Originally Posted by torontomichael
When foreigners ( Japan & China) own/hold most of a nations bonds (USA) that nation no longer controls its financial destiny as it once did.Bonds are an OBLIGATION.To reply with "screw them" infers the USA should default on its' bond obligations.Think you've got it rough now??? You do not want to see the fallout from a bond default. Like it or not,USA is obligated in a very major way to China & Japan,so it is...legitimately...their right to express issues which affect the bond market (on which,I might add,they have TRUSTED the USA to make good on it's commitments).Google up some stats to see the value of US-issued bonds owned by China & Japan.Pretty shocking.Just as the Consumer has leveraged debt on income they don't have,so has the US Government issued bonds with money they don't have.I'd be concerned if I was on the receiving end like China/Japan too.
Read up on some Karl Denninger, if you haven't. He sees the bond default as inevitable, given our complete refusal as a country to live within our means.