The US was the dominant world power after WWII but has been failing, compounded by desperate plans for hegemony compounded by declining culture and values. Many other countries are falling under the same spell.
Scroll down to read the most recent articles. Links to previous articles follow.
- The Saker’s View of the US Election From The Saker, via PaulCraigRoberts.org, 15 September 2020
- America’s Colour Revolution By Paul Craig Roberts, Zerohedge, 14 September 2020
- Lockdown Lunacy. Your US Government Ordered Depression Has Arrived By David Stockman, 2 August 2020
- The Bretton Woods Dollar System and pending collapse of the fiat US dollar By F William Engdahl, 7 July 2020
- What Happens Next for China. Collapse or War with the US by Doug Casey, InternationalMan.com, 2 July 2020
The Saker’s View of the US Election
The Saker’s View of the US Election From The Saker, via PaulCraigRoberts.org, 15 September 2020
In early July I wrote a piece entitled “Does the next Presidential election even matter?” in which I made the case that voting in the next election to choose who will be the next puppet in the White House will be tantamount to voting for a new captain while the Titanic is sinking. I gave three specific reasons why I thought that the next election would be pretty much irrelevant:
1The US system is rigged to give all the power to minorities and to completely ignore the will of the people
2The choice between the Demolicans and the Republicrats is not a choice at all
3The systemic crisis of the USA is too deep to be affected by who is in power in the White House
I have now reconsidered my position and I now see that I was wrong because I missed something important:
A lot has happened in the past couple of months and I now have come to conclude that while choosing a captain won’t make any difference to a sinking Titanic, it might make a huge difference to those passengers who are threatened by a group of passengers run amok. In other words, while I still do not think that the next election will change much for the rest of the planet (the decay of the Empire will continue), it is gradually becoming obvious that for the United States the difference between the two sides is becoming very real.
This is probably the first presidential election in US history where the choice will be not between two political programs or two political personalities, but the stark and binary choice between law and order and total chaos.
It is now clear that the Dems are supporting the rioting mobs and that they see these mobs as the way to beat Trump.
It is also becoming obvious that this is not a white vs. black issue: almost all the footage from the rioting mobs shows a large percentage of whites, sometimes even a majority of whites, especially amongst the most aggressive and violent rioters (the fact that these whites regularly get beat up by rampaging blacks hunting for “whitey” does not seem to deter these folks).
True, both sides blame each other for “dividing the country” and “creating the conditions for a civil war”, but any halfway objective and fact based appraisal of what is taking place shows that the Dems have comprehensively caved into the BLM/Antifa ideology (which is hardly surprising, since that ideology is a pure product of the Dems (pseudo-)liberal worldview in the first place). Yes, the Demolicans and the Republicrats are but two factions of the same “Party of Money”, but the election of Trump in 2016 and the subsequent 4 years of intense seditious efforts to delegitimize Trump have resulted in a political climate in which we roughly have, on one hand, what I would call the “Trump Party” (which is not the same as the GOP) and the “deplorables” objectively standing for law and order. On the other hand, we have the Dems, some Republicans, big corporations and the BLM/Antifa mobs who now all objectively stand for anarchy, chaos and random violence.
I have always criticized the AngloZionist Empire and the USA themselves for their messianic and supremacist ideology, and I agree that in their short history the United States have probably spilled more innocent blood than any other regime in history. Yet I also believe that there also have been many truly good things in US history, things which other countries should emulate (as many have!). I am referring to things like the US Constitution, the Bill of Rights, the spirit of self-reliance, a strong work ethic, the immense creativity of the people of the US and their love for their country.
It is now clear that the Dems find nothing good in the US or its history – hence their total support for the wanton (and, frankly, barbaric) destruction of historical statues or for the ridiculous notion that the United States was primarily built by black slaves and that modern whites are somehow guilty of what their ancestors did (including whites who did not have any slave owners amongst their ancestors).
