With Druckenmiller on my feed today, here he is in May 2023's Sohn conference, laying the math out to Kiril Sokoloff that the US fiscal gap is 3x worse than France, & that the US actually cannot cut fiscal spending without actually increasing the deficit:

This is pathetic: 'The US government has pressured telcos to rip out network gear made by Chinese companies Huawei and ZTE but has allocated only about 38 percent of the money needed to replace equipment with non-Chinese hardware, the Federal Communications Commission said.
'FCC

'That's not fiscal dominance, sir. That's the Fed 'maintaining the functioning of the UST market' so USTs can continue to serve as pristine collateral for the US banking system. The Fed did that to help the banks it oversees, not to finance government deficits.'

Some say China’s buying gold to hedge a coming CNY devaluation, but historically gold flowing OUT of a country portended future currency devaluations, not gold flowing IN.

Consider US 1965-71, or S. Korea 1998, for example - gold flowed out, portending future currency weakness.

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Translation: If the US wants Chinese goods to stop being so cheap, it needs to print USDs and buy gold.

The problem is not just that China subsidizes its industries (even though that's all we hear about); it is also that the US subsidizes the USD, to subsidize Wash DC's largesse

Paulson could have stopped excess Chinese reserve/$ accumulation with a single action: Freezing the FX reserves of a major nuclear power... like maybe Russia?

As the old Chinese idiom says, 'Kill the chicken to scare the monkeys.'