Consequences Of USA Waging Economic War
Has anybody stopped to think of what might happen if the USA pushes its economic war too far?
The USA dollar is an international reserve currency. We have certain capability of waging economic war because of that status of the dollar.
At the moment, China is willing to hold excess USA Treasury securities as a way to hold trillions of dollars of reserves. China is stuck on what it wants to do with the USA dollar in the world because China holds so much wealth in the form of USA Treasury securities.
If we get too pushy, and start sanctioning China even though or because of our massive trade deficit with China, China could decide that it has had enough of accepting USA dollars for our purchases of manufactured goods from them. What if China started to demand gold as payment? They could start slowly transitioning to gold while they were still “invested” in trillions of dollars. However, their squeeze on the USA could gradually tighten as China divested from its dollar holdings in an orderly fashion.
What would happen to the USA empire in this situation? What response options would we have? Is it wise for us to push the situation to its limits to see what would happen? Is there a lesson to be learned from pushing on Russia in the Ukraine until they had to make good on their threats?