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Originally Posted by Etarip
One, China is currently bearing the brunt of supporting the dollar, if they merely stop buying up our debt the dollar goes south. Second, if the U.S. shows it's willing to default on debt, much less attack countries that hold it's debt, other countries aren't going to be too enthustatic about buying up our debt or holding onto stockpiles of dollars. If other countries don't want dollars what are we going to buy oil with?
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This post is slightly offtopic (as I will not address the main issues raised in the original post) but I'd like to further address this point.
As I understand it Etarip is correct. It is enough for investors (many who are continously reinvesting their gains) to stop buying new bonds (when their old ones expire or at all) for the dollar to be impacted dramatically. Now I'm not sure if the numbers involved are large enough to have a major effect if there were to be such an incident but it is possible and I'd guess that it would have a major effect.
I don't think a war or other escalation would be benificial to any parties actually. Not to say that I don't think pressure should be put on China to improve its human rights record, allowing North Korean refugees to pass through to a third country would be a good start.