Remove ads from site

Gandalf The White
30 April 2020 23:27:41


 


A dangerous game.


China could pull the plug on the US debt mountain.


https://www.investopedia.com/articles/investing/040115/reasons-why-china-buys-us-treasury-bonds.asp


Originally Posted by: RobN 


Except that there are obvious downsides for China:



  1. It would push the USD down, delivering losses on their investments and making Chinese imports more expensive

  2. It would invite US retaliation; indeed if the USA was unable to finance its trade deficit it would have to reduce imports and/or see the USD continue to weaken 

  3. The Chinese would have to find other homes for their huge trade surpluses - as well as any money they pull out


So, yes, a dangerous game - but almost certainly more so for China.


Location: South Cambridgeshire
130 metres ASL
52.0N 0.1E


Bugglesgate
30 April 2020 23:44:05


 


Except that there are obvious downsides for China:



  1. It would push the USD down, delivering losses on their investments and making Chinese imports more expensive

  2. It would invite US retaliation; indeed if the USA was unable to finance its trade deficit it would have to reduce imports and/or see the USD continue to weaken 

  3. The Chinese would have to find other homes for their huge trade surpluses - as well as any money they pull out


So, yes, a dangerous game - but almost certainly more so for China.


Originally Posted by: Gandalf The White 


 


One can't help feeling this will all accelerate the  crumbling of the  world trade edifice - it wasn't looking too good before all this.  If Trump gets another term I think we are going to see fundamental changes and probably even if he isn't.  Lots of people and countries are pretty hacked off with China just now.


The US and China are 2 bookends in the current set up, both are likely to suffer from its demise, not just China. 


Chris (It,its)
Between Newbury and Basingstoke
"When they are giving you their all, some stagger and fall, after all it's not easy banging your heart against some mad buggers wall"

Remove ads from site

Ads