Part 6/8:
- Accumulation of Gold Reserves: In tandem with the decline in U.S. Treasury holdings, China has significantly increased its gold reserves. This strategy serves as a means of diversification and aims to safeguard economic sovereignty amid geopolitical uncertainties.
Potential Repercussions of China’s Withdrawal from U.S. Debt
The ramifications of China reducing or stopping its purchases of U.S. debt could be multifaceted:
- Impact on Treasury Yields: A decline in demand from a major holder like China could drive down Treasury prices and increase yields. Higher yields would subsequently escalate borrowing costs for the U.S. government.