[Arleigh]

Why is it not good? They have no power to influence buy owning federal bonds.

Actually, dumping large amounts of US government debt has been suggested by some Chinese military strategists as one "asymetrical warfare" tactic to use in the coming Sino-American War. Doing so could drive up US interest rates dramatically. Leveraged financial speculators (i.e. most major banks) who sell Treasuries short and invest the proceeds in higher yielding securities would be crushed, toppling our whole financial system.

[Toddsterpatriot]

Doing so could drive up US interest rates dramatically. Leveraged financial speculators (i.e. most major banks) who sell Treasuries short and invest the proceeds in higher yielding securities would be crushed, toppling our whole financial system.

If the Chinese dump their treasuries the lower prices would give the banks and speculators an easy opportunity to cover their short positions and make a large profit.

[Thane_Banquo]

Anything the Chinese government can do with its mere $81 billion in US Treasury Bonds pales in comparison to what the Federal Reserve can do to lower interest rates back to their normal level. It wouldn't work. Plain and simple.