Economic Warfare

[Dayuhan]

But short selling is not the only financial practice or instrument available. If I were going to construct a strategy of financial attack, my main weapon would probably be the CDS. Used correctly (or badly), a set of credit default swaps can act as a land mine, draining liquidity from a company very quickly.

Possible, but again, targeting one company is unlikely to do damage much beyond that except in very precarious circumstance. If you're dancing on the edge of a cliff any number of things can push you over the edge... but your problem in that case is not all those things that could push you over the edge, but your position on the edge of the cliff.

Certainly it's possible that if the US backed itself into a position where it could be so easily disrupted, and if that were sufficiently clear to outside parties, someone might come along and exploit that for political advantage. I don't think that's what happened, but it's possible. I also don't see any realistic way of protecting ourselves from that, other than not getting into that position in the first place. Again, the conspiracy talk seems to me a distraction from the real systemic problems that need to be addressed... and all too often a way to blame some nefarious external party for problems that with political will could be brought under control.

I'm speculating that what he refers to is a coming war in Asia over Energy(IF credit bubble debt is NOT written down and energy efficiency does NOT become a massive focal point) , I believe he is referring to a conflict between the US and China directly or via proxy thru Pakistan/India/Kablamistans with Russia playing a significant role as well.

I'm not seeing how addressing debt is going to produce a war in Central Asia. I also don't think energy will: Central Asian oil is not important enough to the US to justify war, by proxy or otherwise. China could absorb the entire output of Kazakhstan, Turkmenistan, and Azerbaijan without any significant adverse consequence for the US. It would be an issue for Russia, not because Russia needs the energy but because Russia's dominance of the export conduits for these countries gives Moscow huge influence at both ends of the pipe. I can see Central Asia as a Russia/China flashpoint more than as a China/US flashpoint.

I would also agree that China would try to play to it's strengths....dollars...but wouldn't the US also be tempted to leverage it's own strength via it's incredible conventional/unconventional force projection overmatch?

Temptation to use(literally and/or figuratively) it before you lose it due to increasing difficulty in sustaining the capability long-term?

Use it how? Where, and to what end? Is there any specific scenario in play here?

My personal feeling is that there seems to be a disconnect between strong conflict & security analysis and strong finance/economic/energy analysis...I guess that's why I'm an open advocate for trying to cross pollinate the two wherever possible to see what comes out of it, if anything, and try to better understand where we are likely headed.

Since that's my line of work, I'll agree, vigorously