Krugman: A dollar crisis?

[Rakesh Bhandari]

>: what would happen if the Chinese, in a huff at the
>U.S., decided to dump all of their immense dollar reserves and exchange them
>for Euros?
>
>Presumably some chaos would ensue in the financial markets, but the actual
>exchange of dollars for euros would cost the Chinese nothing, right?

I think the Chinese would pay a heavy price: the US could help further
militarize Taiwan, aid India's military program to reach parity to China's,
close off the US market (ouch!), put greater pressure on North Korea, and
carry out accidental strikes on all the embassies on European soil.

rnb