He did get one point backwards, though. He says “The US runs a trade deficit with China. That means China must accumulate US assets. China does not have a choice in the matter; it is purely a mathematical function. When the US runs a deficit, mathematically someone must run a surplus.” In reality, it’s the other way around. We can’t force our deficit on the world. The US runs a deficit BECAUSE other countries (China, Japan, Saudi Arabia) are willing to accumulate US assets. If they didn’t want to accumulate dollar-priced assets (such as treasuries), there’s a place where they can easily dump excess dollars, it’s called forex market … but that would strengthen RMB and Yen, and they don’t want that.
