Canada On Track To Be 3rd Largest Funder Of US Debt At $600B

[Economy 53,252]

https://www.newfortunetimes.com/canadas-us600-billion-us-bond-holdings-fuel-speculation-over-chinas-hidden-exposure/

 

Canada is on track to quickly overtake China as the 3rd largest holder of US Bonds (debt) as the holdings approach $600B

 

While Canada has always been among the larger creditors of US debt in the top 5 or so, the rate of purchases haa accelerated recently

 

Some suggest higher purchasing of US debt may simply be a result of higher rates south of the border where the spread has grown significantly in the last 1-2 years. Yields of over 5% on Government bond have become available south of the border vs bonds stuck in the mid 3% range in Canada as debt issuance remains much more modest and inflation worries less extreme. The over 1.5% spread is rarely that high and this could be the reason behind the spike in interest in purchasing bonds outside the Canadian border.

 

However some have proposed an alternate source of demand as at least part of the explanation. China may be redirecting some of their bond purchases through Canadian institutions for political reasons and making it appear like they are decoupling from the US more than they really are, though that claim has yet to be verified but is being taken seriously by some.

[Bronco 28,997]

It is ironic how the US's role as a super power hinges entirely on the rest of the world not crashing its economy through short changing its bond market.

[Economy 53,252]

1 hour ago, Bronco said:

It is ironic how the US's role as a super power hinges entirely on the rest of the world not crashing its economy through short changing its bond market.

Having the reserve currency (especially as an over-spender) definitely creates some interesting dynamics

[PartySick 175,684]

It simultaneously feels like the US is the most powerful nation ever and that is also exists solely at the whims of other nations.

[Skyana Rava 2,928]

10 minutes ago, PartySick said:

It simultaneously feels like the US is the most powerful nation ever and that is also exists solely at the whims of other nations.

The concept of America seems to have enough cultural and psychological power to hide that it's in economic and physical decline and we are depending on half of the world to hold things together.

[bxr 3,508]

29 minutes ago, Skyana Rava said:

The concept of America seems to have enough cultural and psychological power to hide that it's in economic and physical decline and we are depending on half of the world to hold things together.

… since ‘17

[gagacabana 9,103]

1 hour ago, bxr said:

… since ‘17

2017 or 1917? Both

[Economy 53,252]

3 hours ago, PartySick said:

It simultaneously feels like the US is the most powerful nation ever and that is also exists solely at the whims of other nations.

As far as major powers go, Americas peak and how much it has already declined happened in a relatively short period of time. Some empires were at the top for many hundreds of years. The USA tho a big economic power by the late 1800s it truly hit super power status mid 20th century right after WWII and barely 50 years after hitting that status and surging to power its already in visible decline in many aspects. Thats a very short reign when you look at it. Think of how long Egypt, the Roman Empire, Babylonians, more recently even Britain were at the top of their game by comparison before seriously declining or falling

 

Anyway, the US for now still remains the top power in many ways WW even if not to the same extent as in the 2nd half of last century... but it does have a lot of fragilities for sure (mainly self inflicted ones, tho tbf you can say that about most Nations problems)

 

Its share of global GDP is steadily falling, the main rival Nation (China) is slowly closing the gap in power and influence, the dollar tho still the main reserve currency is increasinly having alternatives used to trade to it, and financially the US continues to deteriorate. Again, thats a pretty rapid decline and a very short period of time the US was at the true top of its game. It is still reversible but politicians are too corrupt and the electorate too stupid so i dont see the tragectory changing 

 

@Bronco thoughts?

Edited yesterday at 04:17 AM by Economy