No shots will be fired...no tanks rolling...no nuclear missiles launched...no troops rousted from their sleep...instead....
It will go something like this...a sort of legal ransom note...probably sent electronically...
FROM: PBOC
REFERENCE: US TREASURIES
We are placing an order to immediately redeem the $1.1 trillion of US Treasury notes we currently hold in our possession...
Please forward the proceeds to the bank account you have on file...
P.S. Please redeem the treasuries in Chinese Yuan...not US dollars...thank you.
That's all it would take...a simple demand...our financial system would come to a standstill...
Now mind you....while I have a mind for business...and enjoyed the Keynesian economic theories I learned about back in my college days...this whole foreign exchange stuff gives me a headache...however...if its one thing I have learned in all my years on this planet...while I may not understand something...I do understand when something isn't right...
And so...while I don't understand all the technicalities of foreign currency interactions...debt loads...leverage...derivatives...etc...I do know that China is beginning to flex its muscle...
It is hitting us where it hurts most...our debt load...and why not?....we aren't paying it down...we keep adding to it...there's already a bunch of it out there...and someone has to keep buying it...
Up until now China has been one of the biggest buyers...it had to be...the world does a lot of transactions based on the "dollar"...which over the years became the main stay currency in order to interact among countries...kinda like bitcoin is to all the other coins...
But now....there's a new sheriff in town...actually more than one as Russia and the Middle East Countries are all starting to think outside the box...maybe its time for a new way of doing business...time to make the renminbi and ruble the new king of currencies...lets tie it into gold...like the world did up until the early 1970's when money was worth more than just the "Good Faith of the US Government"....
Shit...you mean no more bail out? You mean we actually have to pay it back? Even worse...we can't just run the printing press and whip up a bunch of dollar bills? We have to use the yuan which is actually tied into gold?
Hello...Fort Knox...what do we have on deposit in the vault? What do you mean its empty? We already sold it? Double shit...
Get the Chinese ambassador on the phone...Yes...Mr. Ambassador...does your country accept bitcoin ?
Not a single shot would be fired...