If the USA is doing less trade with China (and vice versa), then China may be thinking: Why should it hold all those US treasuries/bonds? In the past, when China did a lot of trade with the USA, it made sense to have a lot of US treasuries/bonds. Now, it may not be. So, if it isn't, then China has to acquire something else (e.g., gold, capital assets, etc).
Thanks Mr. Walmsley... I understand more each posting. Still, how gold will be more secure for a mid-west farmer, I don't know.
If the USA is doing less trade with China (and vice versa), then China may be thinking: Why should it hold all those US treasuries/bonds? In the past, when China did a lot of trade with the USA, it made sense to have a lot of US treasuries/bonds. Now, it may not be. So, if it isn't, then China has to acquire something else (e.g., gold, capital assets, etc).