ExtremeDullardTrump dealt major blow as Europe threatens ‘nuclear option’ over Ukraine
European leaders are considering dumping $2.34 trillion in US debt if Trump abandons Ukraine, potentially triggering an economic crisis worse than 2008
ProfessorozoneWhat’s does it mean to dump debt?
That they would sell or let their holding of US bonds expire and take the principal.
So like calling in the loan?
wiesonI don’t think exactly. As I understand: let’s say Italy is holding US debt. This debt has a certain value as long as the US economy is good because then there is a chance of repayment. So as long as Italy holds US debt, it’s interested in having trade with the US or generally being invested in the US economy to keep up the value of their debt.
If they let go of the debt they would have less interest in keeping the US economy up. They would pr stop encouraging their Italian companies to buy American machines/goods/services.
Something like that.
But how do they “let go” of US debt?
CorkyskogDepends on the time frame. They will naturally shed it as treasuries reach maturity and just not buy more. But otherwise you would just sell them, it’s like what the bond market is.