The Asian Cold War is heating up. On Jan. 7 China offered Europeans its services as a white night to the Euro. A mere 3 days later Japan upped the ante for as Lisa Twaronite writes from Japan, Whenever China says it will lend a helping hand, Japan is sure to offer an arm or a leg of its own. Indeed, American decline ends not only the period of Chinese free ridership but even the India one. Sides must be chosen and Japan is determined not to accede to Chinese hegemony without a fight and to do so it must have allies. Everything must be done to secure and strengthen the democratic alliance. That means preventing Europe from becoming even more indebted to China as well as forcing India to enforce sanctions on Iran.

The era of the peaceful rise of China is over. If our luck holds the Asia Cold War will not be warmer than the first one. One thing is sure, the fate of American 401K accounts will depend on decision made in Beijing and Tokyo as well as in Washington, London and Berlin.

See also, Why Japan Is Rushing to Aid Europe: It's All About China

The result? Portugal has a very good Bond sale and both the EURO and the stock markets are up.