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Nation Building 2028 A World of Strife (Modern)

Germany, want to increase trade majorly? I'm trying to shave off my dependence on American exports, so my economy doesn't crumble entirely.
 
Screw you guys I'm going to try and strike a deal with America. They can have my oil


IN RETURN FOR THEIR JETS, TANKS, DRONES AND MISSILES
 
Yoghurt said:
Germany, want to increase trade majorly? I'm trying to shave off my dependence on American exports, so my economy doesn't crumble entirely.
Click to expand...
Sure detail a plan in your post ill review it and get back to you with a response
 
Or sell it to Germany cause we didn't rise prices on you, or are a Islamic caliphate :P sorry bob
 
Wait... China is trying to call in their debt? Uhh... pretty sure that China carries US treasury bills... meaning they can't immediately demand that the US pay them back... China could try to sell their US T-bills, but at that volume it's going to be at a fairly significant discount.
 
Heyitsjiwon said:
Wait... China is trying to call in their debt? Uhh... pretty sure that China carries US treasury bills... meaning they can't immediately demand that the US pay them back... China could try to sell their US T-bills, but at that volume it's going to be at a fairly significant discount.
Click to expand...
Your right... but that would destroy there value thus creating a large sell almost completely achieving the same thing, Investors might start selling before china does just out of fear
 
I mean... the global economy is based on the USD. Since it still appears that the USD is still the strongest currency, then there will be a market for people to buy US t-bills. Plus, China only owns about 6% of US debt (currently). Japan is an extremely close second and was the number 1 holder of US debt for a few months this year. So, China doesn't really have that much US debt. In fact, they would be stupid to have that much cause then the Chinese Yuan would be extremely dependent upon USD and their foreign investments would be not very diversified.


Also, investors would love to see a massive sell off cause then they could buy US t-bills at a significant discount. As long as the US is not at risk of defaulting any time soon (the lifetime of these bills)then people would be buying bills like crazy since it is considered the safest investment in the world. Hell, seeing how chaotic the world is... I can easily see people buying US bonds in huge amounts.
 
Heyitsjiwon said:
I mean... the global economy is based on the USD. Since it still appears that the USD is still the strongest currency, then there will be a market for people to buy US t-bills. Plus, China only owns about 6% of US debt (currently). Japan is an extremely close second and was the number 1 holder of US debt for a few months this year. So, China doesn't really have that much US debt. In fact, they would be stupid to have that much cause then the Chinese Yuan would be extremely dependent upon USD and their foreign investments would be not very diversified.
Also, investors would love to see a massive sell off cause then they could buy US t-bills at a significant discount. As long as the US is not at risk of defaulting any time soon (the lifetime of these bills)then people would be buying bills like crazy since it is considered the safest investment in the world. Hell, seeing how chaotic the world is... I can easily see people buying US bonds in huge amounts.
Click to expand...
The problem isn't as much China selling off there shares its the crumbling of the US internally. When China asked to sell off there shares it further complicated things. But to be honest I did not know that thank you for the input any ideas how the situation might go instead? I am not an economics major but I want to stay as true to realistic as I can.
 
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lcomstock4 said:
The problem isn't as much China selling off there shares its the crumbling of the US internally. When China asked to sell off there shares it further complicated things. But to be honest I did not know that thank you for the input any ideas how the situation might go instead? I am not an economics major but I want to stay as true to realistic as I can.
Click to expand...
don't worry


Iran will save US!


As long as they give Iran weapons!
 
I'm not an economics major either, so I'm not going to pretend that I know everything. However, I am a finance major, so I can give some guidance on how investments/cash flows would work and some macro economics, but I wouldn't be able to give you exact numbers like how much interest rates would change.


I'm making these assumptions based on the US being able to pay off it's bonds and t-bills in time for the foreseeable future and not default. How they do it? It doesn't really matter as long as the US dollar is credible and the strongest currency in the world. Hell, texas could become independent and it wouldn't matter as long as the US can manage to pay off its future payments. It's all about cash flow.


Now, if I were China, and I REALLY were in need of money, then I would start selling off a chunk of the foreign investments. US debt could be one of them, but almost half of China's foreign investments are in US debt because it helps stabilize their yuan (effectively backing up a their own money with the safest investment in the world). So, yes, China can sell their bonds, but in return their own currency would become less credible. So, it's a bit of a double edged sword. The more they sell, the more they hurt themselves too in the long run.


