Risk, debt and US- China Relations-is the game over?

Children of the nineteen-sixties will recall the famous Waddington’s board Game Risk. It was simple enough. The world was divided into 42 territories via five continents. There were six players. The aim of each player was to launch aggressive warfare and acquire sufficient armies to crush all other players and achieve world domination. (On the up side, we learned the names of faraway places like Irkutsk and Kamchatka).

Well our world of the twenties is not so different, except that now the weapons can be financial as well as military. The two principal players are the USA and China. The question that worries US policymakers is: what sort of financial cards is China holding?

As every schoolchild knows, China has been buying up US debt big time. There current holdings are estimated at $1trillion-about 5% of US debt. What would happen if they suddenly liquidated.if things got nasty over Taiwan, for example? In a fascinating article for The National Interest, Scott B MacDonald discusses the effects on markets, countries and economies. That means every person reading this.


#USChina #debtweapon #reservecurrency

we thank Mr Peter Seymour of Hertfordshire for this piece

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