But then why, according to this theory, does China lend money to he USA? Is it some kind of vicious circle where they have to keep propping it up because the alternative is even worse...? I mean, why else lend to someone who isn't going to pay back? I am sure they have a very good reason for lending that money - they are clearly very shrewd. I've been wondering if the US isn't going to come up with some rhetoric about why their debts to China don't need to be paid... Or what other options do they have?

During the cold war era, all companies in Sweden wanted to do business with the Eastern bloc, because those countries always paid, straight away, no fuss. My dads company did a lot of such business and he pointed that out many times.
All that disappeared straight away in the 1990s though and whole businesses fell down because suddenly they no longer got paid, or even ripped off. I think I read somewhere that they also always paid their foreign debts, but did not have much debt.

I think it's spooky about the US debt though.
If the dollar just crashes, it would not just affect the Americans but everyone else.