Now, if China sold ALL their US debt, then that would hurt the US economy. Completely kill it? No, but selling bonds in large volumes causes the yield to rise for the bonds as they are cheaper. This rise in yield would cause interest rates to go up in the US and the financial world would follow since a lot of interest rates are based off of the US bonds as well. Rises in interest rates are pretty bad for growing economies as it makes loans more expensive. Thus, people take out less loans and do no invest/buy as much. This causes a ripple effect where people spend less money causing others to spend less money. So, governments would have to take action to tackle this rise in interest rates through expansionary monetary policy via their central banks.


So, if China sells a lot of bonds. It's going to affect the world for sure. Destroy the US economy? I doubt that, but people are going to not be spending as much money around the world and put their money into safe investments. But, one thing that should always be kept in mind is that the global economy relies on the US economy and currency very heavily. Thus, anything that happens to the US would also affect the world and every country.


Now, let's say that the US dollar becomes unreliable. Meaning it is not longer considered the safest investment in the world. Well... this brings up a lot of interesting things. But for the most part, the international finance world would halt to a crawl as no one would be able to trust another nation's currency. Trade would be difficult as it would be hard to gauge the value of currencies without the USD as a benchmark. So, we might see international trade practically freeze, which is obviously not good. Thus, the world would have to decide how to back up their currency. If another country were to be able offer the same financial security that the US was able to, then that country could become the next country that the world depends on for risk-less investments (aka. practically 0% chance of default). However... rebuilding that kind of a system wouldn't be able to happen immediately and would take years.
 
Last edited by a moderator:
Heyitsjiwon said:
I'm not an economics major either, so I'm not going to pretend that I know everything. However, I am a finance major, so I can give some guidance on how investments/cash flows would work and some macro economics, but I wouldn't be able to give you exact numbers like how much interest rates would change.
I'm making these assumptions based on the US being able to pay off it's bonds and t-bills in time for the foreseeable future and not default. How they do it? It doesn't really matter as long as the US dollar is credible and the strongest currency in the world. Hell, texas could become independent and it wouldn't matter as long as the US can manage to pay off its future payments. It's all about cash flow.


Now, if I were China, and I REALLY were in need of money, then I would start selling off a chunk of the foreign investments. US debt could be one of them, but almost half of China's foreign investments are in US debt because it helps stabilize their yuan (effectively backing up a their own money with the safest investment in the world). So, yes, China can sell their bonds, but in return their own currency would become less credible. So, it's a bit of a double edged sword.


Now, if China sold ALL their US debt, then that would hurt the US economy. Completely kill it? No, but selling bonds in large volumes causes the yield to rise for the bonds as they are cheaper. This rise in yield would cause interest rates to go up in the US and the financial world would follow since a lot of interest rates are based off of the US bonds as well. Rises in interest rates are pretty bad for growing economies as it makes loans more expensive. Thus, people take out less loans and do no invest/buy as much. This causes a ripple effect where people spend less money causing others to spend less money. So, governments would have to take action to tackle this rise in interest rates through expansionary monetary policy via their central banks.


So, if China sells a lot of bonds. It's going to affect the world for sure. Destroy the US economy? I doubt that, but people are going to not be spending as much money around the world and put their money into safe investments. But, one thing that should always be kept in mind is that the global economy relies on the US economy and currency very heavily. Thus, anything that happens to the US would also affect the world and every country.


Now, let's say that the US dollar becomes unreliable. Meaning it is not longer considered the safest investment in the world. Well... this brings up a lot of interesting things. But for the most part, the international finance world would halt to a crawl as no one would be able to trust another nation's currency. Trade would be difficult as it would be hard to gauge the value of currencies without the USD as a benchmark. So, we might see international trade practically freeze, which is obviously not good. Thus, the world would have to decide how to back up their currency. If another country were to be able offer the same financial security that the US was able to, then that country could become the next country that the world depends on for risk-less investments (aka. practically 0% chance of default). However... rebuilding that kind of a system wouldn't be able to happen immediately and would take years.
Click to expand...
damn, sounds complex


USA BUY ME OIL
 
Well, I would say the Euro would be the next benchmark. Many countries are using it and it is one of the most common currencies in the world. Wait but the EU is defunct...ah crap.
 
Last edited by a moderator:
Heyitsjiwon said:
I'm not an economics major either, so I'm not going to pretend that I know everything. However, I am a finance major, so I can give some guidance on how investments/cash flows would work and some macro economics, but I wouldn't be able to give you exact numbers like how much interest rates would change.
I'm making these assumptions based on the US being able to pay off it's bonds and t-bills in time for the foreseeable future and not default. How they do it? It doesn't really matter as long as the US dollar is credible and the strongest currency in the world. Hell, texas could become independent and it wouldn't matter as long as the US can manage to pay off its future payments. It's all about cash flow.


