I must be thinking of the Communist Chinese holding in US Treasuries and futures then. I was having a discussion with someone about this and now I don’t remember particulars.
The $500b odd Chinese holdings of Treasuries aren’t a big problem, either for the Chinese or for us. They’re not a problem for the Chinese because Treasuries are the most liquid income-producing asset in the world. If they put that in gold, they would end up buying at $10000 an ounce, an asset that produces no income, but incurs storage costs. And if they need to sell, prices go back down to $1000. They’re not a problem for us because if the Chinese sell their Treasuries, yields will go up a little, but other investors will buy. It’s no different from how some people will stick with a savings account if 12-month CD’s are at 1% but go into CD’s if yields go to 2%. If the Chinese sell their Treasuries or stop buying any more, Uncle Sam will have somewhat higher financing costs, but life will go on.