What if Washington and Beijing freeze each other's sovereign assets?
Mutual sovereign-asset freezes weaponize finance: this is the rare risk-off that lifts long-end Treasury yields (10y/30y +10bp) as reserve demand fades, while gold +4% and semis -5%. The template is the 2022 freezing of Russia's reserves, which durably accelerated de-dollarization and central-bank gold buying. Transmission: China dumping or being locked out of USTs is the tail. Forward angle: unlike 2022, the counterparty holds ~$700bn+ of Treasuries, so the bond-market feedback loop is the real systemic risk, not equities.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Washington and Beijing freeze each other's sovereign assets, weaponizing finance in a decoupling spiral. The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▼ · Geopolitical risk ▲ · Trade tension ▲ — which propagate through our causal graph to the markets below.