$1.6T in century-old Chinese bonds offer Trump unique leverage against Beijing

Fox Business ^ | May 14 2020 | Jonathan Garber

[LucyT]

.

PING

[fhayek]

The Chicoms will say it’s Taiwan’s debt.

[Jonty30]

At least it can be used to force China to recognize Taiwan.

[yoe]

BINGO!

[Dr. Sivana]

The Chicoms will say it’s Taiwan’s debt.

The ChiComs don't acknowledge Taiwan. If they did, Hong Kong would have gone to it.

[Pearls Before Swine]

The Chicoms will say it’s Taiwan’s debt.

Or, failing that, find a bunch of Confederate bonds that they want redeemed.

[neverevergiveup]

I love it!! China absolutely needs to be defanged. They are a world-wide threat.

It's not just Communism. It's Communism combined with a multi-centuries old cultural belief (by some but not all Chinese citizens) in the superiority of the Middle Kingdom - the ‘Center of the Universe’. Even those Chinese citizens who have become westernized, fear and respect the perceived inevitability of world dominance by the Middle Kingdom.

[PIF]

Mainland China sends us the virus, and some bank wants to fiscally break the non-communist ROC? Could only make the CCP mainlanders happy.

[DoodleDawg]

The Chicoms will say it’s Taiwan’s debt.

But they also say Taiwan is part of China. Not that I expect them to honor it anyway.

[WildHighlander57]

Call in the favors, errrrrrr loans due.

China, it’s time to pay the piper...

[fhayek]

Yeah, kind of puts them in a pickle.

[x]

You beat me to it.

Confederate bonds or confederate money used to turn up on sitcoms, most notably on The Andy Griffith Show, but there were others.

[reed13k]

They can’t unless they want to give up on their 1-china policy.

[billyboy15]

There is a well founded belief that if you owe the bank a million dollars and cannot make the payments you are in trouble. But if you owe then bank a billion dollars and cannot pay then it is the bank which is in trouble.

Think about it.

[Zhang Fei]

[Or, failing that, find a bunch of Confederate bonds that they want redeemed. ]

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Confederate bonds were issued to secure funding to fight the Civil War. The Chinese bonds were issued to build infrastructure, and were technically secured by that infrastructure. The Chinese are still using the infrastructure that those bonds paid for, ranging from utilities to railroads.

[wildcard_redneck]

That saying used to have ‘million’ in it instead of ‘billion’, inflation changes everything.

[pepsi_junkie]

They would then be acknowledging that Taiwan is not China. Not going to happen.

[NRx]

There is a problem here. The United States is also in default of bonds issued prior to 1933. At the time the US was on the gold standard so we were borrowing gold (which was money at the time), and explicitly promised to repay in gold. But when we abandoned the gold standard in 1933 we defaulted on the bonds, returning only paper currency. There are so many countries that have defaulted on debt at time or another, that this is just not going to fly.

[pepsi_junkie]

How this could play out: Trump supports collection of the debt. China laughs. Trump says 'you refuse to pay your debt, we take it out of our debt to you. Or we freeze your assets here, which do you prefer?'

Then China cooks up another virus and...