China's nuke US by selling treasuries?
As Warwick McKibbin recently argued, https://www.puzzlefinancialadvice.com/single-post/2018/03/06/USAs-Achilles-heel-in-trade-war, a very effective way for China to respond to Trump's trade war threats would be to sell down its large holdings in US treasuries, forcing up US interest rates crunching the US economy. Today's AFR continues this discussion:
China's leaders must be sorely tempted to activate the "nuclear option" and punish the capitalist running dog, the tango dancer in the White House. They could at any time start to liquidate their $US1.2 trillion ($1.5 trillion) holdings of US Treasury debt.
Even a small dose of this financial arsenic would - in the minds of Beijing's ultra-nationalist faction - set off a salutary panic. It would crater the US bond market at the very moment when Donald Trump's fiscal depravity is driving the US budget deficit to a stratospheric $US1 trillion.
The contagion would spread instantly through US mortgages and consumer credit, and would detonate a Wall Street equity crash - the "Trump crash" in blood and gore.