There has been great global anxiety about the trade imbalance between the United States and China. Historians have written essays and tomes about the emerging US-China G2. America’s Chinese addiction and China’s America addiction, each for its own geopolitical reasons has become a battle of economic ideologies between the United States and China and a proxy war for civilization between the European Union and China.
In the brinkmanship game of economic warfare which can imminently engulf the global economy in a downward and perhaps uncontrollable spiral because of the rising risks associated with US indebtedness, the one player who can change the outcome is the United States, not out of fiscal responsibility or an urge to dramatically reform its global conduct but out of opportunistic self-interest.
Should a targeted debt buy back from Eurasia as a part of the Fed’s quantitative easing not work, America must default on its debt obligations to China before China could dump US debt and the dollar from its currency basket.
If not, in the most counterintuitive act of kindness, Eurasia must forgive America’s debts and no longer lend, for the United States to sin no more.