“Do you think that several disastrous circumstances are better than high inflation? Even if we can avoid higher inflation, they are still disastrous, aren’t they?”
The disastrous circumstances can be avoided by not getting involved in a long term war on the Asian continent in an age of modern weaponry where no one’s productive facilities are safe, by not allowing Finance to run up asset prices in a speculative frenzy or countering any embargo on modern economy’s major resource like petroleum with renewable energy sources aided by a 50% discount/rebate policy for any and all green big ticket items.
So far as China or the Saudis cashing in their bonds or disinvesting I highly doubt they’d do that simply because it would not actually be in their interest to do so. Secondly we could just say that we will honor the payment of the bonds as they mature, and if they try some other strategy to destabilize our economy we could just declare it “null and void” and tell them that they can continue to trade with us, but if they attempt destabilization in any way we will simply not let them take advantage of our 50% discount/rebate policy and in the interim we will re-industrialize in all of the products they export…so never mind and have a nice day. That would probably be the best thing that could happen to them actually as it would undoubtedly make them consider the 50% discount/rebate policies in their own country thus making it stably prosperous without having to be an export platform. After all everything and everyone adapts to a new paradigm….not the other way around.