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this post was submitted on 03 Dec 2023
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That's not how that works. Bonds cannot just be asked back like that, they mature over a standard set of time. All you can do is try to sell them to other countries.
And if you do, you're just going to drive down the cost of US debt, the Fed will have to increase interest rates so that people buy from the fed instead. Basically all they're going to be able to do is put a lower bound on American interest rates.
That would be bad, but at the end of the day if the US government needs to fund itself it can still print money.
Also a fire sale on US debt means they have to actually trade it for something. That would create a massive correction in the Chinese economy as there surplus of excess capital and trade turns into a huge deficit, all the factory jobs disappear, American manufacturing booms, and they get the value of what they've produced over the last 20 years that since on the dollar as they fire sell the United States bonds.
Lose lose lose lose lose. I would happily encourage the Chinese to try to do this.
If I could gild this comment I would, it's spot on, thank you!