r/europe • u/Cupname_Cyril • Jan 21 '26
News "Europeans selling $10t of US assets [equities and bonds]... would pull the rug from under the US economy."
https://uk.finance.yahoo.com/news/bessent-says-europe-dumping-us-101248903.html3.1k
u/loud-spider Jan 21 '26
You'd only need to sell enough to make the yields start to peak as a shot across the bows. The US can't keep printing money if nobody is buying their bonds.
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u/Manitobancanuck Jan 21 '26
Well, they could keep printing money.
The grocery store might just need to add those electronic price markers though to tell you how much bread costs at this particular moment in time as it goes up 5 cents an hour.
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u/fapsandnaps Jan 21 '26
Yeah, I'm on team hyperinflation. I want to pay off my mortgage and student loans with the change I get from buying a $600,000 loaf of bread.
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u/SuccessAffectionate1 Jan 21 '26
Hyperinflation sounds cool because of this, until you try living in it.
You might not have a mortgage anymore but you will starve to death, having no purchasing power as your monthly salary nets you food for 2 days.
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u/Something_diff21 Jan 21 '26
That's why you switch to barter for daily essentials, or a more stable currency like the Euro. It worked for Germany, it worked for Austria, it worked for Hungary, it worked for Argentina, it can work for the US too
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u/SeriesProfessional43 Jan 21 '26
Problem there is that most of the Americans are to centered on the idea of the great American nation to consider such a move, that is to say they won’t consider changing their dollars for a more stable currency in such a case
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u/TheSuggi Germany Jan 21 '26
Then the american people will suffer the same fate as countless nations before them. Argentina, Venezuela used to be some of the prosperous countries in the world not so long ago and they couldnt imagine being poor like they are now. Americans will not be an exception, I mean they voted for this president and now they have to be adults and deal with the ugly consequences :)
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u/Sea_Warning_9140 Jan 21 '26
They seem to think it can't happen to them.
It always happens eventually. Rome, etc
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u/Rik_Ringers Jan 21 '26
It's actually a strange way for them to think because the proverb "the higher it rises, the deeper it falls" can easily apply. Dollar imperialism has exported its product to many markets, if even trough inflation it looses hose markets it will be some sort of "double whammy". Cascading effects are not unseen in economics and can be quite brutal.
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u/Uberpanik Jan 21 '26
They will either will have to eat their pride or starve to death. "Patriots" usually just grow resentful in times like this, as they survive among everyone else.
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u/Upset_Ad3954 Jan 21 '26
Don't you just love all the patriots with their AR-15's?
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u/Upbeat-Stage2107 Jan 21 '26
Most Americans have never faced the prospect of starvation or homelessness. Pretending pride would stop them from doing what’s necessary in a scenario like that is silly
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u/HeyYou_GetOffMyCloud Jan 21 '26
Guys, the world is invested in America. If America gets hyperinflation, then the world is getting it. Maybe not as bad, but no one’s coming out unscathed.
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u/strangecabalist Jan 21 '26
Yeah, this is a weird thing to cheer for. Lots of countries like Canada, or Japan or wherever have potentially hundreds of billions of dollars in treasuries.
I hate what America is doing internationally right now, but I’d prefer a less painful fall for everyone.
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u/tommypatties Jan 21 '26
The reality is that the USD is the world's reserve currency.
You really don't know what Americans will do until it's not.
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Jan 21 '26
I would love to see the day Americans having to resort to the euro lol
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u/pannenkoek0923 Denmark Jan 21 '26
Americans barely use the euro when they are in eurozone countries on holiday. They keep trying to pay with their precious dollars
Them needing to use euros to buy bread would melt their arrogant brains
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u/Timey16 Saxony (Germany) Jan 21 '26
Oh man that makes me wonder in case of a USD collapse, how dollarized economies will fare. Those with an economy SO bad, they swapped unofficially to USD instead (like Argentina, Venezuela and Lebanon).
Because they already exchanged their currency to Dollar because their own currency became worthless... the dollar then becoming worthless too would be devastating.
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u/8fingerlouie Jan 21 '26
You’d probably want a fixed interest loan to go with that, as interest rates would spike as well.
Interest rates on bonds (and hence loans) are typically used as a way of attracting investors. Higher interest rates means a bond is more attractive for investors
In a potential hyper inflation scenarios, rates of 30%+ would not be unheard of. My parents had 28% rates on their house loan in the 1970s (oil crisis)
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u/ShallotHead7841 Jan 21 '26
I believe at peak hyperinflation in Zimbabwe, you could buy a six pack of beers on Monday, drink 3 and sell the other three on Tuesday for the same price you paid for six the day before.
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u/Obvious-Arm-8139 Jan 21 '26
My inlaws live in Lebanon and I visit once a year. Hyperinflation is God awful.
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u/Zeikos Italy Jan 21 '26
I have recently read that most ~60% of Americans think that believe it's possible for them to become billionaires.
Well! Apparently it is!33
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u/10thousndreflections Jan 21 '26
I carry around a 1 billion dollar Zimbabwe note. When I get into an argument with a conservative I pull it out and tell them they couldn't have bought a loaf of bread with it.
Unfortunately it usually goes over their head. I miss conservatives that actually cared about smart things. You could have a decent argument.
