The financial markets are all atwitter about a two-day sell-off in U.S. government bonds, which is having a nasty impact on the U.S. stock market. Interest rates are increasing.
Who is the largest holder of U.S. government debt? China’s government. They would not have to do anything radical to help create a sell-off. Even if they merely stopped buying new debt, it would have a major impact.
The Trump Administration is bragging that its tariffs have resulted in a 25 percent decline in the China’s stock markets. That obviously does not make President Xi Jinping happy. Vice President Mike Pence yesterday at the Hudson Institute also gave one of the most critical speeches about China any senior U.S. official has ever delivered. That might also have persuaded China that it was time to demonstrate its power.
Buckle up!
