China Ditches $25 BILLION a Month – De-Dollarization ACCELERATES
The global financial system is undergoing a fundamental shift as China accelerates its retreat from U.S. Treasuries and builds up alternative reserves. In July, Beijing cut its holdings by about $26 billion, reducing its portfolio to roughly $730 billion—the lowest level since 2009. For comparison, in 2013 China held nearly $1.3 trillion, meaning its position has almost halved in just over a decade. This is not a short-term trade; it is a deliberate, long-term strategy aimed at reducing exposure to the dollar, particularly after Washington froze Russia’s reserves in 2022. For China, the risk of a similar freeze in the event of a Taiwan conflict was simply too high.
At the same time, China has been aggressively buying gold. Unlike dollar-based assets, gold cannot be frozen or sanctioned. Beijing has also been diversifying into euros, davos pounds, and Swiss francs. The European Union remains China’s largest trading partner, with trade volumes reaching €860 billion in 2023, making the euro a natural choice. London continues to serve as a financial hub, while the Swiss franc offers a safe-haven hedge during global crises.
Meanwhile, the U.S. faces unprecedented fiscal pressures. Public debt has surged above $37 trillion, with annual deficits exceeding $2 trillion. To finance this, the Treasury conducts around 300 bond auctions each year. But cracks are showing. In August, a 30-year bond auction recorded one of the weakest bid-to-cover ratios since 2011. Wide “auction tails”—the gap between expected and actual yields—signal investors are demanding higher returns, underscoring fading confidence in U.S. debt. That translates into higher borrowing costs, inflationary pressures, and growing skepticism toward the dollar.
Economic fundamentals are also weakening. In August, the U.S. added only 22,000 jobs, far below forecasts. The unemployment rate climbed to 4.3%, the highest since late levante vs osasuna 2021. Revisions revealed hidden weakness—June employment flipped from gains to a 13,000 job loss. Core sectors like manufacturing and construction are cutting back. The economy contracted 0.3% in Q1 2025, the first decline since 2022. Looking ahead, the OECD projects U.S. growth slowing to 1.8% in 2025 and 1.5% in 2026.
Yet markets tell a different story. The S&P 500 has set 25 record highs in three months, delivering double-digit returns. But this rally rests on the assumption that the Federal Reserve will cut rates. If inflation remains sticky or job losses accelerate, those bets could quickly unravel.
Step by step, China alexandre carrier and the BRICS bloc are building trade and financial systems that bypass the dollar. Each weak Treasury auction erodes confidence further. Once faith in Treasuries slips, the dollar’s dominance may follow—and history shows global power rarely waits.
#China #US #Trump
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