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The Beginning of the US Debt Collapse is Here - Video học tiếng Anh
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The Beginning of the US Debt Collapse is Here
The Beginning of the US Debt Collapse is Here
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Phụ đề (240)
0:00
You've been told the Federal Reserve controls your interest rates.
0:03
That’s a lie. Your mortgage, your car loan,
0:06
and your 401k are all tied to oil-rich nations in the Middle East. America’s economy depends on a
0:12
deal most people never knew existed. None of it is secret. Most
0:17
of it is on the public record. Almost none of it was ever put to you.
0:21
Chapter 1: The 2026 Mortgage Spike In late March 2026, the average 30
0:26
year mortgage rate climbed by 13 basis points, its biggest weekly jump in nearly
0:32
a year. Eventually it hit its highest level since September 2025. Just three weeks,
0:37
rates surged again, this time by 34 basis points. Mortgage applications fell 10.5% that same week.
0:45
Refinancing fell off a cliff. It wasn’t for the usual reasons. The Federal Reserve
0:49
hadn’t raised rates. Inflation data hadn’t suddenly exploded. Instead,
0:54
war tensions abroad were pushing Treasury yields up. Mortgage rates were dragged along with it.
1:00
So how does conflict on the other side of the world change
1:03
the cost of buying a house in America? Behind the scenes, a small number of
1:07
foreign governments hold enormous amounts of US debt. When one of them suddenly needs cash,
1:13
there’s a simple way to get it… Sell Treasuries.
1:16
When a major holder starts selling into a volatile market, Treasury prices fall and yields rise.
1:21
American mortgage rates are built on top of those yields. When long-term bond yields climb,
1:26
30 year mortgage rates usually climb with them. Banks price home loans off that bond
1:32
and add their own cut on top. None of this is hidden.
1:35
It is just rarely said out loud. The numbers behind it are bigger than
1:39
most people realize. The Federal Reserve Bank of Kansas City estimated that a single month of
1:45
roughly $141 billion in foreign Treasury selling could push US yields up by about 57 basis points.
1:53
Other estimates range from 25 to 100 basis points. A separate study in the Journal of International
1:58
Economics puts the impact of a $100 billion sale at around 100 basis points within a month.
2:05
Put that on a median new American home today. A 50-basis-point jump adds about $130 a month
2:12
to your mortgage. Every month for 30 years. A 100-basis-point move roughly doubles that,
2:19
north of $260 a month. Over the life of that loan, it adds up to tens of thousands of dollars.
2:25
All of it paid out of one family's future. And the pain does not stop there.
2:30
Home equity is the biggest pile of wealth most middle-class families ever touch. And
2:34
when rates shift, it starts to chip away at it. The house stops rising
2:38
in value while the cost of keeping it climbs. That is wealth thinning in slow motion. Higher
2:44
rates freeze new construction and renovations. Higher rates also halt new construction and
2:47
renovations. Projects get delayed. Jobs on framing crews, electricians, contractors disappear.
2:53
That slowdown doesn’t stay in housing. It spreads outward.
2:57
Car loans get more expensive. Student debt becomes harder to refinance. Even small
3:01
business credit lines start tightening in towns that have nothing to do with global bond markets.
3:07
All from one shift in a distant market. One that can send a shockwave through
3:12
the entire system before most people even realize anything has changed.
3:16
Chapter 2: The Invisible Pawn Shop The Fed uses a system called the FIMA
3:21
Repo Facility. FIMA stands for Foreign and International Monetary Authorities.
3:27
Let’s say a foreign central bank owns US Treasuries and suddenly
3:32
needs dollars. It can bring those bonds to the Fed, hand them over as collateral,
3:36
and walk away with cash. It’s a short term deal. It gets bonds back when the trade is reversed.
3:42
Essentially, it is a pawn shop for entire countries.
3:45
But it was never meant to be a permanent system. The Fed set up a temporary FIMA Repo Facility
3:50
on March 31st, 2020, during the Covid pandemic. It was supposed to run "for at least 6 months."
3:57
It was extended… again and again. On July 28th, 2021, the Fed made
4:02
it a standing facility. There was no debate or vote. It just became a thing.
4:07
The pricing was set deliberately high. 25 basis points over the interest rate on excess reserves.
4:12
That rate is purpose. It sits above private market rates when conditions are calm. So nobody uses
4:18
the Fed's counter when markets are healthy. The open market is cheaper and easier to deal with.
4:23
A central bank only uses it when selling would be worse than paying the Fed's
4:28
markup. In other words, it only gets used when doing anything else would make things worse.
