Originally Posted by
patsy
The Chinese have now a big dilemma.... similar to a poker player that has to keep on calling and raising bets. On the one hand, they have become the buyers of a big proportion of US Govt bonds - the Americans need the Chinese to fund the bailout. This presents a good opportunity for the Chinese: they can just close the tap and see the US$ collapse and challenge World hegemony. But if they did so, the trillion dollars or so they already hold on Treasure notes would be wiped out. So what should Chinamen do?, they ask themselves. It is a classic example of prisoner dilemma - they can both go down or they can share the pain.
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