China has to hold massive US debt because China exports more than it imports. There is no realistic way for China to collect on that debt unless it imports heavily from the US.

The US does have a lot of leverage (military!) here, unlike other indebted countries like Sri Lanka. https://twitter.com/prchovanec/status/1264898090408062978

This is the most important economic issue facing the world.

I do believe massive debt defaults, haircuts, write-downs and cram-downs are likely (and the word used tells you who has the power!).

Poor nations get to default while rich nations get to give haircuts or cramdowns!

We have had this global absurdity where East Asians and Germans worked hard to export goods to the rest of the world, built up IOUs and called those debts "reserve assets" and almost none of that debt is collectible.

This absurdity will have to end but where do we from here?

You would think the massive exporting countries would be happy but the Japanese and Koreans have worked too hard and have suffered a demographic collapse due to that overwork. They are not happy nations.

Balance is vital. Spiritual economics is about that balance.

The debts the exporting nations hold (reserve assets) have seriously distorted their domestic financial systems because the reserves got multiplied as "money" (I.e, internal debt!) within those nations, giving rise to massive bubbles. Japan showed the way and China has followed.