

The USA has little to lose by confronting China's trade polices - rodyancy
http://www.nytimes.com/2010/01/01/opinion/01krugman.html?hp

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noelchurchill
_If China were to start selling dollars, there’s no reason to think it would
significantly raise U.S. interest rates. It would probably weaken the dollar
against other currencies — but that would be good, not bad, for U.S.
competitiveness and employment. So if the Chinese do dump dollars, we should
send them a thank-you note._

I'm not so sure about this. It might be true, but I think there is a lot more
back story. A weakening dollar is bad for people who don't have debt, and it's
bad for people who want to buy any good produced in foreign countries who's
currencies aren't depreciating as quickly as the dollar. However, for anyone
awash in mortgage and credit card debt, the weakening dollar is welcoming
news, as it lowers the cost of the debt. The caveat is that you have to be
able to support yourself, despite the weakening dollar, while still not
falling further into debt. If you're able to increase your pay to match real
inflation then you're in a real good position, but most people's income will
lag far behind the increasing cost of goods.

