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The bigger question is why lend to someone that has no means of ever repaying their debt?I have pondered this many times, and when placed relative to our defeating the USSR without firing a shot, I look at China taking the same strategy as we did.What would happen if they cut us off tomorrow? Answer, is we would print money and the dollar would collapse in a year as well as our economy.The Chinese have been positioning themselves to be the world currency, the only thing that is slowing them down is our ability to produce oil on private land, in turn keeping the dollar locked to the price of oil.I hate to think what devious plan is underway to change the pinnacle of power in the world, what is in play that could unseat us?I'm not saying China is in this alone, I think Russia is helping them with their own interests in mind.Conspiracy? You betcha, but seems pretty obvious doesn't it?
Well, the debt is all over the place. I almost wish that China held all of it and would cut us off from any more. It's not going to happen though. I don't know how much more they can borrow, but considering that Obama wants to eliminate the debt ceiling, they don't plan on stopping anytime soon. At some point, just the interest payments will be really hurting us..............as if they're not now. http://finance.yahoo.com/news/biggest-holders-of-us-gov-t-debt.html
Of course the outcome is beyond my comprehension as to what would happen, but looking at Greece, it's not all that bad for everyone, just Govt employees mostly.Lets assume the dollar collapsed, the Govt would instantly have to lay off 10s of thousands of people, people that most likely couldn't make it in the private sector, which is why they got a Govt job in the first place.Now granted, it would be pretty miserable for many, but I believe a majority of us would be just fine, maybe have to cut back and lose the ability to purchase certain products, but Hell, were spoiled as it is.Of course this is the best case scenario, the worst case would be 50% unemployment and soup lines.
The government could cut it's civilian workforce in half or more, and I wouldn't notice a thing.
China has been a net seller of US debt for a bit.The FED is the one buying up most of the debt with its QE-ternity program.