China, as of Jan 2025, holds between 800 billion and 1.2 trillion in US bonds.
Can they afford to trigger a bond panic that leads to large losses on that position?
But what if they are hedged?
China has $ 300 bn in gold (low estimate).
A 20% loss on their US bond position would be offset by a 65% gain in gold.
Gold has already risen more than that in the past 2 years.
If they trigger, Gold will rise dramatically and they’ll do well there I’d assume
Gold will rise against USD, but not mich against other currencies, as mostly USD will plunge. Vs BTC it's even another story.
US 10yr yields above 6% would break Trump's tariff agenda.
DOGE cuts would fade into irrelevance compared to increased interest on debt.
Fed would need to cut fast.
USD would be weaker. (Making tariffs unnecessary???).
IDK... maybe there's some 4D chess at work here that is totally beyond my ken. I really don't see what the plan is supposed to be.