4:33
For years, the Fed has been fighting inflation and making loans harder and
4:37
pricier. But at the same time, the Fed is ready to hand dollars to foreign central banks. One
4:42
move squeezes the American borrower. The other t ensures that if a foreign holder needs help,
4:48
there is always a backstop waiting. Critics say it creates a death loop. When a
4:53
market knows there is always a safety net for its biggest players, pricing stops being honest. Price
4:58
discovery is the whole point of a market. It is how everyone learns what a thing is truly worth.
5:04
Markets don’t just move on data, they move on what people believe will happen when things break.
5:09
And that’s the problem. Emergency tools are supposed to be
5:13
the back up. The last resort. They only exist for rare moments of stress. But if they keep getting
5:18
used, rare stops meaning rare. It becomes part of the system.
5:23
FIMA became necessary because the normal buyers of US debt stopped doing their
5:28
job as reliably as they once did. But the warning signs were there.
5:32
Chapter 3: The Warning Nobody Watched On September 17th, 2019, the repo rate - the
5:38
rate banks pay to borrow cash overnight against safe government bonds - suddenly spiked. It went
5:44
from about 2.4% to over 5% in a single day. At one point, it briefly touched double digits.
5:51
For a market that rarely moves 20 basis points in a session, that’s a warning sign.
5:56
And nothing big had happened. The cause was boring.
6:00
Corporate tax payments drained cash out of the system at the same moment a large
6:05
Treasury settlement pulled even more liquidity away. Roughly $120 billion
6:10
vanished from available reserves in a single day. The institutions that normally smooth these gaps
6:15
didn’t step in fast enough. Not because they were in trouble, but because the rules and incentives
6:21
after 2008 made them more cautious about doing so. The New York Fed responded within hours.
6:26
It injected $75 billion and repeated the operation every day for the rest of the week.
6:32
This is where the Fed drew a line. Cash drained out in predictable ways.
6:37
Tax payments. Treasury settlements. Normal events. But there wasn’t enough buffer left
6:42
in the system to absorb them. Nobody in charge could confidently say where the
6:46
safe level actually was anymore. So two years later, in July 2021, the Fed made it permanent.
6:52
It turned its emergency repo actions into a Standing Repo Facility for US banks. This
6:58
was a standing promise to step in and lend cash whenever private markets wouldn’t. It was the same
7:03
day it created the FIMA facility. One domestic. One global. Both built for the same reason:
7:09
to make sure liquidity stress could never again spike the system like it did in 2019.
7:14
And this became the template for everything that followed.
7:18
Chapter 4: The Japan Pivot For a long time, Japanese institutions
7:22
were among the steadiest holders of American government debt. They were reliable enough that
7:26
markets treated them as part of the furniture. The thing pulling Japanese money across the
7:31
Pacific was a trade called the carry trade. Japanese rates sat near zero for years. Investors
7:37
could borrow yen for almost nothing, convert it into dollars, and buy higher-yielding US
7:43
assets. The difference became the profit. For years, huge amounts of capital flowed
7:48
through that single trade.It didn’t feel like speculation in the usual sense. Money moved
7:52
so consistently it stopped looking like movement at all. It worked like a hidden stabilizer under
7:58
the whole Treasury market. That all changed in 2025.
8:01
The Bank of Japan stepped away from its long era of super-loose policy. It raised its policy
8:06
rate in stages. By December 2025, that rate sat at 0.75%, the highest in three decades.
8:14
The increment looked small. Its effect was not.
8:18
A carry trade only prints money while the borrowed money is free. The moment the yen
8:23
stopped being free, the gap that justified the trade started to close. Even worse for Washington,
8:28
Japanese bond yields were rising at home, above 2%. Japanese investors suddenly had a reason to
8:34
bring money back. They could earn a safe return in their own currency. Money that had flowed out
8:39
for a generation began to turn around. Japan's pullback arrived while US debt
8:44
issuance was setting records. At the exact moment Washington needed to sell more debt than ever,
8:50
one of its most reliable buyers started stepping back. That doesn’t trigger an instant crisis,
8:56
but it changes the balance underneath the system. Because when a borrower suddenly needs more money
9:01
while a longtime lender buys less, the stress has to go somewhere.
9:05
The foreign slowdown wasn’t even the full problem. While that cushion was thinning overseas,
9:11
another pressure point was quietly building inside the United States itself.
9:15
One large enough to matter on its own. Chapter 5: The $1 Trillion Maturity Wall
9:21
Washington is not the only borrower in America living or dying by the refinancing
9:25
window. Underneath the federal numbers sits a second debt pile.
9:29
Most people never think about it until it lands on them. Commercial real estate. From
9:33
the office block downtown, to the strip mall off the highway, almost none of it
9:37
is financed with loans that pay themselves off over time. These loans come due in full.
9:43
Nearly a trillion dollars in property loans were scheduled to come due in 2025 alone.