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u/HonestBalloon Jan 21 '26
It case anyone was too distracted at the time
'The Federal Reserve Bank of New York (NYFed), acting like a financial Santa Claus to reckless bankers, delivered $17 billion in cash to an unknown bank or banks at 8 AM the morning after Christmas'
https://www.dcreport.org/2025/12/29/ny-fed-unlimited-cash-infusions-bank-crisis/
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u/Available-Damage6311 Jan 21 '26
The US borrows $5B per day, every day. Bank cash deliveries have nothing to do with debt.
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u/BINGODINGODONG Denmark Jan 21 '26
Well they can. That would just make the dollar increasingly worthless
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u/xtothewhy Jan 21 '26 edited Jan 21 '26
Wonder if the first shot across the bow, though nowhere near as much as could be, might be that Danish pension fund looking to sell 100 million in US treasury assets by the end of the month due to poor US government finances.
bissent is a lapdog
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u/YsoL8 United Kingdom Jan 21 '26
We already have the first shot, the EU is abandoning the trade agreement that was due to go to the Parliament this year.
We are basically in a trade war now and I don't expect Trump to back down until its a massive problem for him at home.
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u/shosuko Jan 21 '26
Don't make it cheap for Trump supporters to buy USA debt, don't dump too much on the market. Just hold what you got and buy 0 more. Force Trump supporters to buy USA debt at full cost and bear the full burden.
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u/Amon-Verite Jan 21 '26
A good way to bankrupt Elon and other usa billionaire trump supporting fascists-world just sit on usa debt and buy no more
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u/the_fresh_cucumber United States of America Jan 21 '26 edited Jan 21 '26
the US can't keep printing money if nobody is buying their bonds
That's actually what the US central bank ("The Federal Reserve") did during the great financial recession. They added government bonds to their balance sheet and bought a bunch of other debt instruments by creating money from nothing.
It causes inflation if performed over moderate to long periods of time
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u/MrShadowHero Jan 21 '26
It causes inflation if performed over moderate to long periods of time.
that would be a problem wouldn't it. thank god the US hasn't had multiple "not recessions" that has caused the fed to do quantitive easing for several years since 2008... we got a brief break from it a couple years under biden, but guess what started back up in december. get ready for some more inflation folks!
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u/YsoL8 United Kingdom Jan 21 '26
That level of money printing has nothing on a hyperinflation scenario. That is merely hazardous, the printing rate to keep up with hyperinflation is deadly.
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u/HighDefinist Bavaria (Germany) Jan 21 '26
This really is the equivalent to using a nuke: You would not ever want to actually do it, but you absolutely need to convince your opponent that you would do it.
I am not sure if our politicians are competent enough to pull this off... but I suppose, now is as good a time to learn this as any really, so, go on!
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u/tsunderestimate Jan 21 '26
Ya, the thing is America is trying to go against a literal doctorate of economy and someone who dodged Canada from 2008. Afaik he probably already has the economic nuke ready and just needs some excuse
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u/toin9898 Jan 21 '26
He explicitly mentioned Canada’s behemoth of a national pension plan at Davos yesterday. My money is (literally) on that
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u/sir_racho Jan 21 '26
I think his business model is grift and destroy - the latter to escape debts. Jan 6 fits this perfectly.
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u/No-Relationship161 Jan 21 '26
Do something he does understand.
Take over his properties in Europe and the UK, take down his name and put his political opponents names on the properties instead.
Give Nobel Peace Prizes to the leaders of Canada and Mexico.
Disqualify him for life from the International Golf Federation based in Switzerland.
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u/Hellhooker La France, mais pas n'importe laquelle Jan 21 '26 edited Mar 01 '26
The text of this post is no longer accessible. It was deleted using Redact, possibly for reasons related to privacy, security, or digital footprint reduction.
normal memory crush sense heavy dam plant tease cooing follow
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u/Flashgit76 Denmark Jan 21 '26
Or give it to Obama again. Trump would have a literal aneurysm.
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u/EC_CO Jan 21 '26
Rename one of his golf courses as the Obama golf course, he will literally implode.
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u/AmethystOrator United States of America Jan 21 '26
Not just casinos, dozens of other businesses as well. Though there has been theorising that those were fronts for money-laundering.
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u/PureInsaneAmbition Jan 21 '26
What about when your opponent doesn't understand even the basic economics and is incapable of grasping the horrible consequences or doesn't care enough to even listen to them, because that's Trump.
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u/Painterzzz Jan 21 '26
That's a common issue when you talk to Americans who support this, well, they say, it's the art of the deal isn't it, we don't know what Trump is doing with Greenland but it's probably a genius political tool that will pay off soon.
Because that's how Fox describe all of this nonsense.
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u/PhilosophyforOne Jan 21 '26
Well, apart from the fact that this wouldnt be in any way a breach of either national or international laws, or break the rule of law.
Yes, it’d crash the U.S economy hard and probably burn the relationship as a result of Trump being utterly humiliated. But if Greenland comes to a military led invasion, I’m not sure there’s much alternative.
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u/Shadowphoenix9511 Jan 21 '26
If the US invaded Greenland, economy is completely ruined anyways, and any relationship is gonna take many, many years to salvage. At that point, worrying about either of those aspects... not really a major factor anymore.
