The financial media is replete with stories of China holding over a trillion dollars of U.S. government bonds and buying euro bonds to help euro zone countries.
This is a remarkable turn of events from a hundred years ago. Hanging on the walls of my home library are two Chinese government bonds that I acquired in Hong Kong many years ago. One is an Imperial Chinese Government gold loan bond dated 1908, subscribed in sterling by Great Britain. The other, dated 1913, was subscribed by Russia, France, Great Britain, and Germany. Both are valued today only as collector’s items, not financial instruments of real value.
Who’d have thunk it? Could the same happen to Treasury and Euro bonds?