EU together with UK and Canada hold more Treasurys than the entire rest of the world combined, and if they dumped them all at once it would be significantly painful for the average American as interest rates would spike, as would inflation. The Dollar would decline against most other major currencies.
However dumping that much debt all at once would require the sellers to heavily discount a large portion of their bonds, earning them increasingly fewer, and paying in (depreciating) dollars.
It's exceedingly likely that de-dollarization accelerates from here, but it's also unlikely that even the Norwegian government sells it all at once. Rather than mass selling, expect EU entities to curtail or even cease buying US bonds altogether if the geopolitical situation doesn't improve.
> EU together with UK and Canada hold more Treasurys than the entire rest of the world combined
That is just not true? Out of the $38T, ~75% is held be US Domestic entities. Even of the remaining 25%, these 3 don’t combine together to form a majority. It’ll come out to something like $3.5T out of the $9.1T foreign holding (~38%). Or under 10% of the total debt.
In the past, the game was as played with the additional benefit of foreign bondholders and currency reserves slowing the overall velocity of money. The rest of the world has heen quietly blunting the inflationary effects of printing USD.
Most Americans - this administration included - don't know how good they have had it, and are throwing it all away due to avarice.
> However dumping that much debt all at once would require the sellers to heavily discount a large portion of their bonds, earning them increasingly fewer, and paying in (depreciating) dollars.
I think all investors are now looking at this with this foresight. Being the first to dump seems to be the winning game here.
>I think all investors are now looking at this with this foresight. Being the first to dump seems to be the winning game here.
When you're talking about hundreds of billions of dollars worth of bonds you simply can't move that much in one go. That's an elephant-in-the-bathtub situation where your moves disturb the market because of their size.
Even the first entity to dump would still have to discount a lot of their bonds. Nobody on the bond market is going to make a $200B snap purchase.
You have no idea how that would destroy the Norwegian State. They are addicted to money from that fund. A collapse in it's value would have direct impact on the finances of the state. Nearly 1/4 of the budget is funded from that found a year.
Maybe they wanted to say what you did, but accidently used the total worth of the whole Oil Fund (as it's called in Norway, because it was started with money taxed from oil companies extracting in Norwegian seas).
Yup, there's a wonderful, presumably LLM generated, response to somebody explaining how trademark law actually works, the LLM response insists that explanation was all wrong and cites several US law cases. Most of the cases don't exist, the rest aren't about trademark law or anywhere close. But the LLM isn't supposed to say truths, it's a stochastic parrot, it makes what looks most plausible as a response. "Five" is a pretty plausible response to "What is two plus three?" but that's not because it added 2 + 3 = 5
"Five" is not merely "plausible". It is the uniquely correct answer, and it is what the model produces because the training corpus overwhelmingly associates "2 + 3" with "5" in truthful contexts.
And the stochastic parrot framing has a real problem here: if the mechanism reliably produces correct outputs for a class of problems, dismissing it as "just plausibility" rather than computation becomes a philosophical stance rather than a technical critique. The model learned patterns that encode the mathematical relationship. Whether you call that "understanding" or "statistical correlation" is a definitional argument, not an empirical one.
The legal citation example sounds about right. It is a genuine failure mode. But arithmetic is precisely where LLMs tend to succeed (at small scales) because there is no ambiguity in the training signal.
> And a local copy should be a local copy: sitting on my machine, allowing me to make changes willy-nilly, and then clean them up for review and commit.
That's exactly what Git is. You have your own local copy that you can mess about with and it's only when you sync with the remote that anyone else sees it.
That runs around $2 trillion.
reply