The US media suddenly opened up, saying to the world: "If China does not pay back its debt 100 years ago, the United States will not recognize that it owes China's money."
Recently, China is systematically adjusting its home base. Once holding more than $1.3 trillion in U.S. government bonds, it has now dropped to more than 700 billion, reaching a new low in years.
At the same time, the gold in the vault is increasing piece by piece. This action is very clear. In the global economic environment, there should be less promises on paper and more real hard currency.
Against this background, several U.S. congressmen suddenly turned up an old case more than a hundred years ago and asked China to repay the "Huguang Railway Bonds" issued by the Qing government in 1911.
What's even more exaggerated is that under some people's "calculation", this old debt with principal and interest actually rolled to $1.6 trillion. They even unabashedly suggested that this money could be used to offset the debt that the United States owes China today.
Simply put, it was in the late years of the Qing Dynasty, when the government sold sovereignty loans to foreign banks in order to survive.
For the money owed by this predecessor oppressive regime, there has long been a public opinion in the world, which is called "evil debts will not be inherited". The reason is simple. The debts borrowed by a dictator in order to maintain his rule should not be borne by the people who overthrew him. This is a default rule in international communication.
The most fun thing is that the United States itself is a senior player in this rule.When the North Korean War ended, the United States directly wrote in white and black paper in the Fourteenth Amendment to the Constitution that any debt to help the rebellion is “illegal and invalid”.
Based on this article, they cancelled the money owed by the Southern Federal Government, throwing it clean and clean.The rules they used, but today require others to look like waste paper, this logic is really incomprehensible.
This is not a legal issue at all. Decades ago, when people brought similar Qing Dynasty bonds to U.S. courts, the results were rejected on the grounds of "sovereign immunity", and China had long won the trial.
Their real intention is to play a very dangerous financial blackmail. The subtext is that if China doesn't recognize this illusory old debt, can the United States not pay back the new debt it owes you?
The idea sounds very "smart", but in fact is demolishing the foundations of their own house.The US government bonds can go through the globe, relying on nothing else, is the unquestionable credit of the US government, the whole world believes it will expire.
But once the United States opens this opening and engages in "selective default" on a major creditor country like China, it is tantamount to telling the world my promise with my own hands, and it can be seen by others.
There is little need to imagine what will happen next.The Japanese, British and U.S. government bonds will just panic and then sell out the U.S. debt at no cost, avoiding themselves from becoming the next “selected” target.
Global capital will flee the United States, resulting in the collapse of the U.S. bond market and the rise of interest rates. For an economy with a total debt already exceeding $34 trillion, this means that the cost of borrowing money is so high that it is unbearable that a worldwide financial storm, far more terrifying than in 2008, will explode.
Living examples are just around the corner. Russia's hundreds of billions of dollars of overseas assets have been frozen, which has taught all countries a costly public lesson. It is incalculable to bet excessively on the credit of a certain country. That's why China and many other countries are accelerating the diversification of their reserve assets.
The increase in gold, an asset that does not depend on any country’s credit, is not intentionally aimed at whom, but to push the global financial system toward a more balanced and secure state.
But in any case, that illusory bill of $1.6 trillion can't solve the real debt problem of the United States. What really determines the direction of the world financial structure is the profound and real changes that are taking place quietly on the balance sheets of central banks.
Source: China Network of Farmers.
Recently, China is systematically adjusting its home base. Once holding more than $1.3 trillion in U.S. government bonds, it has now dropped to more than 700 billion, reaching a new low in years.
At the same time, the gold in the vault is increasing piece by piece. This action is very clear. In the global economic environment, there should be less promises on paper and more real hard currency.
Against this background, several U.S. congressmen suddenly turned up an old case more than a hundred years ago and asked China to repay the "Huguang Railway Bonds" issued by the Qing government in 1911.
What's even more exaggerated is that under some people's "calculation", this old debt with principal and interest actually rolled to $1.6 trillion. They even unabashedly suggested that this money could be used to offset the debt that the United States owes China today.
Simply put, it was in the late years of the Qing Dynasty, when the government sold sovereignty loans to foreign banks in order to survive.
For the money owed by this predecessor oppressive regime, there has long been a public opinion in the world, which is called "evil debts will not be inherited". The reason is simple. The debts borrowed by a dictator in order to maintain his rule should not be borne by the people who overthrew him. This is a default rule in international communication.
The most fun thing is that the United States itself is a senior player in this rule.When the North Korean War ended, the United States directly wrote in white and black paper in the Fourteenth Amendment to the Constitution that any debt to help the rebellion is “illegal and invalid”.
Based on this article, they cancelled the money owed by the Southern Federal Government, throwing it clean and clean.The rules they used, but today require others to look like waste paper, this logic is really incomprehensible.
This is not a legal issue at all. Decades ago, when people brought similar Qing Dynasty bonds to U.S. courts, the results were rejected on the grounds of "sovereign immunity", and China had long won the trial.
Their real intention is to play a very dangerous financial blackmail. The subtext is that if China doesn't recognize this illusory old debt, can the United States not pay back the new debt it owes you?
The idea sounds very "smart", but in fact is demolishing the foundations of their own house.The US government bonds can go through the globe, relying on nothing else, is the unquestionable credit of the US government, the whole world believes it will expire.
But once the United States opens this opening and engages in "selective default" on a major creditor country like China, it is tantamount to telling the world my promise with my own hands, and it can be seen by others.
There is little need to imagine what will happen next.The Japanese, British and U.S. government bonds will just panic and then sell out the U.S. debt at no cost, avoiding themselves from becoming the next “selected” target.
Global capital will flee the United States, resulting in the collapse of the U.S. bond market and the rise of interest rates. For an economy with a total debt already exceeding $34 trillion, this means that the cost of borrowing money is so high that it is unbearable that a worldwide financial storm, far more terrifying than in 2008, will explode.
Living examples are just around the corner. Russia's hundreds of billions of dollars of overseas assets have been frozen, which has taught all countries a costly public lesson. It is incalculable to bet excessively on the credit of a certain country. That's why China and many other countries are accelerating the diversification of their reserve assets.
The increase in gold, an asset that does not depend on any country’s credit, is not intentionally aimed at whom, but to push the global financial system toward a more balanced and secure state.
But in any case, that illusory bill of $1.6 trillion can't solve the real debt problem of the United States. What really determines the direction of the world financial structure is the profound and real changes that are taking place quietly on the balance sheets of central banks.
Source: China Network of Farmers.