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I think they can when the vast majority of the debt (nearly all of it) is locally owned and denominated in their own currency. What stops them simply saying "al
by dageshi 7y ago
I think they can when the vast majority of the debt (nearly all of it) is locally owned and denominated in their own currency. What stops them simply saying "all this debt we owe to ourselves is cancelled"?
- DeonPenny 7y agoVast inflation, being label a currency manipulator, tariffs, and basically stealing most of chinas household income and giving it to corporate would leave a sour taste in their citizen's mouth causing unrest.
- onlyrealcuzzo 7y agoThe same thing that stops the Federal Reserve from doing that. You can't get something from nothing. If the market has priced in that $30T is on reserve, and you just say, lol nvm -- you get incredibly fast inflation. The market reacts to that $30T not being priced in anymore.
- dageshi 7y agoWhich market? The only thing that's directly attackable by the market is the chinese cny peg/trading range and china controls the convertibility of the currency, they can perfectly legally stop their own citizens from taking money out of the country while protecting their peg with their USD reserves. Their bonds aren't in foreign hands, so there's nothing liquid to panic sell or short, there's nothing for the markets to directly apply pressure with. If the currency doesn't fall I don't see where this inflation comes from, cancelling debt essentially owed to a state owned bank just re-starts the credit cycle.
- imtringued 7y agoThe Fed, the ECB and Japans central bank managed to "lol nvm" trillions dollar, euro, etc into the economy without impacting inflation at all. If there was such an easy quick fix for inflation then those institutions would come knocking at your door and beg you to help them.