Re: Doesn't the US have a huge debt with China?
The US defaults.
Everyone around the world sniggers at the US, then realises how integrated their economies are to the US's, and that collapsing the US economy would be bad for them too, and so carries on lending the US money (at a marginally higher interest rate).
The US now has a much lower debt, since it's effectively renegade on what it owed to China.
China now has no 'money owed by USA' in it's accounts, so looks to be less wealthy.
China's actions are seen to be political so countries all round the world start questioning how beholden they are to China (since unlike the USA, they are not 'too big to failure' and if they are forced to default, it will actually hurt them).
So China loses wealth and influence, and the US carries on largely as it did before.
Hence it seems very unlikely China is going to call in the US debt to China any time in the foreseeable future.
Biting the hand that feeds IT
