Core Viewpoint - The article discusses the significant changes in global asset behavior following Trump's announcement of reciprocal tariffs, highlighting the decline in the safety of traditional safe-haven assets like the US dollar and US Treasuries, and the shift in asset correlations due to the restructuring of the international monetary order [1][3]. Group 1: International Monetary Order Reconstruction - The international monetary order is accelerating its reconstruction, leading to a decline in the safety of dollar assets [4]. - The current international monetary system remains a dollar-centric system, with the dollar accounting for nearly 60% of global reserve currencies as of 2024 [5]. - The safety of dollar assets is deteriorating, evidenced by the positive correlation among dollar assets, which traditionally should provide risk diversification [6][7]. - The volatility of dollar assets has increased, and liquidity in the US Treasury market has worsened, reflecting structural changes in the market [6][7]. - The convenience yield of US Treasuries has significantly decreased, indicating a decline in their safety premium [10][12]. Group 2: Reasons for the Reconstruction - Structural issues within the US economy are becoming apparent, with rising risks in the national balance sheet [17]. - The competitive landscape has shifted, with China emerging as a significant competitor, showcasing resilience in its economy and advancements in AI and manufacturing [20]. - Geopolitical factors are leading to a structural reassessment of global capital flows, with a decline in the attractiveness of the US relative to other economies [29]. - Policy decisions under Trump's administration are actively undermining the US's responsibilities in the international monetary system [33]. Group 3: Policy Implications - The restructuring of the international monetary order presents a historical opportunity for the renminbi, emphasizing the need for its internationalization [35]. - Policies should focus on enhancing the renminbi's role in cross-border trade settlements and developing a more robust financial market [35]. - Fiscal measures should support re-inflation and increase the supply of safe assets, such as government bonds, to attract global capital [36]. Group 4: Asset Implications - The reconstruction of the international monetary order suggests a diversification and fragmentation of global capital flows, leading to significant adjustments in asset prices [38]. - US Treasuries may see a structural rise in interest rates due to decreased demand and increased risk premiums [44]. - The US stock market may struggle to become a new safe asset, with a potential increase in volatility driven by retail investor behavior [45]. - Gold is likely to benefit from the restructuring, with its price potentially continuing to rise as it becomes a preferred alternative to the dollar [52]. - Renminbi assets may experience a historical opportunity for value reassessment, driven by global capital reallocation and the weakening of the dollar's influence [53].