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 %.
https://tradingeconomics.com/united-states/foreign-treasury-...
https://tradingeconomics.com/united-states/foreign-treasury-...
https://tradingeconomics.com/united-states/foreign-treasury-...
Only China has gone down:
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-...
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
Everything else is portfolio allocation choices between treasuries or agencies or BAA corporates or AAA corporates, there are so many different instruments to invest in, you can shift your holdings back and forth however you like, all while keeping your dollar exposure exactly the same. And you can set up a fund in the Caymans and hold your assets there. And China does all of that. So really it is all fungible once you are in the "foreign ownership" bucket.
Also, equities and treasuries are not equivalent. If foreign holdings are moving to equities over treasuries, the added risk will be a serious problem in a crisis. It could also be a sign that some nations are being “encouraged” to prop up equity markets, either by the US or large domestic holders of US equities, which is a rumor that I’ve come across.
Edit: so much hate for something so benign.
If so, those constituencies are immune to facts and common sense.
