When China gets US$ (which they get via trade) they can do with them as they please. They can get it in cash and roll around in it on their beds, exchange it for another currency, leave it in their reserve account at the fed (checking), or purchase US Treasury bonds (savings) 1/4
Anyone w/ US$ has the same choices, and many choose buying US Treasury bonds because they are risk-free financial assets. They are risk-free b/c the US govt can make ANY payment that comes due in US$. They also add to the national "debt" which people are afraid of. But why? 2/4
No one is afraid of the majority of the "debt" which is "owed" to ourselves, so they must be afraid of foreign held "debt". But if they dislike the "debt" to China (et al.) then they just dislike China's ability to purchase US Treasury bonds, which simply means... 3/4
No one dislikes "the debt", they simply dislike the trade deficit which is how China (et al.) gets US$ to buy Treasuries. That is at least a position you can take that makes sense, because complaining about "the debt" is like complaining about the overpopulation of unicorns (End)
