I think it is possible that Obama will precipitate a trade war between US and China. This is realistic considering that Geithner has been calling China a currency manipulator before he was even in office. Also, China has been voicing its discomfort with Obama. This trade war could lead to China using its "nuclear option" concerning the USD. http://www.nytimes.com/2009/01/24/washington/24diplo.html?_r=1
noooooo way, the tough talk is just to shut the unions up and get votes. The reality is that they are shitting kittens in private about just what you said- a trade war with our largest creditor. Think like Bill Clinton on this one, the risk far outweighs the rewards. The risk is a full blown depression with your name written all over it. I'll bet this is the scenario: He'll make so much hot air, claim victory by 'forcing' China to the negotaiting table, way down the road get some concession from them in trade for an even larger one from us, run out and claim victory and a new day for America. Democrats are not hard to figure out, the script is tried and true. The only difference this time, Obama will say 'these things need to be well thought out and done intelligently' and then on cue the press and the zealots will tell us what a smart man he is.
Interesting insights I must admit. Honestly, I really really hope you're right. I'm not saying that nightmare scenario is probable, but I think it is possible. It's another compelling reason (if there weren't enough already) to short the USD in the future.