Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

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Further, not all investors seeking to avoid market volatility risks are able to do so using derivatives. This has spawned demand for secure and highly liquid assets that can be held as insurance against sudden and large funding needs. The largest issuer of such assets in the world is the US Treasury.

As of the end of 2020, the total amount of US Treasury securities outstanding stood at $27.8 trillion.ssss1 These securities represent the cumulative amount of money raised by the US federal government to fund its spending requirements over and above what it collects in taxes. They are the largest and most liquid asset class in the world, with around one-third of the public debt owned by overseas investors.ssss1 Although the number seems staggeringly large, there is theoretically no risk that the US government will default on this debt. This is because all of its outstanding debt is denominated in US dollars and, since Nixon took the US off the gold standard, the US Treasury can simply print more dollars to meet its repayment obligations as they fall due. For this reason, US Treasuries are considered to be ‘risk free’ assets.