Hypothetical attack on U.S. outlined by China

[unhappycamper]

Sucker punch
Air Force bases in line of Chinese fire.


Hypothetical attack on U.S. outlined by China
By Patrick Winn - Staff writer
Posted : Monday Jan 21, 2008 6:20:08 EST

In a hypothetical future scenario, the U.S. and China are poised to clash — likely over Taiwan.

The democratic Republic of China, commonly called Taiwan — which America backs and the communist People’s Republic of China considers part of its territory — frequently irritates Chinese leaders with calls for greater independence from the mainland. But while the American military mulls its options, Chinese missiles hit runways, fuel lines, barracks and supply depots at U.S. Air Force bases in Japan and South Korea. Long-range warheads destroy American satellites, crippling Air Force surveillance and communication networks. A nuclear fireball erupts high above the Pacific Ocean, ionizing the atmosphere and scrambling radars and radio feeds.

This is China’s anti-U.S. sucker punch strategy.

It’s designed to strike America’s military suddenly, stunning and stalling the Air Force more than any other service. In a script written by Chinese military officers and defense analysts, a bruised U.S. military, beholden to a sheepish American public, puts up a small fight before slinking off to avoid full-on war.

This strategic outlook isn’t hidden in secret Chinese documents. It’s printed in China’s military journals and textbooks. And for much of last year, Mandarin literates and defense experts — working for the Santa Monica, Calif.-based Rand Corp. on an Air Force contract — combed through a range of Chinese military sources.


Rest of article at: http://www.airforcetimes.com/news/2008/01/airforce_china_strategy_080121/

[iamjoy]

1. Silly Chinese

If you want to bring America to your knees, all you have to do is call in your debts.

Oh wait, then we won't be able to buy your stuff anymore. Make a military strike against us, and there will still be Americans buying your products 'cos it's cheaper. Heck, we haven't stopped buying oil...

[A HERETIC I AM]

2. Please explain how China could possibly "call in (it's) debts"?

By what mechanism can China (or any other entity holding US Treasury Securities) "call" them in?

[endarkenment]

4. They could stop buying more t-bills.

That would effecticely 'call in their debt' in the sense that we would no longer be able to float our deficits without a drastic increase in t-bill rates. Of course this would also wreck the value of the existing Chinese t-bill holdings (which is happening anyway due to the drastic slide of the dollar. A sudden change would just accelerate what is currently happening.) Wrecking our economy would also wreck their economy as they are dependent on us buying their stuff to keep their factories running. As China develops their own consumer economy, they will be less dependent on our market and will probably decouple their yuan from our dollar. They are already reducing the proportion of t-bills in their portfolio, and the whole planet is trying to figure out how the system works after the end of the petrodollar as the fiat currency.

[A HERETIC I AM]

6. Not buying more is not that same as calling them in.

In fact, what you suggest by saying "we would no longer be able to float our deficits without a drastic increase in t-bill rates" is not necessarily the case, based on what is currently happening in the mid and long term Treasury Bond market.

The interest rate these bonds pay is set and does not change. The Ten Year Treasury pays 4.25% and the 30 year pays 5%. What changes is the price of the bonds and that affects their yield. This is an important distinction and one that should be kept in mind. When you hear "Bonds rallied today and the yield on the Ten Year Treasury went down" it means the price of the bond went up. The prices are bid up in large part because of supply and demand. Demand for them is high because they are seen (rightfully so) as a safe haven.

10 & 30 year Treasury Bonds have been a well performing asset class of late because of this rise in their price. If you purchased a 30 year 2 years ago, your bonds are worth considerably more now than they were when you bought them.

China or any other holder of these securities can most certainly sell them on the open market but they can in no way demand payment or redemption for a bond before it matures. The bond market simply does not work that way.

I agree with you that China will at some point have a consumer class large enough to be self sustaining and that might preclude them needing the United States as a major trading partner, but that time is not right around the corner. I think it will happen, but it won't be this year or even this decade. It is years and years away.

My apologies if you knew all of this already but I have seen that line inferring China could some how "call in it's debt" many times on DU. It is simply untrue.

[endarkenment]

7. The interest rate these bonds pay is set and does not change

past rates don't change, future rates do. If buyers go away the treasury will have no choice but to raise the rate on new bills until the buyers come back.

I thought I was clear that China pulling out of the T-bill market would be *effectively* calling in our debt by forcing the treasury to raise rates until they could sell enough to float operations. Yes it is not somehow a demand for instant repayment of current obligations - that indeed cannot happen. Instead it would simply cause an instant global financial crises - oh wait we already are having one of those. If China stopped buying our crappy t-bills it would cause an instant financial crises even bigger than the one we are in now, which is pretty big. Runaway inflation on top of economic stagnation, but unlike the 70's without the dollar as the financial system's fiat currency acting as a brake on conditions here in the US. It should be fun.

When people inaccurately refer to China 'calling in its debt' they are reflecting the reality that China is in the financial driver's seat and can manipulate our economy they way we have long been doing to other economies over the last 50 years. When we get a dose of the Beijing Consensus and are forced to alter our domestic policies to suit the financial market dictates emanating from Asia rather than America, it will slowly dawn on our national leaders that the center of the world is no longer in Washington, and that the authoritarian and closed system they set up to dominate other nations through market forces is now being used to dominate us. What goes around comes around.

[Birthmark]

3. Yeah, that 'sucker punch' strategy...

...worked so well for the Japanese, why *wouldn't* China want to try it? Idjits.

[endarkenment]

5. For the limited objective to retaking Taiwan it probably works.

However I rather doubt the this is anything more serious that our Ministry of Disinformation doing its usual saber rattling as the normal part of swindling the public into pouring another 500-800B/yr into the corrupt and useless MIC.