Sometimes a Twitter hoax reflects reality. Photographer: David Paul Morris/Bloomberg
Sometimes a Twitter hoax reflects reality. Photographer: David Paul Morris/Bloomberg

You have to love a hacker who can annoy China, America and Japan and prompt an existential debate about the state of the global economy -- all with just 140 characters.

Whoever got into CNN's Twitter and Facebook accounts today sure did make the most of the opportunity. Before they were hastily deleted, postings said that China had decided to dump all its U.S. Treasuries and declare the South China Sea a no-go zone. It would be easy to dismiss this as a random prank and revel in the twisted humor of it all. Timing is everything with comedy, and this stunt came a day after Beijing and Tokyo traded barbs about whether Sino-Japanese relations are starting to resemble those of the U.K. and Germany prior to World War I.

But it's also worth considering how satire sometimes cuts right to the heart of an issue: in this case, the collective denial by the political and financial intelligentsia about the wisdom of letting a developing nation run by communists act as lead banker to the world's most advanced economy.

If we could reverse engineer the mechanics of the global financial system, no sane person would recommend that relatively poor China prop up Americans who irresponsibly live beyond their means. The $1.3 trillion of U.S. debt held by Beijing is a problem on three levels. First, it would appear to give an opaque rival government undue leverage over Capitol Hill. Second, it's a terrible waste of money that Chinese officials could be using to narrow the gap between rich and poor and reduce pollution. Third, it's more of a trap than Chinese officials understand.

The first absurdity makes me think back to June 1997, when Japan's Former Prime Ryutaro Hashimoto rocked global markets. Hashimoto told a Columbia University audience that “several times in the past, we have been tempted to sell large lots of U.S. Treasuries.” The dollar plunged and yields surged within seconds, prompting energetic denials from Tokyo that any such considerations were afoot. One of the true beauties of Japan's economy is that more than 90 percent of IOUs are held domestically, removing the risk of capital flight. The U.S. has the opposite problem.

The second problem concerns the wildly unproductive use of China's state wealth. If entire nations were for sale, China's $3.8 trillion of currency reserves could buy India, South Korea and Indonesia. Or, if cheaper petroleum is on Beijing's mind, it could bid for Saudi Arabia 5 1/2 times over. True, the financial stockpile built up after Asia's 1997 crisis may come in handy this year as a defense against turmoil. But Asia needs to bring more of these funds home to pay for infrastructure, education, research and development on cleaner energy, and other vital investments in the future. The question, of course, is how?

And that's the third problem. We shouldn’t mince words about Asia's currency-reserve obsession -- it's history's biggest pyramid scheme. As China and other Asian nations buy more and more U.S. Treasuries, it becomes harder to unload them without incurring huge capital losses. And so they keep adding to the pile. Many analysts -- and Communist Party bigwigs -- mistakenly see this embarrassment of riches as a financial strength. It's really a weakness.

Were China to try to exit this pyramid scheme -- something the CNN jokesters were suggesting was brewing -- U.S. interest rates would skyrocket, credit-rating companies would pounce, and China's most important market for its goods would evaporate. And that's not even considering the huge paper loss to national wealth that officials at the People's Bank of China and the Finance Ministry would have to explain. And so, like it or not, China is stuck with its mountain of dollars.

Perhaps all those trillions will come in handy if China's shadow banking system crashes. George Soros is looking more and more prescient right now: Three weeks ago the billionaire investor highlighted “eerie resemblances” between the 2008 global financial crisis and China's debt markets. Now all eyes are on a $496 million Chinese trust investment that's gone bad and sits on the brink of default.

Not that America's own debt-related vulnerabilities are anything to sniff at. The CNN pranksters could have chosen lots of other topics for faux tweets -- North Korean missiles in the air, Chinese and Japanese war planes exchanging fire, the U.S. bombing any number of places, troubles at the Sochi Olympics. That the first impulse was to target China's U.S. bond holders, though, is a reminder of where the real vulnerabilities lie.

(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)