Breitbart Business Digest: The Dollar Is Still King
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0 left · 0 center · 2 right
What happened
The Trump administration has continued to run large U.S. budget deficits and has expanded the use of economic sanctions. The yield on the 10-year Treasury note recently climbed above 5 percent. Treasury data released this week showed foreigners purchased a net $1.75 trillion of long-term American securities over the 12 months through July, up from $1.47 trillion in the preceding 12 months. This month Norway’s sovereign wealth fund, the world’s largest, said it planned to reduce its holdings of U.S. Treasuries. Central banks have been buying gold, and some foreign governments have been moving gold out of American vaults.
Omitted — what each side leaves out
Unpacked
Foreign investors are still net buyers of America, which left-leaning coverage does not report. Right-leaning coverage cites net purchases of $1.75 trillion in long-term American securities over the twelve months through July. That haul is described as more than double the equivalent window before the current administration. Left-leaning coverage treats the United States as a shakier store of stability because of debt and sanctions, without those totals. Right-leaning coverage is more complete on the flows. The missing inflow turns wariness into a rotation toward U.S. stocks rather than an exit from America.
Left-leaning coverage has global investors "balking at U.S. bonds," while right-leaning coverage has the same capital "rushing headlong" to buy U.S. stocks and corporate bonds.
Who funds the federal deficit if foreigners keep choosing American stocks over Treasuries?
Bottom line
If foreigners bought $1.75 trillion of American securities in a year, The New York Times wariness story is a fight over Treasuries versus stocks, not over whether the money stays.
The receipts — 5 facts one side's coverage lacks
- Foreigners purchased a net $1.75 trillion of long-term American securities over the 12 months through July
- Foreigners became net buyers of $598.1 billion of American stocks after a prior-year net sale of stocks
- The market measure of expected inflation over the next decade stood at 2.33 percent
- Norway's fund proposal would leave dollar exposure at about 52.5 percent of the bond benchmark
- About 98 percent of stablecoins are dollar-denominated
The Left View
The New York Times said “the world economy is becoming wary of the U.S.,” arguing that “America’s position of global economic stability is starting to look shakier as the Trump administration piles on debt and doubles down on sanctions.” It reported that “global investors are balking at U.S. bonds,” that “talk of the dollar’s dwindling power is getting louder,” and that “foreign governments are hauling their gold out of American vaults.” The paper attributed the yield increase to “investors nervous about the mounting national debt” demanding a higher return, said capital was “starting to seek alternative destinations,” and wrote that Norway’s fund planned to reduce Treasuries “as it looks elsewhere for stronger returns.” It also said gold had “overtaken” official holdings of Treasuries and portrayed Treasury liquidity buybacks as a failed market-support effort, while noting stablecoins as a potential way for adversaries to circumvent the U.S. financial system.
The Right View
Breitbart argued that “the dollar is still king” and “the world still loves the American economy,” calling the Times “completely wrong.” It said the Treasury data showed foreigners “rushing headlong to buy U.S. stocks and corporate bonds,” with a shift toward private-sector securities that meant the world was becoming “more bullish on America, not balking.” Rising yields, it wrote, are “typically a sign of economic confidence” reflecting “burgeoning optimism about growth and corporate profits,” not fear, because “real yields have climbed while inflation compensation has remained anchored.” It said reserve-share declines were concentrated in China and Russia, a New York Fed analysis showed active decisions “increased dollar allocations slightly,” and Norway’s proposal left dollar exposure “approximately unchanged” by shifting within American securities, including government-backed mortgage bonds. Gold buying, it argued, showed that “neither the yen, the yuan, nor the euro is a credible substitute”; the gold-over-Treasuries ranking was “a price effect”; about 98 percent of stablecoins are dollar-denominated and thus “extend the dollar’s influence rather than replacing it”; and the buybacks were a small liquidity operation, not a failed rescue.
Our Take (balanced)
The left’s strongest argument is that yields above 5 percent, official gold accumulation, reported gold withdrawals from U.S. vaults, and a major sovereign fund’s announced Treasury reduction, occurring amid rising debt and heavier sanctions, support the Times’ claim that America’s “position of global economic stability is starting to look shakier.” The right’s strongest argument is the large increase in foreign purchases of U.S. long-term securities—especially the swing into stocks and corporate bonds—plus anchored inflation expectations and the lack of any other currency central banks treat as a full substitute, which Breitbart presents as evidence that investors are “more bullish on America” and that “the dollar remains king.” The central unresolved tension is whether those same market developments primarily register anxiety about U.S. fiscal trajectory and sanctions policy or a reallocation of capital into U.S. private-sector assets that still leaves the dollar without a peer.
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