BEIJING (Reuters) - Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan...--
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Comment: It is irrational to bring up military revenge as a reason for getting rid of US bonds when in fact it is an economic necessity and highly rational in terms of finance. The problem, however, remains what to do with the dollar cash when the bonds are sold. There is no simple solution to this problem and thus China is forced to hold on to its junk position much longer and to a much larger degree than financial rationality would suggest.
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