Recession?

[Mikkel]

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Agree if he’s gonna play tough guy, he needs to be tougher than this.

Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say

"Tell me why Xi should not continue to wait out The World's Greatest Negotiator, who keeps 'dealing' with himself?" says Jim Chanos.

www.cnbc.com

We'll see how Xi will play the Hong Kong situation. He can't wait out everything, especially if your country is in the process of disintegrating (see: Xinjiang, Hong Kong, tariffs, North Korea, South China Sea, Taiwan, aging population, population constriction, loss of businesses to other SE Asian countries).

Maybe Trump is throwing them a bone and giving Xi some room to negotiate?

 

[birchswing]

China already doesn’t buy much from the US.

They buy our debt. They don't own as much as they used to (Japan even owned more US debt than China briefly). But they still buy a very sizable portion of our debt every year. We buy their stuff, and they buy our debt.

Spending their money on our debt rather than internally is why they have an export-driven economy.

In a trade war the risk is not them not buying our tangible exports, but selling off our low-interest debt.

They could theoretically annihilate both the US and themselves economically with a sell-off. It wouldn't be good for anyone. But they have leverage.

 

[urge]

They buy our debt. They don't own as much as they used to (Japan even owned more US debt than China briefly). But they still buy a very sizable portion of our debt every year. We buy their stuff, and they buy our debt.

Spending their money on our debt rather than internally is why they have an export-driven economy.

In a trade war the risk is not them not buying our tangible exports, but selling off our low-interest debt.

They could theoretically annihilate both the US and themselves economically with a sell-off. It wouldn't be good for anyone. But they have leverage.

Disagree.

They have Dollars from all the stuff they sell here. They need some of those Dollars to participate in world markets because that's the currency there. Their extra Dollars that they are not spending/investing and they don't know what to do with them get placed in Trasury bonds to gain interest. If they don't put them in bonds they are not going to disappear. What are they going to do with them? The answer is nothing. They don't want to dump them into the market at a fire sale because that would make the Dollar weaker to the RMB and they don't want that because of their mercantilist mindset.

The way things are headed Treasuries will pay 0 interest, showing there is really no reason for Treasuries to exist with the current fiat money.