Economy
Related: About this forumSpeaking of China
Doesn't it hold many of our IOUs, sustaining our increased deficit?
Can it decide to cash them?
Yes, I know it is not that simple, but still wondering..
Eliot Rosewater
(31,109 posts)are and start nuking China and Iran...
That we even have to fucking THINK about these FUCKERS is insane and yet we STILL have done NOTHING about it.
TreasonousBastard
(43,049 posts)older article:
https://www.cnbc.com/2018/04/05/chinas-1-point-2-trillion-weapon-that-could-be-used-in-a-us-trade-war.html
For the most part, China, which has owned around $1 trillion of U.S. bonds for several years, has held on to these assets, collecting billions in interest payments. It did reduce some of those assets in late 2016 and early 2017 to help offset an increase in the yuan, but its already bought back much of what it sold.
question everything
(47,476 posts)Luck us, Xi is not a volatile leader who would cash them just to show us, to bring us to our knees.
progree
(10,904 posts)reduce bond prices (flooding the market with "supply" ) and they'd get a lot less for them, then they would by just keeping / renewing them. Or by slowly tapering out of them over a period of many years.
Wellstone ruled
(34,661 posts)China Tariff resolution. If Trump keeps up his China bashing,these IOU's will be in play and cause our Currency to turn into a pre WW2 German Currency event.
Just what could go wrong with the likes of Kudlow,Navarro,and Ross running the Economic Show? Now throw in Mnuchin.
progree
(10,904 posts)I'm pretty certain that a Treasury bill/note/bond-holder cannot, even a major economic power, cannot just go to the Treasury Dept and say I want my money back now without penalty (treasury securities have maturity dates that are there for a reason). But they can sell them to others on the bond market -- Treasury securities, like all other bonds, are bought and sold on the financial markets all the time, for whatever amount that the investor community deems them worth.
More likely, they would just reduce their buying of treasury securities in the future. As their treasuries holdings mature, they can simply decide not to renew some of them (renewing means taking the proceeds and buying new ones). And just not buy any more, or fewer in the future.
With fewer buyers bidding in the auctions, treasury prices will fall and yields will go up, meaning the U.S. government (aka us taxpayers) will have to pay higher interest amounts -- this takes away a portion of tax revenues that would have otherwise gone to funding programs...
question everything
(47,476 posts)TreasonousBastard
(43,049 posts)they may find other things to buy with those dollars.
They are spending a huge amount of money in Africa these days, and that could be dollars if they chose.