View Full Version : End game: War with China to cancel US debt
Business_Casual
05-26-20, 20:20
Consider this scenario. The majority of US bonds held by CCP related entities. The CCP moves on Taiwan or HK. We “cancel” their bonds under a war powers act.
Ramifications:
1). Consumer goods stop flowing
2). Hostility ensues in Pacific
3). WW III
Is the current path and the proposed reaction/provocation that different than the situation pre-Pearl Harbor? Goading the Japanese into attack?
SomeOtherGuy
05-26-20, 20:47
Very plausible, but complicated. China has likely anticipated this in some form, and based on reports over the last 10 years, fewer and fewer US bonds are held in the name of obvious Chinese entities (governmental or govt-controlled businesses). More and more of the US debt is being "held" in accounts in various offshore financial centers. Tons of US debt is held in those same centers for the benefit of other governments and businesses around the world, many of which we are friendly to (e.g., UK), and some we are conditionally friendly to (India, Saudi Arabia). Some large portion of those accounts likely are owned by those same Chinese entities (governmental or govt-controlled businesses), but there are one or multiple layers of intermediate ownership, so it's not as easy to just cancel debt to China without cancelling debt to, say, British insurance companies.
The US has a range of ways to try and trace who owns what, including overt (FinCEN forms, like 114, and the IRS Forms 8938 and 5471), and while I'm not in intelligence, I imagine a lot of more effective spying type means as well. So the US probably could try to cancel debt to enemies but not friendlies, but I have no idea if their accuracy would be 100%, 80%, or 2%. If we cancel legitimate debt to friendlies they may stop being friendlies.
I imagine this scenario has been planned as a contingency for 20+ years and there is probably a good capability to make it happen, but it may not be simple or clean.
Other than that... things are moving fast and 2020 is crazy. I could imagine China being sanctioned this year.
Diamondback
05-26-20, 20:57
You wanna know how to REALLY hurt China? Tariff the living crap out of consumer goods. 'Course then the toy aisles at Target/Walmart go empty and kiddies start crying and Suzy Soccermommy only sees "the mean ol' Orange Grinch stealing her kiddos' Christmas," which pushes that vote to Team Blue...
And then this in turn gores my ox and possibly kills my current gig, because for some reason despite my strong and sustained encouragement of the company I wok for to even if not fully move out of the PRC at LEAST start developing a second supply line elsewhere, they're still married to one Chinese manufacturing subcontractor... I've been trying to nudge them to look at Eastern Europe, some of the poorer ex-Combloc countries or the newer NATO members.
ThirdWatcher
05-27-20, 03:10
War is an expensive way to restructure debt.
Consider this scenario. The majority of US bonds held by CCP related entities. The CCP moves on Taiwan or HK. We “cancel” their bonds under a war powers act.
Ramifications:
1). Consumer goods stop flowing
2). Hostility ensues in Pacific
3). WW III
Is the current path and the proposed reaction/provocation that different than the situation pre-Pearl Harbor? Goading the Japanese into attack?
The CCP got Hong Kong back years ago. We don't currently recognize Taiwan, we aren't going to war over them.
If consumer goods stopped flowing from China we'd buy from Taiwan, India, Pakistan, Vietnam and maybe if we are really good...Japan. China would suffer economic collapse.
Business_Casual
05-27-20, 05:55
The CCP got Hong Kong back years ago. We don't currently recognize Taiwan, we aren't going to war over them.
If consumer goods stopped flowing from China we'd buy from Taiwan, India, Pakistan, Vietnam and maybe if we are really good...Japan. China would suffer economic collapse.
Look at the triggers for Pearl Harbor - very similar.
The_War_Wagon
05-27-20, 08:47
War is an expensive way to restructure debt.
Didn't Gen. Smedley Butler get in trouble for noting the same?
Look at the triggers for Pearl Harbor - very similar.
Even more similarities.
As a result of US criticism of Japan, leading Japan to look at the US strategically, a Japanese analyst (forgot name, as I'm doing this off the top of my head) wrote a book in 1935 outlining a strategy of an attack on Pearl Harbor.
Twenty years ago, a Chinese general outlined an attack on the US, using biological weapons to minimize destruction, saving US infrastructure for Chinese use.
Diamondback
05-27-20, 09:33
Even more similarities.
As a result of US criticism of Japan, leading Japan to look at the US strategically, a Japanese analyst (forgot name, as I'm doing this off the top of my head) wrote a book in 1935 outlining a strategy of an attack on Pearl Harbor.
Twenty years ago, a Chinese general outlined an attack on the US, using biological weapons to minimize destruction, saving US infrastructure for Chinese use.
