Why are we learning Chinese?

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Originally posted by pikeshot1600

Originally posted by Genghis

Originally posted by jiangweibaoye

Genghis,
Additional statement about my scenario about higher savings by the US. consumer.  If our economy enters into a recession, that will prompt increase in savings, which is good for the US budget deficit because we will be less reliant on foreigners financing our debt.  But that will also prompt the foreigners to dump our treasures because our economy is not growing.  That will prompt interest rates to go up.  Good time to be a saver (if you have a job).

What would happen after that?

What might happen is that if U.S. treasuries are "dumped" the economies of the dumpers will follow ours into depression.
It is not likely they will "take that dump."

I don't think any country would dump.  They may reduce their holding in a quite, orderly way.  No country wants to see that happen.  Only if there was a war or some dire domestic situation will the foreigners dump.
However, some misunderstand.  The budget deficit is growing.  They may keep their current position of tresuries, but not accumulate more.  This will also lead to higher interest rates.