Quote:
Originally Posted by Why_Yes_I_Do
Maybe it's just me and my non-finance understandings. But uhmmm... for everyone that bagged on Reagan's trickle down economics policy, I'm skeptical that the "Presto Change O" policy is gonna be a winner. I realize Joey Bribes is in Xi's jock strap and all, but I doubt the Chinese are going to go all in and buy those bonds, because most other major countries lay in the same danged hole that we dug ourselves into. It's something of a financial mass burial site - IMHO.
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they aren't going to mass dump them as several market challenged posters have claimed either. first, they can't for bonds bought less than 1 year. those bonds cannot be sold (dumped) on the open market until they they are held over 1 year. and the yield is usually 5 to 10 years so even dumping them after one year doesn't come close to the ideal yield they were sold under. so it's a marginal gain. basically they get their money back, nothing more.
now which economy can withstand a mass short of US Treasury bonds? the US or China?
the answer is easily .. the USA. by a mile and then some. oh it would short term fuck the US in a economic and money crunch but .. it would cause a 1929 market crash in China, as they have propped up their house of cards economy based in large part by holding US Treasury notes that they exchange for dollars and use those dollars to keep their own currency from dropping like a rock. and thus their economy.
so any threat that China, one of the top three holders of US treasury foreign debt (Japan and the UK are the other two) is a paper tiger in every way.
as it stands with fiat currency in this case oddly enough a good thing .. otherwise not so much .. we'd just print up a trillion bucks and drop it off over Beijing from a C-130 and say .. "here ya go!"
BAHHHAAAAAA
