| So what? The world is literally starving for high quality assets with yield right now. Ten year bonds in Japan have zero yield and a lot of bonds are trading with negative yield. If China were to convert all those bonds into cash in a fire sale there would be investors literally lining up to purchase them. Then all that China has done is traded one form of USD debt (bonds) for another form (cash). To get out of the USD it would need to exchange that for something else of value. What? Bonds denominated in Euro? Ten? How do you think the ECB or JCB would react if their currencies started to soar relative to the USD as a result? Do you think Germany would sit idly by as their manufacturing was decimated due to the strong currency? Would Japan? So what if instead they went on a shopping spree and bought US produced goods. Would the US be aghast as demand soared and factories were expanded and wages rise and imports from China sank? There are certainly people that would get hurt in that scenario. Retirees would be crushed; retail would be crushed; real estate would be crushed; US government spending would be crushed; Wall Street banks would be crushed; US advertising would be crushed. But at the same time farmers would soar; manufacturing would soar; oil producers would soar; miners would soar; Look at the US electoral map and see if how many Trump states would be on the wrong side of that outcome. |
> But at the same time farmers would soar; manufacturing would soar; oil producers would soar; miners would soar;
Interestingly, the industries you are suggesting would crash employ most of the people in all states and the ones you suggest would soar are not large employers (with the exception of oil/mining that might come back online).
Oil and mining actually might get wrecked as well if the US/China relationship gets worse as Chinese demand is so important to those industries globally. Its hard to tell what the equilibrium point in those markets would look like.