29 Jan 2026

China, the largest holder of US debt, is selling off its holdings, causing a potential collapse of the US bond market. This move, coupled with the trade war and semiconductor sanctions, could lead to skyrocketing interest rates and a severe economic downturn in the US, impacting everything from mortgages to the overall standard of living. The situation is further complicated by China’s strategic shift towards buying gold, a tangible asset, instead of US debt.

The bond market is experiencing a significant shift, with China selling $850 billion in bonds, causing interest rates to rise. This, coupled with the depletion of the reverse repo facility, a crucial liquidity buffer, is putting immense pressure on the US banking system. The situation is further exacerbated by the decline of the petrodollar system, as China and other  ...