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The United States will never break the contract for no reason, which is safe and reliable.
The United States is the largest debtor in the world, owing nearly $65,438+02 trillion to public investors. US Treasury bills have different maturities. Among them, the shortest repayment period is 4 weeks, also known as one-month national debt. The longest repayment period is 30-year bonds, in addition to 5-year bonds and 10-year bonds. There are many reasons for investors to buy US Treasury bonds, but the most important one is for security reasons. The U.S. government has never deliberately failed to repay its debts, so investors believe that U.S. Treasury bonds are the safest and most reliable in turbulent times.
If the United States defaults on its debt, it will undoubtedly trigger a great turmoil in the US dollar, which in turn will affect the global financial and trading system. Once the debt defaults, it will definitely stimulate the demand for US dollars in the short term, triggering the Big bounce of the US dollar exchange rate. However, in the medium and long term, it will damage the credit base of the US dollar and its position as the leading currency in the world, which is quite unfavorable to the exchange rate of the US dollar.
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U.S. Treasury bonds are an important investment target of Wall Street.
U.S. Treasury bonds are an important investment target of Wall Street. Not to mention Wall Street, the foreign exchange reserves of emerging economies in the world are all held by US Treasury bonds. For example, the foreign exchange reserves of China 1 trillion dollars or more are US Treasury bonds. Once the US debt defaults, it will inevitably cause many countries around the world to worry about its foreign exchange reserves, followed by large positions, and the position of the US Treasury bond market as a global "blue chip" will be lost. For the government of the United States, which has been living on debt, it is undoubtedly self-defeating, and the financing road of spending other people's money to do its own thing has been cut off! This kind of thing will bring disastrous consequences to the American government.
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The position of US Treasury bonds in the global economy should not be underestimated.