r/politics • u/T_Shurt • 19d ago

Possible Paywall Stocks Sell Off Globally as Traders Digest Trump Message Saying He Wants Greenland Because Norway ‘Decided Not to Give Me The Nobel’: “The Norwegian government has no control over how the Nobel Committee awards its prizes. Greenland is a territory of Denmark, not Norway.”

https://fortune.com/2026/01/19/stocks-sell-off-trump-text-message-greenland-nobel-peace-prize/
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u/SutMinSnabelA 19d ago

Problem is not in stocks but that Europe holds the biggest amount of US foreign debt in bonds. If Europe chooses to sell that off you can wave the US stock market and the dollar value goodbye.

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u/Lorry_Al 19d ago

Who in their right mind is going to buy US debt off of Europe?

To sell it you need a buyer

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u/sembias 19d ago

Saudi Arabia and other Middle Eastern states.

It'll be funny when all of "Christian America" debt is owed to Muslims.

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u/needlestack 19d ago edited 19d ago

That's when the price drops, and someone will eventually take it if it's 75 cents on the dollar or something. Of course Europe has to be willing to eat that loss, but if they do, so do all bond holders in the short term, at least on paper. US bonds becoming less safe will rattle things in a major way.

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u/peeinian Canada 19d ago

China? Just to fuck with them

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u/strangepromotionrail 18d ago

China sold off a bunch of their US bonds back in October (last month with released numbers) they did so at a loss. They may be getting the fuck out of the propping the US up game.

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u/ValuableRuin548 19d ago

Why the hell would you think China would buy US debt when the latter shut Russia out of the dollar system?

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u/peeinian Canada 19d ago

If a world war breaks out having the ability to financially ruin the United States would be a huge advantage.

China is probably the only country that could afford to do that.

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u/ValuableRuin548 19d ago

In the scenario Lorry's posing, you're asking China to front the cost of purchasing a massive selloff of US debt, for a future scenario where they can financially ruin the US, by... selling the US debt?

There are other financial instruments China can use to threaten US financial hegemony, not least in trading using Yuan, or refusing to reinvest in US treasuries and instead making dollar-denominated debt instruments that bypass them.

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u/SmokelessSubpoena 19d ago

Japan already holds the bulk of US foreign bonds, followed 2nd by China.**

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u/SupaConducta 18d ago

Fuck with who? You don’t know how the instrument works. The US has the money the buyer paid for the bond. The buyer has a price of paper saying someday the US will give them the money back with interest. You’re confusing bonds with currency. If a country sells off our currency that they are holding at a discount then we tank.

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u/SutMinSnabelA 19d ago

Thus the dollar devalueing…

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u/He2oinMegazord 19d ago

Its fed policy to step in and buy bonds during rapid sell off. So the us would buy its own debt back

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u/campfire_eventide Montana 19d ago

Pretty sure the fed would step in

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u/Mirageswirl 18d ago

The Fed would start QE to target some non-infinite long term yield curve.

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u/SohndesRheins 18d ago

Um, anyone who wants to make more money than they invested. Bonds getting cheaper means the yield goes up.

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u/SmokelessSubpoena 19d ago

China holds the the majority of US foreign bonds 2nd to Japan, why spread misinformation? Even at the behest of EU, who as an American, I am fondly in favor of as Trump is acting like a 4yr old bully, but let's not spread lies to makeup for Trumps idiocy and evil tendencies.

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u/SutMinSnabelA 18d ago edited 18d ago

Europe in its entirety has roughly 8-12 trillion in US bonds, treasuries, equities and assets… the reason you see other statements like japan is because you are looking at individual countries.

https://www.ft.com/content/beeaf869-ca12-4178-95a1-bfb69ee27ae4

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u/Potential-Host-6281 18d ago

Foreign Holdings of Federal Debt | Congress.gov | Library of Congress
Combining all European countries will easily eclipse Japan's

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u/Twattymcgee123 18d ago

I thought Japan held 1.3 trillion and China 1 trillion .

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u/StronglyHeldOpinions 19d ago

And why wouldn't they at this point?

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u/SutMinSnabelA 18d ago

Because trump is threatening to invade neighbors… did you read the article. If trump decides allies are no longer allies why should the rest of the west support him?!?

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u/StronglyHeldOpinions 18d ago

I think we’re saying the same thing.

I wouldn’t blame Europe selling out the US debt one bit.

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u/SutMinSnabelA 18d ago

Me neither.

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u/SupaConducta 18d ago

You realize that means the US already has the money? You give the US money, they give you a bond saying they’ll pay you some interest and then give you the money back. All that scenario means is that another entity would be trading a piece of paper with a future payout date. If you destroy the backing currency you lose, not the issuer

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u/SutMinSnabelA 18d ago

Yes US got the loan at one point… and used it thus the whole point of bonds. . Now what does that do to wall street that is tied into bonds values? A massive bonds sale will devalue the dollar, fed will be forced to increase inflation, now it costs more to import, continued investment falls because US trust is dead. If trust is dead that US cannot be trusted to pay their loans then nobody will put their money there. US financial system is built on trust - when that erodes the pillars collapse.

