Greed fatally compromised national security. Those countries have political agendas. They can use their leverage to achieve their strategic goal in geopolitics. Not that their economy could be spared. On the other hand, if economy deteriorates bad enough, they can ditch their U.S. assets in well-coordinated moves to cripple U.S. economy as bad or worse than theirs.
When the time comes, they will enjoy forcing Uncle Sam to kowtow.
We've been down this road before, no? Discussing ferners dumping bonds?
Bond dumping means there must be a buyer. If things are so bad a ferner needs to dump, even for geo-political reasons, someone is going to want a big discount. This would mean a high interest yield to maturity. If enough bonds were sold, world wide interest rates would be affected. The issuing country's new issues would have to reflect that rate.
Let's say the world financial situation deteriorates to the above hypothesis, the ChiComs and the RooskieComs try to ruin U.S.A. economy, whose side would you want to be on?
Worst case future scenario would see Uncle Sam offering higher yields and ferners putting their eggs in EUrotopia or other socialist countries' basket. In a time of financial crisis, I wouldn't take that bet.
yitbos