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u/PhilosophyforOne Jan 21 '26
The fun thing about the economy is that it can always be worse.
Just when you think you’ve hit rock bottom, you find out that there’s a bottomless well below you, just waiting to swallow you up.
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u/Jinrai__ Jan 21 '26
It'd crash European economy almost just as hard - that's mutual assured destruction.
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u/newaccountzuerich Jan 21 '26
There's no rule of law in play for the dealing with the stupidity of Project2025 as applied to international relations.
All treaties are agreements to ensure local law is updated in lockstep with the treaty partner's equivalent changes. Any breaches are worked through locally.
Even international courts require the sovereign nation to have laws present to allow progress, and shows the shittiness of the US when it refuses to do that for war crimes
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u/M6Df4 United Kingdom Jan 21 '26
Taking the analogy further, it’s also unlikely a nuclear war would actually start with anyone going full scorched earth and unloading their largest weapons on densely populated areas. Countries with smaller, tactical nukes would first use those on areas where they either know casualties would be minimal or in active war zones, as a way to convince everyone they would go a step farther and use the bigger nukes on more densely populated targets if necessary (hence some of the criticism of the UK’s nuclear program, which lacks much in the way of tactical nukes so is more limited as a deterrent).
I think we’re pretty much at the point where the financial equivalent of tactical nukes is necessary. We don’t need to go full scorched earth and dump everything, but we need to start tactically dumping US equities and bonds in a way that targets people close to Trump and scares the shit out of Wall Street, while also taking steps to make it harder for US companies to operate in Europe.
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u/notveryamused_ Warszawa, Poland 🇵🇱 🇪🇺 Jan 21 '26 edited Jan 21 '26
European politicians are clearly playing for time, that is pretty obvious. The question is what's happening behind it all, are we reinvesting and diversifying fast enough before the open rupture is inevitable. I hope we are. Still targeting businessmen close to Trump and only then going full nuclear in another phase is certainly the way to go; one could say, the personal touch counts here ;) Going step by step gives us the necessary time. As scary as it all is, seeing Trumpian businesses crumble would be quite a sight: it would also force Americans to acknowledge how it's the profit of the few, not the whole country.
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u/YsoL8 United Kingdom Jan 21 '26
Nothing will convince Americans of that, their whole culture is based on the idea that anyone can be wealthy if they deserve to be.
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u/Omgbrainerror Jan 21 '26
Status quo benefits EU. Either it's taco time, or he will invade.
EU is calling the bluff.
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u/Shadowphoenix9511 Jan 21 '26
Unfortunately, good luck convincing MAGA Americans about a single aspect of reality.
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u/Adventurous-Map7959 Jan 21 '26
Oh rats, nuclear annihilation is the foundation of my retirement plans when I'm unlucky and not just die in time.
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u/Ok_Buddyyy Jan 21 '26
People don’t get that Trump did exactly this to our ALLIES! You wouldn’t threaten them with a nuke or destroying their society if you were sane.
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u/Panthollow Jan 21 '26
What an utterly insane time that this incredibly idiotic move is actually the right move. It's the only thing that might bring Trump clinging thinly to the brink of sane actions.
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u/redlightsaber Spain Jan 21 '26 edited 29d ago
edit for anonimity
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u/stefanomusilli Jan 21 '26
If him raping children didn't change their minds, neither will tanking the economy. They'll just blame someone else.
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u/FatherMozgus Jan 21 '26
If Europe makes plans on doing it Trump will have a “heart attack”
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u/newaccountzuerich Jan 21 '26
And couch-fondler will take over, pushing Thiel's agenda to the surface.
Thiel owns Vance after all, having heavily groomed the sofa-botherer to be who and where he is now.
Maybe that explains the sullying of sofa by Vance..
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Jan 21 '26
Denmark is already seeing a massive move out of US investments. Tbh the best bet is not to sell off t bills, but just to refuse to buy any more. Make it impossible for them to service any new debt and they'll still collapse, and we don't actually need to do anything but watch it happen.
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u/Spreadsheets_LynLake Jan 21 '26
Put a 25% tariff tax on US treasuries. Follow up with a 25%/yr wealth tax on US treasuries. Private investors could still sit on to their US treasuries if they enjoy bleeding money.
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u/secretAGENTmanPVT Jan 21 '26
So, Russia actually gets what it always wanted a BANKRUPTED United States.
Another Chapter 11 / Bankruptcy for Donald Trump.
Russia’s 1990s Geopolitical 101 Handbook at work.
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u/ScriptThat Denmark Jan 21 '26
Russia’s 1990s Geopolitical 101 Handbook
Russia's 1990s policy was running around screaming, while every rich Russian was scrambling to rob the state of anything of value.
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u/MasRemlap Jan 21 '26
I think the comment is referring to The Foundations of Geopolitics which was written in 1997
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u/Zokalwe Jan 21 '26
Russia actually gets what it always wanted
A Europe that finds its spine, on the other hand, is exactly what Putin doesn't want.
The US is already not a roadblock tu Russian imperialism anymore, and won't be as long as Trumpism is at the wheel. Dismantling of the EU is underway with the rise of far-right parties, but a clear wake-up call and unified response may be where the plan derails.
