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A comment on China Sells U.S. Treasuries to Support Yuan. Parent comment

Re:China Sells U.S. Treasuries to Support Yuan by misja111 on Thursday August 27, 2015 @10:13AM (#10129486)
Point 1 is correct, the selling of bonds by China will have the effect that their prices will drop. That's the law of supply and demand in action.

Point 2 will probably also happen; but only up to a limited amount, because:

Point 3, and the others, won't happen. There will not flow more money towards the USD. What happens now is the opposite; China is selling USD's. Again because of the law of supply and demand, this will lead to a drop of the USD rate. If the drop will be too much for the FED's taste they will increase the interest rate (point 2), but only so much that the depreciation will stop.

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Re:China Sells U.S. Treasuries to Support Yuan by RaSoJo on Thursday August 27, 2015 @10:31AM (#10129626)
>There will not flow more money towards the USD. What happens now is the opposite; I guess it is an event in the chain. jpollock asks the question in point 6 "That USD->Renminbi sale might result in a drop in USD because there will be more USD around?"
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