To avoid feeling sleepy while watching the market, let's continue with the "Waiting for Sideway Relief" segment by our friend G 😁

PART 6: The tip of the iceberg of the trade war

If you only look at the fluctuations in the US market since the tariffs were imposed, you might only see the surface, while the iceberg that Trump is releasing is worth discussing!
Recently, in addition to raising tariffs in response to US policies, China has had to sell $760 billion in US bonds (70%). This has caused bond yields to rise slightly. However, it does not bring the US down; in fact, it destabilizes China. It is a defensive reaction to maintain the face of a country that has always communicated in a yin-yang style, portraying China as powerful so that the people believe it - which Trump understands very well that China cannot do otherwise.
What Trump needs is not for China to collapse, nor does he need to be praised by everyone during this period. The deeper game he is playing is to make China reveal itself to the world: they are unstable & unreliable. Because the damage to the US is certainly there, but it can be calculated and is only temporary. The long-term goal is to restructure the market. As for China, which has long been seen as the world's reserve currency, the sell-off of US bonds has caused them to lose balance in trade when rising gold prices cannot be replaced, leading to a depreciation of the yuan, and most importantly, causing countries to lose trust. Because flexibility and stability are the most necessary things in international relations. The proof is that FDI into China has sharply decreased, no country openly supports China due to instability causing them confusion, while the real estate market is bursting, the stock market is in the red, and domestic consumption is weak.
On the other hand, other countries are also holding large amounts of US bonds such as Japan, Korea, India... and they are negotiating with the US...
Let's follow along with friend G to see what happens next!