You mean Unrestricted Warfare, advocating a full-court press including lawfare, terrorism and economic warfare to "prepare the field." https://en.wikipedia.org/wiki/Unrestricted_Warfare An interesting look at their Long Game: http://www.indiandefencereview.com/news/six-wars-china-is-sure-to-fight-in-the-next-50-years/
The main threat is still EMP and Death From Space, two tech capabilities they're very aggressively pursuing while we collectively sit around and polish the pole.
https://www.newsmax.com/peterpry/emp-infrastructure-grid/2020/03/26/id/960038/
https://imprimis.hillsdale.edu/urgent-need-united-states-space-force/
An interesting theory about Trump's actions WRT China right now: https://www.redstate.com/diary/clint-fargeau/2020/05/26/what-if-president-trump-is-an-illiberal/
TexasGunNut
05-27-20, 09:38
No expert but stayed at a Holiday Inn once.
CCP (Government) put US bonds up as collateral in numerous banks around the world.
Since the ‘90s, borrowed tangible currency (EU, $, etc) against these.
Invested that real money in real assets worldwide, all the time skimming small but significant amounts into personal or surrogate trust accounts.
Set up enough dummy corporate accounts worldwide to keep approximately $500 billion “floating” at any given time. IE laundering
Buy controlling interest in hedge, mutual and sovereign wealth funds. Buy controlling interests in strategic industries.
Use float to short and long worldwide markets through overnight windows. Use controlling interests to manipulate information (propaganda) to move markets and currencies for profit.
Wash rinse and repeat.
At this point there are SIGNIFICANTLY more assets outside of China, controlled by China or surrogates than there is inside. The way they convert fiat into real assets and global control is brilliant.
We have about a ten year window before the compounding of their strategy is irreversible.
Please take care of my family if I don’t post anything within the next two weeks ��
Look at the triggers for Pearl Harbor - very similar.
China doesn't need oil, rubber or scrap steel from us. To the contrary we purchase their steel.
China is not going to start a military war when they are already winning an economic war. China today and Japan 1940 are so completely different it isn't funny.
Japan went to war because we denied them resources and they realized they needed to take over European colonies to get raw materials and establish themselves as a super power.
China already IS a super power and they don't need anything from us except for us to continue to buy iphones and nikes.
The_War_Wagon
05-27-20, 21:49
Please take care of my family if I don’t post anything within the next two weeks ��
Youtube will make sure, we never knew you were here. :rolleyes:
ThirdWatcher
05-28-20, 02:36
Didn't Gen. Smedley Butler get in trouble for noting the same?
I’ve got the benefit of leading a pretty insignificant life.
An interesting theory about Trump's actions WRT China right now: https://www.redstate.com/diary/clint-fargeau/2020/05/26/what-if-president-trump-is-an-illiberal/
Trump is a lot smarter than people think. (Most people think that if you disagree with them, you are a moron anyway). As trump is not a politician, but someone who approaches things in a business like solve-problems manner, he often does things that do not make sense to the politician, but make eminent sense to the every day man. China is an example. He recognized that China is a drain on the country (whether he has thought it through as much as the article above suggests or not). So he has gone on to try and change that relationship. And as a businessman and negotiator, he knows you have to compromise. (Liberals should get this as this is how many of our liberties have been done away with) -- so you make "outrageous" demands, and then negotiate those demands back to what you expected in the first place. Witness the China Tariff issues. By moving the ball into China's court he has made them negotiate backwards to avoid even strong backwards motion. (Same as the left has done to the 2A and others).
Anyway, the article made a lot of sense, even if some of Trump's actions in it are inadvertent -- Trump is playing the strategy even if he has not thought it through as much as the article says.
China already IS a super power and they don't need anything from us except for us to continue to buy iphones and nikes.
I've long said we won't have a shooting war with China until they can't keep their people employed and they need to reduce their population. They make too much doing business to need to shoot at us.
Diamondback
05-28-20, 16:18
Trump is a lot smarter than people think. (Most people think that if you disagree with them, you are a moron anyway). As trump is not a politician, but someone who approaches things in a business like solve-problems manner, he often does things that do not make sense to the politician, but make eminent sense to the every day man. China is an example. He recognized that China is a drain on the country (whether he has thought it through as much as the article above suggests or not). So he has gone on to try and change that relationship. And as a businessman and negotiator, he knows you have to compromise. (Liberals should get this as this is how many of our liberties have been done away with) -- so you make "outrageous" demands, and then negotiate those demands back to what you expected in the first place. Witness the China Tariff issues. By moving the ball into China's court he has made them negotiate backwards to avoid even strong backwards motion. (Same as the left has done to the 2A and others).
Anyway, the article made a lot of sense, even if some of Trump's actions in it are inadvertent -- Trump is playing the strategy even if he has not thought it through as much as the article says.
