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Reply #104: China debt [View All]

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Home » Discuss » Archives » General Discussion (01/01/06 through 01/22/2007) Donate to DU
many a good man Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-23-06 04:16 PM
Response to Reply #30
104. China debt
Will's story is a little off because China can't just "call in" the debt. The US T-Notes that line the vaults of their central bank from floor to ceiling don't come due until the due dates written on them.

The real impact will be if China starts refusing to buy our debt. That will cause a real monetary crisis that can't be papered over with gimmickry. Interest rates will have to shoot up crunching credit and the mint will have to crank up the printing presses. The federal government will miss pay rolls. The dollar will lose much of its value, making imports more expensive, etc., etc.

Of course, the whole point is moot if the oil stops flowing.
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