Latest news with #USTreasuryBonds
Hans India
08-07-2025
- Business
- Hans India
Global gold demand surges: India holds 15 pc of $23trillion global gold market now
The global gold market, now valued at approximately $23 trillion, is witnessing a surge in demand as central banks ramp up their purchases in a move to reduce dependence on the US dollar, according to the July 2025 edition of the DSP Mutual Fund's Netra report. In comparison, global foreign exchange reserves stand at around $12.5 trillion. The report notes that even a modest 5 per cent shift of these reserves into gold could trigger a significant and sustained rally in gold prices. India continues to hold a dominant position in the global gold landscape, accounting for 15 per cent of the total gold held worldwide. Of all the gold mined to date, 65 per cent is in the form of jewellery, indicating both the cultural and financial importance of the metal, particularly in countries like India. Central banks have emerged as the primary drivers of the recent gold demand boom. Between 2000 and 2016, total central bank gold purchases amounted to $85 billion. In stark contrast, in 2024 alone, central banks acquired gold worth $84 billion. Since 2022, central banks have been consistently purchasing nearly 1,000 tonnes of gold annually, which represents over a quarter of the annual global mining supply. This shift highlights the growing preference for non-dollar reserve assets amid concerns about the volatility of US Treasury Bonds, which have historically been viewed as safe-haven investments. The Reserve Bank currently holds 880 metric tonnes of gold, according to the latest figures. However, it has refrained from adding to its reserves in FY26, likely anticipating a correction in gold prices, which have risen by over 80 per cent in the past five years. The rally in gold prices has been driven largely by geopolitical uncertainty, trade tensions, and a lack of attractive alternatives to the US dollar as a global reserve currency. The report points out that potential alternatives to the dollar are riddled with limitations. The Euro continues to show structural weaknesses due to fiscal imbalances within the Economic and Monetary Union. The Chinese yuan, though increasingly influential, remains heavily state-controlled and lacks the transparency and global trust required to function as a major reserve currency. Other currencies are simply too small to attract meaningful interest from central banks. Additionally, the report highlights a positive domestic trend in India, noting that strong operating cash flows have resulted in elevated operating cash flow margins. This signals improved capital allocation discipline and corporate governance, strengthening India's economic fundamentals at a time when global financial systems remain under pressure.
Hans India
07-07-2025
- Business
- Hans India
15 pc of $23 trillion global gold market now held in India: Report
New Delhi: While global forex reserves total around $12.5 trillion, the gold market is currently valued at $23 trillion, 15 per cent of which is held in India, according to a report released on Monday. Of the total mined gold ever, 65 per cent is in the form of jewellery, and a mere 5 per cent shift of global reserves into gold could trigger a sustained and significant rally in its price, according to the DSP Mutual Fund's July 2025 Netra report. Central bank gold reserves are rising, and they bought more safe-haven assets in the last four years than in the previous 21 years. Central bank gold purchases from 2000 to 2016 totalled $85 billion. But in a single year, 2024, central banks bought gold worth $84 billion. In fact, since 2022, Central banks have bought nearly 1,000 tonnes of the precious metal each year, which is more than a fourth of the annual mining supply of gold, according to the report. This torrent of gold purchases reflects the affinity of most countries to hold non-dollar reserve assets. The volatile nature of the US Treasury Bonds has made gold an even more attractive instrument for Central banks. Demand for gold, therefore, is strong, for now, the report mentioned. In India, the Reserve Bank of India's total gold holdings amount to 880 metric tonnes, according to the latest data. It has not added to its gold stash in FY26 yet, likely waiting for the softening of the safe-haven asset prices that surged more than 80 per cent in five years amid geopolitical and trade uncertainties. Gold has made a new lifetime high in inflation-adjusted terms and is firmly in a bull market. This happened as the alternatives to the US dollar are scarce. 'Euro has repeatedly shown vulnerabilities due to a rugged fiscal make of the Economic and Monetary Union (EMU). The Chinese yuan is far from market-driven or politically palatable enough to be the reserve currency, and most other competitors are now too small to attract reserve asset purchases,' the report mentioned. The report further stated that sustained strength in operating cash flows has resulted in elevated operating cash flow (OCF) margins in India, which is a positive indicator from both a capital allocation and corporate governance standpoint.
Yahoo
08-06-2025
- Business
- Yahoo
America's biggest lender is closing its wallet — and investors and home buyers will feel it. Here's what to watch.
