[The Truth]

A poster in another thread said, "Also, when you talk about "cutting off the money supply", you're talking about destroying the global economy. Its economic mutually assured destruction."

My question is how would China selling off its US dollar holdings and refusing to let US go futher into debt yield mutally assured destruction?

I am having problems understanding the dynamic. I understand that the value of the US dollar would drop extremely sharply. China's total exports would go down because the US couldn't afford to import nearly as much. However, China isn't exactly "gaining" anything from its excess exports to the US at this point anyway, right (besides more dollars that they cant get rid of without causing mutally assured destruction)?

Can anybody explain what would happen in this situation (or at least educated speculation)?