A former US administration official says China can ruin the US dollar and economy by dumping its “massive dollar-denominated financial assets on the market.”
Dr. Paul Craig Roberts, who was Assistant Secretary of the US Treasury Department in the Reagan administration and associate editor of the Wall Street Journal, made the remarks in an article published on Friday.
Despite unending provocations from neoconservatives in Washington, Dr. Roberts wrote that China and Russia are exercising patience because they know some “fools” in the US could “resort to their nuclear weapons, and the entire world would be lost.”
He added that if the US persisted with its provocations, China and Russia could decide to retaliate by using economic cards.
“All China needs to do is to dump its massive dollar-denominated financial assets on the market, all at once,” he noted.
“In order to avoid US financial collapse, the Federal Reserve would have to print massive amounts of new dollars with which to purchase the dumped Chinese holdings,” the former Treasury official added.
“The Chinese government then dumps the massive holdings of dollars it has received from its selloff of dollar-dominated financial instruments,” he further said.
“Now what happens? The Fed can print dollars with which to purchase the dumped Chinese holdings, but the Fed cannot print foreign currencies with which to buy up the dumped dollars,” he continued.
He warned that the massive supply of dollars dumped in the market by Beijing “would have no takers,” leading to a drastic devaluation of the dollar as well as the economic, social, and political chaos in the United States.
As part of a new strategy to “pivot” US military presence toward the Asia-Pacific, the United States is encircling China with a chain of small air bases and military ports, a strategy many analysts believe could lead to a direct confrontation between the two adversaries.
The US has also entered what many observes call an “economic war” with Russia over the crisis in Ukraine.