Think that through a bit. The chinese don't show up at the treasury auction? What really happens? Prices decrease. Yields increase. The rest of us buy the notes with increasing yields. The world keeps turning, no? If that is stupid just say it, I'll live. But please explain the scenario a little.
Ok. Since our government is doing everything they can to stop us from production, and now they are doing everything we can to prevent us from buying from aboard. So, what we going to do now? Cannot production, and cannot buy?
But then the Fed will just start buying up Treasuries that China doesn't take and China's existing Treasury investment starts going down the tubes as the Dollar tumbles. Let the wars begin! Trade wars, that is.
It would be the correct course of action. Current trade policy is no less than the US committing slow economic suicide - China should not have access to major markets until it has a real currency. Period, full stop. Unfortunately, I doubt it will happen.
And the all US has to do is put an asterik to every CUSIP held by the Chinese. If this becomes a trade war, all sides get bloodied, but China will get destroyed and probably have an internal revolution.
You meant default. It happened numerous times in last few decades to numerous countries. It is U.S. turn now. Talking about running for the banks global scale?
Wait until people see the tighty whitties go up at Walmart by 20% That will give them something new to bitch about.
US is clearly more dependent on the Chinese than they are on the US. Chinese manufacture products sold to virtually every country in the world. US is a large trading partner and would be painful to lose. Like losing your biggest customer. They will continue on like they have for the past 5000 years. Now if the US dollar loses reserve currency status the game is over.