No. of Recommendations: 1
If Europeans are holding $8 Trillion worth of U.S. government debt, and they "drive up" the cost for the U.S. to borrow more (i.e. drive up the necessary interest rate payable on the bonds), they are simultaneously DRIVING DOWN the value of the $8 Trillion of debt they already hold.
Your statement (quoted above) documents you do NOT understand international finance.
What YOU did NOT identify was the TERM OF THE DEBT HELD--which is critical in this type of decision-making.
If they hold relatively SHORT-TERM debt, then long-term rates are irrelevant because they will have REDEEMED the vast majority of their held US debt for full value. Meantime, long-term debt with have fallen off a cliff in terms of value in the secondary market because US govt debt will be deemed to NOT be a safe/reliable investment any more.
So, large amounts of investment funds go ELSEWHERE for obvious reasons.
