by David Stockman, Lew Rockwell:
An alert observer from the “World of Statistics” posted this warning shot on X, recently. It seems as if the Chinese have dumped $448 billion of their US Treasury holdings in recent years, and have been buying what J.P. Morgan famously called real money more than a century ago. Said he:
“Gold is money. Everything else is credit.”
In fact, China’s official gold holdings have risen by 19% over the last five years–even as its holdings of Uncle Sam’s “credit” have plunged.
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China’s U.S. Treasury holdings:
- March 2021: $1.1 trillion.
- March 2022: $1.0 trillion.
- March 2023: $869 billion.
- March 2024: $767b.
- March 2025: $765b.
- March 2026: $652b
China’s gold reserves (tonnes)
- March 2021: 1,948.
- March 2022: 1,948.
- March 2023: 2,113.
- March 2024: 2,262.
- March 2025: 2,306.
- March 2026: 2,313.
For want of doubt, here is the value of Morgan’s “real money” on China’s national balance sheet expressed in aggregate dollars. With the price of gold up by 166% and the physical stock higher by 19% over the past five years, the math works out to a +$230 billion or +217% gain in the dollar value of China’s gold holdings.
Of course, being communists, the rulers of Beijing are supposedly quite benighted when it comes to economics. But even they, it seems, have been sensible enough to sell $448 billion of Uncle Sam wasting “credit” paper and replace more than half of that by buying $230 billion worth of real money.
We seriously doubt whether the 18-year-old Mao Zedong was paying much attention when J.P. Morgan mansplained the meaning of “money” to a Congressional committee in 1912. Still, his heirs and assigns of today have apparently come to understand Morgan’s wisdom far better than the successor Congressional Committees of 2026.
This brings us to the topic at hand. To wit, the reigning UniParty geniuses on Capitol Hill might be well advised to get into a deep study mode with respect to where they are going to sell the impending eruption of new US Treasuries (USTs). After all, even common observation tells you that the two big time buyers of recent years—the Federal Reserve and China—have been sidelined, as we amplify below.
In the interim, however, the task ahead should not be minimized, to say the least. The current public debt knocking on the door at $40 trillion will rise by the staggering sum of $142 trillion over the next 30 years!
