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0 pointsericd8y ago0 comments

Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once. What they can do, though, is stop rolling over the debt into new bonds, which, given the deficits the US government is running, doesn't seem like a great scenario for the US, as I believe that would force bond yields to rise to entice enough buyers, which would eventually cause the cost of servicing the debt to rise.

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2 comments · 1 top-level

RobertRoberts8y ago· 1 in thread

>Government bonds generally have a fixed term, so unless I'm mistaken, repayment can't be demanded all at once.

But espionage, market and currency manipulation, copyright and patent infringement and a miriad of other activities are illegal, yet China does them with impunity.

I can imagine they can demand whatever they want, (they are a sovereign nation) and can use that debt as a bargaining chip to be used in any negotiations.

In theory, I think you are correct, in practice, who know what is possible?

ericdOP8y ago

I guess, I don't know of any precedents for demanding bond repayment pre-term (though I'm not well versed in that history). Those others all have precedents, and most are things that it's generally accepted that almost all large nations engage in regularly to greater or lesser degrees.

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