The Chinese ARE Dumping our Treasury Bonds

We warned about this in our Pentagon research back in late 2008 and early 2009 but there were plenty of skeptics. We emphasized the risk in the 2012 NY Times bestseller, Secret Weapon. In Chapter 9, we made a strong case that China could dump their Treasury bond holdings and work fervently to establish the Yuan as a reserve currency alternative to the American dollar. We pointed out how multiple Chinese sources were planning for this and labeled it “financial warfare.” We made it clear that this would prove deflationary for China but said “If China can tolerate such deflation and if it can transition effectively, it will be sitting in the shade.”

While we knew then that the time had not yet arrived for China to make her move, we also knew it was just a matter of time. Starting in 2011, we began to address the risk of financial warfare in this Blog. Just look back at this February 2011 post where we argued that China had a long-term view and a five-year plan:

The Chinese Take a Long Term View; Evaluating Their 5YP Continue reading

A New Grand Strategy

Berlin choosing Moscow over Washington emphasizes the fact that in the real world there is no such thing ‘allies’, but ‘interests’. This article precisely underscores this fact. Although its true regarding the persuit of ‘two global policies’, Germany has historically chosen Russia over America which has ironically lead to two of the bloodiest wars in world history as both have used economic/political/military cooperation to out-maneuver the other for strategic military advantage before an actual war is declared. History is repeating itself and the only difference this time around is the Fourth Reich (German-dominated EU) versus Putin’s neo-Soviet Union.

BERLIN (Own report) – An influential German weekly opened a debate on the call for redefining EU – US relations. The West’s current policy toward Ukraine is diametrically opposed to “European” interests, according to an article published in the online-edition of the German weekly “Die Zeit”. “Europe should not deprive itself of cooperation with Moscow; it should rather be enhanced. At the same time, the EU should intensify its relations with Washington, while pursuing “its own concepts” with more determination. The objective should be a “new and more promising transatlantic grand strategy.” The article was authored by an associate of the Global Policy Institute, a think tank in London, but his standpoint also reflects opinions being expressed within the German foreign policy establishment. Back-stage disputes over Germany’s policy toward Ukraine are slowly surfacing into public view. Continue reading

China’s Foray Into Bhutan Worries India

After intruding into the Indian territory of Ladakh, China has made a foray into Bhutan, India’s neighbor and one of its closest allies, according to an intelligence note in possession of the Indian news channel, Times Now.

The channel reported that China’s People Liberation Army (PLA) had intruded into Bhutan and set up three camps and was carrying out patrols. Continue reading

Xi Jinping May Have to Heed Military Hot Heads

As a change of leadership in China draws near there are a few crucial points people need to be aware of. One, Xi Jinping is a moderate Communist, yet a Communist is a Communist. Two, there is a struggle within the political structure where the military war hawk Communists are attempting to take the hold on power from the more moderate political structure of Jinping and current leader Hu Jintao currently control. Should Jinping, who is favored by Jintao, not be the one to lead China; America should expect more transparency. However, not the transparency America is thought to be looking for.

Being that China is already engaged in economic warfare against the United States, technology theft (for decades) to enhance military capability in giving them the edge in warfare — both already acts of war — what else is left? One should expect that China be openly hostile and war-like. This same hardline Communist power structure within the PLA vying for power has also called for the outright extermination of the USA via biological warfare to depopulate the country and prepare it for a future massive Chinese colonization. Yes, you read that correctly. China is also not even the least bit afraid of a third world war in order to protect Iran. Make no mistake, this is not politics as usual and these are not your average sabre rattlers. Combine all this with a destructive and inept administration giving the heart of the US defense and global peacemaking deterrent away (among other things) to those who ‘share’, you now have all the makings of a true world crisis brewing.

What’s more is that most people would rather focus on Kim Kardashian as they believe it’s the “real news” of the day and continue being part of what geopolitical expert JR Nyquist calls the shopping mall regime.

To the average reader unfamiliar with world events, geopolitics, military history or the drivers behind leadership in countries such as China et al, this may sound like what some would superficially label as ‘fear mongering’. However, to those who have been tuned in for years realize that this is the real world around us — and it sees America as an empire in decline with a shortening list of allies and as an increasingly irrelevant superpower. What happens with the next leadership transition will mean a big deal.

The following article excerpts underscore the point of what’s possibly to come:

Xi Jinping, who is completing a four-day tour of the United States, is expected to take the helm of the regime in fall of this year.

But, according to Lam, “Xi Jinping’s major power base is not in the Party, not in the government, but in the PLA,” or the People’s Liberation Army.

New entrants to the Politburo Standing Committee, the central power organ of the Communist Party, have to consolidate their position quickly, Lam indicated.

“There is a vast number of princeling generals,” Lam said, referring to generals who are the sons of early communist revolutionaries.

Generals began issuing aggressive statements about potential warfare scenarios, and portrayed the United States as an enemy and an aggressor bent on “containing” China.

“In the last four years we’ve seen a very disturbing increase both in terms of the frequency and harshness of messages of generals,” Lam said.

“Many of my friends in Beijing who are liberal academics were very disturbed,” he added.

In particular, Lam said, “in the past several months we have seen an exacerbation and escalation of this totally irresponsible, even to the point of warmongering, statements, made by these generals.”

Full article: Xi Jinping May Have to Heed Military Hot Heads (Epoch Times)

Power Struggle in China

The attempted defection of Wang Lijun, recently the top cop in the western city of Chongqing, suggests that China’s ongoing leadership transition will be especially turbulent.

On the 6th of this month, Wang entered the American consulate in Chengdu, the capital of neighboring Sichuan Province, seeking asylum. He spent a day there. Incredibly, his old boss, Chongqing Party Secretary Bo Xilai, essentially invaded Sichuan by sending hundreds of his armed security troops to surround the Chengdu consulate in an unsuccessful bid to apprehend Wang.

Full article: Power Struggle in China (World Affairs Journal)