Money, Politics And The Wealth Of Nations |
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Owning a Country
We believe that the United States has made a critical error in the high-stakes game of global dominance. They assumed that military bases and shared values were enough to secure our alliances and they have been proven wrong. While Washington focused on traditional diplomacy, the Chinese identified a hidden vulnerability in America’s conventional approach to its allies.
They found a way to exert influence over South Korea that uses our own financial systems against us. This financial maneuver is explained in our previous article so here we will just outline how it works.
Beijing has successfully executed a roughly decade-long operation to fill what we called a strategic void in the South Korean bond market. Recent analysis suggests China is now the undisputed master of South Korean sovereign debt and they hold a large amount of it. This dominance resulted from Chinese agility in seizing financial opportunities that were open to all. America probably rues this neglect now. (RELATED: The One Hundred Billion Dollar Hostage)
Missed Opportunity
In fact, America rarely engages in long-term strategic bond holdings in Asia. As the issuer of the world’s reserve currency, the U.S. has no practical need to accumulate foreign government bonds. American institutions rely on the safety of U.S. Treasuries when they invest,........