The Observation Deck

roundeye you listen to us (clicky here) I do not think that the Chinese would ever sell off all of its US Dollars.. (I hope )

This is the natural consequence of our free trade policies.

Fortunately, the U.S. Constitution gives Congress the right to regulate our end of currency exchange volume and rates. This power has largely been abandoned since WWII, NAFTA, and WTO.

However, on the hypothetical free market it would have made sense for our dollar to depreciate greatly since 1973. It also should have taken several nose dives in the 80s in reaction to Japan and the 'Asian Tigers', and another few nose dives as Mexico and China became more significant trade partners.

So, what China can do with their currency and their holdings of U.S. debt is perfectly within their rights, rights we trumpeted when increasing trade with them.