The last time the Federal Reserve stepped in to rescue the U.S. economy, to the extent it did yesterday, was just after that infamous September 11th when investment confidence had been shattered.
A couple days ago, China let Washington and Wall Street know that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”
In other words, "We got you by the short hairs!"
Adding that “the Chinese central bank [may] be forced to sell dollars, which might lead to a mass depreciation of the dollar.”
The delusion that the US is “the world’s sole superpower” is no longer a reality.