“NBC...Question: “Are U.S. treasury bonds still safe to invest in?”
Alan Greenspan...Answer: “Very much so. This is not an issue of credit rating, the United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default.”
Amazing. And it’s not like the Chinese don’t watch these shows (or even frequent these websites - hi Phoebie). In a few short years, the Chinese will calmly ask us to start paying them back. A few years after that, they will demand repayment. And a few years after that, once they have the means, they will come here and collect....while we’re still waiting for the green economy to materialize and going broke paying off baby boomers.
Instead of trading for US products, China has chosen to trade their dollars for US Treasury debt in place of computers, natural resources, airplanes, etc. Thus our trade deficit, as normally defined, was necessary for our national debt to accumulated in the manner it has.
Either they'll have to find another use for the dollars, keep buy questionable US Treasury bonds, find another country to dump there products in or stagnate (just like Japan).
For all of China's talk, they're also in a bad spot.
RD