[taiwansemi]

If China no longer buys US bonds, then who will fund US budget deficits? The selling of US bonds makes up the shortfall in the US budget. If China no longer buys US bonds because America defaults, the US taxpayer can expect to pay much higher taxes, because America's credit rating and ability to borrow will be destroyed. In addition, interest rates will skyrocket, and America's economy will resemble some Third World economy.

[glorgau]

It all goes back to the old saying,

If you owe a bank a thousand dollars and you can pay it back, then you have a problem.

If you owe a bank a million dollars and you can't pay it back, then the bank has a problem.

[Cronos]

If China no longer buys US bonds, other countries will fund our deficits. Japan was until recently the largest buyer. Plus theKoreans, europeans etc. would not want the US economy to collapse -- they wouldn't mind a chicom collapse though