9:48
Hundreds of billions more were stacked right behind them in 2026. That means well
9:53
over $1.5 trillion in debt suddenly has to be refinanced into a completely different world.
10:00
A building financed years ago at 3% now has to roll into a loan that costs dramatically more,
10:06
while the building itself may be worth dramatically less. For many properties,
10:10
there isn’t enough income left to make the numbers work anymore.
10:14
So lenders lean on a move called extend and pretend.
10:18
And it’s exactly what it sounds like. Banks extend the loans and push the
10:22
deadlines out for another year or two. They avoid locking in the loss today and
10:27
hope conditions improve before the problem comes back around. Individually, every step
10:32
sounds reasonable. But across the entire system, those delays start piling on top of each other.
10:37
A refinancing wave that large, hitting that fast, is enormous. It’s a debt on the scale
10:43
of an entire midsize country’s economy suddenly needing new terms all at once. Except this isn’t
10:48
some distant sovereign crisis. It’s American real estate.
10:52
Much of that debt was written in a completely different era when rates were low and property
10:57
values were far higher than they are now. Some sectors got hit harder than others.
11:01
35% of hotel mortgages and 24% of office mortgages came due in that single year.
11:08
Offices have an extra problem. The working world stopped using them during the Covid
11:12
pandemic and working from home became the new reality. Fewer workers came back and
11:17
the buildings emptied out. So naturally, the values fell. Now the loans are coming
11:22
due against properties worth less than when the debt was originally issued.
11:26
Hotels have a similar problem. Their revenue swings with travel demand and conference
11:30
budgets. Both shrank. That pressure does not stay inside real estate. It moves directly into
11:36
the banking system, especially smaller regional and community banks. They tend
11:40
to hold huge amounts of commercial property debt on their books. And those are the same
11:45
banks many small businesses rely on every day. A bank carrying quietly stressed property loans
11:51
becomes more cautious. Lending tightens. Small businesses struggle to expand.
11:56
First-time homebuyers get squeezed harder. This is where the pieces start connecting.
12:01
Earlier, foreign demand for US debt began thinning out. Now domestic credit is tightening too.
12:07
Two separate pressure points start pushing against each other.
12:11
And because the losses haven’t fully surfaced yet, the system enters a strange state. Everyone
12:16
knows stress exists, but nobody wants to be the first to fully price it in.
12:21
Banks extend the loan or rewrite the terms. They can give the borrower more time. Technically,
12:26
the loan can still look current on paper because payments are still being made
12:31
under the new agreement. The losses don’t vanish.
12:34
They just sit there, quietly accumulating, until the system
12:38
runs out of room to keep postponing them. Chapter 6: The Dollar Liquidity Squeeze
12:43
The Gulf runs on a steady current of American currency. Oil is priced in dollars. Export money
12:49
returns in dollars. Sovereign wealth funds are all measured in dollars.
12:53
When the Iran War broke out in late February 2026, the conflict had a global impact. The
12:59
closure of the Strait of Hormuz choked off the flow of roughly a fifth of the world's oil. Oil
13:04
prices rose and inflation expectations rose with them. Treasury yields and mortgage rates followed.
13:10
As instability spread through the region, governments across the Gulf started pulling
13:14
harder on dollar liquidity. These countries are usually portrayed as the lenders. The cash-rich
13:20
powers buying skyscrapers, sports teams, and stakes in companies all over the world.
13:24
But when dollar funding tightens, even they can feel the effects.
13:28
The countries people imagine as financially untouchable still depend on the same Federal
13:33
Reserve mechanisms as everyone else. When pressure rises, they need dollar access
13:37
too. Fast. Which means the image of total independence was never quite real. It only
13:43
looked solid while dollar liquidity was easy. That’s when the foreign banks face a hard choice.
13:48
They either sell a huge pile of Treasuries into an already stressed market. But that creates its own
13:54
problem immediately. Selling pushes bond prices down and yields up, which means the value of
14:00
the bonds you still own also falls. You solve the cash problem by damaging your own balance sheet.
14:06
So most don’t want to do that unless they absolutely have to.
14:09
Which means they use the Fed’s dollar backstops instead. They borrow dollars,
14:14
post collateral and avoid dumping bonds into the market. And that decision can
14:18
ripple all the way into American households. If enough Treasuries hit the market at once,
14:23
yields rise. Mortgage rates rise with them. Retirement portfolios get hit too. One liquidity
14:29
decision overseas can change the monthly payment on a house thousands of miles away.
14:33
For the foreign banks, it makes sense. Without swap lines or repo facilities,
14:38
they have no choice except to liquidate Treasuries into the open market. That kind of forced selling
14:43
can spiral fast, driving yields sharply higher and destabilizing everything tied to them.
