The Thought of Chairman Liu

Asia Times Online :: China Business News - Paulson, China and the turmoil beneath: "Actually, what is odd is US foreign debt being denominated in dollars, a fiat currency that the US and only the US can print at will. The United States is the only nation in the world whose foreign debt is denominated in its own currency. In that sense, the US has no real foreign debt as all its debts are sovereign debts payable in currency it can issue at will. The term 'foreign debt' usually means debt denominated in foreign currencies. Such debts require the backing of adequate foreign reserves because the debtor governments cannot print foreign currencies and are therefore subject to risks of default on foreign currency loans. Foreign debts for the US, as they are denominated in dollars, are only sovereign debts held by foreigners. If foreigners holding US sovereign debt want to cash them in, the US can print as many dollars as it needs to satisfy them. "