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Yglesias' extreme language always gets me.

>> It doesn't give China any leverage over the American government

They get some leverage. China's bond buying lowers rates on everything from mortgages to student loans. I agree that fear mongers overstate this, though.

>> the Chinese ... could order enormous quantities of Chipotle burritos and then throw them out. But that would be so hideously wasteful as to become politically untenable.

Even if it were tenable, it would still be a bad idea-- China want to suppress their currency now, but they're smart enough to know they may need to lift it later. That's why they buy US Bonds, similar to how the Fed buys or sells bonds depending on what effect it's going for. We've been in an extended period of buying so people forget that there are extended periods of selling, too. This gives them another tool apart from the usual raising interest rates, etc.

[yxhuvud]

>> It doesn't give China any leverage over the American government

Own a million to the bank, and it will dictate your life.

Own a billion to the bank, and you will dictate their life.