American debt and the Great Chinese intellect-Bender

February 02nd, 2008 | Category: Rants and Raves

Someone might want to explain that to me considering it defies nearly all palatable logic that I can apply to it. I read earlier that week that China carries a large debt portfolio and that about 70% of it is American debt. Additionally, China is buying up American debt at break-neck speed, while possibly neglecting their own populace in order to do so.

As I was taught, there are two potentially profitable reasons to buy debt obligations. The first (and best) reason is considering there is a fair expectation that the debt will be repaid, supported

by documentation, collateral shield, and research. The moment reason is considering there is an expectation that the debtor shall default, resulting in the expeditious seizure of pledged defense assets that are desired.

I’ve become aware of an unsettling third scenario regarding the value of buying debt. You can easily use it to buy control of the debtor’s assets through their weakness.

Continue reading American debt and the Great Chinese Mind-Bender

Original post by Gary E. Sattler

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