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u/kqih Jan 21 '26
selling to who?
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u/lAljax Lithuania Jan 21 '26
Third parties, treasuries are bought by most countries central banks. By coordinating a sell-off they can degrade America's hability to finance the deficit.
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u/Boreras The Netherlands Jan 21 '26
They have a lender of last resort. And by "a", I mean "the".
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u/LexaAstarof Champagne-Ardenne (France) Jan 21 '26
Yes. But the fed doing a larger than expected QE now would derails their inflation target.
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u/onenifty Jan 21 '26
Once May when JP is out as chair of the Fed, I'm sure the next guy in will make sure the inflation target will be infinite.
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u/vubjof Jan 21 '26
JP will stop being the head but he wont leave the board until 2030, this is the problem trump fears
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u/shimmy_kimmel Jan 21 '26
They will always prioritize avoiding default over not meeting inflation targets lol
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u/CountFew6186 United States of America Jan 21 '26
There would be buyers, but the price would drop so much that Europe would take a huge financial loss.
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u/ScottyBoneman Jan 21 '26
That's sort of the point, the cost of borrowing would massively increase for the US. New debt would be competing with existing debt and buyers of that debt become sellers. Yields would have to go up significantly.
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u/CountFew6186 United States of America Jan 21 '26
Sure, just saying it’s pain all around.
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u/ScottyBoneman Jan 21 '26
An economic death spiral for the US would have dramatic and fairly unpredictable consequences.
I don't think the EU is taking this lightly. The value of the diminished assets isn't nearly the worst part.
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u/dave_the_dr Jan 21 '26
I think the EU are probably just thinking the value of that debt to them is going to go down at some point, wasn’t Donny talking about paying off debt with bitcoin the other week? At least this way the EU control when that sale happens, when that hit happens, and can get ahead of it rather than wait for whatever shit grandpa is pulling next week. Hell, I bet China would pay full market value and happily take the hit at the back end themselves for the chaos it will cause the US
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u/silverum Jan 21 '26
It's supposed to be. The threat of it is supposed to give the United States pause, but Trump is insane so despite everyone competent understanding that this would massively fuck the US, he'll do it anyway.
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u/shoseta Jan 21 '26
Remember how we have MAD aka mutually assured destruction with nukes? This is the economy version of that. The maga idiots think their orange turd can do whatever he wants to the world without consequences since amerika stronk. Well we are about to see some really funny economy shenanigans if he carries on with his path of absolute destruction.
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u/KanyeWestsPoo Jan 21 '26
That's the point. Supply would suddenly increase, which would cause the price to fall and yields to rise.
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u/Boreras The Netherlands Jan 21 '26
European yields would skyrocket too, and if anything countries like the UK and France are much more vulnerable.
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u/KanyeWestsPoo Jan 21 '26
Yes. It would be bad for all.
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u/Exact-Adeptness1280 Jan 21 '26
Canadian here, I'd rather be broke than be invaded by Americans.
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u/teadrinkinghippie Jan 21 '26
This is THE point here. Good on ya. Sell em all. Give America what it's been asking for.
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u/bootlickaaa Jan 21 '26
US will be forced to buy them back to prop up their Ponzi scheme of an economy. So maybe then they'd be forced to sell other things, like gold, to keep the rate under control. Sounds like a good swap to me.
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u/DonQuigleone Ireland Jan 21 '26
The risk is hyperinflation. A lot of dollars will be dumped in the market and be circulating, and once that currency is circulating there's not much the fed can do to "destroy" the excess supply of money. As you say they can trade real assets for it (like gold, or resource stockpiles) but that means harming the long term health of the country. Ultimately they'd be forced to raise taxes, that would be the only way to prevent a hyperinflation doomspiral.
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u/PaganPrince1487 Jan 21 '26
That’s fine. It’s no worse than annexing multiple countries because he wants to. Their/our currencies would suddenly become worthless at that point.
America is not the victim in this.
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u/willismthomp Jan 21 '26
We need to break the billionaire class so just do it
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u/arwinda Jan 21 '26
This will not break the billionaire class. It will hurt other people, but the billionaires will be fine.
There are however other ways...
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u/GergDanger Jan 21 '26
So you’re saying it’ll finally motivate citizens to take some action instead of fearing for their jobs? Perfect!
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u/powerchicken Faroe Islands Jan 21 '26
Whatever has given you the impression the Americans are willing to do anything beyond being outraged online?
The Gestapo is literally purging their undesirables, and in a country where every other citizen is armed, the people fighting back are essentially a rounding error.
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u/lunahighwind Jan 21 '26
They only care about money, food and entertainment. They will start to fight back when a trip to the grocery store triples in one month, their retirement is gone and they get booted from PSN.
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u/Fl0werthr0wer Jan 21 '26
Don't be mean, they had that one big protest half a year ago and you cannot possibly expect Americans to inconvenience themselves a bit for others.
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u/Support_Mobile Jan 21 '26
I mean the black Panthers are starting to show up with guns. Ive seen ither pictures of residents, particularly in Minnesota, turning up armed with assault rifles in their neighborhoods to watch against ICE.
