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China stopped buying bonds and opted for cash 4 weeks ago. Now they're only buying dollars and dumping the liquidity into the market place buy buying so much. We're seeing that effect on the exchange rate. Not buying bonds will force the Fed to keep printing and accelerate monetization - they must be buying their own bonds with Fed money...putting even more dollars into the market place.
Once the run on the dollar starts - and it will pretty soon I believe - it will trigger a run on the derivatives.
NESTI PREDICTION: A 'Bank Holiday' will signify the commencement of the run. It will be an opportunity for only the biggest of banks to close-up shop, they will tell everyone else that this is to stabilize the economy, but this will be a misdirection.
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