- 05 Apr 2021 17:33
#15164899
You're thinking people are rational.
I wish.
It really wouldn't be hard to dump enough of the debt to set off global panic selling. They've got enough to do it.
But it would absolutely destroy their economy, as well.
One of their big fears is another Chinese government collapsing, and setting off chaos. So they won't. But you can be they are sorely tempted.
B0ycey wrote:
I would say the impact of mass borrowing from Covid would have a greater impact to the US economy than who holds 4% of their debt. Besides, the liability of debt is who holds it, not who owes it. I once (and perhaps still believe) that if China sold off US debt all in one go it would create US inflation. But when I watch the amount of "new money" that is currently being handed out with no plan of drawing that back in, well if that doesn't create high inflation then perhaps the MMTs have it right after all. 2008 only made a blip on inflation figures during QE and perhaps that will occur again. I don't know. So I will be watching the next few years with interest. My instinct is this is going to come back and hurt us once everyone starts spending again due to excess cash in the system. But if I am wrong, then I don't see how China can sell $1tn in the bond market to create a negative US economic power play when the US have just quadrupled that amount and just plonked it into their economy with little effect since last year.
You're thinking people are rational.
I wish.
It really wouldn't be hard to dump enough of the debt to set off global panic selling. They've got enough to do it.
But it would absolutely destroy their economy, as well.
One of their big fears is another Chinese government collapsing, and setting off chaos. So they won't. But you can be they are sorely tempted.
Facts have a well known liberal bias