--- In FairfieldLife@yahoogroups.com, nablusoss1008 <no_reply@...> wrote: > > > > --- In FairfieldLife@yahoogroups.com, "John" <jr_esq@> wrote: > > > > Buck, > > > > The Red Chinese are more likely non-meditators. Yet in material terms, > > they appear to be properous than most countries in Southeast Asia. They've > > bought about one trillion dollars in US government bonds. Are you saying > > they are delusional? > > > Anyone buying a trillion dollars in US government are delusional :-) > > Another thought; what would the US do if the China and Japan wanted to cash > in on these huge loans ? Would the US be able to pay ? >
Nabs, That's a good observation. I was hoping Buck would answer this question. Regarding your question, I would think that the US Federal Reserve Bank has enough money to pay for two trillion dollars to cover both countries' demands. At the present moment, the Bank owns about six trillion dollars in government bonds. However, the effect of paying those bonds would flood the world with excess dollars in the world market. As such, the value of the dollar would plummet in the market. Also, inflation of the American prices of goods would rise. So, it would be wise for both countries to let their investments stay for the long run. JR
