An Independent Evaluation of the Data Behind the Headlines

The YouTube channel House of El, run by a data analyst with a PhD in computer science who goes by El, recently published a video essay making a sweeping argument: the world's major economies are systematically reducing their financial exposure to the United States. She calls it "the great divestment," and her thesis is that the shift is not coordinated but emergent — parallel risk management by rational actors who have independently concluded that American political unpredictability has turned US exposure from a default asset into a liability to be managed.

It is a provocative claim, and El supports it with a dense stack of figures spanning Canadian bond sales, Chinese Treasury drawdowns, Gulf sovereign wealth reviews, and new trade agreements that conspicuously exclude Washington. We set out to verify every major data point in the video against primary sources. What we found is a picture that is largely accurate in its facts, occasionally imprecise in its framing, and genuinely important in what it reveals about the shifting architecture of global finance.

Canada: The Numbers Are Real, and They Are Striking

El's headline figure — that Canadian investors executed a record $20.5 billion divestment of US Treasury bonds in Q4 2025 — is confirmed directly by Statistics Canada. The agency's February 2026 release on Canada's balance of international payments states plainly that the Q4 divestment was driven by three consecutive monthly sell-offs of US government bonds, representing the first Canadian divestment from foreign debt securities since Q2 2020. This is not disputed data; it comes from Canada's national statistical office.

The broader context, however, matters. Canadian investors simultaneously poured $31.7 billion into foreign equities in the same quarter — the largest such investment since Q2 2021 — with much of that targeting US corporate shares, particularly large-cap technology firms. So while the government bond sell-off was real and unprecedented, Canadian private capital was not uniformly fleeing American markets. It was restructuring its exposure: less sovereign debt, more corporate equity. That distinction is important, and El's video does not make it.

The consumer revolt, meanwhile, checks out with remarkable precision. Statistics Canada and multiple polling firms confirm that Canadian car trips to the United States dropped roughly 23% in February 2025 year-over-year, with the decline accelerating to approximately 35% by early 2026 compared to pre-tariff baselines. Flight bookings for US leisure travel fell 40% in February 2025 relative to the prior year. Forbes and the US Travel Association have reported an estimated $4.5 billion in lost US tourism spending across 2025, with 4.2 million fewer Canadian visitors. Air Transat announced the termination of all US flights by June 2026. This is not speculative; it is one of the largest sustained single-country tourism pullbacks in modern American history.

Canada's strategic pivot is equally verifiable. Prime Minister Mark Carney announced in an October 2025 televised address that Canada would aim to double non-US exports by 2035, generating an additional C$300 billion in trade. Bloomberg, the Washington Post, and The Logic all reported on this target extensively. Then in January 2026, Carney made the first Canadian prime ministerial visit to Beijing in eight years, where he and President Xi Jinping signed a deal reducing tariffs on Chinese EVs entering Canada (from 100% to 6.1% on up to 49,000 vehicles) in exchange for China dropping duties on Canadian canola from approximately 84% to 15%. CBC, NPR, and Al Jazeera all covered the agreement in detail. A Canada-India crude oil and natural gas agreement was also announced in the same period, consistent with El's claims.

The "third option" language El uses is an interesting historical reference — it echoes Pierre Trudeau's 1972 "Third Option" foreign policy paper, which similarly argued for trade diversification away from the United States. Carney's version is more concrete: it comes with specific export targets, signed trade deals, and measurable policy commitments.

China: The Decline Is Real, but the Story Is More Complicated

El states that China's Treasury holdings fell to $693.3 billion in February 2026, the lowest since 2008, and that China is now the third-largest foreign holder of US Treasuries behind Japan and the UK. This is confirmed by the US Treasury Department's Major Foreign Holders data and corroborated by the Global Times, which reported the $1.1 billion month-over-month decrease from January to February 2026.

The long-term trajectory is also accurate. China's holdings have fallen roughly 48% from their $1.3 trillion peak in 2013 — a staggering drawdown by any measure. But here El's video, while directionally correct, omits a critical technical nuance that deserves attention.

Real Investment Advice published a detailed analysis in February 2026 pointing out that the US Treasury's own data is built on custodial records — it tracks where securities are held for settlement, not whose balance sheet carries the risk. The Treasury's own FAQ acknowledges that securities held in custody accounts in third countries may not be attributed to their actual owners. Over the same period that China's reported holdings fell by approximately $600 billion, Belgium's holdings rose by roughly $500 billion. Belgium and Luxembourg are major custodial centers, and the surge in their holdings almost certainly reflects Chinese assets parked through European intermediaries rather than Belgian pension funds suddenly developing an appetite for Treasuries. When adjusted for probable custodial transfers, China's effective Treasury exposure may be roughly flat since 2011.

This does not invalidate El's broader point about strategic diversification. China is undeniably building alternative financial infrastructure — the CIPS cross-border payment system processed RMB 175.49 trillion ($24.47 trillion) in 2024, up 42.6% year-over-year. China's gold reserves reached 74.38 million ounces by end of March 2026, marking 17 consecutive months of increases, per SAFE data. And Bloomberg reported in February 2026 that Chinese regulators were advising financial institutions to limit their US Treasury holdings, citing concentration risk — a policy directive that suggests the drawdown will continue.

However, one figure in El's video requires correction. She states that "Renminbi cross-border settlement reached nearly 47% of total settlements by late 2024." The 47% figure comes from the People's Bank of China and refers to the RMB's share of China's own cross-border payments — not 47% of all global cross-border settlements. The RMB's share of global cross-border payments via SWIFT remains in the low single digits, around 2-4% depending on the month. That is still a meaningful and growing figure, but it is an order of magnitude smaller than what the video implies. The distinction between "47% of China's bilateral transactions" and "47% of total world settlements" matters enormously for assessing how far dollar displacement has actually progressed.

