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But what happens to all that cash they would use to buy the treasuries with? Where is that $1.1 trillion going to flow into?
by topmonk 7y ago
But what happens to all that cash they would use to buy the treasuries with? Where is that $1.1 trillion going to flow into?
- LegitShady 7y agoWhoever sells the treasuries gets the money. That's how buying and selling works.
- topmonk 7y agoYou understand that China is unlikely to just leave the cash sitting around, aren't you? That money will probably end up being dumped on Forex crashing the US dollar.
- LegitShady 7y agoChinese currency is artificially valued and its foreign value depends on their forex exchange and large US dollar reserves. If china dumps us dollars it will devalue the dollar, and it will destroy the chinese currency beyond saving. Thats not a one sided situation, that's a situation far more likely to destroy the chinese than the US. They're using their USD to buoy their crashing currency, not to dump out of spite to try to crash the USD.