Let's imagine that we, the USA, have a rival country that we have outsourced almost all of our manufacturing to. We have created an environment where our domestic producers were forced into high priced products through OSHA, unions, EPA, taxation, etc etc. and were not able to compete pricewise, and stopped producing. Even our national defense is using this rival country to make such sensitive items as missile components.
Now, since we owe this country a trillion dollars, and they are concerned with our monetary policies, namely inflation, they stop lending us any more new dollars, and want to exchange what they have for hard, tangible assets, and for real estate, stocks, in short, for anything that is not a us dollar. We already pay them more interest than we pay to our private citizens, but they still sense that this is a losing proposition for themselves.
Now, lets go to a scenario where this rival is short of food to feed their billion population. They need all the corn, soybeans, etc, that can be imported, and they can buy all of our production with their supply of dollars if we let them.
How long before our government would close the door on these exports, to keep our own citizens from revolting over high food prices?
Would we embargo grain sooner or later under a situation like this?
If you have forward contracts in place, would they still be valid?
