Discussion on:

It's impossible for the US to default

Message 18 of 17

View entire thread
0 Votes

Where else can China invest such large amounts of money and get such immediate return?

No, not in getting their money paid back, but in almost immediate new spending.

One of China's worst fears would be for the US to have a drop in consumer spending. Walk through almost any store and look at how many items were made in China. China has to keep the US consumer spending money to keep it's own economy moving and growing.

Another benefit that China gets is that as the US government borrows more money from China it is harder for the US government to make any diplomatic or monetary moves against China.

I fully expect at some point that China will demand that the US severe all military and diplomatic ties with Taiwan. If not demand that the US actively assist China in taking control of Taiwan.

But, those are just my thoughts on the situation.