Cancelling China's Treasuries

AussiePete

Mish, regarding the issue of Trump threatening that China will pay a big price for their handling of the coronavirus, what do you think of Jim Rickards comments that the US could, through due process of law, get a judgment against China for the estimated $4 trillion of damage to the US economy and simply cancel the $1.4 trillion of treasury notes held by China?

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Comments (10)
No. 1-4
Curious-Cat
Curious-Cat

I think if he tried to do that, even beginning the process, that no other country would ever trust us again.

Casual_Observer2020
Casual_Observer2020

The dollar would crash overnight and gold would go to $10000 an oz.

Snarla Hazard
Snarla Hazard

What court can deliver a judgement against a country? This is grade school nonsense.

Eddie_T
Eddie_T

Rickards basic assumptions about the future are highly unlikely, They ignore the reality of how the entire wealth of the planet is tied up in and dependent on the US and our Treasury market.

Rickards has been beating the same drum for many years. I've read some of his books. His basic assumption is that China's currency will become the worlds reserve currency and that some kind of gold-backed Chinese bond will kill our bond market.

There are so many reasons this is never gonna happen. Rickards is a gold bug talking his book, just like Peter Schiff and many others.

2 Replies

AussiePete
AussiePete

He has never said that China's currency will become the world's reserve currency. He does talk about the coming "Great Reset", either the global elite's attempt to achieve greater globalisation, or his theory that there will be a collapse of all world's currencies relative to gold, which will inevitably lead to an international currency system tied to gold, with gold priced much higher. He is predicting $15,000/oz by 2025

Eddie_T
Eddie_T

He is obsessed with the US losing reserve currency status. His stated belief, I believe, is that the IMF will use a basket of currencies for the reserve..... and that SDR's will be used for something entirely different than what they are used for now.

But it's all based on the flow of gold from West To East, and the ascendancy of China.

He could be right, but he (and many others) have been completely wrong, over and over, for 20 years now. Hoarding gold to the exclusion of other assets is not a strategy I recommend for the ordinary investor. Good luck with that.

My guess, we see a bankster backed digital currency based on something similar to XRP (third generation crypto of the non-mined variety) , within the next five years.

We see cash mostly voluntarily abandoned (as technology takes over in payments)over the next decade or so. With cash out of the equation, negative rates become much more easily maintained.

We see negative rates for as long as extend and pretend can possibly be maintained . That might some years.