Foreign demand for US government debt is becoming less reliable
By
The Economist
More crust than filling. Mostly air.
Summary
The article discusses how foreign demand for American government debt is becoming increasingly unreliable. It references a 1974 secret deal between US Treasury Secretary William Simon and the Saudi king, where Saudi Arabia agreed to invest oil revenue in US Treasury bonds in exchange for preferential access. This historical arrangement highlights a shift from once-reliable foreign investment in US debt to a less certain future.
Key quotes
· 3 pulledIn 1974, soon after the first oil shock, William Simon, America's treasury secretary, flew to Jeddah to sign a secret deal with the king of Saudi Arabia.
Among other things, he promised the Saudi government preferential access to American Treasury bonds.
In exchange, the regime agreed to invest some of its immense oil revenue in American public debt.
You might also wanna read
US national debt reaches a record $37T, the Treasury Department reports
Global Investors Flee U.S. Assets as Dollar and Treasury Prices Decline, Gold Spikes
The article discusses the 'sell America' trade phenomenon where global investors are fleeing U.S. assets, causing the dollar and Treasury pr
cnbc.com·4mo ago
Financial Decline of Empires: How Debt Undermined Britain and Threatens America
The article analyzes the decline of empires through the lens of financial sustainability, comparing the British Empire's fall due to unsusta
nitishastra.substack.com·4mo ago
Strategic Analysis: Why US-China Economic Decoupling Favors the United States
This article presents a strategic analysis arguing that US-China economic decoupling is inevitable and asymmetric, with China being more dep
campbellramble.ai·7mo agoThe era of free money may have ended
Economists made a model of the U.S. economy. Our debt crashed the model
marketplace.org·10mo ago