4 ms·

So in your opinion, should the US government buy back the $1trillion+ bonds it sold to China?

by ksk 8y ago

RobertRoberts 8y ago
Isn't that how bonds work? [0] Nothing extraordinary needed. The threat is China demanding total payment at once (my vague understanding of the actual real world problem due to debt owed). Something that the US has laws protecting land and home owners [1], but no law says another country can't do this to us. [0] https://en.wikipedia.org/wiki/Government_bond https://en.wikipedia.org/wiki/Government_bond [1] https://en.wikipedia.org/wiki/National_Housing_Act_of_1934 https://en.wikipedia.org/wiki/National_Housing_Act_of_1934 https://en.wikipedia.org/wiki/Homeowners_Refinancing_Act https://en.wikipedia.org/wiki/Homeowners_Refinancing_Act
- ericd 8y ago
  Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once. What they can do, though, is stop rolling over the debt into new bonds, which, given the deficits the US government is running, doesn't seem like a great scenario for the US, as I believe that would force bond yields to rise to entice enough buyers, which would eventually cause the cost of servicing the debt to rise.
  - RobertRoberts 8y ago
    >Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once. But espionage, market and currency manipulation, copyright and patent infringement and a miriad of other activities are illegal, yet China does them with impunity. I can imagine they can demand whatever they want, (they are a sovereign nation) and can use that debt as a bargaining chip to be used in any negotiations. In theory, I think you are correct, in practice, who know what is possible?
    - ericd 8y ago
      I guess, I don't know of any precedents for demanding bond repayment pre-term (though I'm not well versed in that history). Those others all have precedents, and most are things that it's generally accepted that almost all large nations engage in regularly to greater or lesser degrees.
- ksk 8y ago
  Sure, but then the US government is accepting capital from China to finance itself. Is it a high level quid-pro-quo to give China "freer" access to the US market?
  - RobertRoberts 8y ago
    Only if you agree to it? (which is seems we have up till now)

So in your opinion, should the US government buy back the $1trillion+ bonds it sold to China?

by ksk 8y ago

So in your opinion, should the US government buy back the $1trillion+ bonds it sold to China?

Isn't that how bonds work? [0] Nothing extraordinary needed. The threat is China demanding total payment at once (my vague understanding of the actual real world problem due to debt owed). Something that the US has laws protecting land and home owners [1], but no law says another country can't do this to us. [0] https://en.wikipedia.org/wiki/Government_bond https://en.wikipedia.org/wiki/Government_bond [1] https://en.wikipedia.org/wiki/National_Housing_Act_of_1934 https://en.wikipedia.org/wiki/National_Housing_Act_of_1934 https://en.wikipedia.org/wiki/Homeowners_Refinancing_Act https://en.wikipedia.org/wiki/Homeowners_Refinancing_Act

ericd 8y ago
Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once. What they can do, though, is stop rolling over the debt into new bonds, which, given the deficits the US government is running, doesn't seem like a great scenario for the US, as I believe that would force bond yields to rise to entice enough buyers, which would eventually cause the cost of servicing the debt to rise.
- RobertRoberts 8y ago
  >Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once. But espionage, market and currency manipulation, copyright and patent infringement and a miriad of other activities are illegal, yet China does them with impunity. I can imagine they can demand whatever they want, (they are a sovereign nation) and can use that debt as a bargaining chip to be used in any negotiations. In theory, I think you are correct, in practice, who know what is possible?
  - ericd 8y ago
    I guess, I don't know of any precedents for demanding bond repayment pre-term (though I'm not well versed in that history). Those others all have precedents, and most are things that it's generally accepted that almost all large nations engage in regularly to greater or lesser degrees.
ksk 8y ago
Sure, but then the US government is accepting capital from China to finance itself. Is it a high level quid-pro-quo to give China "freer" access to the US market?
- RobertRoberts 8y ago
  Only if you agree to it? (which is seems we have up till now)