what if Mr. China sells its U$ T-bills ?

[aigeezer]

I'm not condoning these monetary policies, they are irresponsible and will hurt future generations but if you think the US will be the first to go, you're badly mistaken.  Japan will likely be first (especially with their demographics), then the Euro nations.

I would guess it will all collapse almost simultaneously, regardless of which is nominally the first. I agree that Japan "should" be first, from their financial and demographic numbers and from Abe's risky disastrous "arrow" policies, not to mention their Fukushima situation, but financial matters are so intertwined now - financial Archduke Ferdinand effect, I imagine.

On the other hand, I've been expecting "it" to blow for many years, and it all keeps lurching on. Faced with that dilemma, Bill Bonner quipped "just because something is inevitable does not mean it is imminent."

Meanwhile, we've got BTC.

[artos]

They won't, their economy relies on the USA's economy too much.

[notme]

the "nuclear option" :

Mr. China hits the sell button on his US treasury bills

just to find out they are worth zilch  

America has assets. Namely California.

It's funny to think about California as an asset when you consider how far in the hole their state government is.

[weisoq]

China runs a current account surplus (exports capital), the US runs a current account deficit (imports capital). That means china has to recycle its surplus overseas and the US has to fund their deficit from overseas. Only if the US current account deficit declines will net foreign purchases fall, or only if foreign purchases of dollar assets reduce will the US current account deficit decline. These are accounting identities, a current account surplus = net foreign claims = a corresponding current account deficit. i.e. it’s probably a good not a bad thing for the US if china wasn’t buying as many treasuries.

[TheButterZone]

the "nuclear option" :

Mr. China hits the sell button on his US treasury bills

just to find out they are worth zilch  

America has assets. Namely California.

It's funny to think about California as an asset when you consider how far in the whole their state government is.

Considering CA.gov has effectively seceded from the union with all its Constitutional violations despite ratifying it... in a better world, all CA.gov land, buildings, and property would be seized and sold at federal auction, and the CA government itself would be imprisoned and/or ejected from the U.S., citizenship revoked.