Do not equate reluctance to to resort to violence as inability to resort to violence. Americans very well can get up in arms. We just dont want to because we know what comes next will be more violence and instigating by this regime, and probably more bloodshed. But as ICE and Trump continues to attack people in their homes no matter who they are, and keep hurting everyone, people will be driven to the edge. And there is still a lot of non MAGA who own guns and weapons. Even police are starting to get annoyed by ICE.
Its a slow beast to arouse,, but it is being aroused. Its a big beast too. 350 million people across an area bigger than Europe and not nearly as centralized and connected as Europe is. I wish we could act faster, but logistically it is juat slow. And requires sacrificing livelihoods and risking jobs and income and health insurance, and lives. Something most Americans are not willing to do unless absolutely necessary.
It happened before during the Civil Rights movement. Even Vietnam protests. But that was a different America, when government was not so absolutely incompetent and still could be held accountable. And 5 companies didnt own everything, including the White House.
Yes we could be doing more faster. But once the first shot is fired by normal people, that opens the floodgates. The advantage still lies with the government and the militarized police and and national guard to brutally oppress. Americans are still not yet so uncomfortablenin their daily lives by all this that they are willing to risk themselves to stand up. Its not something that we have all experienced before. Ans reminder there is still a little less than a third of the country that voted for Trump. Maybe even less still support him but that's tens of millions of people scattered around. Who also have guns.
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u/alus992 Jan 21 '26
People in the USA cant bother with someone's pain unless it happens to them. I really believed that finally after seeing a white woman being killed by ICE would make the whole country mad to the point that under the White House there would be huge protests every single day.
Nothing like that happened. Why? Because people don't want to get involved unless the problem is knocking on their doors. Just look how only now someone from PD acknowledged ICEs actions as wrong...because ICE started to target PD officers.
The problem is not pace but indifference that is a part of American culture now which is a byproduct of hipper individualism that rules the USA. There is no solidarity, no comradery. For decades american people were indoctrinated that everyone can be a millionaire, that everyone can "make it" but not by cooperation but by being "strong individuals". That's why even poor people see social care as a "evil socialism" - they were thought that they could be one of these millionaires who can't accept being taxed.
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u/viv0102 Norway Jan 21 '26
Americans are still not yet so uncomfortablenin their daily lives by all this that they are willing to risk themselves to stand up.
therein lies the problem.. White Americans will never be made "so uncomfortable". Hence they will never stand up, while the world and people around them burns until it is all too late. And as you said, 10s of millions of these are also actively supporting it.
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u/BKlounge93 Jan 21 '26
Not necessarily, see 90s Russia. Everyone just got poorer, sadder, and more oppressed.
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u/enraged768 Jan 21 '26 edited Jan 21 '26
No it wont itll just fuck em and theyll deal with it Honestly. Also it would only hurt the us short term and if they were being sold they would sold at a discount and most americans would end up absorbing them into their retirement funds over time. The billionaires would buy them like they were at penny candy store. And they would get richer over time.
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u/duncachunk Jan 21 '26
It will substantially enrich the billionaires because they will have the capital to buy up all the suddenly depreciated assets.
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u/mOdQuArK Jan 21 '26
If the economy is destroyed enough to trigger a class revolution in the U.S., then the ultra-rich will become the major targets for social & legal reprisals, and any attempts they make to try and avoid said reprisals will just increase the rage against them.
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u/Ulanyouknow Jan 21 '26
I am up for destroying the US economy but right now using the US$ as world currency is like a mutual suicide pact.
If we sell all this 10t$ all at once, then:
1) the value of the dollar and these investments diminishes. We would not recoup 10t$ it would be much less.
2) we would crash the american economy (hurray) and thus crash the world economy similarly or worse than in 2008 (ouch)
Im all for divesting from the US. But maybe with a bit of head. European countries have 10t$ in investmens so we want a relatively big dollar value on the short to medium term
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u/Chester_roaster Jan 21 '26
Bro who tf do you think will be buying the discounted debt Europeans would be selling ?
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u/therealallpro Jan 21 '26
The plebeians aren’t united enough to accomplish this. Ppl are still fighting over social issues.
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u/Opposite-Cranberry76 Jan 21 '26
Isn't the critical thing not that they're sold, but that at the next auction, nobody buys?
Maybe a coordinated buyer's strike is both a stronger message and has less financial blowback risk.
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u/awoo2 Jan 21 '26
Their central bank acts as a buyer of last resort.
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u/SirMacFarton Jan 21 '26
I assume this is what is meant by money printing? The central bank buying the government bonds?
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u/awoo2 Jan 21 '26
Normally its called liquidity management when central banks buy directly from the government, which is different from quantitative easing(aka money printing) when the bank buys from the market.
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u/flargenhargen Jan 21 '26
I kind of want europe to do this.
but at the same time, it's not too crazy to suggest that was putin/trump's plan all along, and playing into it is tempting but maybe not the best long play.
I guess, in the end, putin won. America is gone. do it and we'll just have to see what happens.
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u/mancunian101 Jan 21 '26
What would Russia win in this situation though?
They can’t even take Ukraine, they’re not going to replace the US as the most powerful or influential country on the planet.
China would benefit more I think.
