China Has Lots of Treasuries, Not Much Leverage

``China won't sell Treasuries is there's nothing else it can buy. It turns out the Pentagon was right in 2012 when it concluded "China has few attractive options for investing the bulk of its large foreign exchange holdings out of U.S. Treasury securities." Where else could China strategically stash a few trillion dollars? Euro zone debt, in a desperate hope that Greece won't crash anew? Japanese government bonds? Swiss francs? Australian property? Mineral-rich African nations? None of these are very attractive options.'' -- This of course misses the minor point that China has already dumped about $200 billion in Treasurys in the last few weeks (however there are insights, for example, that Japan will happily hoover up any Treasurys that China does not want). Further, it seems blissfully ignorant of the possibility that China might not dump its Treasury hoard all at once, in one place, but rather diversify (e.g., by pledging Treasurys in exchange for long-term commodities deals).