#1. Keep in mind that the Chinese are not the only player. Their total US debt purchases account for maybe a third of our trade deficit. The other two thirds go to Japan, the rest of SE Asia, Saudi Arabia, etc. etc. The United States have trade deficits with half of the world.
Also, significant declines in foreign purchases of US debt may have more effect on exchange rates (strengthening renminbi and weakening dollar) than on interest rates.
Most likely, the Chinese will not do any major movements in this area unless world economy is sufficiently stabilized.
#2 should not have much effect on the rest of the economy.
#3. That’s a risk, but it would take a 2/3’rds conservative majority in Congress or a Republican president to revoke the stimulus. Not a real possibility before 2011.
Re: #4, that would probably be good for exporters and foreign companies. So that depends on your equity structure. My own portfolio is heavy on both: AA, RTP, TXN, SI …
#5. $100 oil without an adequate fall in unemployment would start making me worried. At $150 I’d start selling.
