China can not willy nilly sell the USD because the RMB is pegged to the USD.
I get diplomats are polite but China never grew up economically and depegged.
While buying gold is of interest for some parties and central banks it is not central to anything much.
The Japanese and Europeans are selling our paper. The JPY and EUR are appreciating.
Meanwhile the market is buying the long end of the curve as a flight to safety.
The western currencies are appreciating internally. In real terms inflation comprables y/y will be dropping. Not enough to matter. Only the US/Mexico retooling can truly bring down global inflation.
China has a problem. We can dictate China pay more for Russian oil while keeping the price steady to India. The way to dictate Russia should get more from China is to tell both of them we allow for a higher price to China. Such a shock would scramble the Chinese economy.
China’s gambit that the country would get large enough economically to reverse the peg meaning in affect the USD was pegged to the RMB has failed.
That is why China is turning inward. That and not enough water to keep an outward facing economy. We must become the manufacturing global powerhouse.
There is no reason for China to actually fight with us. There are reasons for Xi to have enemies as props. I do not trust Xi he is scummy along with his purges.