A senior advisor to the Chinese government has called for an attack on the Japanese bond market to precipitate a funding crisis and bring the country to its knees, unless Tokyo reverses its decision to nationalise the disputed Senkaku/Diaoyu islands in the East China Sea.
I've never understood these threats. The issuer has all the power. They could simply refuse to honor bonds held by the foreign power threatening them. The holder would be left with hands full of toxic waste that nobody would want to buy from them.
They've rattled their sabre in similar fashion about dumping US treasuries and moving away from the dollar, etc.
I don't think it takes a PHD in economics to know they would be screwed without us buying the junk thy produce. Their entire economy is built on their one huge asset which is a massive and cheap labor force. You take away exports and they will be in a bloody civil war within a month
clacy wrote:
You take away exports and they will be in a bloody civil war within a month
Um, yeah. And a month? You're being very generous with the time frame. The financial you-know-what hits the fan here and I would give it a week or two, tops.
(Trying hard to not screw up handling the money that my husband and I have traded untold life-hours to earn...)
