By the way, the only non-western country that could support a large scale war of some sort is Russia. Although they make over $500 billion/year form export and only 5% of that is to China, so starting any kind of war is an economical suicide.
By the way, the only non-western country that could support a large scale war of some sort is Russia. Although they make over $500 billion/year form export and only 5% of that is to China, so starting any kind of war is an economical suicide.
No, it's an important distinction. If China can withdraw, they can pull out all in one go and leaving the US to hold the bag for $1 trillion. The reality however is that China can't. Even if China stops buying US treasury bonds completely, it'll still take a long time before they are completely out, during which time the US would be continually selling new bonds to the rest of the world. Therefore, it's really insignificant. China would just spend the same money somewhere else thus now really affecting anything.
Can we please stop being irrational and debating over hypothetical wars that could potentially end with Earth being destroyed should last-resorted weapons be used, and instead look at more of the current issues that are ongoing?
Like this for example: http://www.bbc.co.uk/news/world-middle-east-19160410
China will team up with Mexico, The Middle East, North Korea, Sierra Leone, Democratic Republic of the Congo, Sudan, Somalia and Sweden.
The United States will get "The full backing" of the United Nations, but only Germany and Great Britain will actually help out. The other countries will hide in a corner, surrendering at the first sign of the war coming close to their country.
The Battleground for this war will be Antarctica.
It is not as simple as you think. you cant JUST sell more new bonds as you wish.
debts needs to have equity to back them up. if your have too much debt that surpasses your GDP, which means you borrow more money than you can make, who will lend money to a country with such high risk? this is exactly what happned in some european countries right now, and their bonds go down like trash.
And you have to offer interesting yield to attact buyers. how can you make sure US government bond always give the highest interest rate that people would prefer your bonds than others.
things are not this simple, and it is never easy to find a buyer for such chunck of debt.
If the US starts to drop nukes on china, china will start to drop nukes on the US. Then every 1 could play fallout without a computer
I wouldn't fight on either sides. Only way I'd go to war was if someone decided they want to own a part of Canada.
Israel alone could fight an even match. Add America, and pretty any country is done for
Apparently i didn't explain myself right (or you made an effort to bend my words). Ill try to explain better.
Those $11 trillion you mention, that are called "held by the Public" are NOT the problem. Those 11 trillion consist of regular bills, trust funds, the Federal Reserve, social security, etc. That's internal marketable debt, which is hardly the issue (obviously, if it gets out of hand, it results in "foreign debt" but that's another issue).
The problem is the foreign public debt. That is what your country owes, to other countries and is usually considered "your debt". These bonds issued by the government can be due in up to 20 years, but they aren't forever. And when they are due, the government has to pay.
You are entitled to ignore China´s importance. But nobody who owns a business would ignore their biggest "client" that is responsible for 26% of their income. Like i said, if for some reason, China stops buying US bonds, ill bet you there will be a huge crises in the US. China = fresh fast money... nobody in the world buys like they do, at this point in History.
Anyway... staying on topic, this is one of the biggest reasons why Tibet is still Chinese, for example. Nobody will go to war against China (they dont want it either).
Countries will always go to war if they get something out of it. The next war will be over resources. China is going for the south China sea, the rare earths in Greenland, oil in the artic and Canada, a confrontation will develope at some point. It won't be a land war but one of isolation. At first China will lose 350 million customers which will create unrest and that is only if the US lets them trade with the rest of the world. Most of their oil and raw materials comes via the Sea, with 70 submarines and 11 carriers it could be easly stopped. If the US loses China as a supplier 50 other countries will jump at filling the need. Plus it would solve the US unemployment problem.
As for sides China has two countries of value, Russia and North Korea. You would think North Korea would jump at another shot at South Korea but they are a wild card, lots of subs would help and a land war would spread the conflict but now that they have the bomb if they start losing they will use it and suck China and Russia into a much bigger war. North Koria has been trying to do that sine the war ended. If Russia enters the conflict they will pull in the xxxstans and NATO will join the US. Japan will enter to get back the islands China and Russa are holding. Most of the South China Sea countries will join the US to claim their share of the South China Sea. If China talks Iran into joining it's side Turkey is a match to contain them. Pakistan will not join because it could pull India into the conflict. Ukrain will unhappily Join Russia, Georga will join NATO. Argentina will make another grab for the Folklands.
Bottom line is, it's a no win
---------- Post added 2012-08-07 at 10:18 PM ----------
China's most powerfull weapon is the dollars it holds in it's reserve, if war were to break out China could flood Japan, South Korea, Austria and Europe with paper currency, just think of what would happen if 500h billion dollars was dumped from planes over major cities, the value of the dollar would drop to nothing in those countries and the US ecomony would crack.
Wow. I don't even know where to begin. Are you actually serious? That is almost completely wrong in every single way.
That $11 trillion is the problem. That's the size of the US public debt (held by the public). I get what you are trying to say, that internal debt is not a big problem compared to foreign debt, but you are wrong about both what debt held by the public actually means, as well as the size of the foreign debt.
For the record, foreign held debt stands at a total of $5,264 billion. Debt held by China is $1,169 billion. That is actually just over 22%. So basically you are completely wrong.
And that's part of the $11 trillion.The problem is the foreign public debt. That is what your country owes, to other countries and is usually considered "your debt".
Debt doesn't mean income.But nobody who owns a business would ignore their biggest "client" that is responsible for 26% of their income
How can you safely assume the U.S would have started it? Like when the US started WWI and WWII? I don't know if you have noticed, but China is purposefully making attempts to reach military parity with the US and given the chance surpass the US.
I know that may sound delicious for any non-American, but keep history in mind. The US did not gain its power through imperialism as enemy nations suggest. The US gained it's power by being called in to help mop up two massive wars. We fought whole-hearted two times in Europe when we really didn't have to step foot there. Our war with Japan was because we were the ones attacked first by their bombs.
The bottom line, unlike any previous world power, the US was outright handed global hegemony. When your country has so many different nationalities all within its borders, the world tends to trust you more. China is mostly a Chinese nation looking out for the Chinese, while the US is everyone. The only power that should ever surpass the US would be the UN or a body like the UN. No single-raced nation better ever take over Earth, just won't end well.
In the long run, it's possible China is responsible for much of the West's economic downturn. Constant industrial hacking often backed by the Chinese government, meanwhile the Western powers jail its own hackers. If the economic downturn continues, I could see fingers pointing a bit more toward China.