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Two things you can do with US debt: 1. Buy precious metals such as gold and silver and then take physical delivery - COMEX is required to accept US debt as an
by patrickg-zill 18y ago
Two things you can do with US debt:
1. Buy precious metals such as gold and silver and then take physical delivery - COMEX is required to accept US debt as an equivalent to cash. This would raise the price of silver significantly - you can just about corner the market for silver with about $5B to $6B. Buying even a fraction of the gold that China has stated they wish to acquire would send the gold price soaring.
2. Buy other assets such as real estate, commodities like copper, aluminum, steel, wheat, chicken legs, etc. Competing with Americans and Europeans for some of these commodities would also drive the price up.
Bottom line: inflation is coming to America and possibly Europe (which may be in better shape) as well.
- teyc 18y agosooner or later, China would have to bring trade back into equilibrium. The purpose of debt is to have it repaid one day. This can only be when Chinese are willing to pay for U.S. goods. This can be either when both countries enjoy some kind of parity. This is not as far fetched as it sounds. The savings rate of Chinese Gen X'ers are 0. They are voracious consumers. If Chinese goverment decided to fund local debt instead of foreign debt, U.S. manufacturing could conceivably come back and sell into China in the future.