The next bubble?

Some market watchers seem to believe that the Chinese have begun dumping U.S. treasuries and will reduce their purchases of them.  What does this mean?  Hard to say.  Some would say this spells doom and gloom in terms of the Federal Reserve printing money, euphemistically referred to as quantitative easing, which translates in time into hyperinflation.  Others predict higher interest rates which will choke off a housing recovery and impact consumer spending.  Some predict for the U.S. the same as what has happened in Japan: over a decade of stagnant economic growth.

Regardless, we as a nation must reduce our reliance on foreign capital and soon.  The Arabs have had us over the oil barrel for years.  Detroit responded with SUVs and other gas guzzlers.  It seems to me that the Chinese have us over the proverbial financial barrel.  To this, we have responded by borrowing more money.  What happens if our actions anger the Chinese and they refuse to lend us any more money?  Hard to believe that we have allowed ourselves to be so indebted to the Chinese.  They are now the world's banker and we the world's largest debtor.

This reminds me of one of the final scenes in "The Patriot" when General Cornwaliss, seeing surrender at Yorktown as inevitable, lamented to himself something to the effect "how could this have happened?"