Score 1 For Japan As Chinese Protest At US Embassy In Beijing

Tyler Durden's picture

Between the anti-Japanese tensions and the converging dominance of the Japanese with the Chinese to our fiscal status quo, it seems the Chinese are increasingly pushing the US hand to supporting the Japanese. Via Ai Weiwei, contemporary Chinese artist, the US Embassy in Beijing is under protest by the Chinese marchers demanding (Google Translated) "Pay Back The Money" and "Down with US Imperialism". Some embassy cars were attacked - apparently on the back of the US role in the China-Japan tensions. The question now is what happens to China's Treasury holdings? They already threatened Japan with economic sanctions and now the populist view is turning anti-American at a time of new leadership. We assume they will continue to sell down their USD-based Treasury holdings and convert to Gold as they have been for the past year. With 2 months until the election, this will be an interesting distraction of global importance as the US is forced to support Japan or throw them under the bus.


Image : Ai Weiwei's Instagram

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john39's picture

The U.S., largely behind the scenes, has been antagonizing China over this issue for some time...   Probably pushing the Japanese to turn this into yet another crisis.... the bankers want a war... a major war on all fronts to hide their crimes.  one way or another, they will get it...  destroying the U.S. economy is part of the plan.

SeverinSlade's picture

One thing that people may be missing...If anti-American sentiment is increasing in China over THIS (the US supporting Japan over China) what will happen if the US launches another preemptive, undeclared war on Syria/Iran (both Chinese allies and interests)?  The Chinese are unlikely to buy US debt that funds a war that is contrary to China's interests...Could this new war offically signal the end of the dollar and bring the death of this ponzi scheme?  Seems highly plausible to me.

Life of Illusion's picture



Is that a Toyota truck under embassy awning?

NotApplicable's picture

Lemme guess, they watched that movie too?

JPM Hater001's picture

""Pay Back The Money" and "Down with US Imperialism"."

So this is how it ends.

Hmm, I might have to noodle that one for a while.  I really didnt see this coming.  At least not while we continued the facade of solvency anyway.

Do you think they'll take a bridge?  I have one for sale in Brooklyn.

SWRichmond's picture

All we need now, after things heat up just a bit more, and when everyone is very distracted and after the US begins to respond militarily and has thoroughly exacerbated their already badly-overstretched condition, is for the Russians to roll once again into Georgia and occupy the rest of the Caucasus.

Look at it on a map of oil routes, and reserves; be sure to include the Caspian.  Have a look at the pipelines that make landfall at Baku.  Azerbaijan borders guessed it...Iran.

Count on it.

Popo's picture

Here's the rub for China though:   it actually takes a long time to acquire gold in the amounts that they acquire it in.

Marking their Treasury holdings to zero ("unredeemable") takes one click.

Whatever made them think Treasuries were safe? 

N. B. Forrest's picture

Yes, and in the mean time the Bernank can buy up all those treasuries. 


However, if China dumps all their treasuries they will crash the market and cause their treasuries to be worthless.  They are stuck in a jail of their own making.

Money Squid's picture

"However, if China dumps all their treasuries they will crash the market and cause their treasuries to be worthless.  They are stuck in a jail of their own making."


Nash Equilibrium?

JR's picture

It seems that “when everyone is very distracted,” you’ve used false information to target the wrong instigators and the criminal trouble makers in Georgia. It was the Georgian president who aggressively rolled into Tskhinvali, capital of tiny South Ossetia, as an occupier and contrary to what you say, it was Putin who came to the rescue.

The international financiers who want expansion of an American Empire to feed their interests want Georgia as a NATO member, as an outpost against Russian interests, and as a base nearby for Israeli jets attacking Iran.

In August 2008, as the world's leaders gathered in Beijing for the Olympic games, it was Georgian President Mikheil Saakashvili,” hot-headed and erratic,” who made the first move, fighting over Takhinvali. As Pat Buchanan wrote at the time.

