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More specifically, there's going to be inflation to pay. Not necessarily a bad thing if you owe $1T in fixed rate loans.

• pcurve 10y ago
  "Not necessarily a bad thing if you owe $1T in fixed rate loans." It's fixed rate loans, but it's also fungible assets that can sold before maturity. I don't think China will sit idly and watch their tbill ands forex reserves turn into paper.
  • arcanus 10y ago
    > I don't think China will sit idly and watch their tbill ands forex reserves turn into paper. What will they do? Unloading them will flood the market, collapsing the price.
    • pcurve 10y ago
      It has already begun. $1 trillion is already down from $1.25 trillion just couple years ago. That's a sizable dumping. https://www.ft.com/content/714117d0-ddd1-11e6-86ac-f253db7791c6 https://www.ft.com/content/714117d0-ddd1-11e6-86ac-f253db779...