Posted on 09/01/2015 3:28:56 AM PDT by HomerBohn
No. Bonds are sold based on the value of the rate at which they were issued, time remaining, etc.
There is a bond market, entities that want to purchase bonds. U.S. bonds on the secondary market compete with U.S. bonds on the primary market. So traditionally, If we want to sell $100 billion in bonds, we have to offer an interest rate on them sufficient to entice $100 billion in purchases. Secondary bonds are just as "good" as primary bonds, so imagine that we a selling cars. We produce the exact same model every year and sell "X" number of them. China has been buying them, and storing those brand new cars to sell themselves on a rainy day. Now the Chinese bring $100 billion in our brand new cars to the market, at the same time that we are trying to sell $100 billion in the same cars. What happens? At the standard price, there aren't enough buyers. The Chinese can discount their bonds to unload them, if they really need the cash, but we must service our giant debt, so we will have to compete by raising the rates on those bonds to attract more buys. 5% of $20 trillion is $1 trillion. If rates go to 1982 levels, we'll need $4 trillion to just pay our interest, and we don't have it.
Ah, I see. So, there is the option of saying “screw you” to the Chinese as well then.
I believe US taxpayers are the second largest holders of US debt thanks to QE1/2 and 3
Now with China bailing, maybe the largest holder
Hey, we borrow money and print more to pay the interest!
Obama not gonna be able to call his Saudi masters to buy US treasuries with oil sinking
Sorry, but you lost me. How exactly would that work? Bonds are frangible. As the article said, most are held by European financial institutions for the Chinese.
When someone sells their stock on the NYSE, you don't know who is selling when you buy. Same with the bond market.
If you start threatening people who purchase your bonds with retaliation, should they decide to sell their investment, you aren't going to sell many bonds going forward.
Yes, I get it. Ok.
I had to read your last sentence three times to get that “let me be clear” feeling. At the moment my opinion is the USSC and the US Senate, are the most dangerous organizations respecting our freedom and liberty, followed close behind by the immigrating hordes from the South and East.
China... remaining comments self censored.
Don’t want to say China is a pack of wolves.
Soros telling China what to do though is kind of like a cow trying to give orders to a pack of wolves.
wolves eat cows
someday even Soros’ money won’t stave off the wolves
Just hope we live to see it
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