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Toto deVeer

Economic War Breaking Out Between China And Japan

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Economic war is beginning. Currency wars followed by trade protectionism. I wrote, on another board, yesterday:

China launched a strategy to increase the Yen by buying Samurai Bonds. Japan countered by intervening on the currency market. This upset the US (but China is the culprit).

So the US has countered by saying to the whole world "Don't even think about what Japan just did, ours is bigger than yours and you will get squashed".

Meanwhile China hangs on to the dollar like a leach to a dying patient, and the US trade deficit continues to increase. It does not matter how low the dollar goes, the trade deficit is still increasing and China is the export beneficiary.

China is the problem here. There are enormous geopolitical strains building in the South Asia region. China has just deployed warship(s) to Myanmar. Japan has just seized Chinese fishing vessels near disputed islands between the two countries. The US is working with Taiwan on a more aggressive strategy to counter China. And remember that South Korea recently found one of their ships has been sunk by a North Korean torpedo (NK being a puppet state of China). Meanwhile China has just deployed missiles with the capability to sink US aircraft carriers (for which reportedly the US Navy has no counter). And China has a new fully operational nuclear submarine base on Hainan Island (complete secret to the world until very recently).

I believe that China is waging war on the United States indirectly through the currency markets. She is cleverly trying to put wedges between the US and her ASEAN allies and will soon be probing for signs of weakness. It would not surprise me to wake up tomorrow and hear that a US or Japanese ship had been sunk in the seas off the coast of China. What is the US going to do with no money left and currency turmoil? Invade China? These will be the tests that the ASEAN group will be watching. As much as they fear China, they will migrate to the stronger power, in the end. It's going to be a tit-for-tat situation until sides are aligned.

The problem now for the US is that the whole world is like a bee hive, and China is the Queen Bee. Everywhere the US goes she gets stung. No individual sting will bring her down, but in total the ultimate effect will be fatal, if she continues on this course. China is happy to watch this play out, seeing the victim slowly die. While this is happening China is building up sophisticated finance capability in Hong Kong. When the dollar dies, the Yuan will be cut loose and floated, and the job will be done.

And that, my friends, will be the end of Anglo and Euro centric finance dominance, and usher in the new age of Asian finance dominance. You will know this is true when the Gulf oil lanes open up to Chinese naval power.

EDIT: I will just add that the parasitic interplay between China and the US (where China is benefiting by having a currency pegged to a very weak host) is also being identically replicated by Germany and the PIIGS of Europe. Both the worlds manufacturing export powers are playing the same game. Perhaps it is China that is trying to push up the Euro, to fend off Germany. After all, Germany (or the ECB) cannot buy Yuan to retaliate, can they?

Well, today there are reports that China has stopped rare earth exports to Japan.

Lets bore down more carefully and look at the developing picture:

There are three great export surplus economies of the world: China, Japan and Germany. History teaches us that export surplus economies tend to suffer more during depressions than others.

Can you spot the difference this time? I can. China is a parasite to the US, and is feeding off a weak host. Germany is a parasite to the PIIGS/Eurozone, and is also feeding off the host. This allows China and Germany to manipulate their currencies down in an unseen way.

Where does this leave Japan? I'll leave this to you to figure out.

"May you have interesting times" is appropriate for each of us at this junction. For interesting times will truly begin, when the US deliberately breaks the China/US parasite/host paradigm.

The US has no choice. It's the only way that the trade deficit will be brought down. But there is going to be a BIG realignment of the currencies, and don't be surprised if this moves from a financial war towards a physical conflict.

You've been warned....

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Japan had been stockpiling these for years, IIRC. It'll take a while for the blockade to have an effect.

China isn't in any position to threaten anyone, militarily or economically.

They have

(i) an outdated military based on USSR hardware and no real power projection ability

(ii) if they call the US's bluff on treasuries, they are fecked

(iii) they have massive pollution, a population which will age before it is rich and they cannot feed themselves. Oh, and serious corruption problems.

Edited by FaFa!

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Very good.

Apart from the bit about China.

Wouldn't back that horse matey. US can cripple them any time they want, and that time looks to be getting closer by the day.

Edit: Btw, Particleman has been documenting this on his Protectionism then War thread for quite a while.

Edited by Frank Sidebottom

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you cant eat gold and you cant use food as ahighly efficient conductor so how does that help

E175.

But seriously if TSHTF, I don't think anyone is better placed than the US to deal with it.

The US can fail if everyone else plays nicely.

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Japan had been stockpiling these for years, IIRC. It'll take a while for the blockade to have an effect.

