A Quick Reminder That Americans Have Their Priorities 100% Backwards

These numbers are from a recent Gallup poll:


Photo: Gallup

That’s right. Americans are way more concerned about foreign holdings of US debt than they are about the prospect of war in Iran.

There’s a lot of hype about China holding our debt and whatnot, but it’s all based on a misconception that somehow foreign holders of US Treasuries have a lot of power over us. They don’t. China holds Treasuries because they run a big trade surplus with us and don’t really have any alternative place to recycle their dollar holdings. Same with Russia, Japan, and so on.

If China wants to sell some Treasuries — which they do from time to time — that’s fine, but then ultimately those dollars they get for them will wind up somewhere, where they’ll likely end up in a Treasury.

On the other hand, war in Iran could have huge ramifications, both in terms of a human toll and an economic one through oil prices… and that’s an imminent threat.

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