[Iris7]

I am familiar with these arguments and many others. The "dollars" you refer to largely exist as various contractual obligations owed to and from bank-like entities, from hedge funds to manufacturing concerns to cities and counties. Banks, too, of course.

This is certainly true of East Asian holdings.

An attempt to "cash out" these holdings would require an avalanche of cash creation by the Fed, or the bankruptcy of the financial system, or both. Severe and instant inflation, severe cash crunch, severe writedown of debt and assets, business failure, loss of faith in the dollar - sure could happen, and is what the Chinese have been threatening for a number of years now.

[Dalite]

"An attempt to "cash out" these holdings would require an avalanche of cash creation by the Fed, or the bankruptcy of the financial system, or both. Severe and instant inflation, severe cash crunch, severe writedown of debt and assets, business failure, loss of faith in the dollar - sure could happen, and is what the Chinese have been threatening for a number of years now."

Here is a new Asian Wrinkle.... What if China decides to comply with our demands to unpeg from the dollar and retaliates by purchasing all of OPEC's production for a couple of years with their excess debt?

I Wonder who gets the last laugh then?