The Gulf: Where El's Narrative Gets Ahead of the Data

This is where the video's thesis encounters the most friction with available evidence. El states that Gulf sovereign wealth funds collectively hold over $2 trillion in US assets and have initiated internal reviews following the Iran war, with Saudi Arabia's Public Investment Fund cutting new US commitments by 70% in early 2024. She characterizes the pattern as a slow but deliberate tilt away from American markets.

The Financial Times and the Dupree Report both confirmed that Saudi Arabia, the UAE, Kuwait, and Qatar initiated internal reviews of US investment commitments after the Iran conflict began in late February 2026, including assessments of whether force majeure clauses could be invoked. That part is real.

But the broader narrative is substantially more complicated. Semafor, citing data from consultancy Global SWF, reported in January 2026 — weeks before the Iran war — that Gulf-based sovereign funds had more than doubled their US investments in 2025, deploying $70 billion into American assets, the highest level ever recorded both in absolute terms and as a share of total deployment. The US accounted for 59% of all deals by the seven most active Gulf funds. PIF alone drove $29 billion in US acquisitions, led by its purchase of Electronic Arts.

Even after the Iran war began, Global SWF data cited by Semafor in April 2026 showed that PIF, Mubadala, and QIA combined for almost $25 billion in new investments in Q1 2026 — a pace that, absent the war, would have portended a banner year. Semafor's assessment was blunt: "It may be fashionable now to suggest that sovereign funds will signal their governments' anger at the US by trimming investments. The reality is different."

The AGBI (Arabian Gulf Business Intelligence) analysis was more measured but reached a similar conclusion: Gulf states are expected to continue investing in the US, though they may scale back, shift priorities, and seek revised terms. The Emirati ambassador to Washington noted that 45 bilateral deals had been signed in the prior 15 months, with partners like Amazon, Disney, Microsoft, and Wynn all committed to moving forward.

So the Gulf story is not wrong — reviews are underway, budgets are under strain, and the Iran war genuinely disrupted the calculus. But calling it part of a "great divestment" overstates what the data currently shows. The more accurate framing is that Gulf capital is renegotiating terms, not exiting positions. That may change if the war drags on, but as of April 2026 the money is still flowing.

The Trade Architecture: Where the Thesis Is Strongest

El's argument lands most convincingly when she moves from individual actors to the structural shift in global trade agreements. The EU-India Free Trade Agreement, signed January 27, 2026, is the centerpiece. EU Commission President Ursula von der Leyen did indeed call it "the mother of all deals," and it does create a free trade zone of approximately two billion people covering roughly 25% of global GDP. India will eliminate or reduce tariffs on 96.6% of EU exports by value. The World Economic Forum, Al Jazeera, the European Policy Centre, and India's own government all confirmed the agreement's terms.

Critically, geopolitical analysts from the European Policy Centre and the Economist Intelligence Unit both assessed the deal as fundamentally driven by geopolitics rather than pure economics — both India and the EU were motivated in part by the need to diversify away from US trade dependence. The EU had also been advancing the long-delayed EU-Mercosur trade agreement and concluded deals with Indonesia and Switzerland. India separately signed agreements with the UK and Oman.

The pattern El identifies — a proliferation of bilateral and multilateral trade deals that deliberately exclude Washington — is the hardest data point to dispute. The US trade-to-GDP ratio did decline to approximately 25%, running counter to a global trend where four of five nations saw trade's share of GDP increase over the same period. American mercantilist tariff policy is creating precisely the structural vacancy that competitors are filling.

An Honest Assessment

El deserves credit for assembling a coherent and largely well-sourced thesis. The Canada data is solid. The trade architecture analysis is the strongest part of the argument. The EU-India deal is real and consequential. The Chinese diversification trend is genuine even if the Treasury drawdown numbers are partially a custodial accounting artifact.

Where the video falls short is in the connective tissue. By presenting each of these developments as manifestations of a single phenomenon — "the great divestment" — it implies a degree of coordination and directionality that the evidence does not fully support. Canada is retaliating against tariffs. China is pursuing a decades-long strategy of dollar hedging. The Gulf states were increasing US exposure until a war disrupted the calculus. The EU and India found each other because Trump's tariff wall closed other doors. These are related but distinct dynamics with different drivers, timescales, and likely trajectories.

The more precise version of El's thesis might be this: the United States has lost the benefit of the doubt. For decades, the default assumption among global capital allocators was that American political noise was temporary and that underlying institutional stability would endure. That assumption is now being tested by tariff volatility, CFIUS restrictions, political unpredictability, and the weaponization of financial infrastructure for geopolitical ends. The US still has the deepest markets, the strongest technology sector, and the most liquid assets on earth. But as El puts it in perhaps her sharpest observation, "best available option is different from only option — and the gap between those positions is where empires lose leverage without firing a shot."

That line, we think, captures the structural reality more accurately than the "great divestment" framing. What we are witnessing is not a coordinated exit but an erosion of default status — a slow-motion loss of the unearned premium that comes from being the only serious option. The US is now one option among several, and the rest of the world is building the infrastructure to make that choice real.

Whether American financial dominance can survive American political unpredictability is, as El suggests, the defining economic question of the next decade. The data she presents does not settle that question. But it does establish that the question is no longer theoretical.

Primary source: House of El, YouTube. All figures independently verified against Statistics Canada, US Treasury Department, Global Times, Semafor, CBC News, Bloomberg, Al Jazeera, Global SWF, Real Investment Advice, and the World Economic Forum. This article is analysis, not financial advice.

Jonathan Brown for Border Cyber Group