China Threatens to Collapse Dollar
This could be very big news. China has over a trillion dollars of foreign reserves in their hands. If they sell off what they own, it would cause a collapse in the dollar value and would increase the yields on bonds which in turn would hit a US housing market already reeling from rampant foreclosures largely as the result of an over saturation of subprime loans. This is really just a war of words at this point meant to neutralize Democrat efforts to slap tariffs on Chinese goods (a huge component of their economic growth is exports to America and their neighbors). That said, we should watch. They do have us over a barrel and while we should not be cowed by threats, we should be sure that if we run high level risks, its for the right reasons not petty domestic political posturing.
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