Tuesday, February 09, 2010

The boss speaks: SELL US BONDS

culturalrevlution.jpgWHO PAYS THE PIPER CALLS THE TUNE, AMERICANS

China PLA officers urge economic punch against U.S.

BEIJING (Reuters) - Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

World

The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China's National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency.

The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday.

The People's Liberation Army (PLA) plays no role in setting policy for China's foreign exchange holdings. Officials in charge of that area have given no sign of any moves to sell U.S. Treasury bonds over the weapons sales, a move that could alarm markets and damage the value of China's own holdings.

While far from representing fixed government policy, the open demands for retaliation by the PLA officers underscored the domestic pressures on Beijing to deliver on its threats to punish the Obama administration over the arms sales.

"Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counter-punches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease," said Luo Yuan, a researcher at the Academy of Military Sciences.

"Just like two people rowing a boat, if the United States first throws the strokes into chaos, then so must we."

Luo said Beijing could "attack by oblique means and stealthy feints" to make its point in Washington.

"For example, we could sanction them using economic means, such as dumping some U.S. government bonds," Luo said.

The warnings from the PLA come after weeks of strains between Washington and Beijing, who have also been at odds over Internet controls and hacking, trade and currency quarrels, and President Barack Obama's planned meeting with the Dalai Lama, the exiled Tibetan leader reviled by China as a "separatist."



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4 comments:

Pastorius said...

Good, they have two choices; either they use the money to buy French bonds (or some other Euro-bond), or they do what they're doing already; taking the money out of our bonds and investing it in other American assets.

China is our slave. They are not our Master.

China is going down next generation. They are going to run out of taxpayers because of their one-child policy.

We've been down this "the Orient is a threat" road before, back in the late 80's/early 90's.
Japan doesn't exactly own us, do they?

Epaminondas said...

You're quite right about Japan. I can remember people freaking as they started buying bldgs in Manhattan.

The real problem becomes one of the Chinese PERCEIVING they can maneuver us by threatening to destroy the dollar which would hurt them grievously, but kill us.

Considering our business leaders couldn't wait to take $$ from the feds, my bet is that they would be lobbying any prez to cave out of naked fear.

Pastorius said...

That's a good point.

But, an untold story (in other words, no one in the MSM is telling it) is that the Chinese are investing tremendous amounts of money in other American assets, like Real Estate for instance.

Some would see that as a threat. I see it as proof that the Chinese have more confidence in our economy than any other economy in the world;

INCLUDING THEIR OWN.

Anonymous said...

China can change their one child policy at any time, if anything the US should be more worried of Aztlan which is much more of a reality as each day goes by. The Chinese are swapping out their worthless US debt holdings for real assets worldwide.

No China is buying commodities and real assets, the World is not the EU+US. Both of those regions are on the verge of bankruptcy, the only slaves will be the serfs living in the west once the banks foreclose on the citizens.

Japan was never a threat, ever they were always an ally of the US and they have zero natural resources they are entirely dependent upon trade. Guess who Japan's largest trading partner is? China.