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December 5, 2013 By Joseph P. Farrell

You all remember those islands in the South China sea claimed by both Japan and China, that are little more than uninhabited rocks? You remember that China has claimed them(and Japan has claimed them), and that China has established an "air defense" zone over them, and that the USA continues to fly its own flights over them in defiance of the Chinese claims right? and you remember that both China and Japan recently launched large aircraft carriers (the Japanese are calling their aircraft carrier a helicopter supply ship, or some such nonsense, and they might as well call it a hospital ship for that matter, because it's clearly an aircraft carrier). Well, in case you don't remember all that, here's an article to help jog your memory:

US To Continue Flights in Zone Claimed by China

Here's where the islands are located:

Senkaku Islands

Senkaku Islands

And here's what they look like:

Senkaku Islands Picture


Now the question is, why are the three major Pacific powers at loggerheads over three pretty, but essentially useless, rocks in the middle of nowhewre? What's the possible hidden story here?

Well, as always, when major powers fight over such locations they're fighting over the location, but why is location significant here? Well, we can forget about the rocks having any military utility for, say, a staging area for a mainland Chinese major invasion of Taiwan. The same holds true for any Japanese military adventures, and besides, they're not contemplating any, and the USA has no need to invade Taiwan, or, for that matter, South Korea or Japan, since they're already within the US orbit anyway.  So what gives?

Well, one explanation is the usual: energy and other resources close to the islands:

China Claims Defense Zone

But I think there may be, in addition, something else that seldom gets talked about....

I am going to suggest a rather bold and intrepid hypothesis and it has nothing whatsoever to do with any direct military consideration: in the world of high-frequency financial trading and manipulation, be it of stocks, commodities, futures, or currency, where trades are often executed in mere nanoseconds, and positions are held for mere seconds (if even that), the actual physical proximity of servers and computers to the markets they interact with can often mean a significant financial advantage. Now look again at that map: the islands are both remote, forbidding, inaccessible, and also, relatively close to Taipei, Shanghai, Seoul... each a major stock and commodities market, and a perfect place for a regional uplink to satellites linked to other markets.

Now here's a prediction: we can expect similar and other such conflicts to emerge, and often times, they will emerge in the remotest areas of the vast Pacific(and, for that matter, Indian Ocean), and in some cases these regions may not even have any nearby islands, but simply be claimed for the building of platforms to handle the computer traffic of trading....

See you on the flip side.