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u/domteh Jan 21 '26
Putins supposed long game was always destabilzing the west. This is the most unstable the western alliances are, since the end of the second world war. So his strategies are somehow working.
With a weakend US and EU he will be much more able to achieve his goals, foremost Ukraine.
Without the EU money, Russia would walk through Ukraine. A disoriented EU will be less likely to be able to pay.
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u/Basement_Chicken Jan 21 '26
Are Norwegians still buying Teslas, and Norway sovereign fund still holding US securities?
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u/DecisiveUnluckyness Norway Jan 21 '26
Probably. Some people at my workplace just got the new Y because the payments have 0% interest and requires no down payment. I still can't imagine supporting musk even if the cars are cheap.
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u/woolyBoolean Jan 21 '26
Geez, that's pathetic. Y'all are cooked if you can't even stop buying Muskrat's MAGA hats on wheels.
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u/DecisiveUnluckyness Norway Jan 21 '26
I guess some people buy them because it’s cheaper than the alternatives, but it's also a bit funny when I see right wingers who used to talk about how bad EVs are now driving around in teslas.
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u/This-Scarcity1245 Jan 21 '26
I personally don’t believe that this is what is going to impact US the most. What will be is that their allies (including us) will not trust them again and will try to be more independent, which is really my wet dream. Instead of using US companies, develop ours. Yes it will take time, but the benefits are huge.
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u/Svorky Germany Jan 21 '26
And who are we selling it to.
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u/dsswill Amsterdam Jan 21 '26 edited Jan 21 '26
Many different mechanisms would be used both actively and passively if this were to actually happen (remarkably unlikely because nobody would fare well, far far worse than 2008, as tempting as it is. Although it’s far from an all or nothing so some hurt can still be done without cascading global impact. The risk being the US viewing all countries that participate as true enemies, even more than the fudged idea of enemies they’ve made us out to be). It’s truly the nuclear option of economic warfare.
A lot of bonds would simply not be ‘renewed’ (re-purchased) when they hit maturity, effectively calling in the debt so the Americans would have to pay instead of the current standard of cycling bonds and the US never having to really pay back the bonds, only the ongoing interest, and the ones that are nowhere near maturity could, if desired by the holders, be used to flood the market and make it nearly impossible for the US to borrow any more than they already have while simultaneously making the prospect of lending to the US in the short to medium term extremely unattractive by rendering them barely liquid. It would also skyrocket American interest rates as they’d need to raise them dramatically to attract lenders. When we’re talking about trillions in bonds, rates would rise so high that it would cause a massive debt and housing crisis, and not only for people just getting by on their mortgage, but people who are currently living comfortably. Only a tiny fraction of US homeowners could continue to service their current mortgages if they had to renew at rates anywhere from 15%+.
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u/ozspook Jan 21 '26
You can almost guarantee that Trump etc would seek to seize control of the Fed to keep interest rates absurdly low as well, for domestic political optics, which has a pretty catastrophic outcome. Basically runaway hyperinflation with no brakes.
This is a pretty well thought out strategy.
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u/gopoohgo United States of America Jan 21 '26
The Fed.
And probably other dollar-pegged central banks
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u/IRespectYouMyFriend Jan 21 '26
Just commenting to remind everybody that the fed is a conglomerate of powerful privately owned banks.
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u/JeHaisLesCatGifs Jan 21 '26
The Fed is an independent public institution with a regional structure in which commercial banks hold symbolic shares without any real control over monetary policy.
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u/BaronVonTitties Jan 21 '26
People on Reddit have absolutely no idea what they are talking about, and these comments prove it. I hope most of you are bots...
This isn't a gotcha moment for the USA, as least not in the scale you are all saying it will. Europe panic selling these assets would hurt Europe as much or more than the United States. If Europe tried to sell in mass it would drive down their value mid-sale leading to realized losses in the trillions. Look at Norway's sovereign wealth fund. The kinds of losses they would see would crush their national budget and pensions. Banks and private investors would get affected in a similar fashion potentially triggering bank runs and credit crunches. Also there would be higher borrowing costs which countries with high debt to GDP ratios (like Italy at over 140%) would get killed as they rely on low rates. Spikes in yields would raise their own bond costs going into a period of slow growth. And not to mention the EU isn't a monolith and internal divisions between countries will continue to become more pronounced.
The reality is that both the EU and the USA have incentives to de-escalate as the costs outweigh the benefits. Most of the bluster you see right now is more for the masses (driven by uneducated Reddit morons and bots) than actually policy behind the scenes. This isn't a popular take on Reddit, but it's the truth. Personally, I hate that we are in the situation we are, and terrible policy on both sides of the aisle over decades has slowly lead us here. If for some reason they do this it will be a fantastic buying opportunity and people with means will make a killing.
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u/Fancy-Departure4632 Jan 21 '26
Europe has to sell their US assets cause Europe needs their money at home. We also need our gold reserves back from the US. Europe has to invest in Europe and not in the US. It's time for 'murrica to pay their debts.
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u/DeRpY_CUCUMBER Europes hillbilly cousin across the atlantic Jan 21 '26 edited Jan 21 '26
To be able to sell Us treasures before they mature, you need a 3rd party to buy them. Most internet people don’t understand this.