Over the past 40 years, Japan has helped bankroll Americans' lifestyle while its own economy sank into decades of stagnation. Now the tab's due, and it might cost the U.S. a fortune. The Japanese have been floating America's boat since the mid-1980s. Not out of kindness. Not out of stupidity. But because of a deal so sweet that nobody wanted to talk about it. 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. I help my elderly mother every day and drive her to appointments. Can I recoup my costs from her estate? 'The situation is extreme': I'm 65 and leaving my estate to only one grandchild. Can the others contest my will? My new husband gave me a contract and told me to 'sign here' — but I refused. It was the best decision of my life. My daughter's boyfriend, a guest in my home, offered to powerwash part of my house — then demanded money Now the deal's going bad. Japan's drowning in debt, its politics are in chaos and it needs its money back. And when your biggest lender starts heading for the exits, it's time to pay attention. Japan holds $1.1 trillion in U.S. Treasury bonds. It's got more U.S. paper than any other country. But unlike China — the second-largest Treasury holders — Japan has never complained about it. Japan just kept buying, kept lending, kept quiet. But here's the thing about quiet money — when it stops being quiet, you've got problems. Look at Japan today: government debt at 235% of GDP — that's like owing your annual salary times 2.3 to Visa. Prime Minister Shigeru Ishiba hanging on to power like a cat on a screen door, with 21% approval after a series of fundraising scandals and economic missteps. You know what happens when your biggest lender is both broke and paralyzed? America's reliable ATM is about to display 'INSUFFICIENT FUNDS.' Picture this: 1945. World War II is over. America's got the guns, Japan's got the ruins. The U.S. cut a deal — military protection for economic cooperation. But the real magic trick came later. For the next 40 years, Japan rebuilt itself, accumulating dollars and using them for its own development. Japan went from making tin toys to Toyotas JP:7203 TM, from cheap radios to world-class electronics. By 1985, they'd completed their first miracle. Then came the second act. The Plaza Accord of 1985 — five finance ministers in a New York hotel room deciding to dismantle Japan's export machine. Japan signed on too, thinking they could manage it. They couldn't. The yen USDJPY shot up 50% against the U.S. dollar DXY in two years. Japan faced a choice: Watch its economic miracle turn into a pumpkin, or get creative. They got creative. Instead of converting their mountain of trade-surplus dollars to yen (which would have pushed the yen even higher), the Japanese did something beautiful. They started buying U.S. Treasury bonds. Mountains of them. It was perfect. The U.S. got to keep borrowing. Japan got to keep exporting. Nobody had to mention that the whole thing was a shell game. As economists have long warned, this recycling machine couldn't last forever. But that's a problem for the next guy. For the next 40 years — from 1985 to now — this recycling machine has been running nonstop. Japan made our Walkmans (Google it, kids), Americans would buy them with dollars, and then — here's the beautiful part — Japan would loan those dollars back to the U.S. by purchasing Treasury bonds. It's like paying your bartender with an IOU, then having him loan you money to keep drinking. Genius! Three major shifts are killing this arrangement, and they're all happening at once. First, demographics. Japan's aging population needs those savings for retirement, not for subsidizing American consumption. Turns out, elderly Japanese people prefer eating actual food to dining on Treasury bonds. Read: Why America's aging population will be a problem for stocks — and your retirement Second, debt. At 235% of GDP, Japan's government debt makes America's national debt look positively prudent, like comparing a shopaholic to someone who merely forgot to cancel their gym membership. As Japan's bond rates rise, the math becomes more impossible than explaining cryptocurrency to your grandmother. Third, politics. Prime Minister Ishiba's government hangs by a thread, with 21% approval after a series of fundraising scandals and economic missteps. You can't run a corner store with 21% approval, let alone a country. Adding to the pressure, there's declining demand for Japanese government bonds domestically. This forces Japan to raise interest rates, which in turn makes holding U.S. Treasurys even less attractive. When your own bonds can't find buyers, it's hard to justify buying someone else's. Enter Masayoshi Son, the SoftBank JP:9984 SFTBY billionaire who's become President Donald Trump's favorite Japanese dealmaker. He pledged $100 billion in U.S. investments in December, but that was just the warm-up act. Son doesn't look like a financial revolutionary. He looks more like your accountant's fun uncle. But this billionaire who makes Elon Musk look risk-averse has reportedly floated an idea more radical than Trump's Gaza resort plan: transform Japan's passive Treasury holdings into active investments in American companies through a joint sovereign wealth fund. According to financial press reports, this would mean converting government bonds into equity stakes in U.S. technology, infrastructure and energy projects. Picture this: Instead of Japan parking $1 trillion in government bonds yielding less than a savings account at the Bank of Mattress, this money would flow into U.S. technology, infrastructure and energy projects. Both nations would share the profits. Americans might even be able to buy shares, receiving dividends from Japanese investment in the U.S. economy. Of course, converting $1 trillion in bonds to equity investments would be fraught with risks — currency fluctuations, market volatility and political backlash on both sides of the Pacific. U.S. Treasury Secretary Scott Bessent would face a delicate task in making this transition without triggering a bond-market crisis — kind of like defusing a bomb while riding a unicycle. If Japan simply dumped its Treasury holdings, interest rates would spike faster than blood pressure at a tax audit. Time to panic? Not yet. But keep your running shoes handy. The immediate risks are clear: But the opportunity is equally significant. A U.S.