Putin once said that he has no problems at all with any opposition to the Russian government, but that he categorically rejects the opposition to Russia herself (most of the non-systemic opposition in Russia is profoundly russophobic). I see the exact same thing happening here, in the USA: the Dem/BLM/Antifa gang are profoundly anti-USA, and not for the right reasons. It is just obvious that these people are motivated by pure hate and where there is hate, violence always follows!
To think that there will be no violence if these people come to power would be extremely naive: those who come to power by violence always end up ruling by violence.
For the past several decades, the US ruling elites have been gutting the Constitution by a million of legislative and regulatory cuts (I can personally attest to the fact that the country where I obtained my degrees in 1986-1991 is a totally different country from the one I am living in now. Thirty years ago there was real ideological freedom and pluralism in the US, and differences of opinion, even profound ones, were considered normal). Now the apparatus needed to crack down on the “deplorables” has been established, especially on the Federal level. If we now apply the “motive, means & opportunity” criterion we can only conclude that the Dem/BLM/Antifa have the motive and will sure have the means and opportunity if Biden makes it to the White House.
Furthermore, major media corporations are already cracking down against Trump supporters and even against President Trump himself (whom Twitter now threatens to censor if he declares that he won). YouTube is demonetizing “deplorable” channels and also de-ranking them in searches. Google does the same. For a President which heavily relies on short messages to his support base, this is a major threat.
[Sidebar: one of Trump’s biggest mistakes was to rely on Twitter instead of funding his own social media platform. He sure had the money. What he lacked was any foresight or understanding of the enemy]
Paul Craig Roberts has been one of the voices which has been warning us that anti-White racism is real and that the United States & Its Constitution Have Two Months Left. I submit that on the former he is undeniably correct and that we ought to pay heed to his warning about what might soon happen next. I also tend to agree with others who warn us that violence will happen next, no matter who wins. Not only are some clearly plotting a coup against Trump should he declare himself the winner, but things have now gone so far that the Chairmen of the JCS had to make an official statement saying that the US military will play no role in the election. Finally, and while I agree that Florida might not be a typical state, I see a lot of signs saying “defend the Constitution against all enemies, foreign and domestic” with the word “domestic” emphasized in some manner. Is this the proverbial “writing on the wall”?
The Empire is dying and nothing can save it, things have gone way too far to ever return to the bad old days of US world hegemony. Furthermore, I have the greatest doubts about Trump or his supporters being able to successfully defeat Dem/BLM/Antifa. “Just” winning the election won’t be enough, even if Trump wins by a landslide: we already know that the Dem/BLM/Antifa will never accept a Trump victory, no matter how big. I also suspect that 2020 will be dramatically different from the 2000 Gore-Bush election which saw the outcome decided by a consensus of the ruling elites: this time around the hatred is too deep, and there will be no negotiated compromise between the parties.
In 2016 I recommended a Trump vote for one, single, overwhelming reason: my profound belief that Hillary would have started a war against Syria and, almost immediately, against Russia (the Dems are, again, making noises about such a war should they return into the White House). As for Trump, for all his megalomaniacal threats and in spite of a few (thoroughly ineffective) missile strikes on Syria, he has not started a new war.
By the way, when was it the last time that a US president did NOT order a war during his time in office?
The fact is that the Trump victory in 2016 gave Russia the time to finalize her preparations for any time of aggression, or even a full-scale war, which the US might try to throw at her. The absence of any US reaction to the Iranian retaliatory missile strikes against US bases in Iraq in January has shown that US military commanders have no stomach for a war against Iran, nevermind China or, even less, Russia. By now it is too late, Russia is ready for anything, while the US is not. Trump bought the planet an extra four years to prepare for war, and the key adversaries of the US have used that time with great benefit. As for the former world hegemon, it can’t even take on Venezuela…
But inside the USA, what we see taking place before us is a weird kind of war against the people of the USA, a war waged by a very dangerous mix of ideologues and thugs (that is the toxic recipe for most revolutions!). And while Trump or Biden won’t really matter much to Russia, China or Iran, it still might matter a great deal to millions of people who deserve better than to live under a Dem/BLM/Antifa dictatorship (whether only ideological or actual).