Frankly, I'd suspect a lot of what Trump does is "unconscious competence" born of instinct--he may not be able to describe a strategy, but he does have a natural talent at finding the other guy's jugular and going for it. Same thing as I as taught in Business 101, "if your opening offer isn't so absurdly in your favor the other guy laughs in your face you've just screwed yourself."
look at history China has been on top of the world many times for hundreds of years we have not even been on top 100 years ?
and most likely will be again some day but they can wait 200 300 or more years their history is thousands not hundreds so they will wait it out and move
IMHO war with them wont happen in a regular way but if we do not bring back medicine and tech we are doomed we just need to cut off the made in China and they will go back to a even longer waiting game we have built them up way way to much its our own fault
they can not go to war and cut off the hand that feeds !
they can deny the hand that feeds once they have the upper hand and the left is playing into that with the bribes that are happening in college and gov selling secrets and info to them and that we need to do something serious about
Frankly, I'd suspect a lot of what Trump does is "unconscious competence" born of instinct--he may not be able to describe a strategy, but he does have a natural talent at finding the other guy's jugular and going for it. Same thing as I as taught in Business 101, "if your opening offer isn't so absurdly in your favor the other guy laughs in your face you've just screwed yourself."
You said it much better than I was able to.
One: I don't even want to consider going to war with China over trival crap like our debt. We ran up our credit card balance, nobody made us do it. I can't stand that crap when individuals do it and then act like the credit card company is the bad guy.
Statecraft level geopolitical maneuvers are not reasons to go to war. You respond with your own strategy and maneuvering, but on the global political field of battle, not an actual battlefield. Our disjointed politics leaves us ripe for getting our ass handed to us compared to systems that have Presidents-for-life and/or generational despots. One administration plays hardball for gains that the next administration throws away. If we can't get our shit together we will lose a lot of ground on the world stage. That's just the way it is. Representative democracy is a beautiful thing, but it requires more of its citizens than we as a country are currently giving.
China, Russia, and others are bad actors no doubt about it. If Biden wins the Oval Office he will be on his knees doing a Lewinsky for his family's personal gain and F the rest of us, no doubt about it.
Will speaks of China having a cultural strategy of patience, but that is not entirely accurate. China has a long history, but one of many dynasties. The CCP is the latest of these, their dynasty is stable in China so they can afford to play the long game. They have no domestic opposition, they kill all who speak out internally. Russian history and current domestic politics are pretty much the same.
War between major world players is not a thing to take lightly. Ask the few remaining WW2 vets. If there was truth to the conspiracy theory that China intentionally launched this pandemic, that could be a prelude to war( just an example, I don't think this was an attack).
We can't put domestic politics aside in the face of this epidemic, we are in no position to fight a major war. Hell our troops get yanked this way and that in the fights we have now thanks to our inability to present a united front politically.
Business_Casual
05-30-20, 06:41
( just an example, I don't think this was an attack).
Agree, the crime was covering up human to human transmissibility once it got out. I do think it was likely shoddy quality control/procedures in their lab that allowed this.
As to scrap steel, rubber and oil, not the point. The point is we boxed in Japan, if we box in China the same course is likely.
Agree, the crime was covering up human to human transmissibility once it got out. I do think it was likely shoddy quality control/procedures in their lab that allowed this.
As to scrap steel, rubber and oil, not the point. The point is we boxed in Japan, if we box in China the same course is likely.
You missed the point.
Japan WANTED to be a super power and was lacking natural resources.
China IS a superpower and has plenty of natural resources.
We aren't capable of boxing in China, won't happen. Do you think we are the only consumer of Chinese goods? Also do you think the US government has been on China's tit because they aren't getting anything out of it? The US government will do everything they can to prevent any kind of real conflict (other than the usual political theater) with China because that would stop a giant gravy train going into the pockets of the DC power brokers.
Business_Casual
05-30-20, 19:22
You missed the point.
Japan WANTED to be a super power and was lacking natural resources.
China IS a superpower and has plenty of natural resources.
We aren't capable of boxing in China, won't happen. Do you think we are the only consumer of Chinese goods? Also do you think the US government has been on China's tit because they aren't getting anything out of it? The US government will do everything they can to prevent any kind of real conflict (other than the usual political theater) with China because that would stop a giant gravy train going into the pockets of the DC power brokers.
I think there are multiple factions in DC, all with sometimes conflicting and sometimes converging agendas.
Diamondback
05-30-20, 19:35
I think there are multiple factions in DC, all with sometimes conflicting and sometimes converging agendas.
Byzantine court politics had nothing on the Puzzle Palaces around the Beltway...
I think there are multiple factions in DC, all with sometimes conflicting and sometimes converging agendas.
Absolutely, couldn't agree more. And that is why I don't buy into a single "deep state" conspiracy. However when Clinton trades hard drives full of tech and erodes restrictions on their Favored Nation Trading status, that isn't a one time deal and the rent still gets paid even if everyone can't agree on who is the land lord.
Things are put in place and if it's a money maker each administration is more than willing to inherit that windfall. The government is a lot like the mafia, they know it's more lucrative to work together in a cooperative and cohesive way, but that doesn't mean if it suits their purposes right now they won't whack each other trying for a bigger piece of pie. And if conflict really cuts into profits, they will still come back to the table to work it out, at least until the opportunity for a bigger piece of the pie comes along again.
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