-Japan investment fund could: This isn't just about financial engineering — though let's be honest, financial engineering is sexier than it sounds, like accounting's dangerous cousin who rides a motorcycle. It's about whether America can maintain access to foreign capital while reducing its debt dependence, kind of like keeping your rich friends while learning to pay for your own drinks. For 40 years, the U.S. has run its economy on other nations' savings like a teenager with Dad's credit card. That model is more exhausted than a parent of triplets. Critics will call this government interference in free markets. But free markets in international finance have always been about as real as professional wrestling — entertaining, but heavily choreographed. Every major economy practices industrial policy; America just outsourced its policy to allies and called it 'free trade.' Now the U.S. is bringing it home like a college kid with dirty laundry. Read: Why Trump's tax and spending bill isn't getting the bond market's vote Japan's quiet subsidy of American prosperity is ending. The U.S. Federal Reserve can't print its way out of this one — they've tried that trick more times than a birthday party magician. Congress can't tax its way out either, though God knows they'll probably try. The only path forward is a new bargain that transforms debt into equity, dependence into partnership. For American investors and homeowners, the message is crystal clear: The era of cheap money is over. Lock in fixed-rate mortgages while you can. Prepare for higher interest rates. And watch for announcements of new investment vehicles that could reshape global finance. The greatest risk isn't change — it's pretending the old system can continue. Japan's bondholders are already voting with their wallets. The only question is whether Washington can engineer an economic soft landing for the U.S. or whether the country is headed for the kind of turbulence that has flight attendants reaching for their own oxygen masks. Here's what to watch as these transitions unfold: For 40 years, Americans' have been drinking champagne on Japan's tab. Now it's closing time and they want to be paid in something besides IOUs. Welcome to the morning after. . More: Jamie Dimon's bond-market warnings put investors on alert to diversify outside U.S. Also read: The 'mother of all credit squeezes' is coming — hang on to your wallet 'I'm not wildly wealthy, but I've done well': I'm 79 and have $3 million in assets. Should I set up 529 plans for my grandkids? How do I make sure my son-in-law doesn't get his hands on my daughter's inheritance? Circle's stock is having another big day. What the blockbuster IPO has meant for other cryptocurrency plays. The S&P 500 closes at 6,000 as bulls aim for return to record territory 'I was pushed out of her life when she was 18': My estranged daughter, 29, misuses drugs. Should I leave her my Roth IRA? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
India.com
30-05-2025
- Business
- India.com
US owes Rs 20000000000000 to India, even global superpowers rely on foreign loans for..., Japan and China also India's debtors
US owes Rs 20000000000000 to India, even global superpowers rely on foreign loans for..., Japan and China also India's debtors India has invested nearly Rs. 20 lakh crore in US Treasury Bonds, a decision that plays a key role not just in supporting the American economy but also in strengthening India's own financial stability. At first glance, it might seem surprising. After all, the United States has a national debt of more than USD 34 trillion. Yet, it continues to be the world's most powerful economy. One of the main reasons behind this is the global trust in the U.S. dollar and the American government's ability to repay its debts. The US borrows money from other countries by issuing Treasury Bonds, Bills, and Securities. These are essentially loan documents that promise to pay back the borrowed money with interest over time. Many countries, including India, buy these bonds as a way to safely invest their foreign currency reserves. China and Japan are among the biggest holders of US Treasury Bonds. Japan holds nearly USD 1 trillion worth, while China owns over USD 800 billion in American bonds. These investments offer them a steady return and help them manage their own economic strategies. India, too, sees U.S. Treasury Bonds as a reliable investment. The interest earned from these bonds contributes to India's foreign exchange reserves. These reserves are crucial for handling imports, stabilizing the rupee, and ensuring the country's financial security. Even though the U.S. pays millions of dollars in interest every day, the strength of the dollar in the global economy keeps its borrowing power intact. Countries across the world continue to see U.S. bonds as one of the safest places to invest their money. In return, India earns a fixed income from these investments, which is both low-risk and helpful in building long-term economic resilience. It's a financial strategy that quietly but effectively contributes to India's global economic standing. So while India's investment in U.S. Treasury Bonds might not make daily headlines, it plays a silent and steady role in shaping the country's economic future.
