The Chinese government has hinted that it may liquidate its vast holding of US Treasury bonds, potentially triggering a crash in the dollar, if Washington imposes trade sanctions to force a yuan revaluation, The Telegraph reported. source- Forbes.com

Since that story broke there has been a number of stories about problems with Chinese manufactured products.

From Mattel toys to Toys R US bibs, to tires, pet foods, tooth paste, the list goes on.

Considering the volume of products coming in from China, it is silly to assume that the quality issues plagueing them lately are new. What is new is the amount of publicity they are receiving. There are new stories it seems, popping up every week.

The US has allowed cheap Chinese products to enter the US because the low prices to consumers have helped to offset increases in food and energy costs at home. The huge trade imbalance this causes puts China in a position to threaten the US, and the currency devaluation that China could presumably cause if they carried out their threat could have a big impact on inflation in the US.

So it is curious that suddenly, we are hearing about the Chinese products in a way that has people checking the Made In labels before they buy.

China may have power to leverage their success against us, but threatening to kill the cash cow is never a good idea. It is a good bet that sales of Chinese goods will slow in the US. This will negatively impact the Chinese economy, all without imposing sanctions on Chinese products.

One has to wonder what the source is of these stories in the first place.