Why should China sell its $3 Trillion US Treasuries when there's a much better alternative?
If you don't understand this the first time, please re-read it until you do. The Chinese strategy is pure genius.
China obtains charters from US Govt to operate banks in the USA
China capitalises these banks with Chinese-held US Treasuries (several trillion available...)
Through the diabolic magic of Fractional Reserve Banking, they then create a mountain of credit 9 times the size of their original reserves and go on an asset purchasing spree in the USA.
Any hanky-panky from US Govt, and they threaten to redeem their US Treasuries.
Utter genius!
Check out the formal announcement for Industrial & Commercial Bank of China, the Agricultural Bank of China, and the Bank of China (CLICK HERE, HERE, HERE).
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