Skip to comments.Who Is Going To Buy The US Debt If This War Causes China, Russia To Turn On Us?
Posted on 09/07/2013 1:48:47 PM PDT by RKBA DemocratEdited on 09/07/2013 2:39:18 PM PDT by Admin Moderator. [history]
Full title: Who Is Going To Buy The US Debt If This War Causes China, Russia And The Rest Of The World To Turn On Us?
Yesterday we implied a difficult question when we illustrated the huge size of US Treasury bond holdings that China and Russia have between them - accounting for 25% of all foreign held debt - implicitly funding US standards of living (along with the Federal Reserve). The difficult question is "Can the U.S. really afford to greatly anger the rest of the world when they are the ones that are paying our bills?" What is going to happen if China, Russia and many other large nations stop buying our debt and start rapidly dumping U.S. debt that they already own? If the United States is not very careful, it is going to pay a tremendous economic price for taking military action in Syria.
(Excerpt) Read more at zerohedge.com ...
How much longer can the US House of Cards defy gravity?
Yesterday we implied a difficult question when we illustrated the huge size of US Treasury bond holdings that China and Russia have between them - accounting for 25% of all foreign held debt - implicitly funding US standards of living (along with the Federal Reserve). [emphasis added][groan]
The array of nations around the world will simply foreclose their various mortgages on this territory once known as “the United States of America”, and treat it like they would a territory in central Africa, or an island out in the middle of the ocean. Come in with their various machinery for extraction, scoop up the resources, and haul it away.
Enter the era of “new colonialism”.
That depends of the intelligence of this administration....
Oh wait, never mind.
Meanwhile the Chicoms are manipulating their economic data and are building ghost cities in order to prop up their numbers. Who really has the bigger house of cards here? No matter how commie the man in the White House is, I don’t think that we can outdo the Chinese. Maybe if the amnesty pimps have their way, of course. Then we’ll have them beat. As for the Russkies, you don’t see any Russians with any wealth sticking around in Moscow because it is so nice and prosperous there.
It will print enough money to buy all the debt if need be. Even though financing the government isn't in its mission statement; this is one of the reasons Congress approved its creation.
The only thing saving us is that we’re the ChiComs biggest customer. Otherwise, it’s always the banker who has you by the balls.
To quote the World's Smartest Woman, What difference does it make ... the currency is already irreparably damaged ... we can't possibly borrow and successfully repay what we need right now to fund ongoing operations ... our only option is to print fiat until the dollar completely collapses ... and we are going to do exactly that until the idiot public finally figures out that they are carrying worthless paper trash in their wallets!
“It will print enough money to buy all the debt if need be. Even though financing the government isn’t in its mission statement; this is one of the reasons Congress approved its creation.”
It probably will eventually. The problem is, it also risks utterly destroying the currency in the process.
Dumping US debt? To who?
Barack. Obama. Does. Not. Care.
He doesn’t care if we go belly up. He wants it. They haven’t figured that out yet?
Isn’t that exactly what Obama had in mind from the moment he ran for POTUS?
And no one in the House nor Senate had the spine to stop him or slow him down.
Our elected critters are as guilty as Obama of the downfall of the US.
FOOD for them will become quite expensive. We just will not export food any longer unless it is in return for our debt. Anyone that doesn’t think we have strings to pull is mistaken. And our armed forces would be used to defend our borders and allies. If we didn’t have OBAMA we wouldn’t need any of the outside energy resources and could explore for minerals and bring manufacturing back to the USA. We would and could be back into making things, I’d say we would/could cut off the internet between us and them as well. No connections would probably be good for us as well.
The Chinese give us money to give to Taiwan to protect Taiwan from China. Who is dumber is a toss up there...
the Mexican drug cartels?
Debt problem? We don’t have a debt problem. As long as the Fed continues to invent $20 billion in new money each and every week and faithfully hand it over to the Treasury, the government no longer needs to borrow money. And as long as the government doesn’t need to borrow money, interest rates will remain low. What could go wrong with that?
Obama doesn't give a rap if he is eventually hated by Americans who see their country collapse around them and their comfortable middle class lives destroyed. Behind the big grin Obama despises all of us for U.S. economic and military power as well as our independent way of life. He wants to see America brought to it's knees and he's more than willing to risk being hated (for attacking Syria) if that triggers events that lead to the demise of the United States. The pundits nonsense about Obama being 'naive' or 'fumbling' willfully ignore his true motives.
They can also nationalize private retirement accounts and “invest” them in treasuries. The idea has already been kicked around.
Seems like if we wanted to play world cop, we would want to get our fiscal house in order. Why does Hussein want to play world cop?
Foreign investors aren’t going to buy it for long either way. The quantitative easing prop for that is reported to be ending. Bond yields will go up, while prices fall, then bond collapse. Pensioners depending on bonds will be left with little or nothing. Interest rates will skyrocket. Business will slow down. Revenues will fall. Government layoffs. Vicious circle.
-— government layoffs -—
The silver lining... Potentially.
They can also nationalize private retirement accounts and invest them in treasuries. The idea has already been kicked around.
Just happened in Poland.
We are. Prepare to have your retirement accounts seized.
China is locked in a murder/suicide pact with us. They dump our debt - our economy crashes - we stop buying cheap plastic stuff from them - their house of cards collapses.
The question is how much of our debt would you have to dump to crash the system? Would Russia’s share be enough? What’s the tipping point?
