Some time ago, the Vice President of the CCP’s Central Bank said (several times, actually) how it was a losing proposition for Communist China to lend the USA government money (buy our bonds) when the USA government depreciates the real purchasing value of our currency far faster than compensated for by the interest on the bonds.
Lend 1 billion, get back 1.05 billion YES... But that 1.05 billion will, when finally received, only actually purchase 0.6 or 0.7 Billion of merchandise, material, products, services.
So Bejing suffers two losses. First, it is losing today...not getting, buying things it wants or needs today. Deferred investment in their own country.
Second, when China finally gets their bond money back it will only buy them LESS goods and services than when they lent the funds in the first place.
If there’s anything the Communist Chinese bankers understand, and understand well, it is how capitalist free markets function.
Making the obvious point that interest rates are way too low, and that what Biden and his sycophant Powell have done is created the situation where we need early ‘80s interest rate levels.
If the Zoomers and Millennials thought 7% was rough, wait till they see 14% mortgages.