The USA of 2020 in so many ways reminds me of Russia in February 1917: the ruling classes were drunk on their ideological dogmas and never realized that the revolution they so much wanted would end up killing most of them. This is exactly what the US ruling classes are doing: they are acting like a parasite who cannot understand that by killing its host it will also kill itself. The likes of Pelosi very much remind me of Kerensky, the man who first destroyed the 1000 year old Russian monarchy and who then proceeded to replace it with kind of totally dysfunctional “masonic democracy” which only lasted 8 months until the Bolsheviks finally seized power and restored law and order (albeit in a viciously ruthless manner).
The US political system is both non-viable and non-reformable. No matter what happens next, the US as we knew it will collapse this winter, PCR is right. The only questions remaining are:
- What will replace it? and
- How long (and painful) will the transition to a new USA be?
Trump in the White House might not make things better, but a Harris presidency (which is what a “Biden” victory will usher in) will make things much, much worse. Finally, there are millions of US Americans out there who did nothing wrong and who deserve to be protected from the rioting and looting mobs by their police agencies just as there are millions of US Americans who should retain the ability to defend themselves when no law enforcement is available. There is a good reason why the Second Amendment comes right after the First one – the two are organically linked! With the Dem/BLM/Antifa in power, the people of the USA can kiss both Amendments goodbye.
I still don’t see a typical civil war breaking out in the US. But I see many, smaller, “local wars” breaking out all over the country – yes, violence is at this point inevitable. It is, therefore, the moral obligation of every decent person to do whatever he/she can do, no matter how small, to help the “deplorables” in their struggle against the forces of chaos, violence and tyranny, especially during the upcoming “years of transition” which will be very, very hard on the majority of the people living in the US.
This includes doing whatever is possible to prevent the Dem/BLM/Antifa from getting into the White House.
America’s Colour Revolution
America’s Colour Revolution By Paul Craig Roberts, Zerohedge, 14 September 2020
The CIA is very experienced at colour revolutions, having pulled them off in a number of countries where the existing government did not suit the CIA. As we have known since CIA Director John Brennan’s denunciations of President Trump, Trump doesn’t suit the CIA either. As far as the CIA is concerned, Trump is no different from Hugo Chavez, Nicolas Maduro, Charles de Gaulle, Manuel Zelaya, Evo Morales, Viktor Yanukovych, and a large number of others.
Russiagate was a coup that failed, followed by the failed Impeachgate coup. Faced with Trump’s re-election and the realization that upon re-election Trump will be able to deal with the treason against him, the Deep State has decided to take him out with a colour revolution.
The evidence of a colour revolution in the works is abundantly supplied by CNN, MSNBC, New York Times, NPR, Washington Post and numerous Internet sites funded by the CIA and the foundations and corporations through which it operates, all of which are committed to Trump’s ejection from the Oval Office. The American public does not realize the extent to which the institutions of a free society have been penetrated and turned against freedom. All of these media organizations are establishing the story in the mind of Americans that Trump will not leave office when he loses or steals the election and must be driven out.
Emails are arriving from readers in the UK and Europe reporting that the British and European media are at work preparing the acceptability of the CIA’s colour revolution against President Trump. It is taken for granted by both media and politicians in Europe and the UK that Trump cannot win re-election because he:
(1) is a Putin agent,
(2) abuses the power of his office,
(3) represents racist “Trump Deplorables,”
(4) is a womanizer – “grab them by the pussy,”
(5) is responsible for America leading the world in Covid-19 cases and deaths,
(6) doesn’t support NATO (a sinecure for many Europeans),
(7) is an outsider and not a member of The Establishment and “is not like us,”
(8) “has orange hair” (orange is considered a low-class colour).
You can add your own to the list.
The scenarios for what the American, British, and European media assume to be a necessary colour revolution to drive Trump from office are:
- Trump loses the election, refuses to leave office and must be dislodged or democracy is lost.
- Trump wins the election by fraud and must be dislodged or democracy is lost.
