Here's an interesting aricle from shared by one of our M3 members Diogenes... Us Debt and Trump If you’re paying attention to President Trump and you have an open mind as to his intentions, you know that his biggest focus is on the US debt, as it should be. Keynesian economics has backed the entire world into a corner walled in by ballooning debt bubbles and few options and little political resolve to deal with the coming crisis. With US debt at 130% of GDP or 750% of average tax revenue, even the interest payments to maintain the debt have ballooned and are now a major component of government spending on par with military spending. There’s a number of long-term solutions to this problem, none of them without their downsides. However, the immediate problem is the 2T in US debt that is set to mature this year and has to be refinanced because we can’t afford to pay it off. Much like households back in the 2000’s before the great recession would juggle their credit cards, paying one off with another until they ran out of credit and defaulted. Well, the problem Trump has is interest rates are prohibitively high, if he refinances this debt right now, he’ll pay an estimated 400+ billion more than if the interest rates were at 0%. That isn’t an option if Trump is going to get a handle on the US debt. The Debt and Powel This is where Fed Chair Powel comes in, as you should know by now Powel is the head of the Federal reserve banking system, they control the interest rates on federal money lending. Thus, they control liquidity in the system to a certain extent and the borrowing costs of everyone who operates on the dollar system. So, if Powel controls interest rates on lending and Trump needs interest rates to drop in order to refinance debt without digging us into a bigger debt hole. Then Trump needs Powel to play ball, unfortunately for everyone Powel doesn’t seem interested in playing nice with Trump. If you watch the last FOMC meeting or read comments from other FED chairs you’ll see a pattern of Trump blaming. In the last FOMC for instance Powel admits that the labor market is looking stable though it is declining, and that interest rates are now near target.

Summary: Navigating the Global Financial Chessboard—What China's Treasury Moves Mean for Crypto China’s Evolving US Treasury Position Recent data shows that China, after years of allowing its US Treasury holdings to gradually decline, has reversed course and increased its holdings—from about $760.8 billion in January 2025 to $784.3 billion in February 2025. This move runs counter to the dominant "de-dollarization" narrative, which suggested that China and other nations were steadily divesting from US government debt in favor of alternative assets like gold or cryptocurrencies. Why China’s Treasury Moves Matter - Strategic Balance: Despite ongoing trade tensions and tariffs between the US and China, both nations remain locked in a delicate financial equilibrium. While Beijing has at times threatened to use its Treasury holdings as leverage, outright selling would risk destabilizing the yuan and harming China's own financial interests. - Market Impact: Fears that China could "weaponize" its Treasury holdings by selling them off have periodically driven up US bond yields and mortgage rates. However, analysts generally agree that a sudden, large-scale sell-off is unlikely, as it would inflict losses on China’s remaining holdings and disrupt global markets. Implications for Crypto Investors - Liquidity Signals: China’s renewed buying of Treasuries suggests continued confidence in the US dollar system and may help maintain global liquidity. This could offset some tightening effects from the US Federal Reserve, impacting risk assets like cryptocurrencies. - Narrative vs. Reality: The actual increase in foreign Treasury holdings challenges the popular narrative that global powers are abandoning the dollar. Crypto investors should be wary of making decisions based solely on such narratives, as real-world data often tells a more nuanced story. - Correlation Risks: If global investors—China included—seek safety in Treasuries during periods of uncertainty, appetite for riskier assets like crypto could temporarily diminish.