[ConstantineX]

This is kinda shocking to me, even though the United States fully deserves it. Accumulating such huge reserves in the first place was at least as much a political decision as an economic one, since buying Treasuries has such a pitiful return compared to other investments the Chinese could have made. Why now? Awfully hard for the Administration to deal with this alongside the Iraq War and the escalating tensions in Pakistan. And the Chinese sell-off would put downward pressure on the dollar, which would certainly encourage other oil-exporting countries with dollar pegs to float after they realize they are trading a sharply appreciating asset (oil) for a sharply depreciating one (dollars). With China needing World validation for the 2008 Olympics, I expect to see heavy political pressure applied in the next couple of weeks.