The scenarios do not accommodate Trump actually winning the election by the vote of the people. That outcome is outside the possibilities.
According to the media, Trump can only lose or steal the election.
With Antifa and Black Lives Matter now experienced in violent protests, they will be unleashed anew on American cities when there is news of a Trump election victory. The media will explain the violence as necessary to free us from a tyrant and egg on the violence, as will the Democrat Party. The CIA will be certain that the violence is well funded.
Trump, isolated in his own government, which has failed to bring charges against the Obama regime officials who tried to frame the President of the United States and drive him from office—Barr and Durham represent The Establishment, not the President or law—will be cut off from Twitter, Facebook and from the print and TV media. All Americans and the world will hear is that Trump lost and must go or Trump won by vote fraud and must go. It will be impossible for Trump or anyone to refute the charges. The weak-minded, weak-willed Republicans will collapse. Republicans are not people capable of combat. Republicans believe that to disparage the military/security complex is unpatriotic. Thus, they are sitting ducks.
Bottom of Form
The CIA, the National Endowment for Democracy, Radio Liberty, etc., have used color revolution against others who stood in the way of the American National Security State. Only Maduro has survived them. So far.
The Secret Service cooperated with the CIA and the Joint Chiefs in the assassination of President John F. Kennedy. What is a re-elected President Trump going to do when the Secret Service refuses to repel Antifa and Black Lives Matter when they breach White House Security? There is no doubt whatsoever that the Secret Service is penetrated by the CIA. How else could President Kennedy have been assassinated?
American Democracy is on the verge of being ended for all times, and the world media will herald the event as the successful overthrowing of a tyrant.
Editor’s note: Download the PDF copy using the link below to view the charts.
Lockdown Lunacy. Your US Government Ordered Depression Has Arrived By David Stockman, 2 August 2020
Well, the Virus Patrol sure has done it. In a fit of reckless overkill they have managed to vaporize six years of economic growth during the last 90 days. And that’s just by the mechanical reckoning of the GDP accounts, where total output in Q2 weighed in at essentially the same level as Q4 2014.
The real damage is far deeper, however, and is reflected in millions of small businesses permanently destroyed, tens of millions of households wiped-out financially and the vicious daisy chain of delinquencies, deferrals and defaults just beginning to rip through the $78 trillion edifice of debt which entombs the US economy.
Real GDP Level
Of course, most of the Wall Street talking heads were nonplussed by this morning’s release because, well, Q2 results are claimed to be ancient history: Reality is purportedly the “V”-shaped recovery on their spreadsheets, which really can’t fail to happen because it’s always two quarters out regardless of conditions at the moment.
So let’s get something straight. What is happening is an economic catastrophe the likes of which we have never seen before, even during the Great Depression of the 1930s.
In fact, the worst annual decline back then was a 14.8% drop in 1932, while the entire peak-to-trough real GDP decline between 1929 and the 1933 bottom was 30.5%.
So it would be fair to say that measured at an annualized rate, the idiotic Dr. Fauci and his Virus Patrol have now delivered a 32.9% GDP plunge, which single-handedly tops the entire contraction of the Great Depression.
Needless to say, the Q2 result also leaves the recessionary drops since 1950 way back in the dust. Even the auto industry induced plunge of Q1 1958 didn’t make the double-digit threshold. It clocked in at a 9.986% annualized decline or less than one-third of today’s cliff dive.
What was especially notable, however, was the vaporization of personal consumption spending on services, which ordinarily accounts for upwards of 70 percent of total PCE; and which is also ballyhooed by the paint-by-the-numbers Wall Street economist as the ballast the keeps GDP moving ever higher.
Not this time!
Services spending literally fell through the trapdoor, contracting at a 43.4% annualized rate. That compares with the 11 recessions since 1950 where real spending on services never went negative, save for the pinprick decline of -1.6% annualized during the Q1 2009 bottom of the Great Recession.
