lol gambit is a clueless vietnamese. no surprise there.
US central bank buy its debt, thats called debt monetization.
go look it up gumby.
china can fully crash the entire US bond market and take the losses, if the chinese leaders decide to.
the borrowing costs will skyrocket.
then not only will US federal debt interest rates soar, but state and municipal debt, auto loan debt, mortgage debt(option ARM, ALT-A, prime), credit card debt, etc will have much higher interest rates to pay because most of them usually set the rates according to the yield on the 10-year bond esp. mortgage debts.
prices will plummet as private buyers flee and yields will skyrocket.
US interest payments on public debt was $197 billion in 2010 out of total revenues of $2,162 billion. interest payments are already close to 10% of total fiscal revenues. remember that is with historically low interest rates. just imagine the absolute carnage that the US will face once interest rates skyrocket. when interest payments as a % of total revenues reach 50%, ur country is finished. then the only way is for the central bank to create new money(print money) and buy up those bonds as there are no private buyers. thats called debt monteization. then ur talking about massive inflation and most probably hyperinflation. when that happens all debts will be inflated away but all wealth of the US will be inflated away too as both debts and wealth are denominated in dollars. then no private buyers will buy US debt as they know their bonds will be inflated, this means US has to live within its means and that means giving up the US empire and just living as the USA just like britain where the british empire collapsed but britain as a union remanied after giving up its global influence and massive military budget. same thing will happen to the US.
the entire US economy is based on debt, and its the assumption that interest rates will stay low forever so u wont have to pay higher interest, well we all know what they said about greece, portugal, ireland, spain, italy. not to mention that assumption that housing prices will go up forever. they are saying the same thing about the bond prices, that bond prices will go up forever.
as bond prices rise, yields on the bonds fall. when bond prices fall, yields rise.
US economy is in a very vulnerable position, once interest rates rise, US will be the last western empire that will go into the dustbin of history.
all empires fall this way, they grow into powerful nations as they rise and once they become powerful, they overextend militarily and financially, and to maintain that overextended empire they go into debt. but once that debt hits a ceiling in the bond market, kaboom, they crash!
if an empire had 9 lives, the US empire is halfway through its final life.
the level of debt accumulation is extraordinary, even with the reserve currency, there is only so much u can get away with.
the US has now upped the ante as their economy is stagnant, so now they are forced to go into even more debt to fight the stagnant economy, and so their debt problem gets even worse and as the economy stagnates the revenues dimish as the economy is not growing to produce enough jobs and wealth. u cant raise taxes into a stagnant economy to increase revenues as it makes the economy even worse as businesses and people are drained of their wealth and thus have less money to spend and start a business to grow the economy.
then they are stuck between a rock and a hardplace.
so interest payments rise and ur revenues fall, then the only solution to this is to makle drastic and dramatic budget cuts in all areas. the military empire is one of the first to fall. the US has already made military budget cuts due to fiscal problems.
to get rid of the massive debts, u have no choice but to give up ur empire as u cannot sustain it anymore.
this has been the fate of every empire and the US empire is no different.
that 'check-mate' moment for the US empire is fast approaching.
