At 8/25/09 10:52 AM, Mehrdad14 wrote:
What ever happened to that trillion debt, and when the fuck are they going to pay it to china.
China won't call in the debt, they can't. It would be as bad for their infrastructure as it would be for ours. Right now the largest buyer of chinese goods is the united states. If they render us unable to pay for their goods, their economy will fail, and since their central bank is already on the verge of collapse, any additional adverse shocks may send the whole house of cards down.
Additionally, China is in debt themselves (to the tune of 60% of their GDP), not to us, mostly to Europe. Calling in a 1 trillion dollar debt and financially crippling an ecnonomy the scale of the US would trigger a mass recall, in which all nations holding debt will call it in, this means that Germany, France, and the UK which would in turn cripple china's economy and probably start a global depression.
The only option China has is to no longer purchase US debt, which is something they are considering.