| when you can’t pay back a loan, the bank can take your house, if america don’t pay back China, what’ll they do?

when you can’t pay back a loan, the bank can take your house, if america don’t pay back China, what’ll they do?

Amadeus C asked:


I understand that it is in the best interest of both nations to keep the relationship going, and that the treasury bonds which China buys are paid when they mature…

but what I can’t figure out is that does China have any collateral over the US, in case that tensions escalate and we just default on a part of our national debt? Our military is much stronger than theirs

Thanks

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Comments

5 Responses to “when you can’t pay back a loan, the bank can take your house, if america don’t pay back China, what’ll they do?”

  1. Stonewall on May 13th, 2009 6:07 am

    They’ll stop loaning us anymore money, and the government will not be able to spend so irresponsibly. They don’t want a war with us any more than we want one with them. They’re not going to take our country and evict us…. well, not without a fight anyway. There’s not really too much they can do.

  2. Warren T on May 13th, 2009 4:50 pm

    THAT IS THE BIG PROBLEM WHICH NO ONE SEEMS TO NOTICE THAT WHEN YOU BUY GOVERNMENT BONDS OR T BILL (LOAN MONEY TO THE GOVERNMENT) YOU HAVE NO COLLATERAL.

    THAT MEANS THAT IF UNCLE SAM DEFAULTS (DOESN’T PAY THE BOND OR T BILL WHEN IT COMES DUE) YOU ARE OUT OF LUCK.

  3. saai on May 14th, 2009 1:38 am

    It is theoretically interesting but not a probable problem at all.. US controls a big domestic and international business interests and can definitely recover from passing problems before long - for, they’ll have to, for ensuring the very livelihood security of their citizens in the first place - and so your govt can buy time for the repayment and any foreign govt would understand that, given the fact that such recession could seize any govt across the globe..!

    Or alternately, the US can mobilize funds from other friendly countries to keep up the terms of commitment.. But that contingency would not arise, because, the basic resource and expertise endowments of a country like US would not allow a crumble of economy.. Some hard decisions would be taken and the problem got over.. It would be a lesson for all countries across the globe, China included..

    Though theoretically there is no way to force-collect the dues, in the absence of a collateral, the situation would help the lender to strike some new deals of strategic significance to it, in lieu of the default and US may have to yield to save its face..! It is however far fetched, be positive!

  4. Bala on May 17th, 2009 5:53 am

    Why, the chinese would be happy to have a few submarines or advanced missiles in lieu of the money.. !

    You have abundant arms of destruction that would lure the communists more.. or some green techs to combat the pollution issues..

    or enter into a massive purchase (on credit of course) of their endless products (of dubious quality) and collect fines..

    there are many ways to calm a villian but a very few to win virtuous ones;

    here no problem is there ..! lol

  5. Henry Zapbeav on May 18th, 2009 10:34 am

    Call the White house and ask….1-202-456-1111 or 1-202-224-3121. Please let us know.