In the context of U.S. public debt reaching 36 trillion USD, the largest creditors of the U.S. such as Japan and China are actively selling off U.S. bonds.
On the eve of Donald Trump's presidential inauguration at the White House on January 20, 2025, the departure of the old Democratic administration, along with the forthcoming uncertainty about the economic measures of the new Republican administration, has led some U.S. bondholders to actively divest.
Currently, foreign partners account for 23.35% of the total U.S. debt. The most influential bondholders are Japan (1 trillion USD - 3.5%) and China (750 billion USD - 2.8%).
According to statistics from reputable financial institutions, in the third quarter of this year, the Japanese sold U.S. government bonds worth 61.9 billion USD, and the Chinese sold bonds worth 51.3 billion USD.
Global investment funds and financial companies cite that Tokyo and Beijing are taking these measures due to the U.S. national debt reaching a record high of 36 trillion USD, something that just five years ago no one would have dared to think about.
Just six years ago, the national debt of the United States was only 20 trillion USD, but it has now increased by 1.75 times; meanwhile, the total debt is 1.3 times higher than the GDP of the U.S. in 2023 (about 27 trillion USD).
At that time, there were also very serious warnings about the U.S. public debt bubble, but it was not taken seriously by the Washington administration; even the U.S. Congress continuously raised the debt ceiling to prevent the country from facing bankruptcy.
In addition to the issue of U.S. public debt, the governments of Beijing and Tokyo are also concerned about the economic instability brought by the Republicans coming to power and the unpredictable initiatives of Donald Trump.
In addition, U.S. bondholders in the "confrontation risk" group such as China also do not rule out the possibility of their assets being frozen, similar to what happened to Russia's gold and foreign exchange reserves.
Driven by such concerns, investors are seeking a "safe haven" to preserve and grow their capital, and an alternative asset to U.S. bonds is gradually stabilizing, which is gold, a precious metal that has increased in price by one-third since the end of last year.
The Economist writes that the rise of gold is largely due to the central banks of some countries shifting to purchasing this metal; in addition, interest in gold is driven by the diminishing popularity of the U.S. dollar, and this global trend is gaining momentum.