14:48
The backstops exist to stop that chain reaction before it starts. And technically,
14:53
these arrangements are structured to protect the Fed from direct currency losses.
14:58
So this isn’t a simple bailout in the way people imagine.
15:02
But the broader shift is still real.
15:04
But the repeated use becomes the normal and is baked into the system.
15:09
Chapter 7: Who Actually Holds the Debt Now You might imagine a dollar swap taking
15:14
place in smoky backrooms in Washington. An oil-rich Gulf state storms into Washington,
15:18
makes demands, and threatens to dump Treasuries unless it gets what it wants.
15:23
That’s not how it works. When swap-line discussions happen,
15:26
they’re not ultimatums. They’re precautions. Countries with enormous reserves want reassurance
15:31
that, if markets freeze or dollar funding tightens, they still have access to liquidity.
15:36
Kuwait's US Treasury holdings have climbed to records near $66 billion. UAE holdings
15:42
are in the tens of billions and growing, backed by reserves far larger than that.
15:46
So this wasn’t a case of bankrupt countries begging for rescue.
15:50
The real purpose of these arrangements isn’t necessarily to save the creditor. It’s to
15:54
stabilize the Treasury market itself. Because the danger isn’t just that a large holder loses money.
16:00
The danger is that a large holder suddenly becomes a forced seller in a market already struggling.
16:06
The word "precautionary" is doing a lot of heavy lifting.
16:10
It’s less about emergency aid and more about keeping major creditors calm enough
16:14
to keep holding the debt. That leaves the United States in an uncomfortable position.
16:19
If policymakers don’t reassure major holders, the risk of panic selling rises. But if policymakers
16:25
do build permanent reassurance mechanisms, the dependence becomes more structural. The reserve
16:30
issuer starts managing the conditions under which its creditors remain comfortable financing it.
16:35
Neither option is especially clean. And once one major holder starts
16:40
becoming more cautious, others notice. That’s how financial behavior spreads. If one
16:45
large player starts hedging, everyone else starts asking whether they should too. That’s important
16:50
because the Treasury market rests on a global assumption that has existed for generations:
16:55
US government debt is supposed to be the safe asset. The foundation underneath everything else.
17:01
But foundations rarely crack all at once. Usually, confidence erodes gradually.
17:06
For decades, foreign demand under American debt came mostly from allied central banks.
17:10
They buy for strategic and monetary reasons. They don’t panic-sell because one quarter went badly.
17:16
Now, that’s change. In 2024, foreign private
17:19
investors overtook foreign governments as the largest overseas holders of US Treasuries.
17:24
And private capital behaves very differently. These aren’t institutions built to sit still
17:29
for geopolitical stability or long-term reserve management. Many are asset managers, hedge funds,
17:35
and leveraged traders running complex Treasury and repo trades through global financial networks.
17:41
Their job is to move when conditions change. Which means the market swapped part of its shock
17:46
absorber for something much more reactive. Chapter 8: The Great Dollar Backstop
17:52
The Federal Reserve has taken on a role it was not originally designed for. It’s now a standing
17:57
source of dollars not only for American banks, but is also a standing source for the global
18:02
dollar system. Foreign central banks included People can argue about whether the Fed expanding
18:07
its role in global dollar support is good or a form of overreach. But the expansion has happened.
18:13
And most people aren’t aware of how far it has gone.
18:16
The Fed's total commitment to rescuing the system since 2008 tops $29 trillion. That’s
18:22
enough to pay off the vast majority of the United States national debt in a single transaction.
18:28
Not one dollar of that built a road, funded a school or made the economy more productive.
18:33
The purpose was narrower. Keep a stressed system from having to recognize its flaws. Every dollar
18:39
of it bought time. None of it bought a fix. What has thinned across all of this is not money,
18:45
but independence. American prosperity was once close to self-funding because the world
18:50
wanted the debt freely. That has weakened.
18:53
More creditors now rely on official backstops as part of staying in the market. Not as an
18:58
exception, but as something assumed will be there if selling pressure appears.
19:02
At the same time, the holder base has become faster-moving and more sensitive to changes
19:07
in rate and liquidity conditions. That shift made it harder to rely
19:11
on private demand alone to absorb the stress. The Fed’s backstop is no longer temporary. It
19:16
is no longer small. The system now relies on two things that cannot be taken for granted:
19:21
the continued willingness of large holders to hold US debt, and the standing presence
19:25
of central bank support when they do not. That is not a prediction of collapse.
19:30
It is a description of the conditions already sitting in the system.
19:34
And conditions like that don’t stay theoretical forever.
19:37
But let's say the worst does happen. How will the average American cope
19:40
with a worthless dollar? And who will be left picking up the pieces? Find
19:44
out in ‘What If The US Economy CRASHES’. Or watch this video.
