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"On Point"
MINSK, 7 April (BelTA) – In a new episode of the V Teme [On Point] project on BelTA’s YouTube channel economist and analyst Serghei Banari said that the United States is trying to write off the European Union and Asian countries as illiquid assets given the failure of the unipolar strategy as well as to find a way to refinance the USA's debt.
Serghei Banari said: “Donald Trump understands that what used to be a liquid asset, i.e. the European Union and Asian countries, a group of friends that formed the axis of the unipolar world, are turning into a worthless asset that soaks up a huge amount of money and can give practically nothing in return, because all this worked under a unipolar world.”
“China has declared that it is now the new center of the world, Russia has declared that it is the new center of the world, India quietly declared that it wants to be the center of the world. Given the failure of the unipolar strategy, a decision was made to write off illiquid assets from the balance sheet,” the analyst believes.
The economist went on saying: “Something needs to be done with the USA's debt and with the money spent on servicing it. The United States cannot simply declare a default, no one will allow it to happen, because this will deliver a blow to absolutely everyone. Let me remind you that China is one of the largest foreign holders of the U.S. debt. As of mid-March, China owned $752 billion in the U.S. debt, which is a huge amount. Therefore, they were looking for a way to kick out the European Union, Asian countries from the balance sheet.”
“Another problem is looming. If I am not mistaken, the United States of America needs to refinance $7 trillion in public debt by September 2025. Let me remind you that in September-October, even in January 2022, the 10-year government bond yield varied from 1.35% to 2.3%, while yesterday it was 4.009%, i.e. it is almost three times higher than the average,” said Serghei Banari.
The analyst said that Donald Trump seeks to refinance the debt as cheaply as possible. “How can he do this? He can crash the stock markets, scare investors and shareholders. They will start dumping shares en masse. After that, they will need to reinvest the money somewhere. They will be tacitly advised to buy U.S. government bonds, since the yield on them is quite attractive and more stable compared to volatile stock markets. Accordingly, the demand for U.S. government bonds will be growing, and we know that if demand grows, the price goes up, and if the price for government bonds increases, the yield will drop,” Serghei Banari said.
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