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China to liquidate US Treasuries?

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011987/china-
to-liquidate-us-treasuries-not-dollars/

Ambrose Evans-Pritchard details how “A key rate setter-for China’s central bank let slip – or was it a slip? – that Beijing aims to run down its portfolio of US debt as soon as safely possible.”

I can certainly see how this is a clear warning to holders of longer-term US debt.

What would this mean for folks silly enough to park ALL of their savings in something like a short-term (1-2 month) 100% US Treasury mutual fund? I have my suspicions that this means trouble and yet I’d like to be able to make a credible argument as to why it is a bad idea. Thoughts?

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