Comment by RachelF
10 days ago
Foreign countries like Japan and China own around $1.8T in US bonds. These are valued in dollars, like stocks.
10 days ago
Foreign countries like Japan and China own around $1.8T in US bonds. These are valued in dollars, like stocks.
Yes. That's what I said "Devaluing dollar does not reduce debt measured in dollar"
The US would still have to pay the debt in Dollars. Devaluation affects currency exchange rates. Debt would be less valuable in Yen and Renminbi but just as expensive for the US government.
Doesn't Europe and Japan have dollar swap lines with US? So ultimately it is US buying its own bonds through Japan to create an illusion that there exists enough external demand.