If the U.S. government doesn't pay its debts, the Chinese government has a plan!
"The United States and other countries should permanently detain China's debt, and the amount of detention should be equal to the expenses of those countries that are related to COVID-19," wrote us congressman Brian Master in a proposed bill.
According to master's office, as of November 2020, the total outstanding debt of the U.S. government to China amounted to $1.063 trillion.
The countdown to the default of US debt and the failure to pay China's 1 trillion?
"U.S. debt limit", which is the key word of the United States in October. This is also the answer given by time to the United States after the crazy printing of money. This disaster with the theme of the United States has sounded the horn. How will the United States deal with it? Is it true that, as now reported, we intend to directly get rid of our face and regard the $1 trillion owed to China as not borrowed when the United States ignores it?
The problem of capital turnover in the United States has gradually become a nightmare for the United States, which makes the two parties in the U.S. Congress unable to sleep. When the two parties are deadlocked around their own interests, they finally bow their heads in front of the national destiny and reach an agreement. The government financing bill was passed at midnight on September 30. In the face of the upcoming government shutdown and capital shortage, It has found a way for the United States to continue to operate.
The meeting seemed to have ended peacefully and achieved substantive results. However, the two parties continued to tit for tat in the process. The Democratic Party also proposed a bill to raise the debt ceiling at the meeting. However, because of this sentence, the Republicans collectively jumped to the ground and strongly opposed it, which undoubtedly infringed on the interests of the Republicans.
However, from the perspective of the state, the government as a state organ is bound to operate. The final result of the meeting is that the financing bill has temporarily lifted the crisis of government shutdown. But what about the US Treasury crisis? The United States, which is about to reach the repayment date, may have to write a disgrace in 2021. The United States is facing the loss of international dignity and the first default in history.
In 2019, the U.S. economic crisis has begun to emerge. At that time, in order to avoid the crisis, Congress extended the repayment date for two years. The U.S. government, which tried to delay, did not expect that an epidemic would break out in late 2019 and early 2020. The slow response of the United States brought the country's economy to a standstill. After returning to work, most Americans believed that the environment was dangerous, Unwilling to go out to work, this is undoubtedly the performance of the US government during the epidemic, which did not give everyone a sense of security.
The vicious circle began. The weak U.S. government could only alleviate the crisis by frantically printing money. This behavior directly led to the depreciation of the dollar, and countries holding U.S. debt sold one after another and were unwilling to buy again. The United States has always used credit as the capital of consumption. With the depreciation of the dollar and no money to repay, the United States can only hide its ears and pretend to forget its debt.
Will the United States default on its national debt?
Now the situation is grim, which is something everyone in the United States knows. Now the calm United States is in danger. Everyone holds a calm face and suffers the twists and turns caused by the national economic turmoil. Everyone in the United States knows that the United States is declining. They will be the audience to witness the withdrawal of the United States from the hegemony, The only thing the United States can do is to extend the time of the endgame and find opportunities in danger.
With the approaching of the repayment date of US debt, the United States has come up with another plan to try to delay time. In the past 10 years, the efforts of the United States have accumulated. The current data show that the amount of US debt has reached US $28.7 trillion. In addition to the US debt that has reached the ceiling, the United States is still unable to extricate itself from the crisis of inflation, and the double-sided attack makes the United States immovable. However, in the current situation in the United States, when trump was in office or even longer ago, American politicians should be alert. After all, tomorrow's money will never be spent, but tomorrow's money will also be repaid within a time limit. If the United States indulges, refuses to control, and spends more money than it can repay, it will open its blood and bite back at the United States.
Once the U.S. debt defaults, it will face the fact that the U.S. federal government will be suspended. The Republicans firmly oppose Biden's proposal to raise the debt ceiling, and resolutely safeguard the rights and interests of the Republicans regardless of the dangerous situation of the United States. In the United States after the epidemic, in order to ensure the quality of life of the American people, the Federal Reserve adopted the method of crazy printing money. Facts have proved that this method has many hidden dangers in the long run, but there was really no better way to solve it for the United States at that time.
These overprinted banknotes, like a tornado, blew all over the financial market. The financial market absorbed these dollars as much as it could, and thus served as an intermediary to circulate to all regions around the world, which also plunged the United States into the fate of the financial crisis.
Moreover, once the United States is liquidated, it will destroy the foundation of the dollar system and the U.S. financial system, that is, the credit monetary system, the credit collapse and the decline of the status of the dollar. What else is the global status of the United States? Global hegemony?
More importantly, an important way for the U.S. national machine to operate is to borrow money. Repurchase and reverse repurchase operations are also important means for the Federal Reserve to regulate the liquidity of the dollar. Therefore, the U.S. Treasury and the Federal Reserve insist that there can be no debt default and no credit problems for the dollar.
Now the United States is burning with anger and even asked Congress to raise the debt ceiling. US Treasury Secretary Yellen insists that if the debt is not raised, the United States will face a heavy economic blow. In fact, Congress has agreed to this request, but it only solves the immediate problems for a short time, and the deep-seated crisis is still hidden.
Looking at the current international situation, if the United States wants to break through the difficulties and rely on external forces, only China can help it. Before, the United States has sent a distress signal to China. In the face of China's "disregard", the United States will take measures to extend the repayment, that is, it intends to delay the repayment. If so, China must be vigilant.
U.S. President Joe Biden knew the situation was critical and called China late at night in an attempt to rebuild China US dialogue. Looking around the world, I'm afraid the only thing that can save the United States is China. The United States hopes that China can pull itself out of the dangerous quagmire again. However, the so-called US request for help this time is to directly rely on China's $1 trillion. How can it be so good?
