mike904

Savings, Debt and the Global Economy

I think you have that backwards. The rise in savings was a result of the Chinese drop in debt demand. The Chinese don't have a "voracious demand" for US debt. The China trade is American manufacturers in China selling products produced by American companies and calling it "trade". That's labor rate arbitrage, not trade.

The Chinese aren't "buying bonds", they're exchanging cash for cash equivalents. The fact that Wall Street spent 7 years manufacturing cash equivalents is what made this "demand" appear.

The whole idea that central banks "invest" in government bonds is loonie. Governments NEVER pay their debts. Treasury bonds are just a debasing mechanism. Global free trade is lipstick on a tradewar pig.