Triggering heated discussion! Former U.S. Treasury Secretary Paulson: The United States needs an "emergency plan" to deal with the collapse in demand for U.S. debt.

``` Former U.S. Treasury Secretary Henry Paulson has issued a warning, calling on U.S. policymakers to prepare contingency plans in advance to guard against a catastrophic drop in demand for U.S. Treasury bonds, and warned that if a crisis erupts in the government bond market, it would severely impact the entire economy. According to Bloomberg, Paulson said in a Bloomberg TV interview on Thursday, "We need a targeted, short-term, 'break glass in case of emergency' plan ready on the shelf, so that it can be immediately activated if we hit a wall." He also admitted that it is difficult to predict when such a crisis might occur: "When we really hit that wall, it will be very fierce, so we must be prepared for this possibility." Paulson’s warning comes as concerns continue to rise among investors about the declining attractiveness of U.S. Treasuries. On that day, the yield on the 10-year U.S. Treasury rose 2.9 basis points to close at 4.308%, and the 30-year Treasury yield climbed 3.9 basis points to 4.929%. Key Differences Between This Crisis and 2008 Paulson stressed that if the U.S. Treasury market experiences a crisis, its nature will be fundamentally different from the 2008 financial crisis. The core of the 2008 crisis was in the private sector, and at that time, the U.S. government still had sufficient fiscal space to intervene and clean up the aftermath. "In 2008, even though the situation was terrible, the government still had fiscal firepower to respond to the credit crisis and could step in to clean up the mess," Paulson said. However, if a public debt crisis breaks out, the scenario would be drastically different—at that point, the government's own financing ability would be severely constrained, and it would not play the role of rescuer. He described a potential vicious cycle: when the government tries to issue Treasuries but faces insufficient demand, investors will require higher yields before buying, which pushes up borrowing costs and further increases interest payments, thus expanding the fiscal deficit. And the rising deficit, in turn, exacerbates investor concerns. "When the Federal Reserve becomes the only buyer, Treasury prices drop, and interest rates rise, that will be a very dangerous situation," Paulson warned. Multiple Pressures Suppress Treasury Demand Paulson’s warning reflects the multiple structural pressures currently facing the U.S. Treasury market. Persistent and growing fiscal deficits, large-scale debt issuance, and lingering inflation fears have recently caused noticeable headwinds for long-term U.S. Treasuries. Against this backdrop, investor skepticism regarding the long-term appeal of U.S. Treasuries has continued to mount. While Paulson did not provide a specific timeline for the crisis to erupt, he made it clear that this risk cannot be ignored and that preemptive policy planning is crucial. "People ask, 'When will you hit the wall?' I obviously don't know—that's impossible to predict," he said, "but when we do hit it, it will be very fierce." Risk Warning and Disclaimer The market carries risks and investments should be made with caution. This article does not constitute personal investment advice and does not take into account any user’s special investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investing accordingly is at your own risk. ```