What price an American default?

[Daniel Quinn]

You seem to be suggesting a relationship parity between China and America which negates any influence a a disgruntled China could exercise upon America , which I don’t accept .

China is the US's most important creditor. The Chinese hold more than a quarter of all US treasury securities, and as a result China's foreign currency reserves have increased to $2 trillion (€1.35 trillion). China is also the US's most important supplier of goods. The fact the American way of life was "made in China," because the key elements of American manufacturing -- from furniture to televisions to the computer industry -- have been outsourced hasn't been working properly since mid-2008, when a blockage occurred in China's most important market. The American consumer, up until then the pillar of the world economy, discovered a virtue he had never even dreamed of before: saving money.

Suddenly the crisis hit China, whose economy had been oriented almost completely toward the United States. In Dongguan, home to one low-wage factory after the next, entire neighborhoods have died out. "We have lost a third of our orders," says Li Zhaoyuan, who owns Dongguan Singyan, a company that makes metal parts. He has laid off 40 percent of his workforce.

China as consequently looked elsewhere in particular to far east and Brick countries , this coupled with his deliberate slowing down of gdp and the increasing importance of the internal market do you emborgeousement of the populace , means they could realistically tell the yanks what to do .

[Oldpinkman]

Bet they don't. They are far more capitalist than you give them credit for. And their published holdings of us treasuraries are $1.2 trillion. Us debt is $16.5 trillion. How is that 1/4?

[Oldpinkman]

I hate this phone!

[Daniel Quinn]

This conversation is becoming reminiscent of PFM , ie its diverting in to several tangents all further away from the initial post , which was simply Obama could neutralise the republicans with the assistance of a threat of Chinese sanctions if they don't get their act together .

[Oldpinkman]

The original post was a bookmakers interest in the likelihood of a default. Obama could neutralise the republicans by invoking the 4th ammendment. I really don't think even the Chinese fancy opening the sanctions can of worms, but maybe that's because my background is pin-making and Adam Smith, not your mate Karl. Nobody mention Nikolai Kondratieff!

[Daniel Quinn]

In that case the best I can is 1/10000 against a default minimum bet a tenner :D