(no title)
0xname
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7 years ago
What about the case of China? Their debt management demands attention even with the arguably greater monetary control that the government holds. If they didn't care for too much debt, wouldn't they have taken less conservative actions by now?
aphextron|7 years ago
It's all about bonds. Nobody wants Chinese bonds yet. So no matter how big they are, they still have to play the same global financial game like everyone else and use foreign debt to raise cash. Depending on the current value of their currency against the international reserve (USD), that may or may not be financially viable. When the US needs money, we just say "Hey everyone, buy our bonds. Here's the price."
People buy US bonds because our workers are the most productive, and our political system is the most transparent and stable. A US bond is essentially just a promise from the government that an American worker will produce $X amount of value in the future, and as long as we have the most productive economy per worker hour, our bonds will always be the most valuable. The Eurozone is catching up on that front, and it's why the Euro has exploded as a reserve currency in the last 10 years. But the Yuan has a long, long way to go.
mooreds|7 years ago