dd

Could China Crash the US Dollar on a Whim?

A Couple More, you're right about one thing: China would like to keep exporting to the US. On many other counts you're confused, like failing to recognize the difference between a trade surplus and a budget surplus. The statement that a weak dollar would lead to an appreciation in value of foreign holdings by US investors is confused too. Value no, nominal price in US$ yes. You don't seem to realize that a weak dollar means less purchasing power, which would worsen considerably if China allows the yuan to appreciate. Their 1.4 trillion is not the tool used to peg the currency, it is the result of pegging their currency, and directly benefits the US in the way of cheap imports. If only they'd recycle all those dollars back into US treasuries, then maybe the dollar wouldn't be falling so badly huh?

On your final comment, yes that does sound familiar. Non-performing loans, high-flying stock market, overpriced real estate... is it the US?