What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european instead would be great for stock prices, but it wouldn't make the underlying assets more valuable, right?
Eurobonds. It may actually happen if this continues. But given the speed of the usual EU decision process I would not be surprised if it takes them longer than the current US administration to finally agree on the various terms. And that's good for Europe in multiple ways.
In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.
> What are some realistic alternatives to US markets here
There is nothing particularly interesting or sexy about US treasuries. You could replace a holding of $8bn to $80bn with equivalent or better rated bonds in a half hour or so.
Replacing that sort of allocation of stocks or commodities would be way harder as returns on those assets are not as simple as "pays a 4% coupon each year" - finding an equivalent of Apple or Nvidia is not a trivial task.
The problem is that Europe doesn't have a European bond market to compete against the US bond market. It has the economic size and stability but not the will right now. Europe did try it a bit during COVID but financial services are just not there yet. The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.
> It has the economic size and stability but not the will right now.
The european union's GDP is a solid 50% behind the US (20 trillion vs 30 trillion). But more alarmingly the growth in the european union since the 2008 financial crisis has been totally anaemic: the growth doesn't even counter inflation and that growth only came at the cost of gigantic additional public debt. Meanwhile both the US and China's GDPs grew like mad.
I also dispute the stability of the EU: in many countries the people aren't happy at all and the far-right are winning elections everywhere. And it's only through tactics (like the center-right siding with the ultra far left in France to counter the far-right party who won the election) that parties that aren't the far-right are managing to prevent the far-right from reigning already.
For example in the European Parliament 36% of the 720 seats are for far-right parties. And that's after all the other parties colluding (including with the far left) to prevent the far right from having more seats.
And as people are more and more dissatisfied with the current situation in the EU, the far-right keep winning more and more voters (sounds familiar?).
> The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.
The Euro is only 27 years old, is a badly conceived currency and may turn out to be one of the shortest lived currency ever. There's no way it's ready to take on the role of the USD. France's finances, the eurozone's 2nd biggest economy, are crumbling (gigantic public debt and insane public deficit) and may very well be overtaken by the International Monetary Fund (like it happened to Greece) soon.
Germany is trying very hard to ban its far-right AFD party from the elections for they know they could very well win. If I'm not mistaken the leader of the AFD said if they won, they're out of the EU. Think it cannot happen? UK left the EU already.
It's not just the EURO that may be the shortest-lived currency ever: the EU is actually in trouble.
US 10- and 30-year bonds are trading at their highest yields (lowest prices) since, uh, August/September 2025. Or in historical context, rates that were more common before 2007 and the ZIRP period.
An equally valid headline is "Investors purchased $8B of US Treasury Bonds". Never really got the point of people announcing US Treasury sales like its a big thing. Someone else not thinking with their emotions can, and will buy them. Its like announcing publicly you are selling your Honda. Its your Honda bro, sell it.
If Honda wants to keep the value of Honda at what it is today and enough people are selling their Honda's then Honda is at some point going to have to support the market if they want to have any chance of selling Honda's in the future. And Honda has only so much capital to spend before the company itself is at risk.
It is the second substantial sell from EU. Additionally, those things gain momentum fast since the later you sell the less money you make from the bonds you are selling.
So everyone doesn't want to be last and the sell-off takes off fast and violently, forcing unmanageable interest rates.
You could say the same when your stock price drops because large investors dumped your stock suddenly. Yes, there was a buying party (or they wouldn't have been able to sell), but the price drop hurts your company and worse can trigger more sales and more price drops.
similar with the US T-bonds - this pushes the yield up making it more expensive for the US to finance its debt (which already consumes nearly a fifth of the entire federal budget).
They can start buying Euro bonds, Gold, bonds for the great european companies like ASML, Airbus etc?? they can basically find a way to invest in their future, right? they just need to figure out the right financial vehicle?
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That runs around $2 trillion.
https://commission.europa.eu/strategy-and-policy/eu-budget/e...
In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.
It seems to be precious metals. And at this point in time, especially silver. Even Indian government seems to be stockpiling silver.
There is nothing particularly interesting or sexy about US treasuries. You could replace a holding of $8bn to $80bn with equivalent or better rated bonds in a half hour or so.
Replacing that sort of allocation of stocks or commodities would be way harder as returns on those assets are not as simple as "pays a 4% coupon each year" - finding an equivalent of Apple or Nvidia is not a trivial task.
The european union's GDP is a solid 50% behind the US (20 trillion vs 30 trillion). But more alarmingly the growth in the european union since the 2008 financial crisis has been totally anaemic: the growth doesn't even counter inflation and that growth only came at the cost of gigantic additional public debt. Meanwhile both the US and China's GDPs grew like mad.
I also dispute the stability of the EU: in many countries the people aren't happy at all and the far-right are winning elections everywhere. And it's only through tactics (like the center-right siding with the ultra far left in France to counter the far-right party who won the election) that parties that aren't the far-right are managing to prevent the far-right from reigning already.
For example in the European Parliament 36% of the 720 seats are for far-right parties. And that's after all the other parties colluding (including with the far left) to prevent the far right from having more seats.
And as people are more and more dissatisfied with the current situation in the EU, the far-right keep winning more and more voters (sounds familiar?).
> The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.
The Euro is only 27 years old, is a badly conceived currency and may turn out to be one of the shortest lived currency ever. There's no way it's ready to take on the role of the USD. France's finances, the eurozone's 2nd biggest economy, are crumbling (gigantic public debt and insane public deficit) and may very well be overtaken by the International Monetary Fund (like it happened to Greece) soon.
Germany is trying very hard to ban its far-right AFD party from the elections for they know they could very well win. If I'm not mistaken the leader of the AFD said if they won, they're out of the EU. Think it cannot happen? UK left the EU already.
It's not just the EURO that may be the shortest-lived currency ever: the EU is actually in trouble.
So everyone doesn't want to be last and the sell-off takes off fast and violently, forcing unmanageable interest rates.
similar with the US T-bonds - this pushes the yield up making it more expensive for the US to finance its debt (which already consumes nearly a fifth of the entire federal budget).