By l4wd0g 24 Comments
Did you know the US and China are currently in a cold war now? It’s not like the cold war with the US and USSR with a military and nuclear build up, but an economic cold war.
Right now, China owns 1/3 of the US debt (approximately 14.3 trillion dollars). They own it in 0% interest US Treasury Bonds*. This is a policy of mutual destruction with the US as well as giving China a huge influence over US foreign and domestic policies.
The way that the mutual destruction works is that China would call in the US Debt. The US would have to print the money, killing the value of the US dollar, to meet the demand. This would effectively kill both of our economies.
*The reason the 0% interest bonds is important is because the US has little to no incentive to pay China back because there are US Bonds that give up to 5% interest, and paying back bond that incur interest is a higher priority.
Let’s say, hypothetically, that the North Korea invades South Korea (as they have just threatened to do). The US would support our allies in South Korea right? Not if China threatens to call in the US Debt if we do. The PotUS would have an extremely difficult decision to make. This is why I cringe when the PotUS says that he is increasing the debt.