The population would not go hungry, but it would be disastrous, and Americans would have to cut back the lifestyles we have become accustomed to.
2006-12-12 02:36:48
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answer #1
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answered by Time to Shrug, Atlas 6
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No, that's crazy talk. First you should know that China's purchases of US treasuries represents only a small fraction treasury bond sales (about 10%). In comparison to total US federal funding, that's a REALLY tiny piece of the total -- about 1.5%. The United Kingdom buys FAR more treasury bonds than China. So no, we do not depend on Chinese lending to a meaningful degree. The very worst case scenario if all Chinese entities quit buying US bonds is a bit less demand at treasury auctions, resulting in slightly higher interest rates to induce enough demand to pick up the slack. Even that is no guarantee, as a million other things also affect interest rates. Rather than expect China to quit buying our bonds, its much more likely that their need to invest the hard currency they receive from trade surpluses will grow while our deficit continues to rapidly shrink (you DID know it is shrinking?), to the point where their need to invest totally swamps the supply of Treasuries available to them. They need us worse than we need them. You should also know where they get the US dollars to buy Treasury bonds. They get them from their trade surpluses with us (ie, our trade deficit). So the US dollars we send to China for imports bounce right back to us to help fund our government so we can pay less taxes. It's a shame people don't understand what a sweet deal that is for us, we're practically scamming China.
2016-05-22 21:37:03
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answer #2
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answered by ? 4
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Most of the world buys US treasury bonds. They are bought and sold on the market just the same as most other major nation's bonds. If China sold all the bonds off that they hold it would cause a temporary market fluctuation but other nations would buy them up pretty promptly. China isn't going to sell them though. They are buying them, like many other nations, to stabilize their own currency.
2006-12-12 02:47:13
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answer #3
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answered by Anonymous
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Some day our government may collapse if other countries stop buying the dollar. Of course the world economy would collapse also if that happened. We could DEVALUE the dollar big time to get out of our national debt and our debt to Social Security.
Politicians must feel the end of the earth will happen first the way they are spending the PORK.
2006-12-12 02:47:48
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answer #4
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answered by Anonymous
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Rather China will go hungary if USA stops the shipment of SOYA BEANS.
2006-12-12 02:45:42
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answer #5
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answered by Dr.O 5
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And they are the only ones?
2006-12-12 02:40:45
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answer #6
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answered by Anonymous
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hell no
2006-12-12 02:34:35
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answer #7
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answered by ? 6
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