No. of Recommendations: 10
The original context of the suggestion was that for non-US customers, (US Government) T-bills were no longer risk-free.
Here is a summary of some of the details of these proposals that have been floated:
The Forced Debt Swap: Masterminded primarily by Trump’s Council of Economic Advisers (CEA) Chairman Stephen Miran and close advisors like Robert Lighthizer, the plan proposes a restructuring of U.S. sovereign debt. It envisions forcing foreign investors and central banks to swap their existing, marketable short-term U.S. Treasuries for 100-year "Century Bonds" or zero-coupon perpetual bonds. Because perpetual bonds have no maturity date, the U.S. would effectively never have to pay back the principal.
Leveraging the Military and Tariffs: Because foreign nations would not voluntarily trade liquid, high-yielding U.S. debt for zero-coupon perpetual bonds, the Trump administration envisioned using coercion. The U.S. would offer a grand trade: foreign allies could maintain access to U.S. markets and continue receiving protection under the U.S. military security umbrella only if they agreed to absorb portions of American debt through this forced bond swap.
Trump is famous for his "thinking outside of the box". Suggesting that a "solution" to our debt problem is not only to default on US Government debt but to enforce that default at gunpoint using the US Military certainly goes beyond what most experts would consider an actual improvement to the debt situation.
Because the suggestion was made particularly to force this default particularly on foreigners holding debt, the suggestion was made that that T-bills might not be a risk free choice for non-US investors holding cash.
Given the context I would imagine that non-citizens of the US should certainly be concerned. But given Trump's suggestions that he didn't see why deportations from the US should be limited to non-citizens, One could not rule out a "final solution" to our debt problem that included defaulting on the holdings of US citizens.
The astonishing level of stupidity associated with suggesting a default on US Government bonds when the US Government holds a monopoly on being legally able to print money to pay off the debt is difficult to comprehend. Why solve a problem legally when you can steal things from people at gunpoint? Is that really a question the US Government could ever actually ask?
So yeah, non-US in this context should probably include
1) non-US citizens
2) non-US residents
3) US citizens that Trump doesn't like
4) US citizens that were stupid enough to trust a government headed by crooks
Cheers,
R:)