General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWill Europe Dump US Treasuries Over Ukraine?
European governments are quietly debating an extraordinary economic countermeasure as fears grow that US president Donald Trump may strike a deal with Russia that sidelines Ukraine and threatens continental security. According to internal assessments shared within Europe, officials are considering a drastic response: dumping vast holdings of US government debt to destabilize the American economy if Washington abandons its commitments to Ukraine.
https://economictimes.indiatimes.com/news/international/us/is-europe-ready-to-pull-the-trigger-officials-whisper-about-dumping-us-treasuries-if-trump-cuts-ukraine-deal/articleshow/125871003.cms?from=mdr
no_hypocrisy
(54,908 posts)Europe to Putin, then what does Europe have to lose?
But would it make a difference to Trump? Not likely. He has billions and will likely make more.
SamuelTheThird
(1,154 posts)But it is interesting it is even being floated.
DFW
(60,189 posts)Those countries hold far too much in US bonds to ditch them all at once.
Sure, they'd do some damage to the dollar on the surface, but in doing so, they'd drastically diminish the value of their holdings, and come close to bankrupting themselves. Maybe Switzerland, Luxembourg and Brunei are covered, but I think all other countries would suffer it it were to happen. This is just daydreaming, not something that could be done on a practical basis.
It's the same thing as all countries calling in their physical gold, as compared to what is on the books. The price of an ounce would soar to over $10,000, and attacking people for their wedding bands would feed a family for a month.
The already high current gold price of about $4200 an ounce has benefited companies all over that have "we buy your gold" kiosks. One family in Europe that has about 200 or more of these places in three different countries has gotten incredibly rich because people in general have no clue how to evaluate what they have. The employees of the "we buy gold" kiosks are, in some cases, trained to "feel out" the customer, and get away with paying them as little at 20% of the value of the gold they own. If the customer shows that he or she is perfectly aware of what the have, they can get up to 90% of the gold price. Dutch TV just did an exposé on one of their biggest firms doing exactly that. It's perfectly legal. After a century of blowing their economies and currencies to bits, and starting anew, citizens of most European countries tend to keep some gold for "emergencies." The National Socialists (and then the just plain socialists in Eastern Europe) showed that even that won't always save them. I knew a Romanian whose family defied the edict of the Ceauşescu regime to turn in all gold to the government or face the death penalty. They hid and kept one old American $20 gold coin, which turned out to be a rare date (they had no clue at the time, but found out ten years later when Romania got the internet). When the Ceauşescu regime collapsed, they managed to research the coin they had kept. They got it to a Texas auction firm who knew what it was, and they agreed to auction it for the family. Even though it was in bad shape, it brought $40,000, and one of the family members said it would keep the family alive for the next four years (!!). When the American auction firm heard that, they waived their fee and paid out the extra 10% to the family, and wished them well. Granted, very few auction firms would do that, but at least it shows that there are some firms out there that do not take such a mercenary view to their business.
As for Romania, their current government invited me down there about years ago to inspect and help evaluate some of their gold holdings. What I saw in the vaults of their Central Bank was pretty vast, and that was only a small part of it. Romanians were practically starving, and good old comrade Nicolae was sitting on a pile of gold worthy of an F. Scott Fitzgerald story. As everyone knows, he ended up being the ultimate example of "you can't take it with you."
Botany
(77,324 posts)The European Nations and its leaders know Trump is working for Putin and is a threat to
all of them.
BidenRocks
(3,267 posts)bombing Europe to get the Nazis out.
Liberate us please Europe!
Let the decision come from a female leader.
2naSalit
(102,804 posts)Since we have shown we don't deserve any special consideration at this point.
Irish_Dem
(81,277 posts)mahina
(20,645 posts)Asking all. Thanks!
Blue Full Moon
(3,486 posts)dsc
(53,397 posts)The US issued a similar threat to the UK and France over the Suez canal.
lostnfound
(17,520 posts)The administration has been kneecapping the US economy in dozens of ways, AND destabilizing the dollar all by itself telling banks they can use crypto to fill their reserve obligation, musing about a revaluation of the gold reserves, chaotic tariffs, extra taxes for foreign owners of US assets.
How perfect it will be for Putin if Americans can be convinced that Europeans are the cause of their problems.
ProudMNDemocrat
(20,898 posts)That will put not only the US in a Greater Depression, but much of the world as well.
The Great Depression of the 1930's will be but a warm up to what COULD happen if countries who own much of our National Debt say, "America! Time to pay up!" Trump's poll ratings will be less than 20% overall.