America could actually shirk its debts to China

Reuters/Breaking Views/John Foley/5-3-2020

“With all the economic damage China wrought by covering up Covid-19’s spread, why should Uncle Sam pay back the $1.1 trillion it owes the People’s Republic? To do otherwise would cause market chaos, potentially trash the dollar’s status as a reserve currency and fail to slow the pandemic’s course. But President Donald Trump would find it surprisingly easy to effectively renege on those obligations.”

USAGOLD note:  If you thought the trade war was bad for the global economy, contemplate the reaction should the U.S. decide to no longer honor its debts. No matter the prevailing circumstances, it would send a message that would likely send financial markets reeling. We enter this under the not-likely-to-happen column.

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