What would happen if China called in the debt?

We'd simply print a whole bunch of new money and pay the debt to China in full, in totally worthless dollars...


With the devaluation of our currency, Americans could no longer afford to buy anything made in the rich country of China.

After a few years of staggering misery, we'd start making factories in America, mostly to provide low grade products to our own citizens, who could not afford to buy anything made in foreign "Rich" countries.

... and slowly begin selling a few products made in those factories overseas, building a reputation for making cheap, disposable products that rich countries, like China would import to mollify their increasingly spoiled and corrupt populace.

And that foothold would allow America manufacturers to begin to improve the quality and efficiency and profitability of their products.

Soon we'd begin to buy up the debt of "Rich" and declining countries such as China...

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for one thing main land china really doesnt hold that much off our debt..social security is the biggest holder..taiwan and hong kong also hold a lot more than main land china...

 

The OP to this thread was answered like 5 times in the thread, but here it still is.

America has a history of getting rich while building up a nation- we got rich rebuilding Europe 1945-1970 until they started making their own stuff and stopped needing ours. With that in mind, may I suggest we start not needing Chinese products?

 

well if you call 98% employment rate and $3trillion surplus is dumb..... like we dont make bad judgement on investment before. they lower their yuan so they can export more.

 

wrong china hold about $1.5T of US debt, follow by japan, taiwan/hong kong don't hold much, their economy is not even in the $1T range

 

Make me in charge of a forced labor economy and I will get employment up. Compare to Hong Kong. All of china could be that prosperous.

We would all have jobs tomorrow if they banned tractors. Wouldn't make us better off.

 

China has reportedly studied this scenario themselves. They refer to it as "the nuclear option" because the consequences would be devastating for the USA and almost as devastating to China. Their prediction is a mutual economic meltdown, strong inflation of the dollar and mild inflation of the Yuan, and a global economic depression (at best, a deep recession like 2007-200.

Not being crazy, they are only likely to carry out such a policy if America seriously backed them up against the wall with some kind of ultimatum they really felt they couldn't accept. Barring such an ultimatum, China would be nuts to carry out such an action.

 

You cant "call in debt". The money isnt due until the instrument matures. Such strong opinions regarding matters you know nothing about.

 

and you might want to check the worker rate, rather than discredit the data. the fact is worker pay around 1500 yuan/month or more . thats compareble to about $800-$1200 when factor in living cost etc.
you still can dispute the fact they have $3T in reserve, we have $16T in debt. they raise from one of the most poor country in the 80's to 2nd largest economy in 30yrs. if people can't recognize this, then they are doom to fail. that been said they have alot internal issues to deal with too.

 

Auto correct wont let me type in the name zen chipping but you get what I was trying there. His reforms liberated the Chinese economy a little an it soared. If he let it go free the way of Hong Kong, they would be bigger then all other nations right now. Government economic control is a bad idea. If not, what do you like about their investment policies?

 

china has issues, state own company does tend to introduce more corruption etc. however, that been said, china acheive something in this 30yrs that basically shift them from a dirt poor country to one of the top GDP.
also private comany or demorcatic china not necessarily mean they will have bigger economy then they are at right now, look at india, and other democractic countries, compare phillippine vs vietnam, india vs china. there are many factor contribute to economy, private company/democratic government just one of them. but most important is how the country view its direction, how hard working are its worker, education, etc etc play all into economic growth. china may not be democratic and has alot state own company, but the direction they are going, the plan, the education level of its citizen, plus their hard working labors make them 2nd GDP nations. Now if china don't have these contribute factors, but a democratic nation and no state ownership, do you think they still be #2 GDP. democracy it self don't make you a economic powerhouse, it will depend on other factors. democracy will only provide wider opportunities.

 

Are you telling me corruption in your military dictatorship d

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Are you telling me corruption in your military dictatorship doesn't exist? The three trillion that went missing. The 9/11 deceit and lies. The torture chambers the degenerates who tell the president he cannot close the illegal torture chambers in Cuba. Perhaps one should open ones eyes before spouting hypocrisy. China is a power house right enough but also can pull the plug in America hopefully
before these degenerates have each nation at the throats of each other!
Regards
Highlander

 

all you're doing is showing that you don't understand how debt works

 

Non payment of debt. Either the debt collectors come in or war rectify matters as in ww1 or ww2
Regards
Highlander

 

your delusions aren't reality

 

At least argue your case with even one fact that I would easily be able to dispute.

Highlander

 

take some economics and finance classes so you'll have a clue what you're talking about

 

I studied Chinese history. Want to hear some stories of Chinese economic flops? In any event the reforms made by xen xiaoping in opening up to the US market, and Nixon's work with Mao before he died are why they are improving. If they were freer, they would improve even faster, they do not suffer from wealth envy. "Let every man be rich, let us all plant a money tree". - you would run this guy out of town for being a "greedy capitalist", but that is from a a communist leader.

$800-$1200 a month is horrible. Compare to Hong Kong. If China went the path of Hong Kong, little island with no resources and enemies everywhere, they would have a GDP of $67.940 trillion a year. That is more then double what the US and the EU make together - combined. That is what free markets do, and the more China moves to a free market, the sooner we should be prepared to fall very far behind.

 

If the U.S. would stop trading with China, it would bring China to its knees. And this talk that China would invade this country is a no brainner. They know the power of this country where we have enough nuclear bombs to destroy any nation on earth or send them to the dark ages. Naturally we would also get hit hard. So to the original question, China would never do anything stupid to provoke the U.S.

 

But not one even a little one a fact..... So near yet so far from any reality

Highlander

 

What a load of Tom tit Provoke whom. American military dictatorship that's what they plan for and ensure the nation states either are starved to death as in Ireland or the boers a pattern well worn on the bones of all our forefathers in all nation states that have gone before

Regards
Highlander

 

They cannot really call the debt. These bonds are not payable on demand. They have a maturity date. What they could do would be to dump them on the bond market selling them at huge losses to them and theoretically driving down the value of US bonds. I am sure what we would do would be to increase money supply to allow the government more funds to buy them up. If I could get 20 year bonds yielding even zero percent at 25 cents on the dollar I would buy them and hold onto them until maturity (assuming of course I was loaded enough to buy these big denomination bonds). China would lose a fortune in US dollars though that they could have invested in the US creating revenue streams.

 

that's your posts you're describing

 

Please. Don't look at others as you do to your lack of knowledge.

The multiplier is a method to ensure liquidity. QE ensures inflation and instability of the financial systems through out the Worlds finicancial markets. A manipulation by a very few which destroys every other market regardless which government is elected in ANY nation.
Ie ww1and ww2

Please make some effort to counter my assumptions Instead of resorting to the actions of an ignorant spoiled child.

I will not be holding my breath though, after looking at your past posts!

Highlander

 

really, take econ 101 and stop making such naive posts