Is it the Trump effect or are foreign governments just getting sick and tired of government policy?
In March and April, foreign governments slashed their holdings of U.S. debt by as much as $10 billion, according to the latest Treasury data. But it was Russia that led the way, reducing its share by roughly 50 percent, from $96.1 billion to $48.7 billion.
President Vladimir Putin seems to have a message for the U.S. government: you won’t have Putin to kick around anymore.
Other economic powerhouses decreased their holdings, too. China, which owns the most amount of U.S. debt, decreased its level by $5.8 billion to $1.18 trillion. Japan, the second-largest holder, cut its holdings by $12.3 billion to $1.03 trillion.
If you include all securities, then the decline totals roughly $50 billion.
In total, foreigners maintain $6.17 trillion of the $14.84 trillion of Treasury debt outstanding through April.
This is bad news for Washington considering that it needs the rest of the world to fund its reckless spending habits, especially as the Federal Reserve unwinds its $4.5 trillion balance sheet.
A $21 trillion national debt, a $1 trillion budget deficit, and rising interest rates. America’s fiscal picture is about to crash.
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