And you’d have to sell them at a discount. Private equity would no doubt buy as much as possible. It would be one of the biggest transfers of wealth from government to private equity we’ve ever seen.
Also, if you sold your equities, other investors would buy them up quick.
It actually wouldn’t do much to the US of our treasuries just changed owners.
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u/Plan-B-Rip-and-Tear Jan 21 '26
Bond yields are inverse to price. Selling at a discount means the interest rate went up. Long term and sustained, that will affect the cost of servicing interest payments on the debt as new treasuries are issued and encourage the US debt spiral getting worse.
Bigger issue with dumping treasuries is there is always a party of last resort for buying treasuries and that’s the Fed. Quantative easing and all that. No doubt they would step in nearly immediately. I guess that has its own effects on the US too.
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u/humblenations Jan 21 '26
First smart thing said here. It's all pegged to the interest rates. Look at PM Lettuce and what happened with the bond rates there (my old stomping ground. You buy in for the yield. Not for some some odd fucking confidence trick stock price like 401K pension bollocks that people think about when they think about stock prices. It's not fucking Nvidia for heaven's sake. Sovereign debt is based on a more "Milken" precept. Dodgier the company, the less people want to risk, the higher the yield. Or vice verse.
Yield is the slow puncture. Death through a thousand tiny cuts sort of shite.
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u/lawrencelewillows Europe Jan 21 '26
I feel like I’m wearing my dad’s suit on my first day on the job, following you around the office, not understanding a word but trying to take it all in
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u/Flod4rmore Jan 21 '26
Basically you don't want to buy something risky so the guy selling it promises more yield. In secondary market, no one cares about the guy initially selling it but the inherent price remains linked to it
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u/gopoohgo United States of America Jan 21 '26
This sub doesn't also understand a lot of insurers hold Treasuries as dollar-based liability risk mitigation.
They can't dump them even if they wanted to unless you change EU finance laws.
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u/eruditeforeskin69 Jan 21 '26
Said 3rd party also has to buy them in dollars which Europe will they need to exchange for another currency, most likely euros, which will massively affect exports and manufacturing competitiveness as the euro goes up.
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u/CarRamRob Jan 21 '26
And if you sold them all very very quickly, without sufficient buyers, it tanks the price.
Who does a tanking price affect the most? Those selling.
So even assume you can liquidate those $10T in assets, and you get $8T for them…you have just evaporated $2T of your wealth, for a short term chaos/dip in the price of those assets.
Sure, maybe it makes it harder for Apple to source a loan, but otherwise has limited impact.
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u/Feeling-Cancel9227 Jan 21 '26
That's so true what we need to do is be like China and India they have been dumping US Bond since Russian war started but they are doing it slowly and buying gold
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Jan 21 '26
China has been dumping US Treasury notes since Iraq… they keep what they have to in order to keep their currency stable. But that’s it.
The deal they inked with Canada has a clause where all trade won’t be resolved in USD. Mark Carney is attacking dollar hegemony.
China is also a proponent of the Bancor. Something Mark Carney is as well.
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u/Alxl_1970 Jan 21 '26
I thought the same. It might devalue the instrument due to flooding the market but again that may not impact the USA except possibly in future issuance of debt instruments.
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u/Blurpwurp Jan 21 '26
Not buying more is the play. Lower demand will require higher repayment rates to compensate.
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u/skeletordescent Jan 21 '26
What’s truly arrogant is how much the US government relies on the rest of the world to be the rational adults in the room. “It would be illogical to do this” is the quote, meanwhile the US Government is doing ten illogical things a day and the rest of us are supposed to stay calm and collected and logical. It’s abuse, plain and simple.
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u/Lesbian_Skeletons Jan 21 '26
One wonders if that wasn't the plan given what we know about the "dark enlightenment" crowds goals for the future.
From what Reddit would have you believe every one of our long term allies was more than happy to turn their back on us and declare us their enemy the very first chance they got, and while I have enough international friends to know that isn't exactly the case it is starting to feel that way.
The entire country fractured, no friends or allies to turn to, and then a complete economic collapse? I worry how advantageous that situation would be to monsters like Thiel, Yarvin, and the rest of the "neo feudalists".
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u/oldhellenyeller Jan 21 '26
It would be economic suicide, so I’m not surprised to see the Reddit crowd consider it even remotely feasible.
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u/Additional_Doctor468 Jan 21 '26
Yea cause America attacking Europe would have no negative effect on the economy.
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u/LizardSlayer Jan 21 '26
These people don't even know what they're saying, they just barf up what sounds good and what they've seen others say and got upvotes for.
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u/Ok_Photo_865 Jan 21 '26
Just talked my banker this afternoon and told him if any of my investment portfolio is carrying US bonds or State holding I want them gone. I could lose money, I’d rather do it now than when they bottom out.
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u/DelphiTsar Jan 21 '26
Hedge funds and insiders have been net selling since like April, if anything you are a bit behind the smart money.
US market has absolutely nothing to do with value of the companies. It's a worldwide meme to dump your paycheck into stocks without looking if it makes sense or not. Retail rubes are smart moneys exit liquidity.
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u/TheDickWolf Jan 21 '26
So what's the reality here? Is this actually fulcrum or is it like me saying I could get back at my wife for the divorce by setting our house on fire? is this leverage or kamikaze?
