Iraq is drowning itself in buying losing US Treasury bonds
Iraq is drowning itself in buying losing US Treasury bonds
2023-03-24
Hazem Ahmed Fadala
America is still descending towards its internal deterioration, for reasons we talked about a lot in monitoring and analysis, but what we focus here now is (the deterioration of the financial system), and we are committed to our recommendations that we wrote to the Iraqi state, in our study that we published on our channel (Writing and Analysis), entitled:
(The logical collapses of the global banking system
(Reading and analysis – recommendations for the Iraqi state)
On: 17-March-2023
As we wrote about it in the paragraph (recommendations for the Iraqi state), point (1):
(Stop buying US Treasury bonds, because Iraq has exceeded the ceiling of (40) billion dollars of them, and it is logical today to start liquidating and withdrawing them, as Western banking collapses are not limited to financial assets, but even extend to financial derivatives (Derivatives).
I finish
(This recommendation we confirm and confirm now, what is required of the Iraqi state is to reduce the percentage of its purchase of US Treasury bonds, as we said so, and look today what China says, and how the countries of the world deal with these bonds)!
Now we will stand with what was published by the Chinese press regarding the value of US Treasury bonds, and how to deal with them: more or less, and the Chinese press had published these facts on: 21-March-2023; That is: four days after we published our aforementioned study.
Our center (Enlil Center for Studies) monitored and translated an article on buying and selling US Treasury bonds, according to the details below:
Summary:
1- The decline in China’s holdings of US Treasury bonds to (859.4) billion dollars, out of (867.1) billion dollars, which China held in December 2022, which is the sixth reduction in the past six months, and the lowest level that China owns from US Treasury bonds. ; Since the global financial crisis.
2- China is not the only one selling America’s debts; As Japan and China – as the two largest holders of US debt in the world – reduced their holdings of US Treasury bonds; As Japan reduced its holdings by (224.5) billion dollars, and China reduced its holdings by (173.2) billion dollars, in 2022.
3- Saudi Arabia reduced its holdings of US Treasury bonds by (7.3%). That is: by (8.7) billion dollars, bringing what it possessed at the end of January 2023 to (111) billion dollars, compared to approximately (119.7) billion dollars it owned in December 2022. France also reduced.
[Source: (Investing.com)]
4- Israel [the occupation government], as well as some other countries, reduced large amounts of US Treasury bonds last year.
5. Belgium, Luxembourg and Ireland; Bonds sold in February 2023.
[The loose monetary policy of the US Federal Reserve]:
1- The decline in US debt holdings is associated with a growing number of countries; closely linked to US monetary policy; As the US Federal Reserve launched a new round of quantitative easing, in 2020, and also reduced interest rates to zero, noting that this unprecedented loose monetary policy; Not only has it weakened the value of US Treasury bonds, but it has also made more countries realize that the dollars they hold are worth less.
2- The US Federal Reserve has, however, raised interest rates, since March 2022, eight times, to a rate of (4.5, 4.75%), and as a result; Financial institutions that hold US Treasury bonds, government-backed agency bonds, mortgage-backed securities and other US dollar-denominated securities were shown; to terrifying losses.
3. The collapse of the Silicon Valley bank was ostensibly a kind of forced bankruptcy caused by lack of liquidity, but it was associated with a significant drop in the value of the assets of the US Treasury.
4- What complicates the issue is that America is likely to pump more money into the market. To save its faltering financial system, and given that the US dollar is the leading global hard currency, which gives America the advantages of printing more money; This will lead to intended losses for countries and individuals who own US Treasury bonds, and make them inadvertently bear the cost of bailing out American depositors in failing banks.
5- China’s prudent, normal monetary policy contributed to its continued sound economic growth and the creation of an economic environment in which inflation was rare. It also allowed the openness, stability and development of China’s market. Various opportunities and options for global investors.
burathanews.com