Seriously listen to him speak. He never speaks as the voice of the United States of America. Instead, he offers an explanation of what he thinks and why. His statements are always about him, what he thinks, and why. Being World Cop requires leadership. Talking about it requires nothing other than a media microphone.
A real President would be in Washington directing policy. But Obama avoids that choosing instead to do isolated interviews where he does not have to share the stage with anyone else - where he alone is the center of attention. That way, he gets to talk about his favorite subject, Baraq Obama, and how Baraq Obama personally assesses the situation.
China and Russia will be stiffed while the Europeans and Arabs will be ceded property and control of the US military (under the UN).
The US will be the thug enforcer for the Banksters and Arabs for use against China and Russia.
A few years ago I would have ignored your comment as a delusional and paranoid rant. But that was a few years ago.
I say, if this government feels froggy, they should jump.
Exactly. And at what loss? And better yet, what will China do with all those US dollars they collect from their current account surplus? They will either buy our goods and services, or invest in our economy. Yup, sounds like doom to me. /s
But that won't stop the doomers from speculating. It's a common occurrence on the FR.
Who will China sell its goods to if they will not buy US bonds and Washington responds by putting a hefty tariff on all Chinese made products?
A few years ago I didn’t have enough information to make the pieces fit, and I couldn’t even conceive of the comment.
Russia has a sweet deal selling weapons to Syria. She ain’t gonna like U.S. intervention.
Yes, I posted a thread about it yesterday.
The debt is going to be repudiated, obviously.
There is no historical example of a debt of this nature being paid off. What has never happened, won’t.
Usually when dumping is a good idea, the security has already lost much of its value. However governments can dump foreign securities with political purpose, accepting some monetary loss in the process. It's still cheaper than a nuclear war.
With regard to "to who," it does not matter. There won't be enough buyers anyway - who has spare change to buy a trillion dollars worth of US paper? As result, the value of that debt will fall through the floor. The USA will be unable to sell more debt because there will be too much of cheaper one on the market. The USD will drop in value, and you won't be able to pay with it for foreign goods. You will need RMB and CDN and whatnot - and they will be gladly sold to you... for the price so high that you can't afford it.
In the end, the USA will default. Nobody expects the USA to ever pay - it's not in the cards. The question is only how soon it will happen, and what will various countries gain from that. China has a great opportunity to buy themselves a great prize. They may not even lose all that much because in the last decade China actively buys various resources (land, mines, ore, etc.) for US cash and for US debt.
Too bad we can’t give you a green arrow or a “like.”
“The debt is going to be repudiated, obviously.”
Eventually it will be. But not before TPTB squeeze the last scintilla of wealth out of the middle class.
We own more of our debt than China does.
It’s sort of like getting jugged for kiting checks, and your spouse goes to ‘Bad Boys’ bail bonding (to pledge the collateral and pay the premium) and asks, “Will you take a check?”
Debt?? It isn’t really debt if you never plan to pay it off.
Perhaps this is another part of the Cloward-Piven: piss off China so they stop buying our IOUs. That would effectively end our consumer-based economy and then no one would care if we go communist.
As long as the Fed cares to support it.
Russia holds about $138 billion. Of a market that grew $6 trillion since Obama took office. Less than 1% of our debt.
We wouldn't even notice.
Who Is Going To Buy The US Debt If This War Causes China, Russia And The Rest Of The World To Turn On Us?
Who else but the American people!
It won’t be pretty either.
Hey, that’s the Fed’s solution. Do they know about you?
And if I'm a television manufacturer in China I'm going to want $20k for that big screen television, and that gallon of gas is going to cost us $15.
Everybody (except the folks counting on government handouts) can play this game.
When was the last time a foreign government "dumped" US debt instruments?
With regard to "to who," it does not matter. There won't be enough buyers anyway
When was the last time the US was unable to sell debt instruments in the open market?
who has spare change to buy a trillion dollars worth of US paper
Uh, huh. What's China's annual current account deficit with the US? What will they do with all those dollars? They can either buy our debt/invest in our economy, buy our goods and services, or hide the $$ in their mattresses.
The USA will be unable to sell more debt because there will be too much of cheaper one on the market.
Cheaper debt? People/governments won't buy US debt because other countries will be issuing debt that yields less and offers less risk? Sure.
You will need RMB and CDN and whatnot - and they will be gladly sold to you...
Do you really believe that the US dollar is going to be supplanted by the renminbi? You have more faith in the Chinese currency than the US dollar? Either you are a doomer's doomer, or you don't know much about the Chinese economy.
In the end, the USA will default.
Yeah, that $70 trillion in household net worth is peanuts.
China has a great opportunity to buy themselves a great prize.
LOL! It wasn't all that long ago the same thing was said about Japan. In the late 80's, I had Japanese businessmen telling me how easy it was for them to do to the US economically what they couldn't do militarily. How'd that work out for them? Do you happen to recall how much the Japanese lost on Rockefeller Center and Pebble Beach?
Doom, it's not just for breakfast anymore.
--making all outstanding US debt worthless. If anyone here actually believes that, then I'd be happy to buy every penny of the $17T debt with solid gold bars. Here's my offer: I'll trade a bar of gold that looks just like this:
--for every $T worth of T-bills you got. Heck freepmail me today and I'll give you one of these bars for just ONE $10,000 T-bill. OK, seriously I know nobody's going to take me up on this because everyone knows the 'US default' story's a crock. Some folks just like to rant I guess...