It seems that economic threats have become a mainstay in geopolitical saber rattling. For example:
Summary: Saudi Arabia has threatened to sell approximately $750 billion in U.S. treasuries if Congress passes a measure meant to facilitate the accountability of any Saudi Official found to have been complicit in/actively involved in the terror attack of 2001. In response to this economic threat, the Obama administration has taken a position against the Congressional action.
Such threats and subsequent responses make me curious:
Let us suppose the Saudi's are able to sell the $750 billion of treasuries. What is the likely outcome for each of the two economies.
Further, if such threats are feasible and serious, why are there no restrictions about who can hold (and in what amounts) US debt?
It seems reasonable for some Americans to argue that the benefits of allowing foreign nations (especially those who are not historically allies of America) are not worth the costs.