European leaders are considering dumping $2.34 trillion in US debt if Trump abandons Ukraine, potentially triggering an economic crisis worse than 2008
European leaders are considering dumping $2.34 trillion in US debt if Trump abandons Ukraine, potentially triggering an economic crisis worse than 2008
Sell it. Basically they can sell bonds that guarantee the US will pay $x at y time at a better deal than the US will. It’s taking a slight loss in exchange for hurting us and creating liquid cash.
A bond is basically a future on tax money. And a future is converting something that will be real, but with risk, into a set amount of money today. It’s “I’ll sell you the amount of potatoes this acre produces, in exchange for a reasonable bit less than it would take to buy that many potatoes in bulk now, that way I can grow them and am not fucked if my field doesn’t get enough rain, but you as the investor can average to it being worth your money and time.” If the acre is incredibly consistent, that farmer can get a really good deal on that future because there’s little risk.
The American taxpayers are very consistent. We don’t default on bonds and our money inflates comparatively little to other countries.