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US is exporting $500 billion currency to China; And China is investing that money back in https://en.wikipedia.org/wiki/United_States_Treasury_security https://
by known 8y ago
US is exporting $500 billion currency to China;
And China is investing that money back in https://en.wikipedia.org/wiki/United_States_Treasury_security https://en.wikipedia.org/wiki/United_States_Treasury_securit... resulting in $1,181 billion debt to USA
- seanmcdirmid 8y agoIf you include HK and Taiwan, they own a whopping $1500 billion in US debt via treasuries. But these are just savings instruments for them, a way to deal with excess foreign reserves without messing with their own exchange rates. It isn’t like the USA is begging them to buy treasuries, more like treasuries are provided as a service that makes the dollar so useful in trade. The yuan does not provide the same service to other countries, nor could it since it isn’t fully convertible anyways.
- known 8y agoUnlike Yuan, US$ is https://en.wikipedia.org/wiki/Petrocurrency https://en.wikipedia.org/wiki/Petrocurrency
- seanmcdirmid 8y agoThe dollar is the petrocurrency because it is fully convertible and because the US government will always trade it for treasuries (no matter how much), not the other way around. It is extremely safe and liquid, so everyone (even China) uses it for trade.
- function_seven 8y ago$1,500 trillion? Did you mean to say $15 trillion, or am I misunderstanding?
- seanmcdirmid 8y agoTypo-fixed.