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Gotcha. Thanks for the reply. Is it likely China would try and do something crazy like that?
by dev1n 11y ago
Gotcha. Thanks for the reply. Is it likely China would try and do something crazy like that?
- vkou 11y agoThey can ask for whatever they want, but they won't get it. (And they won't ask.) What they can do is start selling the debts they own for cash on the open market.
- dev1n 11y agoand that would cause a run from the yuan, right?
- vkou 11y agoI'm not sure - it will, however, make it more expensive for the US to sell new bonds. (Why lend Uncle Sam $100 at a 1% interest rate, when you can buy a piece of paper that says Uncle Sam will pay you $100 next year for $98 from China?)
- coliveira 11y agoYou understand they use dollars to keep their currency afloat, right? If they sell all their dollars, there will nothing to stabilize their currency.
- Keyframe 11y agoWhat can they do? They can sell their US IOUs at a loss.