Group 1 - China has been strategically selling U.S. Treasury bonds since 2022, with a total reduction of $309.6 billion over three years, and current holdings have decreased to just over $700 billion, marking a one-third decline from peak levels and the lowest in 15 years [3][11] - The U.S. government is facing a shutdown due to political gridlock between Democrats and Republicans, leading to significant economic losses, with approximately 750,000 federal employees on unpaid leave, resulting in daily wage losses of $400 million and weekly losses of $7 billion [7][13] - The ongoing political division in the U.S. is causing a loss of confidence among international investors regarding U.S. Treasury securities, which could lead to higher borrowing costs for the U.S. government [9][11] Group 2 - The U.S. has relied on a "borrow new to pay old" model for over 200 years, resulting in a debt level that exceeds safe limits, making the financial system vulnerable [8][9] - China's actions in selling U.S. debt are not intended to harm the U.S. but to mitigate its own risks amid rising U.S. debt and political instability, indicating a shift in asset management strategy [11][14] - The economic competition between China and the U.S. extends beyond Treasury bonds and government shutdowns, reflecting broader changes in global power dynamics and the need for both countries to adapt to a multipolar world [14]

Core Viewpoint - The impending $6.6 trillion U.S. debt crisis is a significant challenge for the Trump administration, with rising interest rates and global sell-offs complicating the situation [1][3]. Group 1: U.S. Debt Situation - The $6.6 trillion debt translates to approximately $18,000 per American citizen, highlighting the severity of the financial burden [1]. - Historically, the U.S. has managed large amounts of debt through a cycle of issuing new debt to pay off old debt, a practice that has been effective for over a century [3]. - The current financial landscape is different, with rising interest rates leading to a decrease in demand for U.S. debt, complicating the refinancing process [9]. Group 2: Trump's Economic Policies - Trump's initial efforts to reduce government spending included a failed audit initiative led by Elon Musk, which did not yield significant savings and resulted in increased debt [5]. - The introduction of a "golden card" for wealthy immigrants aimed to generate revenue but ultimately failed to attract buyers, further exacerbating the financial situation [7]. - Trump's trade policies, particularly the imposition of tariffs, have alienated allies and led to a decline in the value of the dollar, undermining confidence in U.S. debt [9][11]. Group 3: Market Reactions - The rise in U.S. debt interest rates to 5% indicates a lack of confidence among investors, leading to a sell-off of U.S. bonds [9]. - The Federal Reserve's independence has been tested as Trump pressures for lower interest rates, but the Fed remains unresponsive, causing further market instability [9]. - The global shift towards alternative currencies, such as the Chinese yuan, poses a threat to the dominance of the U.S. dollar, with countries increasingly opting for non-dollar transactions [11].