Quote:
Originally Posted by PepsiFree
Which is why the global market would crash if China called it's debt.
I get your invigorated sense of US power, but my point is that the US is no position to mess with China. If it pushes hard enough, China is going to have no problem doing damage to itself to hurt the US.
Again, short term is 20 years of economic devastation. I wouldn't count on China not pulling the trigger just because it would hurt itself.
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How can China 'call it's debt'? Just curious. China has $1.19 Trillion in US T-Bills, Bonds, and notes. I'm not an expert in sovereign debt, but I don't believe that they can simply put the bonds to the US gov't at a moments notice. Even if they intended to liquidate all of their US holdings it would be very difficult. From the US government perspective there's an old saying: If I owe the bank $100 that's my problem, if I owe the bank $100 million, that's the bank's problem!
Also this discussion ignores that fact that China itself is not a great example of great fiscal management, with ridiculous leverage scattered across their public sectors and shadow banking sector. It would be foolish to make the blanket assumption that China has a greater wherewithal to engage in economic warfare than the US.