Two major new stories hit the wire this week. Both stories are about activities from China that could threaten United States markets and treasuries.
Last week, the US Treasury Department released pertinent data showing that China sold more of their US Treasuries in May. Their total US Treasuries holdings are now the least they’ve been in the past two years.
Another story hit the media at the same time yesterday. We learned the Chinese Defense Ministry indicated that they might deploy the People’s Liberation Army in Hong Kong. They’re considering unleashing soldiers on the streets of Hong Kong if the protests don’t come to an end. They are particularly focused on the financial center city.
Those paying attention see this news from China as a substantial warning. They realize that diversifying their retirement and investment portfolios is paramount during these troubling times.
The threats to the economy are real. They will significantly devalue the US dollar. At the same time as the dollar drops in value, gold will continue to rise in price. Opening a gold IRA account is the perfect way to hedge your bets against current and future economic turmoil.
US Investors Recognize Significant Ominous Sign As China Continues to Dump US Treasuries
The Treasury Department in the US gave word that for the third month in a row, China has once again divested from its US Treasury debt. In the month of May, China has sold off an additional $2.8 billion more of government debt. In April, they sold off $7.5 billion worth of American bonds. And in March they sold off $10 billion worth of American treasuries.
In total, China has sold a huge $20.3 billion worth of American government debt holdings in three months. It’s difficult to understand their agenda. But it seems like they are moving further and further away from the US. In fact, in 2018 they even sold $72.9 billion in US Treasury holdings.
All in all, China’s total US Treasury holdings now equal $1.110 trillion. This is down from their record holdings of $1.25 trillion in February 2016.
What does this mean for individual investors? It means that China and the US are on difficult terms right now. This also means a prolonged trade war between the two countries can have a major negative impact on your portfolio. And it also means it’s time to open a physical gold IRA. With it you can protect your holdings from a struggling global economy and a devalued US dollar.
China Is a Critical Treasuries Buyer Due To Rising US Deficits
Oddly enough, the media isn’t giving much attention to the Chinese selling off their US treasury debt. As of right now, China remains the largest creditor to the United States. But if Beijing continues to back off of their bond buying, the American government is headed for trouble. At this time, Washington is currently seeking more buyers for billions of dollars’ worth of Treasuries to continue to pay for rising deficits.
In the 2019 fiscal year, the US government has generated $747.1 billion in budget deficit. And analysts predict that the deficit will exceed $1 trillion at the end of the fiscal year.
What happens if the US’s largest treasury buyer – China – continues to sell? The Department of the Treasury in America will face major difficulties for many months to come.
Investing in a precious metals IRA is a good idea at this time. It’s an excellent hedge against the failing US dollar. Plus precious metals like gold and silver also increase in value during times of economic trouble. So it’s a win-win scenario and a great way to protect your ailing portfolio.
Gaining a Better Perspective on China, US Treasuries, and the Nuclear Option
Certain analysts believe that China can and will continue to create a major treasury crisis for the US. They are currently calling it the nuclear option. It’s a tactic that the Chinese might use to win the ongoing trade war with President Trump.
The results of the nuclear option could end up as follows:
- significantly higher borrowing costs for the US government
- a plunging value of the US dollar
- further selling of China’s $1.11 trillion of US government debt
Most analysts expect China will avoid the nuclear option. This tactic would create major economic pressure on their economy as well.
Even so, the Global Times – a Chinese state-controlled newspaper – had some insightful comments about the situation. An editor of theirs says Chinese scholars are working hard to figure out how to dump US treasuries. But they want to do it in a specific way without creating too much upheaval.
What does this mean for future retirees and US investors? It means the value of your portfolio is at stake. It also means it’s time to invest in a gold IRA. A physical gold IRA will protect your portfolio against significant economic threats and a weakening US dollar.
Chinese Ministry of Defense Threatens to Use Military Intervention in Hong Kong
Hong Kong is receiving threats from the Chinese this week. The British colony officially became a part of China on July 1, 1997. It’s a part of a framework named “one country, two systems.”
Hong Kong political tensions are beginning to boil over. A political upheaval has existed for the last two months and it’s only getting worse. The main issues at stake are as follows:
- An extradition bill would allow Hong Kong residents to be extradited to the China mainland to undergo trial.
- Hong Kong citizens believe Beijing rule is slowly but surely chipping away at their civil rights.
- Certain Hong Kong residents are calling for independence.
- Wu Qian, a spokesman for the Defense Ministry says the behavior of certain intolerable radical demonstrators is challenging the authority of the central government. He believes these demonstrations absolutely cannot be tolerated.
