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This is a move that does not make sense at all - seriously you start a squabble about a payment service with one of your largest bondholder? It does not make se

This is a move that does not make sense at all - seriously you start a squabble about a payment service with one of your largest bondholder? It does not make sense in a strategic way - what on earth is the goal here, if you want to reduce Chinese sales tell Walmart buying the stuff. It makes no tactical sense - there is not current trigger and the administration is outgoing in a few weeks. The only sense I can see is salting the ground for the incoming administration's diplomacy and there I think they underestimate the ability of the Chinese to pursue long term goals.

aaronbrethorst 6y ago
"It does not make sense in a strategic way" "It makes no tactical sense" This is a pretty good summary of much of the last four years.
jjeaff 6y ago
I agree it makes no sense. But having China as a bondholder does not give them any power over us. Especially when said bonds are delineated in US currency - something the US can print at will.
- klyrs 6y ago
  Thought experiment: US pays China $1T in US fiat. Simultaneously, US cuts $1T checks to every single resident of the US. Chaos ensues. But seriously, wtf would happen in this situation?
  - vkou 6y ago
    Hyperinflation and the collapse of the US economy, and at long last, the introduction of socialism to the United States, (unfortunately, in the worst possible manner). A week later, we'll all be trading cans of gasoline and ammunition for euros and bottle caps. Perfect example of cutting off your nose to spite your face.
    - ficklepickle 6y ago
      We've all seen Red Dawn. Patrick Swayze will save us from the big bad socialists.
  - chrischen 6y ago
    Basically what is happening right now, though not as extreme.
  - mywittyname 6y ago
    Answer: The CARES act was the US government printing $2 trillion bucks and handing checks out to every resident of the US. Nothing happened (the chaos predated the money). Also, it's important to realize that t-bonds and USDs are basically the same thing. A T-bond is, for all intents and purposes, high-denomination dollar bill that can be exchanged for low-denomination bills on an open market.
    - klyrs 6y ago
      You missed the part where I said each resident would get a trillion bucks. Patently absurd, I know, but it's more fun to imagine than today's actual news.
- insert_coin 6y ago
  Is not the money that is the problem, they hold bonds because they specifically do not want US dollars and are waiting for the time when the US (or the world) has something other than US dollars to offer them. They don't want dollars doesn't matter who prints them.
nostromo 6y ago
China sitting on over $1 trillion in US debt doesn’t give them leverage over the US, it gives the US leverage over China.
- tandr 6y ago
  Would you be kind and explain how this is works? (my suspicion is that it is akin "if you owe bank a $10000, you have a problem. If you owe bank a $100mil, bank has a problem", but please don't let this idea influence your answer) Thank you.
  - tyre 6y ago
    China has taken on the risk of us paying the $1tn. If they were to get incredibly aggressive, for example starting a war, then we could clear the debt. We just don't pay. $1tn is a lot of money to any country, even one as large as China. Defaulting on our debt would be a huge fucking deal for us as well, but if the stakes were high enough others would understand that we couldn't pay someone money while at war.
    - hertzrat 6y ago
      Both nations are nuclear armed. Creating a nuclear winter over a debt is a sketchy plan
      - mywittyname 6y ago
        Especially such in small amount. It sounds like a lot of money, but the US War in Iraq tallied over a trillion, with Afghanistan matching that amount. The CARES Act is estimated to have cost $2 trillion. Countries are not going to go to war over such a petty amount of money. The costs of such a war would be 100x that amount, easily.
        hertzrat 6y ago
        The cost of two first world nuclear armed nations going to war can't really be measured in dollars. Even if nukes didn't come into play, I'm listening to Dan Carlin's Hardcore History episodes on the War in the Pacific right now. The death tolls and misery is just staggering, and he hasn't even gotten to the firebombing where I'm at yet.

aaronbrethorst 6y ago

"It does not make sense in a strategic way" "It makes no tactical sense" This is a pretty good summary of much of the last four years.

jjeaff 6y ago

I agree it makes no sense. But having China as a bondholder does not give them any power over us. Especially when said bonds are delineated in US currency - something the US can print at will.

klyrs 6y ago
Thought experiment: US pays China $1T in US fiat. Simultaneously, US cuts $1T checks to every single resident of the US. Chaos ensues. But seriously, wtf would happen in this situation?
- vkou 6y ago
  Hyperinflation and the collapse of the US economy, and at long last, the introduction of socialism to the United States, (unfortunately, in the worst possible manner). A week later, we'll all be trading cans of gasoline and ammunition for euros and bottle caps. Perfect example of cutting off your nose to spite your face.
  - ficklepickle 6y ago
    We've all seen Red Dawn. Patrick Swayze will save us from the big bad socialists.
- chrischen 6y ago
  Basically what is happening right now, though not as extreme.
- mywittyname 6y ago
  Answer: The CARES act was the US government printing $2 trillion bucks and handing checks out to every resident of the US. Nothing happened (the chaos predated the money). Also, it's important to realize that t-bonds and USDs are basically the same thing. A T-bond is, for all intents and purposes, high-denomination dollar bill that can be exchanged for low-denomination bills on an open market.
  - klyrs 6y ago
    You missed the part where I said each resident would get a trillion bucks. Patently absurd, I know, but it's more fun to imagine than today's actual news.
insert_coin 6y ago
Is not the money that is the problem, they hold bonds because they specifically do not want US dollars and are waiting for the time when the US (or the world) has something other than US dollars to offer them. They don't want dollars doesn't matter who prints them.

nostromo 6y ago

China sitting on over $1 trillion in US debt doesn’t give them leverage over the US, it gives the US leverage over China.

tandr 6y ago
Would you be kind and explain how this is works? (my suspicion is that it is akin "if you owe bank a $10000, you have a problem. If you owe bank a $100mil, bank has a problem", but please don't let this idea influence your answer) Thank you.
- tyre 6y ago
  China has taken on the risk of us paying the $1tn. If they were to get incredibly aggressive, for example starting a war, then we could clear the debt. We just don't pay. $1tn is a lot of money to any country, even one as large as China. Defaulting on our debt would be a huge fucking deal for us as well, but if the stakes were high enough others would understand that we couldn't pay someone money while at war.
  - hertzrat 6y ago
    Both nations are nuclear armed. Creating a nuclear winter over a debt is a sketchy plan
    - mywittyname 6y ago
      Especially such in small amount. It sounds like a lot of money, but the US War in Iraq tallied over a trillion, with Afghanistan matching that amount. The CARES Act is estimated to have cost $2 trillion. Countries are not going to go to war over such a petty amount of money. The costs of such a war would be 100x that amount, easily.
      - hertzrat 6y ago
        The cost of two first world nuclear armed nations going to war can't really be measured in dollars. Even if nukes didn't come into play, I'm listening to Dan Carlin's Hardcore History episodes on the War in the Pacific right now. The death tolls and misery is just staggering, and he hasn't even gotten to the firebombing where I'm at yet.