There’s plenty of liquidity to sell them on the secondary market.
The average holding period of a US treasury bond is measured in days, not years.
I’m not quite sure what your point is.
Sure, but selling bonds on the market doesn’t mean the US has to pay back those bonds immediately. All it means is that the market price for bonds goes down, which means two things. For the US it means issuing new bonds becomes harder to issue new bonds, because there are so many old bonds on the market, which means we have to offer higher interest rates, and our long period of free borrowing comes to an end. For China it means they sell those bonds at a huge loss, because they’re dumping them all on the market at the same time. This is obviously a huge economic hit for China and a medium economic hit for the United States.
Trump might tweet about embargoing China at 3 AM, but he can’t just order it to happen. So it’s not going to happen, and it’s pointless to pretend otherwise. All it does is make Trump look like even more of a clown on the international stage.
And I’m not sure what you find cryptic about this exchange.
What have the adults stopped Trump from doing? Explain.
China has become so powerful that we can’t expect them to kowtow to the US agenda. Any trade embargo on China would hurt the US drastically and it wouldn’t happen.
Other than China, the world has pretty much boycotted North Korea and China makes up 83% of NK trade. The rest of the trade NK does with the world is (I think) mostly illicit and illegal. Selling drugs, selling counterfeit $100 bills, selling slaves, selling military hardware and WMD technology, etc.
Diplomatic Representatives of the Walmart Republic yesterday urged President Trump of the USA not to embargo the People’s Republic of China and for the three nations to come to a permanent mutual understanding.
“Otherwise,” they said, “the consequences would be regrettable.”
Trump’s inability to separate security issues with global trade and other areas of disagreement is something that could politically dislodge the United States from the region. Trump is way, way, way out of his fucking element here, thinking he can just ‘make deals’ by punishing allies with trade sanctions if they don’t just make North Korea go away. The jaw-dropping stupidity of the man is a sight to behold.
Which shows that you are still living in the Cold War paradigm.
The US isn’t, in trade terms, so economically dominant. Throw in the near certainty that the US is going into a more isolationist/protectionist phase and that isn’t going to change. A pretty large slab of the Pacific Rim, SE Asia, Oceania and Africa already have China as their biggest trading partner. For example Australia which supplies China with the the raw materials for all that wonderfully cheap dinky stuff you buy from Walmart.
Some numbers help to put it into perspective.
North Korea’s total trade with all of the countries on the list last year was worth US$6.5bn 90% of that is with China.
China is the US’s largest trading partner.
The US bought more than $450 bn worth of goods from China last year and exported $115bn to China.
Cutting off trade with Beijing would cost the US almost a million American jobs connected to goods and services exported to China. The US also bought $69 billion bought and sold $42billion worth of trade with South Korea. This part of Asia is the workshop of the world and lost trade means lost jobs and economic instability that would be felt around the world.
Those are two very large apple carts that Trump would be wise not to knock over.
I guess pressure could be exerted on the paltry $600million or so trade done between North Korea and a couple of dozen other countries, some of which have major dealings with the US…but it is small potatoes and countries unfriendly to the US (eg. Russia) would inevitably take up the slack.
If North Korea collapses, China gets a refugee problem and also a US superpower on its border, it upsets the balance of power in the region.
I am guessing China could engineer a regime change in North Korea. But why would they? This stalemate has been in existence for decades, but it depends on this genie staying in the bottle.