General Discussion

Sam1

(498 posts)

64. China is not going to stop buying or rolling over the US Bonds that it holds.

Tue Dec 6, 2016, 08:23 PM

Dec 2016

The bonds earn interest while the cash that they would get doesn't. This is not a problem since the bonds are denominated in US Dollars. China also likes to hold large amounts of US Bonds because it can use these holding to manipulate the exchange rate between American and Chinese money. By keeping American Dollars over valued in terms of the renminbi china can increase their exports to us and decrease our exports to them. These bonds come from the trade deficit not from loans.

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How badly would it roil the markets if China recalls their ambassador and closes their embassy here [View all] DemocratSinceBirth Dec 2016 OP

Or, if Trump really pisses them off... JaneQPublic Dec 2016 #1

Loans have call dates. I don't think they can be arbitrarily called in. DemocratSinceBirth Dec 2016 #2

That's good to know. JaneQPublic Dec 2016 #8

They could however dump all the bonds they own on the open market GummyBearz Dec 2016 #24

They could dump though n/t TubbersUK Dec 2016 #29

Please explain to me how that would work? DemocratSinceBirth Dec 2016 #30

Sufficient political tension and/or US economic factors TubbersUK Dec 2016 #48

China is not going to stop buying or rolling over the US Bonds that it holds. Sam1 Dec 2016 #64

Would Walmart go out of business? world wide wally Dec 2016 #3

Without Chinese goods many retail stores would go out of business. DemocratSinceBirth Dec 2016 #5

Financial armageddon I would say. In fairness that's just an indication they they are very upset el_bryanto Dec 2016 #4

Pretty bad, but it's not like China can kick us to the curb Calista241 Dec 2016 #6

China has other means of financial retaliation. DetlefK Dec 2016 #9

People will still buy less Chinese goods, which threatens their own economy. Calista241 Dec 2016 #12

You think, people would stop buying cheap crap? DetlefK Dec 2016 #20

You can't call in a treasury bond GummyBearz Dec 2016 #26

How would it hurt us if they dumped our bonds. We still don't have to pay until the call date. DemocratSinceBirth Dec 2016 #31

If they were to dump all our bonds it would flood the market... GummyBearz Dec 2016 #34

Thank you. That makes sense. DemocratSinceBirth Dec 2016 #36

Another thing on this topic... GummyBearz Dec 2016 #49

China also holds some of Trump's loans. DemocratSinceBirth Dec 2016 #13

"Give us $100 billion." dumbcat Dec 2016 #38

Thanks, Dumbcat! ProfessorGAC Dec 2016 #54

China cannot say "Give us $100 billion." hack89 Dec 2016 #40

We buy $482 Billion dollars of Chinese goods - why would they do that? jmg257 Dec 2016 #7

There are no US-owned factories over there. China only allows joint ventures for foreign investors. DetlefK Dec 2016 #10

Ah - thanks! jmg257 Dec 2016 #17

They own 51% of such factories Demsrule86 Dec 2016 #41

Precisely Sherman A1 Dec 2016 #16

China is used to privation. We aren't DemocratSinceBirth Dec 2016 #19

well, then the donald-elect could stop making payments on his chinese loans spanone Dec 2016 #11

What if the financial world hears that the new US-policy is to not pay debts? DetlefK Dec 2016 #22

The trump administration is playing a very dangerous game. They are interferring with still_one Dec 2016 #14

The strategic ambiguity of the One China policy has kept the peace for nearly fifty years. DemocratSinceBirth Dec 2016 #15

I understand that, not unlike Hong Kong, but if they continue to push China using still_one Dec 2016 #23

I am sympathetic to the Taiwanese position but not to the point of going to war to defend it. DemocratSinceBirth Dec 2016 #27

I agree still_one Dec 2016 #28

It would end the Walmart Empire randr Dec 2016 #18

Exactly Johonny Dec 2016 #37

It would end a lot more than the Wal Mart empire. It would end a lot of retail DemocratSinceBirth Dec 2016 #42

We should manufacture those things though. Demsrule86 Dec 2016 #44

You would have to give working class Americans huge raises to afford them. DemocratSinceBirth Dec 2016 #45

Probably very bad, but it could be bad for China too treestar Dec 2016 #21

US markets would crash for starters. beachbum bob Dec 2016 #25

IF we make it through heaven05 Dec 2016 #32

Worry when the Chinese start calling in the debt malaise Dec 2016 #33

there will be no way heaven05 Dec 2016 #35

+1,000 malaise Dec 2016 #50

Don't worry he already said he'd repay them "less" than we owe. Say 5 cents on the dollar Johonny Dec 2016 #39

And that is my worry malaise Dec 2016 #52

They can't just start "calling in the debt". hack89 Dec 2016 #43

We know but when one side changes the terms hell breaks lose n/t malaise Dec 2016 #51

No terms were broken hack89 Dec 2016 #55

Yet malaise Dec 2016 #56

How exactly did he do that? hack89 Dec 2016 #57

I wish people would learn how bonds and debt work before spouting off about "calling debt" Dreamer Tatum Dec 2016 #46

It will be bad enough for our economy as China takes over the new Asian-Pacific trade that will Sunlei Dec 2016 #47

It would signal the start of a trade war, not good Warpy Dec 2016 #53

The Chinese own us. Someone should remind ManBaby. Vinca Dec 2016 #58

An economic war would hurt both of us. DemocratSinceBirth Dec 2016 #59

So China gets to tell U.S. Presidents (or President-Elects) former9thward Dec 2016 #60

Should the Chinese government open up lines of communication DemocratSinceBirth Dec 2016 #61

The separatists you refer to do not hold state power. former9thward Dec 2016 #62

We fought a civil war that killed 600,000 Americans to resist southern secession. DemocratSinceBirth Dec 2016 #63