If China or any other entity quits buying treasury bills en masse, the whole government may go broke. They have no money. The tax dollars trickling in do not come close to matching the spending frenzy we have been seeing in Washington since October.
Their remaining solution will be to crank up the printing press and inflate the currency. That, I suppose, and confiscating the wealth of the few that still have any.
Either real cutbacks or QE (quantitative easing ie the Fed "prints" money in which to buy Treasuries.) does the trick. We're very close to pushing them over the edge; I'm not even sure we need the Chinese to stop buying.
The boys at CFR seem to think US savers will step in to fill the breach. My goal is to educate conservatives that that is the last thing you want to do. Imagine, loaning money to the very agent of your oppression.
>> the whole government may go broke
Won’t happen.
>> Their remaining solution will be to crank up the printing press and inflate the currency.
That’s what they’ll do. On the rare occasion they admit to it, they will call it [cough] “monetizing the debt” and hurriedly move on. It sounds nicer and less threatening than “debasing the currency”.
>> That, I suppose, and confiscating the wealth of the few that still have any.
I will be happy to hand over some of my lead to them, in that case.