[Southack]

"1. When foreigners get burned on their dollar holding they will stay home from the T-bill auction, meaning less money chasing them, meaning lower prices and thus double digit interests rates."

Only if they want to kill their economies overnight. The play above that you opine would crash the Dollar so far as to render "cheap" Chinese and European imports more expensive than cavier and car-loads of cocaine.

They'd lose their *largest* customer overnight. Export-driven economies simply don't have that luxury...

...and even if they did, bring it on. You'd shift our current 9.5% of import-driven GDP to domestic American jobs. American employers would be hiring at rates not seen in decades.

[fallujah-nuker]

They reach a point of throwing good money after bad, it is not enough to hold on to your existing dollar reserves, you need to keep buying more to prop up the value. For China there are also some benefits of a stronger Yuan, one being that her imports would be cheaper for raw materials.

For us the biggest benefit will be the absolute discrediting of free trade. They will be as popular as a prohibitionist in an Irish ward.