Canada has suspended trade negotiations with the United States, Prime Minister Mark Carney said, after last-minute changes to Washington’s proposed terms were deemed “unfair” and “uneconomic”, a day after US President Donald Trump had said that US "should be able to have a deal with Canada."
Canada would take a massive loss on the sale while the private markets and the Federal Reserve casually absorbs the influx of new notes at a discount.
It would tank the value, which would trigger other parties to quickly do a sell-off, which would further tank the value.
It would ultimately result in a cascade effect that drops the US dollar value to unprecedented lows.
Temporarily, and not nearly as much as you’d guess.
The appetite for treasuries vastly outstrips the supply.
That’s the traditional viewpoint, sure. But as each day goes by the rest of the world is looking for more ways to circumvent or outright cut out trade and reliance with the US.
There’s a reason why 5 years ago BRICS was kindof a joke, but today it’s taken very seriously.
I’m not talking about US dollars, I’m talking about bonds.
It would definitely be dumb to let them go all at once. You’d want to dovest carefully. Or do some bond swaps, perhaps. Exchange some for euros or yuan.