Reply #30: Plausible but what seems hard to imagine is China [View All]

[lostnfound]

because annihilating the US economy will hurt them deeply as well. We are joined at the hip or the wallet.

The US is such a huge market for them; and just asking for too much "money back" would collapse the dollar.. There comes a point when the fate of debtors and the indebted are tied: A corporate example is Enron, where lenders kept lending money because they were getting partially paid in Enron stock.

The deeply-in-debt have a certain power over the debtor: if the debt is sizeable enough to have a real impact on the debtor when "written off" by the debtor, the debtor would often rather continue to carry the loan than to have the indebted become insolvent. In the case of countries, I would suspect that a collapse of the US dollar would mean that 1) the debt could be paid back in worthless dollars OR 2) China's economy would be devastated due to having so much uncollectible debt.

Great essay, though, for laying out the possibilities.