Now, if I were China, and I REALLY were in need of money, then I would start selling off a chunk of the foreign investments. US debt could be one of them, but almost half of China's foreign investments are in US debt because it helps stabilize their yuan (effectively backing up a their own money with the safest investment in the world). So, yes, China can sell their bonds, but in return their own currency would become less credible. So, it's a bit of a double edged sword. The more they sell, the more they hurt themselves too in the long run.


Now, if China sold ALL their US debt, then that would hurt the US economy. Completely kill it? No, but selling bonds in large volumes causes the yield to rise for the bonds as they are cheaper. This rise in yield would cause interest rates to go up in the US and the financial world would follow since a lot of interest rates are based off of the US bonds as well. Rises in interest rates are pretty bad for growing economies as it makes loans more expensive. Thus, people take out less loans and do no invest/buy as much. This causes a ripple effect where people spend less money causing others to spend less money. So, governments would have to take action to tackle this rise in interest rates through expansionary monetary policy via their central banks.


So, if China sells a lot of bonds. It's going to affect the world for sure. Destroy the US economy? I doubt that, but people are going to not be spending as much money around the world and put their money into safe investments. But, one thing that should always be kept in mind is that the global economy relies on the US economy and currency very heavily. Thus, anything that happens to the US would also affect the world and every country.


Now, let's say that the US dollar becomes unreliable. Meaning it is not longer considered the safest investment in the world. Well... this brings up a lot of interesting things. But for the most part, the international finance world would halt to a crawl as no one would be able to trust another nation's currency. Trade would be difficult as it would be hard to gauge the value of currencies without the USD as a benchmark. So, we might see international trade practically freeze, which is obviously not good. Thus, the world would have to decide how to back up their currency. If another country were to be able offer the same financial security that the US was able to, then that country could become the next country that the world depends on for risk-less investments (aka. practically 0% chance of default). However... rebuilding that kind of a system wouldn't be able to happen immediately and would take years.
Click to expand...
the German mark is a valid replacement, the problem in the us is the brief shortage of gasoline not the lack of oil or the Chinese liquidation of assets.
 
Heyitsjiwon said:
I'm not an economics major either, so I'm not going to pretend that I know everything. However, I am a finance major, so I can give some guidance on how investments/cash flows would work and some macro economics, but I wouldn't be able to give you exact numbers like how much interest rates would change.
I'm making these assumptions based on the US being able to pay off it's bonds and t-bills in time for the foreseeable future and not default. How they do it? It doesn't really matter as long as the US dollar is credible and the strongest currency in the world. Hell, texas could become independent and it wouldn't matter as long as the US can manage to pay off its future payments. It's all about cash flow.


Now, if I were China, and I REALLY were in need of money, then I would start selling off a chunk of the foreign investments. US debt could be one of them, but almost half of China's foreign investments are in US debt because it helps stabilize their yuan (effectively backing up a their own money with the safest investment in the world). So, yes, China can sell their bonds, but in return their own currency would become less credible. So, it's a bit of a double edged sword. The more they sell, the more they hurt themselves too in the long run.


Now, if China sold ALL their US debt, then that would hurt the US economy. Completely kill it? No, but selling bonds in large volumes causes the yield to rise for the bonds as they are cheaper. This rise in yield would cause interest rates to go up in the US and the financial world would follow since a lot of interest rates are based off of the US bonds as well. Rises in interest rates are pretty bad for growing economies as it makes loans more expensive. Thus, people take out less loans and do no invest/buy as much. This causes a ripple effect where people spend less money causing others to spend less money. So, governments would have to take action to tackle this rise in interest rates through expansionary monetary policy via their central banks.


So, if China sells a lot of bonds. It's going to affect the world for sure. Destroy the US economy? I doubt that, but people are going to not be spending as much money around the world and put their money into safe investments. But, one thing that should always be kept in mind is that the global economy relies on the US economy and currency very heavily. Thus, anything that happens to the US would also affect the world and every country.


Now, let's say that the US dollar becomes unreliable. Meaning it is not longer considered the safest investment in the world. Well... this brings up a lot of interesting things. But for the most part, the international finance world would halt to a crawl as no one would be able to trust another nation's currency. Trade would be difficult as it would be hard to gauge the value of currencies without the USD as a benchmark. So, we might see international trade practically freeze, which is obviously not good. Thus, the world would have to decide how to back up their currency. If another country were to be able offer the same financial security that the US was able to, then that country could become the next country that the world depends on for risk-less investments (aka. practically 0% chance of default). However... rebuilding that kind of a system wouldn't be able to happen immediately and would take years.
Click to expand...
The problem is the US is not only facing a call to pay back it's debts to China , its also the fact that they are facing massive gas shortages Imagine for no reason every major business in America just stops imagine the mass hysteria it would cause , people would loose a lot of money
 
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