China isn't in any position to threaten anyone, militarily or economically.

They have

(i) an outdated military based on USSR hardware and no real power projection ability

(ii) if they call the US's bluff on treasuries, they are fecked

(iii) they have massive pollution, a population which will age before it is rich and they cannot feed themselves. Oh, and serious corruption problems.

The conflict will likely begin with actions such as stopping merchant vessels from certain countries within range of Chinese waters, that sort of thing. It will be of a low grade, probing type of activity. Nothing too overt, but with messages clear. It could escalate to prosecution of foreign interests within China on false premises, etc. They may try to instigate conflict between ASEAN members. Could be something like resource wars involving Australia or Africa, for example. Or even financing terrorist cells in western economies. There are thousands of ways covert conflict could be created.

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E175.

But seriously if TSHTF, I don't think anyone is better placed than the US to deal with it.

The US can fail if everyone else plays nicely.

well you learn something new every day, id tend to agree but who knows,

Edited by Tamara De Lempicka

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The conflict will likely begin with actions such as stopping merchant vessels from certain countries within range of Chinese waters, that sort of thing. It will be of a low grade, probing type of activity. Nothing too overt, but with messages clear. It could escalate to prosecution of foreign interests within China on false premises, etc. They may try to instigate conflict between ASEAN members. Could be something like resource wars involving Australia or Africa, for example. Or even financing terrorist cells in western economies. There are thousands of ways covert conflict could be created.

They are not in a position to start dicking about. They are reliant on exports - tit for tat will hurt them more. They can (arguably) only control their own nearby waters. Well, so what? They can bugger about in their own backyard all they want - no-one is selling to them, so no-one will care. ASEAN members already dislike them (i) the overseas ethnic Chinese are the Jews of Asia and are widely resented in Thailand, Philippines and Indonesia where they own a lot of the major players (ii) China claims a ludicrous amount of the South China Sea (iii) China has been building dams in the south of the country causing water shortages in their southern neighbours. They could try to do a CIA in Africa, but I think it is a bit of a stretch frankly.

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My feelings are the next major conflict won't involve any anglo powers overtly.

China Russia / China India are my thinking - and it won't be about economics but subsistence.

I'd agree - India is already pissed off with Chinese palling up with Pakistan and dams in Tibet are threatening their northern water supply.

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They are not in a position to start dicking about. They are reliant on exports - tit for tat will hurt them more. They can (arguably) only control their own nearby waters. Well, so what? They can bugger about in their own backyard all they want - no-one is selling to them, so no-one will care. ASEAN members already dislike them (i) the overseas ethnic Chinese are the Jews of Asia and are widely resented in Thailand, Philippines and Indonesia where they own a lot of the major players (ii) China claims a ludicrous amount of the South China Sea (iii) China has been building dams in the south of the country causing water shortages in their southern neighbours. They could try to do a CIA in Africa, but I think it is a bit of a stretch frankly.

Here's another one: using N Korea to stoke tensions against S Korea and Japan. So many options.

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Japan had been stockpiling these for years, IIRC. It'll take a while for the blockade to have an effect.

China isn't in any position to threaten anyone, militarily or economically.

They have

(i) an outdated military based on USSR hardware and no real power projection ability

(ii) if they call the US's bluff on treasuries, they are fecked

(iii) they have massive pollution, a population which will age before it is rich and they cannot feed themselves. Oh, and serious corruption problems.

not to mention if it heats up any more there will be mass unemployment as the factories start shutting down = civil unrest

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Here's another one: using N Korea to stoke tensions against S Korea and Japan. So many options.

Sorry, I am losing track of how this helps them.

They are not liked in Asia, their money is owned by the Yanks, they are reliant on exports.

All this posturing is more for the domestic audience. It will blow over soon enough once the Japanese release the fisherman which is likely IMHO

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you cant eat gold and you cant use food as ahighly efficient conductor so how does that help

I'm F**KING LIVID about something here, and when I find out what it is, heads will F**KING ROLL

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Where does this leave Japan? I'll leave this to you to figure out.

It means that Japan no longer has control of its own currency (unless they go mental and give a trillion yen to each citizen) The Japanese don't seem to have seen this coming.

Yen value belong China which will result in a slow painful decline.

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I'd agree - India is already pissed off with Chinese palling up with Pakistan and dams in Tibet are threatening their northern water supply.

What are the major water systems in Asia - and the average number - of countries of disparate ethnicity / ideology - that they flow through?

Anyone?

How do these demographics compare to the US?

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  • 244 Brexit, House prices and Summer 2020

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      • down 5% +
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