US business would love the dollar to fall by 30%, our exports would soar and those companies that depend heavily on manufacturing in China could probably use other hard currency like the Euro. It would crimp our military operations overseas, but when you get down to it a lot of countries still want to be under the American nuclear umbrella and we paid for the nukes a long time ago.
As for the military, well, China will pick a good time to crash the dollar (when they've liquidated most of their dollar reserves). Then they'll be able to bring US to its knees without firing a single bullet. Why shouldn't they? it's their turn to be the empire.
The US will be able to pay the trillions of dollars back. How? Just printing more dollars and using them to pay. The problem for the investors is that those dollars might not be worth it too much.
But this will be in many years. Right now US creditors don't want to dump the dollar because it would decrease the value of what they hold.
Almost like we're sitting the top of an unstable equilibrium that is only getting taller.
Why the Germans save as much as they do with such a low interest rate is a topic for another discussion.
