This article appeared online at TheNewAmerican.com on Friday, April 6, 2018:
In the nascent “trade war” between the United States and China, there is one option the Communist Chinese government isn’t considering using: its current stash of $1.1 trillion of U.S. Treasuries. Trevor Hunnicutt, writing for Reuters, said that, for the moment at least, “Chinese officials are holding back on taking aim at their largest American import: [U.S.] government debt.”
Hunnicutt posited that, if the Chinese did unleash what he called their “nuclear option,” it would devastate the American economy by forcing interest rates much higher and increasing the U.S. Treasury Department’s costs of financing its trillions in debt.
He also noted that, once liquidated, those assets would no longer serve as a threat to the United States, having already been expended. As Jeffrey Gundlach — known as Wall Street’s Bond King — said, “It is more effective as a threat. If they sell, they have no [more] threat.”
In his typically brash negotiating style, President Trump opened the bidding in March by