[Toddsterpatriot]

The idea that China would refrain from using its U.S. Treasury holdings as a weapon because of economic consequences seems ludicrous in light of China's history.

The idea that we'd even notice if they dumped all their Treasuries is ludicrous. If they sell their Treasuries they get dollars, one piece of paper for another. It's not "worth" anything till you buy something with it.

They will dump their Treasuries when their banking system melts down. They'll be trying to save themselves.

[andy_card]

If they sell their Treasuries they get dollars, one piece of paper for another. It's not "worth" anything till you buy something with it.

You mean like MGM or Rockefeller Center? The Japanese screwed up, when they were in this position, by buying too much. Liquidity is good. Commodity values swing much further than US dollars.