“McCain foreign policy adviser Randy Scheunemann had been paid $290,000 by the Saakashvili regime, from January 2007 to March 2008, to get Georgia into NATO, and thus acquire a priceless U.S. war guarantee to fight on Georgia's side in any clash with Russia.”
Continues Buchanan: “It began with a stunning artillery barrage on Tskhinvali, capital of tiny South Ossetia, a province that had broken free of Tbilisi when Tbilisi broke free of Russia. As Ossetians and Russian peacekeepers fell under the Georgian guns, terrified Ossetians fled into Russia.

“Saakashvili's blitzkrieg appeared to have triumphed.

“Until, that is, Russian armor, on Vladimir Putin's orders, came thundering down the Roki Tunnel into Ossetia, sending Saakashvili's army reeling. The Georgians were driven out of Ossetia and expelled from a second province that had broken free of Tbilisi: Abkhazia.

“The Russians then proceeded to bomb Tbilisi, capture Gori, birthplace of Joseph Stalin, and bomb Georgian airfields rumored to be the forward bases for the Israelis in any pre-emptive strike on Iran.”

Said Buchanan:” What made this war of interest to Americans, however, was that Bush had long sought to bring Georgia into NATO. Only the resistance of Old Europe had prevented it.

“And had Georgia been a member of NATO when Saakashvili began his war, U.S. Marines and Special Forces might have been on the way to the Caucasus to confront Russian troops in a part of the world where there is no vital U.S. interest and never has been any U.S. strategic interest whatsoever.” 


walküre's picture

They probably watched "Flowers of War". I would be pissed too.

quintago's picture

It's a Toyotay-ah. Chinese knockoff. 

YuropeanImbecille's picture


In the modern world, great leaders resolve their conflicts with words.


Words like:


"Scud launcher"

"carpet bombing"

"tomahawk missiles"

cougar_w's picture

In the case of hostilities The Fed will openly buy US debt as a patriotic duty, adding $5T to their balance sheet in a year. Most of Europe will pitch in too.

China will not cover for Iran. They are going to throw Iran under the bus as a strategic loss -- if they can secure claims over the South China Sea in exchange.

The losers here will be Japanese claims. And The Fed will inflate away the $5T over 50 years.

Frozen IcQb's picture

China throwing Iran under a bus will not happen as it is a strategic oil supplier and would alienate all Muslim (current and future trade partner) countries in South-East Asia, Middle East  and Africa


cougar_w's picture

Global Islam can be discounted as a focused threat. The Chinese can work with Islamic leadership (via the liberal application of bribes and threats) to establish totalitarian Islamic states in the strategic areas of Islamic Asia they want to control. Which notice is exactly what the US does in its own hemisphere. Once those client states are established and well-armed, distracting the Islamic world with ongoing but minor factional terrorism will be child's play. China can then do as it likes in the Islamic world.

The situation in Iran is played out. Israel will not tolerate a nuclear state in Iran, period. Iran is entrenched and as a result likely doomed. The US will play along as we have other strategic interests in the region. Further, Iranian oil is a long way from China and easily disrupted, unless China wants to construct a huge oil pipeline through opportunistic Russia. China will jawbone about Iran, but only enough to give them a negotiating position v-s the South China Sea and Japan, which are closer to home.

I fear a blood-bath looms in Iran. China pretending to care about that part of the world has made them bold and now they will not set this nuclear business aside. When reality wakes up those people are not going to know what hit them.

Arnold Ziffel's picture

Japan is Uncle Sam's lap dog ...has been since WWII the radio show talk host expert on Asian affairs indicated yesterday.  However, I'm surprised Japan's leaders would throw their people under the bus like this --- even higher unemployment and depressing on top of the Fuki radiation massive deficits...plunging revenues.....

As you say, Cougar, the big losers will be the Japanese.

cougar_w's picture

I've been thinking for a few years now that Japan may be headed back toward a Feudal Shogunate over the next 30-50 years. If they end up in conflict with China, enough to cut off their access to oil (say, if China can convince the Islamic oil producers to boycott Japan) then a Japanese collapse could follow quickly.

Of course, they would only be early adopters; the West has its own history to revisit over a similar period of time.

N. B. Forrest's picture

But given the demographic suicide that both nations are in the process of committing, do you actually thing there will be a hot war?  What Chinese parents and grandparents are going to be interested in sending their only son or grandson off to war? 