By every account, the economic plunge in the winter of 2008-2009 was the worst since the 1930s, but today the Commerce Department reported a PCE-services drop that was 28X deeper!
Our purpose here is not to marshal scary numbers, even as they surely are. Rather, our point is that what is coursing through the Q2 numbers is not anything that resembles a normal chain-of-reactions macroeconomic cycle. For instance, where job losses cascade through to shrinking incomes, thereby causing consumer confidence and spending wherewithal to diminish and household spending to be curtailed.
To the contrary, what is depicted below is essentially economic marshal law. Agencies of the state commanded airports, restaurants, bars, hair salons, gyms, movies, dentist offices, theme parks, sporting events etc. to close or operate at drastically reduced capacity, which meant, in turn, that day-in-and-day out commerce and economic output vanished instantly.
Stated differently, this 43% plunge in services spending didn’t happen for the ordinary reason that people were short on cash. As we show below, personal income during the quarter – thanks to the massive flow of free stuff from Washington (aka government transfer payments) – clocked in at a record level!
Consequently, there will be no rebound in the plunging red line below no matter how much fiscal and monetary “stimulus” Washington pumps into the main street economy.
The services sector accounts for nearly 66% of total PCE, which, in turn, accounts for 68% of measured GDP. So the latter will not recover until the Virus Patrol gets its foot off the neck of what we call the social congregation activities of daily economic life; and also until it and its MSM collaborationist desist from fanning the false claim that the Covid is the equivalent of the Black Plague, thereby causing people to voluntarily quarantine out of misplaced fear.
Of course, you don’t have to listen to Dr. Fauci and the Scarf Lady for long – yes, they have not yet been locked up in padded cells where they belong – to realize that the Virus Patrol is on a once-in-a lifetime power trip.
In ultra-busy body/Nanny State fashion they are virtually regimenting the comings and goings of a $20 trillion economy – even as they keep the US economy on indefinite idle waiting for the vaccines and antivirals from their allies in Big Pharma and the Gates Complex to ride to the (mandatory) rescue.
Annualized Change In Personal Consumption Expenditures, Services, 1950-2020
We don’t expect the Virus Patrol to be put out of business any time soon because the Donald is too confused and weak to shut them down.
Moreover, if he keeps shooting himself in the kneecaps via tweets like today’s “lets-postpone-the-election” numbskullery, he will guarantee an even worse scenario: Namely, that while Sleepy Joe is being oxygenated and propped-up behind the Resolute Desk for daily Oval Office photo ops, the left-wing health Nazis who surround him will really go to town on Lockdown Nation.
Nor is that any kind of unhinged trashing of the camarilla of out-and-out statists who will form the core of the Biden Administration. The fact is, the Donald’s malpacticing doctors, the MSM and the Blue State mayors and governors have now unleashed a full-on public hysteria that is self-fueling.
It is now transforming ordinary sheeples into obedient and unquestioning brown-shirts. Even in the purportedly enlightened, socialist republic of Aspen, where we are sheltering for the duration, we see them “mask-up” even with no one in sight, while pumping strenuously up the mountain side on a fat-tired bike.
On manifestation of the Covid-Hysteria is the soaring level of “testing” going on as people either try to get a hall pass in order to return to work or just plain run to the nearest testing station every time the media sends off new alarm bells.
During April, for instance, which was the very worst month of the contagion in terms of serious illnesses and deaths, 5.2 million new tests were reported or 175,000 per day.
By contrast, in July to date (thru the 29th), there have been 21.5 million new tests reported or an average of 745,000 per day.
In a population that has been thoroughly exposed to the virus after five months, it is a given that with the number of tests soaring, the number of positive cases will rise proportionately. But that’s a misdirection because the real issue is the true medical severity of the new cases, and that has dropped precipitously.
The death rate has dropped from 1,800 per day in April to 780 in July; and whereas 15-20% of new cases were being hospitalized in most states during April, that figure has now fallen to 2-4%.
