China's out

[InstantGratification]

48. Read this article about the quiet power move Canada's PM made that pushed Trump to "pause".

Quick primer: The Stock and Bond markets most always operate inversely. When the stock market goes up the bond market goes down and vice versa. When stocks are booming investors move money out of safe, but low yield bonds and into higher yielding stocks, sending bonds lower. When stocks go wobbly, investors move money into the safer bonds and the bond market goes up. That wasn't happening earlier in the week stocks and bonds were both going down because US bonds weren't being viewed as a reliable safe haven anymore. That scared the shit out of Trump. Canada (with Japan and EU standing shoulder to shoulder) showed the world how to quietly stand up to the bully.

https://deanblundell.substack.com/p/carneys-checkmate-how-canadas-quiet]

That’s the message Carney delivered in his call with Trump last week. No leaks on the exact words, but the outcome speaks volumes. Trump didn’t just pause the tariffs; he backpedaled hard. China’s still in the crosshairs—125% duties are no joke—but Canada? The EU? Japan? They’re off the hit list. For now, at least. Why? Because Carney’s play wasn’t noise. It was power.

Let’s be real: Trump’s spent years calling Canada a freeloader—remember his 2019 NATO jabs?—while ignoring the inconvenient truth. Canada’s $350 billion in U.S. debt isn’t charity. It’s a lifeline. Japan’s trillion-plus? Same deal. The EU’s pile? Ditto. These countries aren’t just buying bonds to be nice; they’re bankrolling the U.S. government. And when they threaten to pull the plug, even slowly, Washington listens.

This was the determining factor in Trump’s surrender. Not the public spats, not the retaliatory tariffs Canada slapped on U.S. autos (though those stung). It was the quiet, coordinated threat of a Treasury bond unwind that bent Trump’s knee. Carney didn’t need to shout. He didn’t need to posture. He lined up the free world—Japan, the EU, Canada in lockstep—and showed Trump the cliff’s edge. Strategic brilliance doesn’t get louder than that.

China could probably make the same move. Between China proper and Hong Kong, the Chinese hold around 1.1 trillion in US bonds. Trump will bluster on like he always does and his mouth pieces will spin the propaganda web, but all that debt in the form of US bonds is a choker collar if he gets to far out of line. (too bad it isn't a muzzle)