> The U.S. cannot afford much inflation at the moment, since it would threaten the position of the dollar as the reserve currency in favour of the euro.
Not buying that, especially not at the moment - Greece is doing far more damage to the Euro as a reserve currency than anything the US could do to the dollar before August 2nd, and if Greece gets its house in order, there's still Portugal waiting in the wings. What's more, the US has an inflation rate right now that's practically nil, and I suspect China's interest is in the US spending again - their bond holdings exist for the sake of currency control, not as a legitimate investment.