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Could China Crash the US Dollar on a Whim?

In addition to the points made in the above comment, it is worthy to note that China's huge $1.4 trillion surplus is really just an earmarking technicality. If you kept U.S. government revenues at their current level and then eliminated all social programs, we would be running a huge surplus also. This is essentially the situation with China. They have no social security program, a massive 1.4 billion population, a one child policy (which means most the huge population is old), and no significant social programs for medical care, poverty reduction, etc. I would have a huge budget surplus too, if I put my paycheck in the bank and made my family live in a cardboard box. Now I'm not saying China is not in a good position to provide citizen benefits. I'm sure $1.4 trillion goes a long way in China. I'm just saying they use their $1.4 trillion to artificially peg their currency to the dollar, instead of allowing efficient market forces to do their work. Eventually, they will have to deal with the elderly and handicapped in their country (probably by allowing what will become known as The Great Dying). Eventually, they will have to float their currency to remain a member of the WTO. Remember, Japan was running a huge surplus when they were "buying America" in the eighties - back when they were the world's factory. Too many corrupt bank officials and non-performing loans to crony company executives, a high-flying domestic stock market, and overpriced urban real estate killed that off, and they are still trying to recover. Sound familiar?