http://www.telegraph.co.uk/finance/china-business/9551727/Beijing-hints-at-bond-attack-on-Japan.html
World War III will likely be fought by computers and financial markets, not tanks and aircraft carriers. Pay attention to this story as it suggests what might happen to us in the future.
First the combatants – Japan and China are not friends, although the countries have manufacturing ties. Both countries have big economies that need a lot of energy, and neither has an adequate supply.
The current fight over a few unoccupied islands is not about the islands, but that there may be large deposits of natural gas under the China Sea. Who “owns” those islands established who owns the mineral rights.
Japan isn’t backing down even under the threats that China will not prevent attacks on Japanese companies and people working in China. World War II in Asia had been going on long before the attack on Pearl Harbor (since 1937). Japan had invaded the mainland and ruthlessly murdered civilians and overran an ill equipped military that had placed its hopes on the League of Nations preventing all future wars.
So China is now threatening to use its large holdings in Japanese government bonds as a weapon. Japan is such a good credit risk their 10 year bonds sell at less than 1% interest.
Trying to dump bonds may be an idle threat. Flooding the world on the secondary market will not affect the interest Japan has to pay on its existing bonds – at worst it would make it more expensive to borrow new money or roll over existing debt. But Japan is not a weak economy that can be bowled over. Other central banks would pounce on the opportunity to buy Japan’s bonds. Japan might sell its US Dollar holdings to meet its internal needs.
Even if China was able to create a stampede and destroy confidence in Japan, they would destroy the value of the remaining bonds they hold – Kind of like the character in blazing saddles who holds himself hostage.
This is poker for huge stakes. Does Japan think China has a pair of twos?
The current events, as explained above, should not be dismissed. However, as explained above this appears to be a weak threat by the Chinese against their longtime adversaries because, as rightly pointed out above, Japan’s Central Bank’s ability to ‘digitize’ billions upon billions upon billions (trillions actually) of Yen will be sufficient ammunition to stave off any threat by the Chinese central bankers hope to bring down the Yen.
In my humble opinion, we are witnesses to an ongoing battle over money, which will decide the Reserve Currency here on planet Earth and there are many details about this as well as many interesting twists and turns to come.
China’s Central Bank is under pressure from many adversary’s.
But, of course there is always the possibility that POTUS is really nothing more than a whimpering little change agent, a minion if you will, being directed by more powerful entities whose intent is to rain down destruction upon America, as we know it, along with her allies in order to establish a new world order.
Since China dosen’t seem to be friendly with Japan . And with the event’s of protesters burning Japenese auto delerships, in China, One question, could China be cutting off thier noses to spite their faces ? Maybe the chosen one,will have a discussion with China’s leaders and apologize for Japan’s mistake for having dealerships there.