Monthly blog by senior staff on public policy + updates.
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Remember “mutual assured destruction?” MAD was the dominant principle of the Cold War: The Soviet Union would not attack us as long as we retained the ability to retaliate. They might surprise us and obliterate New York, Chicago, Los Angeles, and Washington, but our nuclear subs and hardened silo-based missiles would respond in kind, turning Moscow, Leningrad, Kiev and Vladivostok into historical footnotes (if mankind survived to write any more history).
A kind of financial “MAD” became our consolation in the 1990s as China continued to accumulate foreign exchange, the vast majority of which was in dollars (or financial assets like bonds that were priced in dollars). At present, China’s holdings of dollar assets top $1.5 trillion, says the Peterson Institute for International Economics.