The Sword of Damocles hangs overhead: Nordic giant pension funds abandon U.S. debt, the beginning of a global capital exodus

A “organized retreat” by Nordic capital is rewriting the global financial landscape. This is not about chasing trends, but about institutional investors holding national pension funds casting real trust votes with their hard-earned money— the once-secure halo of U.S. Treasuries is fading visibly. The Damocles sword is no longer an abstract threat but a real crisis hanging over dollar hegemony.

$80 Billion Withdrawal Signal: Why Are Nordic Pension Funds Selling U.S. Treasuries Collectively?

Sweden is leading the way. As a benchmark country in the Nordic financial system, its pension funds have nearly emptied their U.S. Treasury holdings, with over 80 billion Swedish kronor (approximately $7.7–8.8 billion) in U.S. debt positions wiped out—almost 90% of their Treasury holdings have been completely divested. Behind this is Denmark taking the first shot—Danish pension funds openly admit to reducing their U.S. debt holdings and publicly declare that U.S. fiscal health is “beyond救” (beyond救 means “beyond救” in Chinese, but in context, it means “beyond救” or “hopeless”).

Dutch pension funds follow closely, significantly shrinking their hundreds of billions of dollars in U.S. debt. These institutions once regarded U.S. Treasuries as the “cornerstone” of their portfolios, but now they are turning to German bonds and other European assets for risk hedging. This group, which controls the national pension funds and acts as a “global barometer of risk,” is collectively abandoning U.S. debt, signaling the end of an era—the myth of risk-free Treasuries has shattered.

U.S. Debt Out of Control: $38.4 Trillion in National Debt and 126% Debt-to-GDP Ratio Erode Confidence

The U.S. fiscal system itself has become the source of confidence collapse. The $38.4 trillion debt hangs overhead, with the debt-to-GDP ratio already surpassing a dangerous 126%. More critically, $1.2 trillion in interest payments for fiscal year 2025 have overwhelmed the defense budget, with 19 cents of every dollar of tax revenue flowing into debt interest—creating a visible vicious cycle.

The U.S. can only issue new debt to pay off old debt, falling into a classic Ponzi scheme trap. Pension fund managers are well aware that this seemingly stable bond market is actually a ticking time bomb. Their retreat is the ultimate denial of U.S. fiscal sustainability.

Trump’s Threats and Financial Sanctions: Allies Face a New Damocles Sword

More frightening than the debt crisis itself is Washington’s unpredictability. The Trump administration has threatened tariffs on Europe for negotiation leverage and even threatened financial sanctions against allies selling U.S. debt. This Damocles sword hangs over global investors—coupled with the credit crisis of U.S. debt itself, it creates double pressure.

No one wants to hold this “sword handle” of financial sanctions. Rational global capital is fleeing now, whether due to economic considerations or geopolitical risk avoidance. U.S. Treasury Secretary at the Davos World Economic Forum claimed Denmark’s reduction was “insignificant,” but he deliberately ignored a signal—pension funds’ risk-avoidance behavior often leads ordinary institutional investors by several quarters. Nordic withdrawals may just be the beginning; large-scale global capital outflows are brewing.

The De-dollarization Wave Has Begun: Can Crypto Assets Become the New Global Safe Haven?

The share of the U.S. dollar in global foreign exchange reserves has fallen to 46%, while gold holdings have risen to 20%—the most significant diversification signal since the Bretton Woods system after World War II. De-dollarization has long been a consensus among central banks worldwide, accelerating from geopolitical shifts to portfolio rebalancing.

As U.S. debt loses appeal and Trump’s policies create uncertainty, high-net-worth capital globally is seeking new value anchors. Crypto assets, as alternative assets beyond national sovereignty and political risks, are gradually gaining mainstream attention. Although the market’s digital landscape is not yet mature, the direction is clear—market enthusiasm for emerging tokens like $ENSO (current $1.15, down 1.93% in 24h), $NOM (current $0.01, up 3.74%), and $ZKC (current $0.10, up 0.92%) reflects capital’s exploration of diversification and hedging tools.

The fundamental driver behind all these changes is the collapse of the dollar hegemony foundation. When Nordic pension funds divest from U.S. Treasuries, they are not just abandoning a single asset but challenging the entire dollar monopoly structure. The era of de-dollarization has opened its doors, and the shadow of the Damocles sword now hangs over all investors relying on U.S. debt yields.