Right, but they're not threatening to sell their treasury notes, they're continuing to hoard them, which keeps Chinese exports artificially competitive, which i

Right, but they're not threatening to sell their treasury notes, they're continuing to hoard them, which keeps Chinese exports artificially competitive, which is a problem for the US. China would have a problem if they wanted to sell, but they don't; they're content to hold our debt, collect interest payments, and use the leverage to manipulate their currency. See also: http://www.nytimes.com/2010/03/15/opinion/15krugman.html http://www.nytimes.com/2010/03/15/opinion/15krugman.html