What Happens if China Cashes in All Their US Bonds?
Market Mondays
EYL Network
5.0 • 4.1K Ratings
🗓️ 22 September 2023
⏱️ 7 minutes
🧾️ Download transcript
Summary
Dive deep into the intricate world of international finance as we explore the potential consequences if China decided to cash in all their US bonds. How would this decision impact global economies and financial systems?
Plus, we'll delve into the recent issues surrounding Alibaba, drawing connections between China's economic strategies and its implications on global trade and relations. Stay tuned for a comprehensive analysis on the intertwining of these financial giants. #ChinaUSBonds #AlibabaIssues #GlobalEconomy
Link to full episode: htt
ps://youtu.be/rcv-p9P26Qg?si=VA_DFJC2HIIwryiM (https://youtu.be/rcv-p9P26Qg?si=VA_DFJC2HIIwryiM)
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Transcript
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| 0:00.0 | What would happen if China decided to cash in all of their current U.S. bonds, |
| 0:04.9 | and how would this impact the U.S. dollar? |
| 0:08.4 | It's a great question. It's one of those questions that I don't think ever would happen, |
| 0:12.9 | but if hypothetically you did, it would also have a negative impact on Japan as well. |
| 0:18.2 | So it would levy our stock market. It would have an impact on our dollar, but it will have an |
| 0:24.4 | impact as well on a trade agreements and how they offset losses from importing and exporting as |
| 0:30.5 | well. So it's kind of like a mutually assured destruction. There's no real incentive for China to |
| 0:36.5 | do that at this moment. Even if they're upset at us, you can't just flood the market with bonds |
| 0:42.5 | that no one at this point wants to buy. I can see if there was a buyer. And even with bricks, |
| 0:47.4 | with them trying to form an alliance, if they're going to sell off our debt, I don't see anyone in |
| 0:52.9 | bricks acquiring all of that debt to help China when they're forming their own alliance. |
| 0:58.4 | So it's kind of like a argument like what if all the gold on Earth, |
| 1:02.3 | disappear or worth every dollar, disappear or aren't going to be on all digital. Sometimes |
| 1:08.7 | we have to prepare for the worst case scenario, but there is like a poison pill inside of this if |
| 1:14.0 | China does end up letting all of our bonds on the open market and they won't have enough buyers |
| 1:20.0 | for them. We'll have an impact on a dollar. The dollar has been die-insence. We got off the |
| 1:23.3 | gold reserve, the gold standard, excuse me. So that would that would not be the death of it per se. |
| 1:30.6 | Inflation, I think in quantitative easing has done more destruction to our dollar more so than |
| 1:36.3 | China letting the bonds on the market ever could. Okay. Okay. So shares of Alibaba fell 3% after the |
| 1:46.2 | outgoing CEO unexpectedly quit cloud business. What impact will this have on the stock market and |
| 1:53.7 | overall economy? I'm proud to get your insight on this, but when I saw this, my first thought was |
| 2:00.5 | when someone leaves a mega power and we can argue, pound for pound, Alibaba may be better than the |
... |
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