The calculation of the United States is really satisfactory. China is the second largest overseas holder of U.S. Treasury bonds. From this perspective, China has saved the United States once, but now the United States simply hopes that the money will not be repaid. After all, if an agreement can be reached and written off, it will reduce a lot of pressure on the United States, but in order to ensure its credibility, The United States will not directly default, but think of some ways to make the money "disappear" quietly.
How does China respond?
It is worth mentioning that China has made sufficient preparations. Now the basic situation is that many countries have begun to replace us dollar foreign exchange reserves by purchasing China's local debt or euro zone debt. In this way, if the United States has been dragging its debt, China will make the United States pay a more painful price through simple operation.
The United States seems to be a very rich country, but in fact, its wealth is maintained and supported by the help of various countries, that is, using the money of various countries to help him subsidize his family. The reason why the United States spends so much money is that the military expenditure of the United States is quite large, and the military construction of the United States has always been placed in an important position. Even if the United States tightens its clothes and food in other places, Nor dare they neglect their military affairs. Therefore, once no country buys U.S. debt, or the U.S. debt reaches the ceiling, it will be a great blow to the U.S. military. Although the United States can do its best to maintain it, it will add a lot of pressure to the United States.
Therefore, if the United States does not want to paralyze its own country, the model of U.S. debt must continue to be maintained. However, other countries are growing now. It is not the time for the United States to dominate before the cold war. Moreover, U.S. debt is publicly circulated and traded in the international bond market and can be sold or purchased at any time. This particularity makes China not afraid that U.S. debt can not be cured at all.
However, for objective reasons, the United States has defaulted on its debt and even the idea of not paying it back. In the end, it will only hurt itself. Sovereign debt default is a very serious thing for a country, and the consequences are also very serious. First, other U.S. debt holders will sell bonds issued by the United States crazily because of the depreciation of U.S. bonds. For example, Japan, a loyal follower of the United States, has been unable to withstand economic pressure and began to sell U.S. bonds to varying degrees,
The model of US bonds has been set and will certainly continue to be issued in the future. In order to be bought, we can only improve the income, otherwise we can't sell it at all. This is the same as personal credit record. If you have a good credit record, you can easily borrow money with low interest. But if you have a credit stain, the opposite is true. For example, this happened in Greece in 2006, which made the interest rate of Greek sovereign bonds break the world record around 2010. Later, it got rid of the dilemma by the "blood transfusion" of the EU.
The actual situation in the United States is that economic development is slowing down, the unemployed have no living security, and a large number of unstable factors are flooding the society. Crazy printing of US dollars is the way the United States has come up with to get out of trouble. However, this behavior is very reluctant for countries holding a large number of US bonds, because it damages their interests, and more represents depreciation, The U.S. debt in his hand suddenly turned into waste paper. As soon as the domestic situation was stabilized, there was unrest abroad. This behavior was not only not recognized by other countries, but also affected the credibility of the United States.
The United States owes China as much as one trillion US dollars alone. There is absolutely no need for China to worry that they will not repay this problem, because when the United States does not repay its debts, its position in international trade is still unshakable. If the United States openly ignores the international order and does not pay its debts as if it did not know, The international reputation of the United States will plummet. If the United States wants to talk about cooperation with other countries in the future, there will be many obstacles. If a country doesn't even have credibility, what other reasons can a partner feel at ease to cooperate with it? Without credibility, it is impossible for the United States to put forward conditions from above.
At present, the world's economy is linked, and there is no one country's word. However, it seems that the United States has not adapted to this globalization and integration. It still thinks that what it says can become a reality and what it says is what it says. Under Roosevelt's leadership, the new deal was implemented to rescue the United States from the economic crisis. Then, at the right time, the United States sold weapons to aid Britain, which made the United States make a lot of money. Later, it forced Germany to declare war on itself, join World War II with a high attitude, and help Russia, making the United States, Britain and Russia shoulder to shoulder as the three great powers sharing a common hatred.
During Roosevelt's administration, although he experienced war, he laid a solid foundation for the U.S. economy and military, so that the United States had sufficient capital during the cold war. However, after many presidents like jokes, the U.S. national strength was invincible and began to retreat.
If the United States really wants to alleviate the plight of the United States by defaulting, it is tantamount to providing opportunities for China. The current level of China's production and manufacturing is second to none in the world and is no longer below the United States. It is determined to exchange the country's temporary balance at the cost of losing its reputation, and the United States will lose no small market share in the future, After all, which country is willing to cooperate with countries that have no strength and like to default?
"China should compensate the United States and cancel the debts of all countries," said former US President trump. But now the United States is afraid to have no confidence to say such words again. In the face of China's growing strength, the United States hates it. Obama and trump have always regarded China as a strong competitor, and China has to be pulled into the competition field. After many years, Campbell, the top official in charge of Asian Affairs in the White House, suddenly talked about this topic again. Instead of tit for tat, he wanted to stand with China.
Such a change of attitude is unexpected to all the media. In fact, if you pay attention, there are traces of such a change in the United States. Now the United States is difficult to save itself under the dual threat of the rebound in inflation and the U.S. debt crisis. There are serious signs of economic recession. If the United States continues to show its sharp face, it is only a matter of time before it comes to the brink of collapse.
In short, if the United States wants to take measures to delay its debt, China will also take a series of measures to deal with it. Countermeasures are ready at any time. What the United States should do now is not to make enemies everywhere, especially not with countries that can help itself. It should adopt a problem-solving attitude. If the United States is willing to put down its airs, By solving problems with a positive and cooperative attitude, contradictions can be further avoided and the retrogression problem facing the United States can be alleviated.