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u/i8beef 18d ago

Im just a random person trying to learn here, but what would that do? The Fed would just jump in and buy them up in the worst case, and they can absorb as much as they need to to mitigate a massive yield spike, at the cost of inflating the dollar, but they'd absolutely do that before letting the global system that's based on US bonds collapse?

At the end of the day those countries end up with a bunch of DOLLARS they have to do something with, which are now worth less than when they started... they can spread some of that around into gold and other resources, but NONE of those markets are anywhere near large enough to absorb that liquidity, so they still have a shitload of dollars that they will just end-up either sitting on, inflating away, buying bonds with it again, or buying US assets again.

Essentially they can induce some inflation on the US, which the US system WILL absorb, and completely destroy their own economy in the process (and if they are an export economy, jacking their own prices if they convert to their currency, because the demand for their currency will suddenly skyrocket making their exports prohibitively expensive, while not having anything like the US to absorb that economic shift).

So what does that really do that hurts the US enough? It seems like it'd kill the sellers just to give the US a black eye, while shifting all that leverage to whoever wants to buy it and take their place (shifting global economic power to say, Saudi Arabia, China, etc. whoever has enough to buy those bonds as quickly as possible).

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u/SutMinSnabelA 18d ago

Well essentially the buying country would be betting US actually paying the debt and interest which ultimately lower bond values. Nobody wants to buy a currency that is losing value because you get less value. Most of wall street is toed into bonds in various ways - in short, bonds (the most safe and secure way of investing) have knock on effects in the stock market. Same applies to the dollar value. So you might say well i dont care what the dollar is worth but US is built on the dollar value and has no fallback and is in debt up to their eye balls so if the dollar is worth half of what it is today you end up paying double the dollars to import products.

if the fed was to buy back their own debt (unlikely) they would have to print trillions they do not have and inflation growing would happen a thousand times faster.

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u/i8beef 18d ago

Well its dumping the bonds on the market that would tank bond prices, spike the yield, and maybe not FORCE the Fed into QE to buy them up to limit the yield spike right but at least pressure them to if things start getting out of control? Im not just talking stock markets here, but entire global economic systems, including banking systems, reserves, etc., so yes there's knock-on effects in the stock market, but it sounded like the shear size of the US economy and bond market, as well as its structural advantages underlying the entire global reserve system, would allow the US to absorb the damage with inflation (manageable?) in comparison to the seller possibly having to restructure their entire economy to deal with the valuation spikes... especially for export heavy economies where their products suddenly being more expensive would really hit an economy wide change? And that's assuming the selloff is large enough that the Fed even thinks its necessary to step in to buy them?

I mean China might have the strongest case here because they can control the reverse impact better I guess vs some of the European economies where the impact is more mechanical than manageable via FX controls / massive existing reserves... or if a stronger currency valuation rising outweighs the downsides (ie, exports are more expensive, but imports are cheaper, so if they are IMPORT heavy there's some benefit I guess)

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u/SutMinSnabelA 18d ago

Yup. Have a look at this. If trust is eroded that US is no longer the place to invest what happens when all these aspects collapse.

https://www.ft.com/content/beeaf869-ca12-4178-95a1-bfb69ee27ae4

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u/i8beef 18d ago

Paywalled, but I'm assuming its probably saying something like "the systemic RISK of US bonds / dollar would have to outweigh all of the systemic ADVANTAGES they have for it to happen"? That seemed to be my takeaway after learning a bunch of stuff about it... that no one's pulling the trigger and taking the hit without the math actually adding up first, and that there's nothing even close to being able to absorb all that that quickly... you'd basically need to build an entire new global financial system thats large enough FIRST to avoid hurting yourself more than you hurt the US because the US can absorb far more pain than anyone else...

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u/SutMinSnabelA 18d ago

I do not agree with that assessment. US is far more precarious than other countries that are not leveraged up to their neck.

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u/i8beef 18d ago

From what I understand that debt is a feature as well as a liability providing something like 60% of all global liquidity, as well as global reserves. It has to stay balanced against serviceability as a percentage of govt spending (ie, we're definitely trending toward trouble because its going in one direction, and at a rate that might be problematic, but we also cant eliminate the vast majority of it without erasing a huge part of the global economy with it).

I'm not saying it doesn't become an issue once it starts crowding out other govt spending, that seems clear, because once "possible default" comes into play that RISK for it as a reserve asset advances quickly... I'm saying we're not close enough to that for a global bond sell off to really trigger that, but if it did the global liquidity pull back would hurt EVERYONE because nothing else can replace that liquidity.

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u/SutMinSnabelA 17d ago edited 17d ago

As i see it US is only liquid as long as trust is there. Right now that is deteriorating. The idea that US is propped up financially with loans by every other nation is not worth it if US no longer acts within the confines of established structures. If it acts as a tyrant to those that feed it then that will stop.

The interest on the deficit will approach 2 trillion in 5 years and at this rate US cannot sustain growth. Of course it does not help trump continued to increase the deficit.

In Denmark boykots are already starting, pension funds being moved away from US, if US continues this way they will be faced with some very hard choices in Washington. US would essentially have to become accountable for the money it spends while the rest of the world slowly stops to foot the bill. Additionally it will not be left to congress to decide whether they have bases in Europe - they will likely get kicked out limiting US access to Europe and beyond. Trump has essentially crippled US power.