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Originally Posted by Dragonlich
If the US attacks China, do you think it matters one bit if they'd demand the debt to be paid back? Nobody in their right mind would expect that the US would pay billions to it's enemy. Hence, step 3 is logical, but would only apply to that part which was borrowed from China. I do expect the dollar to drop in value a bit, but that'll be because of the international uncertainty about such a war, and what it'll mean to the world economy. I don't believe that the US will be unable to buy oil at all, unless there's some sort of international embargo, which is pretty unlikely.
All in all, a war with China would be bad, but I very much doubt that the US would lose in the economic arena; China isn't that big yet. And most of the economic impact would depend WHO starts the war.
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One, China is currently bearing the brunt of supporting the dollar, if they merely stop buying up our debt the dollar goes south. Second, if the U.S. shows it's willing to default on debt, much less attack countries that hold it's debt, other countries aren't going to be too enthustatic about buying up our debt or holding onto stockpiles of dollars. If other countries don't want dollars what are we going to buy oil with?