How to Handle Significant Geopolitical Developments in China as an Investor
As an investor, your first and only job is to protect your portfolio. Between China selling off their US Treasuries and no longer buying up treasury debt, the US finds itself in a tough financial situation.
Will you let the whims of the Chinese government destroy your portfolio? Or is it time to finally protect your nest egg?
A gold IRA is the perfect investment vehicle during these troubling times. Gold tends to rise in value as the US dollar falters. It’s a much more attractive option during threatening economic times.
Many investors are looking to this safe haven investment now more than in the last decade. Do yourself and your portfolio favor and open a precious metals IRA as soon as possible.
You’ll feel better knowing you’re protected during this tough economic climate. It will make it much easier to sleep at night.
Do you have any questions on the article? Ask below!
If memory recalls China did something similar to this about 8-9 years ago and at that time gold jumped to almost $2000 the highest ever at the time. This time around I am thinking if you are not investing in gold and even silver you are leaving money on the table. The return rates alone if you buy now and sell later are second to none.
Hello Cathy! Yes, you are right that it did shoot up to about $2,000 at one point. Right now, the price of gold is about $1,500 and we are predicting that it will go much past that in the near future. You are right that you are leaving money on the table if you are not investing in precious metals for your portfolio. Thank you for the comment, Cathy!
I have finally registered with gold IRA and would be breaking my banks to invest into it. All these news developments and the various factors that have been going on in the market are pointing the indications to take precautions and since gold is an asset that appreciates irrespective of the circumstance or situation, I have decided to follow the suggestion to invest in it and hopefully by retirement, I would be living a blissful life.
Hello RoDarrick and I am glad that you have decided to invest in a gold IRA! Congratulations on a new step forward in your portfolio! I hope all the best for your retirement as well. Thank you for dropping by and sharing your experience with us!
The issue of dollar being devalued is getting real as the day goes by. I see how the Chinese are really threatening thew economy. As things are now, I think getting gold is a very good investment. There’s no harm in it at all. I am not a retiree but who doesn’t want to stack up some money from some investment that is sure to make me some money in the future. I’ll definitely by a gold IRA.
Hello Henderson! You are right that it is best to start investing in a gold IRA right now even though you are not a retiree. That way you can save up for your retirement and not have to worry about it at an old age. The issue of the devaluing of the dollar is getting real by the day as you said. It is definitely high time to invest in a gold IRA. Thank you for the comment and the feedback, Henderson!
First thing first I musy commend the very nice and brief explanation on the issues going on in the treasury between China and US. This gives me and insight and interest in the rest of the post. I have some investments in that aspect and this issue doesn’t seem good at all, and money is valuable. I’ll certainly follow your opinion on investing with Gold IRA and also inform my friends about such wonderful idea. Thanks for this useful info.
Hello Dane! Thank you for the encouraging comment about how I explained the issues going on with China dumping US treasuries first. I really do hope you follow my advice to invest in a gold IRA if you have the means to do so by rolling over your retirement vehicle or investing in it directly. Thank you for dropping by!
This is a very eye-opening post for getting people to realize that the time is NOW for getting our financial retirement house in the best shape possible. By opening a precious metals IRA like a Gold IRA, people can take advantage of the ever-growing value of Gold in this crazy economic market.
It has been said and known for the past 20+ years that if China stops buying U.S. Treasuries and dumps them on the market, it will hurt the U.S. and its citizens by devaluing the dollar. The reality of that nightmare scenario is taking place right now and Trump’s trade war with China will only accelerate it.
We are already seeing the negative effects of this ill-advised trade war that both Republicans and Democrats warned the White House was a really bad idea. China is now massing troops at the border of Hong Kong and the Dow Jones lost more than 1000 points in two days this past week. If now is not the time people start investing, the time will be too late.
Hello Robert and thank you for all the feedback on my article! All these issues are just more reason for investors to invest in a gold IRA more heavily in these times. The dollar is being devalued by the trade war with China and now that China is dumping US treasuries and buying more gold, it is making it even more imperative for regular people to invest in gold as well. Thank you for your feedback, Robert!
It sounds like China’s actions are threatening the US economy. That’s why it would be good to invest in a gold Ira or precious metals IRA which will be more reliable if the US economy goes down. Because if you have gold then you are not threatened by the decline of the US economy which reduces the value of its paper currency. It sounds like Investing in a gold Ira or a precious metals IRA is pretty much the solution to a lot of these economic issues. Because gold IRAs will pretty much always increase in value.
Hello C! Indeed everything you stated above is true. As the economy plummets, gold and precious metals will increase in value and it will never lose its value because of what happens in the economy. It is the best hedge there is against inflation and economic disasters. Thank you for the encouraging comment, C!