That is, after the Grim Reaper’s original romp through the most vulnerable populations – especially the nursing homes and long-term care facilities in March/April – the preponderant share of the remaining populations being infected and testing positive appear to have stronger immune defenses, and are mainly either asymptomatic or treating and recovering at home in the normal flu-season manner.
So on the facts, the Hysteria should be dying out, but, alas, the facts are of small moment in the context of a runaway public hysteria that is being turbocharged by a severely aggravated anti-Trump partisanship that has no modern precedent, or any at all.
We are constantly reminded that there are less than 100 days until the election, but probably of even more salience is that the next flu season will be arriving even sooner in October. And it won’t matter whether the obvious herd immunities building up against the SARS-Cov-2 cause the next flu season to be unusually mild or not.
That’s because the Virus Patrol will be at shrill alert for the “second wave” in the run-up to October, keeping the suffocated economy evident in today’s GDP report on its back foot for the balance of the year, at least. That means the ballyhooed V is now surely dead-as-a-door nail.
In this context, it needs be recalled that the services sector of the US economy is bearing the brunt of the Lockdown orders, but that it now counts for fully $8.7 trillion or 45% of GDP. That compares to a mere 26% back in the days of America’s industrial might in the mid-1950s.
In the big picture context, therefore, national policy – especially at the Eccles Building – caused the off-shoring and hollowing-out of the US industrial economy over the last three decades. In turn, that has left main street especially vulnerable to a state-orchestrated attack on its new services sector center of gravity such as outpatient surgery clinics, Pilates studios and tapas bars.
Again, an economic marshal law attack on the new epicenter of the US economy means that the issue is not traditional stimulus, but clearing the decks and clearing the air of the Virus Patrol orders and Covid-Hysteria, which was the real culprit behind the Q2 GDP disaster.
Nominal GDP (light brown) Versus Service Sector PCE (dark brown), 1955-2020
Perhaps nowhere is the impact of economic marshal law more evident, ironically, than in the health care sub-sector of the services economy.
The former, of course, has been the workhorse of US GDP growth for decades. However, after peaking at $2.50 trillion in Q4 2019, it weighed in at just $1.89 trillion in Q2 2020. That’s a $608 billion decline, reflecting an astounding -24% contraction.
And this is supposed to be the worst medical crisis to hit America since the Spanish Flu of 1918!
But, actually, the government’s data mill is telling an absolutely opposite, nay crazy, story. Namely, that the single largest sector of the US economy plunged at a 61.6% annualized rate in Q2 – meaning that the figure gives the notion of being “off the charts” of history an altogether new definition.
Needless to say, health care spending is not now and never has been amenable to Washington’s vaunted stimulus machines. The overwhelming share of spending is government funded directly through Medicare/Medicaid et al or through the $300 billion per year tax shelter for employer health plans; and whether public or private, consumer health payments are overwhelming made by third-parties, thereby further limiting the efficacy of the cheap money from the Fed and free money from Uncle Sam.
The plunging red line below, therefore, is the doing of the Virus Patrol and its orders to shutdown most so-called discretionary healthy care services, such as cancer screenings? So until it is put out of business and the public Covid-Hysteria is substantially abated, the rebound of the health services sector is likely to the contained and protracted.
In short, what we have is a government-ordered depression, not a macroeconomic recession that is purportedly remediable by a huge dose of monetary and fiscal stimulus. So the truth is, the Virus Patrol, not the Fed and Washington’s everything bailout brigade, is in charge of the recovery from the Q2 disaster, and they are not much interested in letting it happen.
To take another salient example, the go-to strategy of the Virus Patrol has been to shutdown large scale public gatherings entirely, but that’s obviously the venue of the recreation sector.
So it is not surprising that the PCE spending rate for this sector has given “cliff-diving” a run for its money. Compared to the $590 billion annualized rate of spending in Q4 2019, the current quarter clocked in at just $272 trillion.
The amounted to a 53.4% decline from Q4 and an out-of-this-world contraction of 61% annualized in the current quarter. Or alternatively, recreation spending in Lockdown Nation during Q2 reverted to the level first crossed in Q2 2002.