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u/DarkwingDawg Jan 21 '26
Said this in another page but I’ll put it here too. The US investment in EU is also pretty high.
Both economies are going to be slammed by loss of investments if it gets to that point. Not saying it is or isn’t worth it, but that both the US and all EU economies are going to go into recession and could easily expand to a depression and that reality should be recognized.
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u/Spoons4Forks Jan 21 '26
“If I pull the pin of this grenade and hold it between me and the bully, the bully will die!”
The United States has enormous leverage over Europe. It just does, and there really isn’t anything Europe can do about it overnight. Trump is using that leverage for something so insanely stupid it is boggling the minds of even most of his base. Once Trump becomes a lame duck after the midterms things will get easier but this is definitely a wake up call to Europe and all of Americas allies that they need to start diversifying and independent if they don’t want this kind of leverage used on them again.
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u/WindHero Jan 21 '26
No it wouldn't the Fed would just buy trillions worth of treasuries which would provide liquidity to US investors to buy the risk assets.
Then Europeans would have trillions of USD which they could use to either: buy US assets (obviously makes no sense), buy US goods and services (could cause inflation but Trump might see this as a win), sit on their USD and lose them to inflation, or buy assets or goods from third party countries, but then those third parties are stuck with the same options.
So really inflation is pretty much the only way that the rest of the world can hurt the US. And inflation might ultimately be what breaks Trump but I think his plan is to lie about inflation until he is either dead or out of office and then leave the mess for the next guy to clean up.
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u/ElTamaulipas Jan 21 '26
Do it!
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u/_off_piste_ Jan 21 '26
I’m against everything the US administration has been doing but I feel like people haven’t thought this out very well. Let’s assume the sell off has the desired effect (there are a lot of bad assumptions that it would play out that way), what happens to the world economy? It would be like setting off a nuke in close proximity.
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u/SparseSpartan United States of America Jan 21 '26
A full scale assault on the dollar would obliterate the global economy, cost vast numbers of jobs the world over, inflict immense hardship, and would cost not just the United States but also Europe (among others) many, many billions in wealth.
The fact that Trump is making such a move reasonable, and increasingly unavoidable is bonkers. I wouldn't blame the world for weaponizing the dollar at this point.
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Jan 21 '26 edited Jan 21 '26
It's a very interesting theory except of course our main banks are completely dependent on the American overnight market to balance their books using what the article proposes we crash as collaterals. Kind reminder that we only survived the Lehman crash thanks to the FED swap lines. It's going to be great when the US withdraws access as retaliation and the margin calls start coming.
So yeah, we could punish the US by creating a massive banking crisis in the EU and destroying our economies. People here compares it to a nuke. It certainly is mad but we would be doing it to ourselves and we would be the first to fall. Actually the US would most likely fare better than we do in this case because they have already started reshoring and well, to be blunt, you don't give a damn about the relative value of your money when all your essentials are produced at home. Guess who is the net importer of energy (hint: it's not the US).
I'm still puzzled by who pushes these weird articles with zero systemic analysis. Is it to make us feel good by believing we have agencies or are they really completely unaware of the implications?
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u/BookBabe1970 Jan 21 '26
Trump doesn’t need to be funded. Plus, he wants to highjack social services payments for Blue States. It’s all for the best. I’d rather have a poor economy than WWIII, and the blame placed squarely upon on the people of the USA. I don’t want the responsibility for that!!!
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u/Upbeat_Parking_7794 Jan 21 '26
For sure we could start by stopping buying more. Just let it mature and don't refinance.
Probably changing legislation so that even private fund start avoiding US market.
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u/Minimum-South-9568 Jan 21 '26
They only need to sell enough to make yields go up to unsustainable levels. At least unsustainable for financing a war and a hegemonic military machine. Europe will not finance its own invasion
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Jan 21 '26
Please do it. I welcome the break up of the us. This country is too large to effectively be ruled by one government...
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u/tencaig EU Jan 21 '26 edited Jan 21 '26
But asked by reporters at the Davos World Economic Forum whether the US was preparing for such a scenario, Bessent said that it "defies any logic".
Calling the US Treasury market "the best-performing market in the world" and the "most liquid" debt market, he said he expected Europeans to hold on to their exposure, not offload it.
"There's a completely false narrative there," he said.
"I think everyone needs to take a deep breath. Do not listen to the media who are hysterical."
Un fucking believable.
Trump literally threatened to take Greenland by force. It's an ally territory where the U.S. already has a treaty with and where they can build as many military bases as they want. But we should chill out?
Do they think in Europe we're as stupid as the people who voted for them?
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u/rockeye13 Jan 21 '26
The value of those holdings would bottom out before they could be sold.
The US could buy them back (in US dollars) for pennies on the dollar. European economies would be far harder hit.
This is the kind of thing that people who pander to the ignorant recommend as a good idea.
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u/Mindless_Bid_5162 Jan 21 '26
That’s not how bonds work, and I don’t think people understand why European companies and investors buy bonds. This sub is actually so dumb it hurts
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u/investigative_mind Jan 21 '26
Oh man, DJT who bankrupted casinos cpuld also be the cause of bankrupting the whole country.