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European sell-off of US treasuries could trigger global economic crisis

Published: 27 January 2026

As US President Donald Trump threatened to take control of Greenland by any means necessary, European countries weighed聽a聽response. After decades of low levels of investment in their militaries,聽Europeans聽wouldn鈥檛聽fare well in a head-to-head confrontation with an invading force from the United States. But collectively, Europe鈥檚 economy is huge, and they hold large numbers of US聽Treasury聽Bonds鈥攖he financial instrument through which the US government issues debt.

Selling聽off European-held treasuries聽would聽hit聽the US economy聽hard,聽but it聽would聽also聽have repercussions聽for the rest of the global economy. 鈥淚f you have sellers of Treasuries, that potentially can have selloffs in stocks鈥痑nd that will then impact, potentially, other trades,鈥澛燗ssociate Professor of Finance聽Patrick Augustin told the Financial Post. 鈥淭here鈥檚 certainly going to be ripple effects everywhere in that situation.鈥澛

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