US and China

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.

24 Comments
25 Comments
Posted by l4wd0g

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.

Posted by Sackmanjones

By calling the us debt china would go into hyper inflation. Don't know the real term but basically it means a loaf of bread could cost 1 million dollars. In short cause I'm tired, calling the us debt would not only destroy the us economy but also destroy chinas.

Posted by drGiggless

what is this? i don't even

Posted by Sackmanjones
@drGiggless

what is this? i don't even

Your right. Oh what horrible thread did I just answer too. Now I'm gonna get a lot of political shit. This is what I get for answering threads half asleep
Posted by Rebel_Scum

Yes...yes <twiddles the end of skinny moustache>

Posted by selbie

@Rebel_Scum said:

Yes...yes <twiddles the end of skinny moustache>

Posted by YoThatLimp

Where are you getting the 1/3 of US debt?

Posted by McGhee

If China wrecks us then who is going to buy all of their shit?

Posted by Jay_Ray

Or, you know, they say fuck China, not pay back debts and go to war and since they would already be at war it would not be a thing. Also the world economy would then sky rocket because nothing ends an economic crisis like a world war.

Posted by geirr

I gotta try some of this Pot US, sound wicked.

Posted by NTM

Are you saying... WORLD WAR 3!? RUUUN! FUUUCK!

Edited by FourWude

Old news from 2008 is old. All of this was immediately on the cards once Lehmann Bros collapsed.

Fact. China ain't getting repaid shit from the US, and botn nations know it. At some stage the greater economic shit will hit the US. It will make the current economic crisis look like a skidmark compared to diarrhoea laden underpants.

Posted by TheDudeOfGaming

The Cold War never ended, the arms race did, but there are 2 sides that are still bitter rivals. And it's not just US vs China but west vs east. So...yeah, fuck geopolitics.

Posted by Barrock
Posted by l4wd0g

I forgot to mention the rare earth elements. Maybe that should in another blog post about the friends of China and how they are exploiting Africans. My Wife's teachers at John Hopkins were saying that the next major wars will be fought for drinkable water. Just a thought.

Posted by Canteu

Somebody listened to the CoD:Blops 2 podcast...

Posted by l4wd0g

@Sackmanjones said:

By calling the us debt china would go into hyper inflation. Don't know the real term but basically it means a loaf of bread could cost 1 million dollars. In short cause I'm tired, calling the us debt would not only destroy the us economy but also destroy chinas.

Right, mutual destruction. It was the same policy with the nuclear arms race with between the US and USSR. ,

Posted by Jeust

Nothing like a new Call of Duty launch to put fan's panties in a twist.

What is the worth of worrying about something you have no hold over? Could you prevent China from calling the debt? Or the US from doing whatever?

Posted by l4wd0g

@FourWude said:

Old news from 2008 is old. All of this was immediately on the cards once Lehmann Bros collapsed.

Fact. China ain't getting repaid shit from the US, and botn nations know it. At some stage the greater economic shit will hit the US. It will make the current economic crisis look like a skidmark compared to diarrhoea laden underpants.

It's current, and China still is investing in US Bonds. Your right though, the US is F*ed in the A in the long term. Look at the fall of Russia's economy in 1998. Right now 1 Russian ruble (dollar) is worth $0.03 US dollars. That's 3 damn pennies.

Posted by chrissedoff

You're only talking about the portion of foreign debt, and even then I think it's less than a third of that. The great, great majority of U.S. debt is owed to people within the U.S.

Posted by Grilledcheez

@l4wd0g: I can't find any real figures that say China holds 1/3 of our debt. I believe it's closer to just over 1 trillion dollars.

Posted by spartanlolz92

and toppling the world reserve currency would be smart. sure they could hypotheticaly do that but russia couldve hypotheticaly nuked us over vietnam people only take drastic measure in extreme cases unless their crazy. same law applies to countries now if they actually advance ahead of us economically then i might be worried.

but considering that the work force of china will shrink by 10% in 30 years and that it will be the biggest pension nation in the world due to their imabalance in genders ,due to the one child policy they have alot to worry about.

Posted by Tim_the_Corsair

Have your World War 3 so that Australia can claim out rightful place as benevolent rulers of the post-apocalyptic future.

WHO ARE THE CONVICTS NOW, BITCHES?! WHO ARE THE CONVICTS NOW?!

Posted by NlGHTCRAWLER

How about we just all become one country and focus all our attention on those mo'fucking mole people. They must be stopped.

Posted by Mirado

@l4wd0g: You do realize that rare earth elements actually aren't that rare, right? Some are more common then lead.

It's just cheaper to get it from China right now. If they ever pulled a "Naw, son" like in BLOPS 2, the US would just shrug it's shoulders and get it from practically anywhere else, including in the US proper. It'd just take a bit to restart production as most countries backed off once China flooded the market.