> It means China is dumping US debt. Which will mean a surge in interest rates, a weaker US dollar, and in a nightmare scenario, hyperinflation.
But then again, the popular wisdom seems to be that a weak currency supports exports. So I don't know that this is clearly a bad thing. Hyperinflation I would peg to be usually caused by a break down of the domestic market.
A weak currency means more exports but higher import prices. Add the additional tariff coming soon means anything from China will get more expensive. Perhaps this forces Trump to drop them.. it could backfire and create a local industry that will compete against China.
But then again, the popular wisdom seems to be that a weak currency supports exports. So I don't know that this is clearly a bad thing. Hyperinflation I would peg to be usually caused by a break down of the domestic market.