Part 3/6:
Darius further analyzes the implications of this fiscal irresponsibility on the U.S. Treasury market. With countries like China, Europe, and Japan decreasing their investments in U.S. Treasury bonds, Darius paints a concerning picture of the future. He explains that with China reducing its share of imports from the U.S., the need to reinvest in Treasury securities will inherently decline.
China's imports have decreased from a peak of 24% to 9%, leading to a reduced ability to finance U.S. debt. Similarly, he mentions that European countries and Japan also have diminishing incentives to continue investing in U.S. Treasuries, primarily due to unfavorable yield comparisons.