And the Japanese are so stinkin' old, half the soldiers they could muster up would be pushing senior status. 


I can see a few missiles being launched, and a few ships being sunk, but I just cant imagine these two countries amassing huge armies of soldiers. 

cougar_w's picture

China could recruit N. Korea to start shelling S. Korea fishing boats and shooting missles into the sea near Japan, and psychological war would be on like Donkey Kong.

That would be damned hot, in most diplomat's play books.

Antifaschistische's picture

....over 50 years!!! that sounds very nice and relatively painless, but I do not believe taking the 50 year 'inflation payment plan' will be an option.  Economies have their way of forcing things to happen very quickly once the avalanche begins.

Urban Redneck's picture

The FED has done quite an effective job of plugging the holes caused by the Chinese moving their F/X reserves away from the dollar.

How many YEARS have Chinese Treausry holdings been FLAT?

What have the TOTAL F/X Reserves of China done during this period?

During the  X years that China basically hasn't bought any additional US Treasuries, what has the annual US deficit been over X years?

What have interest rates on US Treasuries done over the last X years?

Where has all the money come since it obviously isn"t China?

If China were to dump 100% of it UST holdings, how many WEEKS of US debt service would that equate to?

If China were to dump 100% of it UST holdings, how many WEEKS of US debt new issuance would that equate to?





sushi's picture

My reading of Dr Bernanke's recent move is this sequence (probably already agreed with the banks):

1) Fed buys up bank holdings of MBS

2) Banks use proceeds to buy US debt. This cleans up the bank balance sheets and transfers bad assets to the Fed

3) The banks replace Chinese purchases of US debt.

I suspect Dr B has made this move more to provide a means to replace the Chinese demand for US debt as opposed to goosing equities or any other percieved outcome.

Dropping demand in OECD countries removes demand for Chinese goods and therefore Chinese have no foreign cash to make US debt purchases.

Also, suspect that Japan, with an aging populace, will soon need to divest itself of US debt to support its old age pensioners. This is doubly true given the conflict with China which will impact Japanese export firms production facilities and hit Japanese tax receipts.


walküre's picture

1) Fed buys up bank holdings of MBS

2) Banks use proceeds to buy US debt

Was thinking the same. But Fed pays back all or part of the interest the Fed earns on UST to the treasury.

If your friends at BAC, GS, JPM, MS, WFC and so on get to convert their toxic MBS into fresh UST, will they pay the treasury too?

Potentially 0.25% on 40 billion is $100 million per month in bank revenues.

Is the plan for US citizens who got fucked by the banks now end up slaving for the banks anyway?

Some serious DD and investigation is required who gets $40 billion per month and what they plan on doing with it.

smlbizman's picture

i would assume sever that "ah bennyson" will continue to buy all we have....

zerozulu's picture

To me it looks otherwise. Some countries are trying to pull USA in to war. This way US$ will die all by itself. USA sacrificed her ambassador but other side pulled the movie card.

hedgeless_horseman's picture



xi is right there between x and xii

Mr Lennon Hendrix's picture

Have you checked Rumsfeld's Montana ranch?  I wouldn't be surprised if you found Saddam there too.

CrashisOptimistic's picture

Lest folks forget what's going on, let's keep in mind what those islands are about:  *** OIL ***

Oil drives this.  Oil driving this should put to bed all the talk of how there is such plenty.  You don't drill in miles of ocean and down more miles from the seafloor if you have "plenty".  If you have plenty, you go get it from Oklahoma.

There is not "plenty".  There is scarcity.  And war is the result.

Japanese schoolchildren are taught from a young age that FDR embargoed oil (the US was the Saudi Arabia of that era, a huge oil exporter) from Japan in August 1941 (because of Japan's war on China).  Japan, because of its millions of years of earthquakes thatcracked all the caprocks that can trap oil, has no oil.  They needed to secure a supply from Indonesia and to do that they bombed the US fleet in Pearl Harbor, which might have interdicted that supply.

