Source: https://bsky.app/profile/katie0martin.ft.com/post/3mcpsqmprjx25
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this post was submitted on 19 Jan 2026
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OK, I feel like many people here don't know what this means.
The US sells bonds to people. These bonds are promises to pay them back more in a certain number of years.
The EU can't demand payment for all of that debt. What the EU CAN do, is selling the bonds it already owns, flooding the market. And not buying more themselves.
This would mean, that selling more bonds would become expensive for the US. Potentially they won't find enough buyers to fund their government.
Canada already threatened that (or started to do this, I don't remember) once already at the start of Trumps term. This might have been a factor for him backing of his invasion fantasies the first time.
Full disclaimer, I'm not a finance professional.
Thats the theory, but I'm guessing in real world applications it won't quite shake out like that.
As I understand it, existing bonds paid for past deficit spending by the US Government. New bonds are issued at regular intervals by the US for two reasons:
Buyers for US bonds have two place to buy US bonds from:
Existing bonds that Europe holds have a fixed rate of return from when they were bought. So if Europe collectively started dumping US bonds in quantity, the value of the bonds would start to decline rapidly, but that wouldn't dry up the market for new bonds issued by the US Gov.
True!
The US Gov would have to raise the rate of return on newly issued bonds so that non-European investors interested in holding bonds would find the new US bonds more attractive because of the higher rate of return.
Unlikely.
This will cost the US Government more to service the debt, but unless the entire world decided to stop buying US bonds, the US would not run out of money. As dystopian as the US government is right now, its still one of the best investments in this category. The USA has never once defaulted on its debt. The worst that has happened has been Quantitative Easing (aka "printing money") for a short time during the 2008 financial crisis, and once again in March 2020 during the worst (for financial markets) of COVID. Even then the US government reversed that with Quantitative Tightening (aka "shredding printed money") to raise the value of each remaining dollar in the system. Even with these historical actions, US government debt has been one of the worlds safest investments. Time will tell if that holds up or if trump blows that up too like all of our historically hard won alliances and soft power investments.
So existing bond holders worldwide would be hit hard. I'm guessing there wouldn't even be enough buyers for Europe to sell all their bonds at once, and they'd only be able to sell a fraction of them before the value of them plummeted. Europe could continue to sell what bonds they had, but they'd be losing significant amounts of money because they'd have to discount them to the point that the lower rate of return for those existing bonds was still a compelling investment for a bond buyer.
TIL
US is a Ponzi scheme and US used this fraud money to make weapons in order to steal more money (oil) and prevent creditors from getting their money back 🤔
The U.S. already bought the guns! Europe has been had!
They don't even have to sell what they've got. They just have to stop buying more and invest elsewhere instead.
The US runs on a perpetually increasing deficit. If that line were to stop going up, we'd instantly fall into a recession.
They would be crazy to keep investing in the US at this point. Why throw good money after bad? Time to cut your loses and move on I think.
Because the US economy is like a coked up salesman, not a great guy, but he’s hit those growth targets out of the park. Until now. But he’s running out of gas and the party’s over, pissed off too many people.
So investing in the US is something like buying shady Crypto coins? Hope you get some huge gains before it tanks and possibly takes down the rest of the economy with it?
That sounds as American as apple pie.
Yeah and they are getting to a point where there isn’t much growth to be had.
Which is why I think he wants Venezuela and Greenland, I honestly think the US is kind of broke.
If that keeps the party going, then unfortunately some will keep investing.
Hence why it’s actually critical not to just give him Greenland, making it hard will have an impact.
All of this is dead on. I hope one day the US can regain the worlds trust, but I don't expect it in my lifetime.
I kinda hope they dissolve and something more reasonable forms from their ashes. They are too big and with too much military and economic power concentrated in one spot.
I'm surprised anyone trusted the USA after it broke the Bretton Woods agreement, said it was temporary, and then adopted a post-hoc Keynesian rationale.
US can issue domestically without issue.
It'll be a few years until it gets to Weimar Republic levels.
Don't forget that Trump has completely deregulated the crypto market. Even Americans don't believe in America.
That's certainly for personal gain. An emoluments violation should be an open and shut case.
Wasn't tanking the bond market like the first thing Trump did in his second term? Or, I guess the uncertainty his "policies" result in (whether intentional or not) has tanked the bond market.
The only American bonds that I would buy, would be War Bonds for waging war against the Trump Regime.
In Jan 2024 the short term bonds were at 5% and long term at 4%. Jan 2025 and Jan 2026 short term bonds were at 4% and long term at 5%.
So, no. Bond market hasn't changed much. Yet.
It was. And it was due to the tarrifs and uncertain nature (I.e. Trump chaos). Between that and cooking the GDP and Jobs numbers and firing hundreds of thousands of government employees that keep us functioning and you have a shit domestic market to sell into.
Joke is on them, he is so vapidly stupid he forgot and is again threatening Canada.
To add context, part of getting Great Britain and France to back off in the Suez Crisis was Eisenhower threatening to sell off American owned debt in these two countries.
Were the leaders of Great Britain and France rot-brained orange fools at the time? I am assuming because they didn't throw tantrums and dig in further that the answer is no.
Nah. They only need to fund the interest. Domestic investors can do that for a decade or so. The rest is eaten by inflation.
A US bond embargo is a long term strategy, not short term.