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re: U.N. Ambassador Nikki Haley Delivers Economic MOAB With Trade Warning to China
Posted on 7/5/17 at 5:00 pm to lsuguy84
Posted on 7/5/17 at 5:00 pm to lsuguy84
quote:
But I thought China controls so much of our debt that they would be able to cripple US financially?
Last time I checked China owns about $1.2 trillion.
But just for the sake of a thought experiment, what would happen to the Chinese economy if they sold that debt?
It would not be good. Americans would slow down the purchase of Chinese goods.
Why?
Selling American debt would plummet the dollar. High supply begets lower prices. A lower dollar is terrible for the Chinese economy. They love the strong dollar because Americans can afford to buy cheap Chinese goods.
1
Posted on 7/5/17 at 6:06 pm to GumboPot
quote:
But just for the sake of a thought experiment, what would happen to the Chinese economy if they sold that debt?
It would not be good. Americans would slow down the purchase of Chinese goods.
Why?
Selling American debt would plummet the dollar. High supply begets lower prices. A lower dollar is terrible for the Chinese economy. They love the strong dollar because Americans can afford to buy cheap Chinese goods.
China would absolutely take the blunt end of that deal. Not only would I be buying the shite out of the bonds that just entered the market in this scenario, but so would other foreign nations. The demand would quickly eat up that supply and the dollar would bounce IMO.
China would then be left holding the short straw.
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