What if China decides it wants American Land?

Say the Chinese send a memo like this to Barry and co;

We would like to bring down your current trading account. We would like no less than $500 bil of what you owe us. Being as you’re all broke we understand cash may not be optimal, so we can accept a suitable tract of land i.e. an area worth $500 billion in today’s market prices which would form part of an expanding China.

What then? The obvious choice would be to write out a $500 bil check, which would likely be the fed’s last as true economic chaos descended. Could the U.S. govt avoid getting into this position and trade land?
Would it be any better as a solution?

I predict the Americans saying “Come and get it!” and the Chinese official who proposed the nutty idea being quietly arrested.

Did we back up our loans with land?

I predict that Operation Anchorage would become a reality. A really awesome reality with power armor, Gauss rifles, and mini-nukes!!!


Only in a very indirect sense, and certainly not one likely to provoke all-out war.

In any event, China knows that its economy is going to hit hard times when the outside world stops buying from it. The best thing they could do is make sure our economy stays active if only because of Wal-Mart. Doing things that would cast them as a Yellow Peril again ranks somewhere below giving the Dalai Lama the Forbidden City and declaring that the true capital of the One China is Taipei.

Obama would write back,

Dear China,

We have received your letter. On our part, we would like to snort cocaine off the belly of a naked Halle Berry. However, neither of our wishes are likely to come true. As you know, US Treasury securities are non-callable by the buyer, and will be repaid at the end of the fixed term.

Your friend,

President Obama

P.S. Love those pandas!

China can’t demand its money tomorrow. The Treasury bills it carries have a set maturity date. When that date is reached, the US Government will just issue more treasuries to pay it off. China certainly can’t buy US land and establish its own laws in them and annex them into their sovereignty.
But can it buy land on the open market and own it for no reason other than to make Americans pay rent on their own country?

Of course they can. What would stop them?

lol, forgot about that. I knew there was a reason…

Sure, but it’s not a very original plan. The Japanese and the British and the Saudis and the Dutch and a whole bunch of other people from other countries have bought up American property because they figured it was a good safe investment.

But at least they were private individuals and not governments.

Most people are renters, IIRC.

More to the point; they can buy all the land they like, and all it does is make them more vulnerable to our displeasure. Because ultimately, if they irritate us enough we could just say “Sale’s canceled, it’s ours again” and that would be that.

Indeed. If eminent domain can grab property for roads and such, there’s an even greater public interest in expelling hostile foreign nationals.

Not to dig at the OP but it really has gotten quite annoying that people don’t have the most basic understanding as to how U.S. government debt works. We didn’t go to entities and ask for a loan, we issue treasury securities which are bought on the open market. They have a set maturation date, they aren’t “loans” like your mortgage. We’ve always paid them at the maturation date and there’s no mechanism for “calling” the debt. When a security matures the government has never failed to pay (to my knowledge), in the history of the United States.

There’s a pretty obvious reason for this: the holder is paid in U.S. dollars. Ultimately we can always print more of those. At one time there was a promise to bond holders that you could redeem your bonds in either gold or currency. This was back in the days of the gold standard when our currency itself was tied to a commodity (gold), at the time it was seen as a protection for the bond holders to protect them from paper currency which can rapidly depreciate at times. During FDR’s administration Congress passed legislation that ended this system, so now there’s even less of a chance of a true default on treasury securities.

Hence the need for a resource like, oh, I don’t know, the Straight Dope, where anyone can come and get some nice, snark-free knowledge dropped on them…

Well, something vaguely similar to the OP’s scenario was the plot of the 1981 thriller Rollover, the title of which, as I recall, refers to the practice of foreign investors to automatically reinvest when the debts they hold mature. They system starts to come apart when “the Arabs” begin not reinvesting larger and larger percentages, thus taking money out of the American system and threatening its eventual collapse.

I don’t how this plausible this is, but it’s vaguely amusing that the supposedly shockingly large numbers of dollars being cited are rounding errors compared to Obama’s stimulus package.

Snark-free? What Straight Dope have you been reading?

Sorry. Wishful thinking I guess. It’s sad, really…

Who’s Barry?

Barry Bonds?

Barry Manilow?

Barry Zito?

What if China decides it wants American Land?

Oh that’s an easy question to answer. They can have the loading docks on the West Coast as a reminder that nobody will every buy anything from them again.