Fascinating article.
Never heard of this before. It sounds valid but don't really know. Basically from a long time ago.
I'd love it if we can start the negotiations now & just do a 1:1. Not sure how the markets would react or any unintended consequences.
China is in default on a trillion dollars in debt to US bondholders. Will the US force repayment? | The Hill
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China is in default on a trillion dollars in debt to US bondholders. Will the US force repayment?
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The United States pays interest on approximately $850 billion in debt held by the People’s Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
Successive U.S. administrations have chosen to sidestep this fact, allowing business and trade with China to proceed as normal.
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In 1938, during its conflict with Japan, the ROC defaulted on its sovereign debt. After the military victory of the communists, the ROC government fled to Taiwan. The People’s Republic of China was eventually recognized internationally as the successor government of China. Under well-established international law, the “successor government” doctrine holds that the current government of China, led by the Chinese Communist Party, is responsible for repayment of the defaulted bonds.
A private group of American citizens holds a large quantity of these gold-denominated bonds. This citizen-led group, the American Bondholders Foundation (ABF), serves as trustee with power of attorney for some 20,000 bondholders, whose bonds are valued at well more than $1 trillion.
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