Update: A way to make sense of this is that China is making a massive bet on the future of the US. Namely, they are assuming that the US will continue to be ric

Update: A way to make sense of this is that China is making a massive bet on the future of the US. Namely, they are assuming that the US will continue to be rich which will maintain the value of US securities which can eventually be cashed out for tangible goods and services. The problem is that the future of the US is dependent in a large part on what the world thinks of it. Thus the catch-22. As long as everybody thinks that the US is rich, they can trade on that. Note that this is just another symptom of a bubble and when this one bursts, its going to make the great depression look like good times.