At what percentage of the global economy do you think the US will become uninteresting?
(it's currently between ¼ and ⅕ of the global economy)
(it's currently between ¼ and ⅕ of the global economy)
That will probably happen once corruption in China becomes manageable, the Chinese stop moving their assets offshore and the US has no industrial technological advantage any more (i.e. once China can make equivalently good airplanes and microprocessors).
That isn't likely to happen soon even though other governments want them to float freely rather than in a price band.
China doesn't hold enough USD to hurt the US economy without hurting themselves even more seeing as the bonds are non-callable by the buyer.
Right. Exactly like the US does right now.
>China doesn't hold enough USD to hurt the US economy
It isn't about who holds the little green bits of paper. It's about who can turn off the wealth spigot.
The US would experience a huge bout of inflation right now if China decided to just float, it's just that China would probably suffer too. Once the US has nothing China wants (soon) they will have no reason to keep giving us a bargain on their imports.
Now they're not far off parity - maybe 5-7 years before they can manufacture anything the US can.
Trends that continue for a long time do not continue forever. That goes double for things that look like a free lunch.
For the last two years, their problem was the opposite. They went quite draconian on people selling RMB to keep currency strong.
The main motivation is to allow CCP keep throwing money around the globe, buying allies