The last part looks a little scary: "If we flood the market with dollars faster than China can buy them relative to its own currency, this strategy will fail, a

The last part looks a little scary: "If we flood the market with dollars faster than China can buy them relative to its own currency, this strategy will fail, and eventually China will be forced to liquidate its dollar reserves. This will have the effect of driving the price of the Yuan up, and the Dollar further down." The problem I see with this is that when the U.S. pumps more money into circulation by buying up U.S. treasury bonds, etc., it further devalues the dollar. The Chinese (and Russia, India, etc.) know this well, and are perfectly happy with this. They'll continue to watch us devalue the dollar. Later, if we try to pull anything, they'll use the money they've amassed to buy up an overwhelming military force. But obviously, they'd rather own us than fight us. Not that they are set on world domination, but when the idiot on the block keeps lowering the cost of his mansion, and you'd like to have that mansion, you'd be stupid not to let him lower the cost until you can buy it for 20% off (or more).