Krugman: China is no longer buying our debt
Remember all the dire warnings about what would happen if China stopped buying our debt, or worse yet, started selling it? Remember how interest rates would soar and America would find itself in crisis?
Well, don’t tell anyone, but the much feared event has happened: China is no longer buying our debt, and is in fact selling tens of billions of dollars in U.S. debt every month as it tries to support its troubled currency. And what has happened is what serious economic analysis always told us would happen: nothing. It was always a false alarm.