Defusing China's "Nuclear Option" Myth

04/08/201812 Comments

Tariffs, counter-tariffs and headlines about trade wars are flowing like wine as the long-anticipated Trump campaign against China is finally shaping up. Given that futures are tumbling, the US trade deficit has just hit a decade low, and, oh yeah, we haven't seen market volatility like this since the crash of '87, you might think we have enough ominous financial storm clouds to worry about at the moment. But (if you listen to Reuters) you'd be wrong.

"China, holding Treasuries, keeps 'nuclear option' in U.S. trade war" blares their headline from this past Wednesday. Ah yes, the old "nuclear option" canard.

So what's China's so-called "nuclear option?" Well, it starts with a chart showing China as the largest foreign holder of US Treasuries, and it proceeds with the insinuation that China could dump all of its Treasuries on the market at once, causing (you guessed it!) a total obliteration of the market and a crisis for Uncle Sam and his almighty dollar.

That's the theory, anyway. But is it really true? Could China really deploy its "nuclear option," cause a market panic and sink the dollar?

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Comments (12)

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  1. I Shot Santa says:

    Thanks. I think that cleared up a lot of the confusion as to the importance of China’s new petroyuan. JimBob

    • manbearpig says:

      “Drills”… true, that word’s become a little scary…

      But the Hong Kong South China Morning Post is a bastion of Autralo-Britanico-Chinese collaboration… now owned by the Alibaba Group…

      just interesting to bear in mind…

      might tend to underline the western bellicose fear-mongering line…


  2. HomeRemedySupply says:

    I love these financial type articles by Corbett.
    After all, doesn’t money make the world go round. (joking)

    I’m glad Corbett put these Treasuries into perspective. I had a false impression that countries which held U.S. Treasuries had tremendous extortive leverage. However, in reality, it is an illusion as is the dollar itself.

  3. mkey says:

    Additional recommended viewing.

    Fake Fake News Is a Danger to Our Fake Democracy

    Collins had the montage on his show, I don’t know what’s the source, but you should hear this. Creepy stuff.

    • I Shot Santa says:

      Melissa is as sweet as butter. Excellent little video, of course. Glad to hear they are in the final stages of producing their documentary. JimBob

    • I Shot Santa says:

      Melissa is as sweet as butter. Excellent little video, of course. Glad to hear they are in the final stages of producing their documentary. Lee Camp also did one on the fake news shows who were jumping all over FOX. It was on RT right after he interviewed Eva Bartlett. Now I’ve got to look it up! Of course, he was spewing his own propaganda BS while knocking on them. Fun, fun, fun. JimBob who don’t believe the news is really news since it usually takes so long to get on air.

    • HomeRemedySupply says:

      Thanks mkey.
      I watched that TruthStreamMedia video. I like those final lines about “Fake”.

  4. FlyingAxblade says:

    so I read the Hasnas interview. Should we legislate tort anarchy?
    in a land of slaves, a freeman will be pulled down by the medusa of the owner with the hair of slaves, and the slaves will easily go along because they are part of the curse.
    The YouTube Union though might put a kink in this. I’m glad I watched a video on that just a little earlier so that when I read the interview I was trying to put the YTU in that perspective.
    One of the funny things that Jeorg said about the YTU is that it was not a “Quitocracy” (yet).
    I suppose the moment that America will stop being scared of the “Yellow Threat” is when private schools teach more students Chinese than German or Spanish.
    So many questions…sigh.

    • mkey says:

      What is YouTube Union?

      • Duck says:

        Not sure if he means this but there was talk of content makers on YT unionizing to bargain for better add revenue and stuff like that… since YT really only cares about the biggest players and really wants to be cable TV since its never turned a profit so far

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