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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bond_bubble who wrote (48261)	12/27/2005 9:26:13 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

Just my curiosity/Conspiracy theory: Suppose, US Banks print USD bonds and give it to Americans and have them buy the assets in China. And China/Japan like a moron buys up all these USTs and hands over their physical assets to Americans. And this way Americans can buy China and Japan. And probably, the US Banks can "wink wink" at the citizens who took the loan and say - you can default on these loans - no problemo!! So the Americans default on the loan - but they own China and Japan - And the Japanese and Chinese own defaulted US bonds. What is the catch in this process? Note that only hegemony currency has this power and no one else. For instance, UK can not give Pounds to Asians and buy assets. UK Citizens need to earn USD and then give USD to Asians!! Can anyone explain why this conspiracy theory wont work? Possible explanations: 1) USTreasuries can not be given for this purpose as US has some integrity in this regard. It is unimaginable that US govt defaults. 2) How about, Americans sell more GSE bonds to China and use the proceeds to buy Asian assets? Is this possible only if currency convertibility is allowed in China? i.e stupid individual Chinese can sell their assets only if they are allowed to freely invest in US/GSE bonds.