According to data released by the U.S. Department of the Treasury, in May of this year, Japan, China, and the United Kingdom each reduced their holdings of U.S. Treasury bonds by $30.4 billion, $22.2 billion, and $14.1 billion, respectively, compared to April of this year.

China's holdings of U.S. Treasury bonds have now decreased to $846.7 billion, approaching the low point of $801.5 billion in May 2009. At one time, China also consecutively reduced its holdings of U.S. Treasury bonds for seven months.

Japan's reduction in U.S. Treasury bonds in May was also the largest since October last year. Currently, it holds $1.0968 trillion in U.S. Treasury bonds, still the world's largest holder of U.S. Treasury bonds.

The United Kingdom is even more extreme. In May, it reduced its holdings of U.S. Treasury bonds by $14.1 billion. However, in April, the reduction exceeded $30 billion, making it the country with the most overseas sales of U.S. Treasury bonds. The key point is that since the beginning of this year, due to the U.S. banking crisis and the risk of debt default, the United Kingdom has not only been selling a large amount of U.S. Treasury bonds but also shorting them. Currently, the United Kingdom's holdings of U.S. Treasury bonds are $666.6 billion.

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It would be understandable if China reduced its holdings of U.S. Treasury bonds, but why, as the United States'小弟, and also the United States' first and third-largest holders of U.S. Treasury bonds, are also reducing their holdings of U.S. Treasury bonds in large quantities? This matter is not so simple.

Let's briefly review the historical background of Japan and the United Kingdom.

After World War II, the United States restricted the development of Japan's military strength. Under the supervision of the United States, Japan's economy was able to develop rapidly. However, later, due to Japan's economic development being too good, the United States single-handedly led to a 30-year economic stagnation in Japan. It can be said that Japan's failure was due to the United States, and Japan's resurgence also relied on the United States. The United States plays the policy of carrot and stick with Japan to perfection. As for Japan, it relies on the United States in both military and economic aspects, so it has a love-hate relationship with the United States. Therefore, even if the United States continues to harm Japan, Japan can only submit.

The former empire on which the sun never sets - the United Kingdom is even more so. After World War II, the United Kingdom's military, economy, and international influence have been far different from the past, which has made the United Kingdom deeply feel the crisis. Therefore, for the sake of national interests, the United Kingdom, the former big brother, can only be the United States'小弟, thereby ensuring the maximization of its own national interests.

In other words, who would like to be someone else's小弟 if they have some ability? Therefore, on the surface, Japan and the United Kingdom are the United States'小弟, but their ultimate goal is still for their own interests.

As British Prime Minister Churchill said, there are no permanent friends, only permanent interests.Since it's all about interests, naturally, interests should be placed first and loyalty second.

From this perspective, it's easy to understand why Japan and the UK are selling a large amount of US debt. This is because the Federal Reserve's aggressive interest rate hikes have led to a continuous decline in the price of US debt. Japan and the UK are reducing their holdings of US debt to minimize the losses caused by the decline in asset prices. Additionally, since the Russia-Ukraine conflict, Japan and the UK have increased their concerns about the safety of US debt and other assets. After all, there is a significant possibility of default on the current US debt. Furthermore, in order to stabilize their own exchange rates and not be endlessly exploited by the US dollar.

To put it bluntly, under the continuous interest rate hikes of the US dollar, both Japan and the UK are now struggling. On the surface, it seems not that we won't help you, but rather our capabilities are limited. In reality, it's more like "you die, and I won't follow you."

Let's look at a set of data. According to the statistical results published by the Japanese Ministry of Finance, Japan's trade deficit in 2022 was 19.9 trillion yen, setting a new high since comparable data began in 1979. Due to the continuous interest rate hikes of the US dollar, the yen-to-US dollar exchange rate once fell below 150 last October. If Japan does not sell US dollars to save the market, Japanese wealth may be completely plundered by the US dollar.

The current economic situation in the UK is even more worrying. The country's inflation rate in May reached 8.7%, much higher than the eurozone's 6.1%, and the highest among Western European and G7 countries. The UK's manufacturing PMI preliminary value in May was 46.9, lower than April's 47.8, setting a new low in five months. In addition, the UK's trade deficit increased to 9.2 billion pounds in the first quarter. According to a report on the website of Spain's "El Economista," the UK is increasingly looking like the "sick man of Europe."

Therefore, the reason why the UK is also selling a large amount of US debt is actually to raise funds to save its domestic economy! In the end, loyalty still cannot overcome interests.

In addition to China, Japan, and the UK all selling a large amount of US debt, in recent years, as the US fiscal deficit continues to expand and the total amount of US debt continues to rise, the interest of many countries in US debt is gradually decreasing.

A professor from Shanghai University of Finance and Economics said that currently, many countries around the world are gradually reducing their dependence on the US dollar. Although the US dollar is still the main international currency, with the changes in the US economic situation and external financial situation, many countries have begun to reduce their excessive dependence on the US dollar.

Under the wave of global de-dollarization, the US is now facing many crises. According to Moody's data, 55 US companies defaulted on debt in the first half of this year. This is a 53% increase from the total number of defaults in 2022, with only 36 companies failing to fulfill their debt obligations last year.

Bank of America warned earlier this year that a tightening credit environment combined with a full-scale economic recession could lead to nearly $1 trillion in corporate debt defaults. The trillion-dollar debt storm in the US may be coming!This indicates that due to the aggressive interest rate hikes by the US dollar, coupled with the global unwillingness to foot the bill, the debt scale of American domestic companies is continuously expanding, and the liquidity of funds has become severely insufficient. If the situation worsens, the consequence could be a series of bankruptcies among US companies. This would lead to a slowdown in US economic growth and put pressure on the credit market, which has just recovered from the most severe losses in decades.

In conclusion, I would like to say that the United States should not assume the world is too rosy and therefore act recklessly. They should not think that someone will always pay for their debts. If they do not focus on revitalizing their economy and instead keep suppressing and sanctioning others, once their own economy declines, who among their former allies will be able to save them?