Foreign governments are steadily moving away from US debt and into gold, which is bad news for the US government's ability to borrow cheaply.

• The US needs long-term interest rates to fall to afford its debt, but the foreign buyers who could push rates down have stopped buying.
• Instead, governments around the world are stockpiling gold; measured in gold, long-term US bonds have lost most of their value since 2014.
• Countries are pulling back because the US has used the dollar as a weapon against rivals and allies alike for decades.
• Europe, China, the Netherlands, France, Germany, and Japan (the biggest foreign holder of US debt) are all reducing their exposure.
• Historically, gold flowing out of a country is a warning sign for that country's finances.

Outlook: Expect the shift from US bonds to gold to continue, keeping pressure on US borrowing costs and supporting gold prices.