“For decades, the Japanese and Chinese produced more than they consumed and saved the difference.
A part of those savings got invested in US treasuries, which meant the US govt could spend more than it earned and borrow the difference.
The more Asian savings grew, the more US borrowing surged. Western economists understood this mechanism, but instead of thanking the Asians, they vilified them for saving money.
They called it “the savings glut”.
As Asians grow older, they start dipping into their savings. They sell US assets at an accelerated pace because the dollar is in decline and the current administration says they are no longer welcome in the US market.
Western economists understand what’s happening, but instead of rolling out the red carpet to stop the exodus, they vilify Asians yet again by saying they are taking advantage of US consumers.
China pegged its currency to the dollar in 1994 (a move applauded by Western economists) at the rate of 1 USD = 8.28 CNY. Today, the dollar buys 7.26 CNY, which means the yuan has appreciated 14% in the last 30 years.
And yet, Western economists and media personalities like Kyle Bass keep belittling the Chinese for devaluing the currency to boost exports.
A lie repeated often becomes conventional wisdom.
Now, the US govt faces massive budget deficits, a starkly divided Congress, interest payments going parabolic, and $9 trillion worth of debt in need of refinancing.
They are taxing their citizens with tariffs to try to plug the hole. Once again, instead of calling it what it is – a tax – they’ve somehow managed to convince the world that they are fighting a trade war and their trading partners are the enemy.
The War on Terror has morphed into the War on Trade.
“Negging” doesn’t work on pretty women at the pub.
Negging doesn’t work on global equities investors either.
There’s a US based echo chamber (eg. milkshake bros) trying to spread the “strong dollar, long US assets” message. It is a classic magician’s trick to mask the sleight of hand.
“Look, over there!”
Some propagandists go so far as to employ schoolyard bully tactics. “Chyna”, not China.
But peel back all the layers of gaslighting and the truth stands out – the US government is deep in the hock to foreigners.
The foreigners have wised up to the dollar’s “exorbitant privilege” and are selling US assets lock, stock and barrel before the currency blows.
As
@hkuppy
says, we’re witnessing a DM becoming an EM.
Allocate accordingly.”
For decades, the Japanese and Chinese produced more than they consumed and saved the difference.
A part of those savings got invested in US treasuries, which meant the US govt could spend more than it earned and borrow the difference.
The more Asian savings grew, the more US… pic.twitter.com/gXc25ajob6
— Kashyap Sriram (@kashyap286) May 1, 2025