How will China collect on our debt, if the dollar is destroyed? - Economics - Page 4 - City-Data Forum

summers73 · 12-07-2009, 05:22 AM

Quote:

Originally Posted by lumbollo

This one is easy. The USA is going to tell China that it doesn't plan to repay the dept. What are they going to do about it?

Let's hope Americans enjoy stitching their own sneakers by hand.

floridasandy · 12-07-2009, 05:25 AM

Quote:

Originally Posted by lumbollo

There is an old saying that goes something like this. If I owe you $1000 then you control me. If I owe you a $1,000,000 then I control you.

i often agree with you, but that is akin to saying that debt is power and we know that isn't true....

summers73 · 12-07-2009, 05:33 AM

Quote:

Originally Posted by lumbollo

There is an old saying that goes something like this. If I owe you $1000 then you control me. If I owe you a $1,000,000 then I control you.

Of course, if that $1,000,000 doesn't buy you more than an orange, I would suggest that control has ceased to exist.

floridasandy · 12-07-2009, 07:06 AM

i have another question. if we aren't buying as much lately, why is our trade deficit with china rising?:
FTD - Statistics - Country Data - U.S. Trade Balance with China

le roi · 12-07-2009, 09:57 AM

Great post esker.

I also have a theory, that the U.S. has more significant international diasporas than other major economies. If nothing else, I think that our status as a melting pot is perceived as a lower geopolitical risk for those nations who have significant populations living in the US.

floridasandy · 12-07-2009, 10:03 AM

Quote:

Originally Posted by floridasandy

i have another question. if we aren't buying as much lately, why is our trade deficit with china rising?:
FTD - Statistics - Country Data - U.S. Trade Balance with China

it certainly looks like all we have done is transfer our debt from the private sector to the taxpayer, and done nothing to deflate the bubble.

fanman72 · 12-08-2009, 05:14 AM

China may not do anything, but they probably won't buy any more treasuries, or at least far less. Their purchases are turning out to not be such a great investment. Guess we'll have to finance our expenses by printing even more money than we do now.

Oh yea, we can forget about any other countries forking over money to help us out. China & Japan alone hold 45% of our public debt. That number is going down in the near future

lumbollo · 12-08-2009, 05:18 AM

This is exactly what is happening. The Fed has been buying these unsold US bond issues and monetizing them.