The betting odds (at time of writing) on a partial US debt default this year were 6/4 - Default and 1/2 - No Default.

Considering the odds, this is something of a wake-up call for nations and institutions with large holdings of US debt. Now while countries can not quickly unwind their US bonds without causing the equivalent of a bank run that would devalue their holdings*; the momentum to do so is likely picking up steam.

My question is: Has any government made the unwinding of their US bonds and currency reserves** a core public policy plank or a law on the books?

* Something that certain unnamed economists and politicians have chortled about over the last 30 years, saying something along the lines of "Hehehe they can't afford to offload our debt so why care?"; all the while forgetting that large ships that turn slowly still turn in the end.

** Bonds and currency are mostly interchangeable debt instruments for the USA. A unusual state of affairs for a fiat-currency, as usually when a country prints money, other countries don't subsidise this habit by buying said currency. But currently the US dollar is both the petrodollar and the global reserve currency; and will remain so until a successor to the Bretton Woods system is decided on.

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    It's not a matter of policy, but China has called for the 'De-Americanizsation' of world finance in the light of the budget crises. There are other factors involved, but the budget crisis has certainly presented an opportunity for China to extend these calls. Commented Oct 16, 2013 at 16:27
  • China, Iran, Venezuela.
    – user4012
    Commented Oct 17, 2013 at 15:44
  • @DVK Interesting. If you know any news reports or policy statements to this effect, would you like to post an answer for China/Iran/Venezuela? Commented Oct 17, 2013 at 21:33
  • @LateralFractal - mostly half-remembered statments coming out of them. Frankly, the topic doesn't strike enough interest in me to bother doing enough research for a good answer.
    – user4012
    Commented Oct 18, 2013 at 1:17
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    @DVK, China? Luo Ping , a director-general at the China Banking Regulatory Commission, said [...] China would continue to buy Treasuries in spite of its misgivings about US finances [...]: “Except for US Treasuries, what can you hold?” heasked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”
    – user1873
    Commented Oct 20, 2013 at 20:04

1 Answer 1


Perhaps not to the level of "core public policy plank" (as you put it), but Russia substantially reduced its holding of US treasuries in 2018, presumably just based on fears:

Between March and May, Russia's holdings of US Treasury bonds plummeted by $81 billion, representing 84% of its total US debt holdings. [...]

"One theory is that this was Russia's revenge for US sanctions," said [Jason] Bush [an analyst at consulting firm Eurasia Group].

Another theory is that Moscow feared further US sanctions that could cause its holdings of US debt to be frozen or even seized.

The Russian side didn't acknowledge this explicitly, but their central banker said something like

Russia assesses "all the risks: financial economic and geopolitical."


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