War resulted and eventually they became the only country on earth to be nuked (twice) in warfare.  In this overall context, they are taught that they were nuked because they have no oil.

Now, finally, they have found oil on their territory under the Senkaku Islands.  The passion they have for this issue is being hugely underestimated by the world media.  They are NOT going to let oil be what they view as being "stolen" from them.  They FINALLY have oil.  Its lack got them nuked.  They won't tolerate this and the media doesn't understand.

Mr Lennon Hendrix's picture

These comments are true.  So since oil is so important then how will we trade for it?

Gold and silver bitchez.

Steaming_Wookie_Doo's picture

Agreed. However, unlike previously, Japan (as far as we know) has no beefy navy. Perhaps this is the way both China and Japan will deal with their high youth unemployment situations (how grim). Possession is 9/10ths of the law. If China can get a mass of humanity to swarm the islands, will Japan carpet bomb them out? How high will the stakes be raised at that point? And worth noting that this is getting zero play in the major US media, lord they are worthless.

I reckon to really find the Who behind this conflict, we'd have to know who [behind the scenes] ordered the purchase of these islands, and who would benefit from a conflict btwn China and Japan as a result. Does the US plan on making up a trade deficit by selling arms to both sides?

Quantum Nucleonics's picture

"Japan has no beefy navy."

Bzzzzz, wrong.  Japan actually has one of the world's most formidable navies.  It thas the less threatening title, "Japanese Martime Self-Defense Force."

Though they don't have as many ships as China, those they possess are among the most sophisticated in the world.  As a top US ally, Japan has access to normally non-exportable US defense technologies, such as the AEGIS radar system.  They operate the most advanced non-nuclear attack submarine force in the world.

It should also be noted that the US-Japan defense treaty, written by Douglas MacArthur, makes an attack on Japan a declaration of war on the US.  The US maintains a sizable naval presence in Japan, including having an aircraft carrier permanently based there.

CrashisOptimistic's picture

Any war breaking out between the two won't be a carpet bombing war.

It will be a tanker sinking war.  Both countries are reliant on imported oil, via tanker.

After a handful get sunk, no more will leave port because no insurance company will insure them.  That war won't last long because modern war requires oil and both will be cut off.

The only caveat on that would be Chinese use of nuclear weapons on Japanese naval facilities, the missiles carrying them requiring no oil.  That would drag in the US, of course.

JPM Hater001's picture

From Wiki-Leaks Huntsman report: "

“b. "The United States no longer sits still; it frequently uses evil tricks to force China to buy U.S. bonds"

    The Shanghai-based Shanghai Media Group (SMG) publication, China Business News (Diyi Caijing)(02/08)(pg A7): "This time the quick change of the U.S. policy (toward China) has surprised quite a few people…The U.S. has almost used all deterring means, besides military means, against China…A crucial move for the U.S. is to shift its crisis to other countries - by coercing China to buy U.S. treasury bonds with foreign exchange reserves and doing everything possible to prevent China's foreign reserve from buying gold.


If we [China] use all of our foreign exchange reserves to buy U.S. Treasury bonds, then when someday the U.S. Federal Reserve suddenly announces that the original ten old U.S. dollars are now worth only one new U.S. dollar, and the new U.S. dollar is pegged to the gold - we will be dumbfounded.”

overmedicatedundersexed's picture

seems if soros or b gates or that fat old man buffet should just buy the islands and pay tax back to japan and china each year.  problem solved, everyone saves face, and the billionairs look like they are good guys avoiding conflict.

Buck Johnson's picture

By getting into a tiff/war with China, it takes us off the hook for the debt (Unless China wins the war).

It is a bargin my friend's picture

Seeing as we can take for granted the fact that nobody protests in China without the Party saying they can, what is the desired outcome they seek?

hedgeless_horseman's picture



How does one say, "It's a distraction," in Mandarin?

krispkritter's picture

Also known as 'Ho Chi Kim'...

A Nanny Moose's picture

and her oily beau hunk....Hung Lo

pods's picture

Has anyone heard from AnAnonymous today?


krispkritter's picture

They're re-dirting his road today...he's rather backed up and waiting his turn to squat...