Originally Posted by wig

I don't understand what you think is important about China owning US Bonds... It's not like they set the terms of the debt.

Their only recourse is to sell them on the open market like everyone else. How easy do you think it is to sell 1 trillion + bonds on the open market and maintain the value of your principal?

That said, I wish every person who is so focused on the US Dollar would acknowledge that the US Dollar Index fell from July 2001 (128.95) until April 2008 (75.03). Between the 2008 low and today, the Index has traded between 92.85 and 75.62 (currently 76.37).

IOW, the US Dollar Index got crushed between 2001 and 2008, but since then has basically traded sideways.

Also, if you look at the US Dollar in terms of Gold, you should also look at other currencies in terms of Gold. What you'll see is that Gold is more expensive for all foreign currencies, not just the US Dollar.