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How do you know you are talking with a moron!

 Last night my wife and I were in London, for many reasons but principally because we had been invited to a dinner party.  Nothing unusual there.  One of the guests, an American, started talking about how China would kill America because it would force it to "repay its loans".  I swear I tried to stay out of it, but having been a fund manager for 20 years, and the only finance person in the group, I could see where this was going.   

In the end, I had to say the truth, that bonds don't work that way, China can wait until maturity and get US dollars back, or sell the bonds to third-party investors.  However, since China holds less than 3% of America's sovereign debt, what they do doesn't matter.   I also pointed out that as long as China insisted on a trade surplus they would accumulate US dollars.   

The man did not understand, he could not comprehend   Basic trade theory.   The man was almost violent and even accused me of being a communist (strange considering I was saying that a communist country had no easy out).  So that was dinner last night.   

I mention this because in my "short" US travel I keep on being reminded of their ignorance of simply economic reality.   I was discussing the conundrum of the Florida and Louisiana Insurance markets, and how the withdrawal from the two markets by the insurance company indicated that there were some fundamental flaws that could not be addressed by the market.   I was told that they were just greedy (by a bunch of Republicans).   Pointing out that they themselves had no issue with greed seemed pointless at that stage.  I was surrounded by Morons.   

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