That’s 18 year’s worth of growth gone in a virtual economic heartbeat.
Of course, there was one thing that was way up in Q2 – transfer payments and personal income. And every dime of the massive increase in transfer payments shown below was borrowed by Uncle Sam and monetized by the Fed.
Yet the only thing it accomplished was to further balloon the public debt because the current depression does not flow from the want of means or desire to spend: It’s the product of economic marshal law ordered up by the Virus Patrol.
Still, it is worth noting that wage and salary income (brown line) was down by $680 billion at an annual rate in Q2, while the Washington spending machine boosted transfer payments at a $2.4 trillion annual rate, or by nearly four times more!
Once upon a time, that would have been considered insane overkill, and at least caused Republicans to screech at the top of their lungs about fiscal profligacy.
Alas, as they put up their $1.2 trillion Everything Bailout 5.0 against the House Dems’ $3.3 trillion alternative in the days just ahead, the chart below will be nowhere seen in the porkers’ lounges of Capitol Hill.
Change From Prior Quarter In Billions: Transfer Payments (purple line) Versus Wages and Salaries (brown line)
Reprinted with permission from David Stockman’s Contra Corner.
Former Congressman David A. Stockman was Reagan’s OMB director, which he wrote about in his best-selling book, . His latest books are and . He’s the editor and publisher of the new David Stockman’s Contra Corner. He was an original partner in the Blackstone Group, and reads LRC the first thing every morning.
Copyright © David Stockman
The Bretton Woods Dollar System and pending collapse of the fiat US dollar
The Bretton Woods Dollar System and pending collapse of the fiat US dollar By F William Engdahl, 7 July 2020
Editor’s note: This book by F William Engdahl explains how the US powerbrokers orchestrated the USD ascendancy and hegemony by a mixture of lies and bullying, many focused on the infamous Bretton Woods agreement in 1944. Chapter 11 provides a basis for understanding why the US dollar is rapidly collapsing, as do all fiat currencies, and possibly what will follow shortly.
What Happens Next for China—Collapse or War with the US?
|What Happens Next for China. Collapse or War with the US by Doug Casey, InternationalMan.com, 2 July 2020|
International Man: While many have been distracted by the unrest in the US, tensions with China are soaring.
Recently, Beijing passed a national security law that would undermine Hong Kong’s autonomy. What comes next for US-China relations?
Doug Casey: I lived in Hong Kong, on and off, from 1985 to 2005. When I first moved there, it was a Chinese city, but there were a lot of Western expats.
When I returned most recently, it had transformed into a Chinese city with very few expats. They’d all gone to Singapore.
What’s happening in Hong Kong is unfortunate, but frankly, it’s none of our business. Unfortunate things are happening in a hundred places around the world. You just can’t solve other people’s problems for them, nor should you try. Nobody likes a busybody.
As I’ve said so many times in the past, the US government has got to stop sticking its nose in other people’s business. The US has been acting as the world’s self-appointed cop since at least WWII, as often as not stepping in on the side of the bad guys—whether it knew it or not— and bankrupting itself while making enemies in the process.
In the case of Hong Kong, my view is that the Beijing regime is totally wrong, but it would be a disastrous error for us to get involved.
The same goes for the South and East China Seas, which were in the news a few years back. The US is sending a bunch of aircraft carriers there to show the flag, which is dangerous and provocative and none of our business. Just as it would be none of China’s business if the US decided to make the Gulf of Mexico its own private backyard sea. Should China try to contest that? Should China step in if Mexico decided the Gulf is really its territorial water?
The fact is that Chinese and US businessmen get along just fine. If the Chinese prove to be unethical or dishonest, a US business should just stop working with the firm that cheats them. Why should the US government be involved?
The US and Chinese governments are posturing at each other like a couple of angry chimpanzees. The Chinese government and the US government are both dead hands on their economies. Neither serves a useful purpose. They’re the problem, not Chinese and American businessmen.
Taiwan is another simmering problem.
The Chinese government sees Taiwan as a breakaway secessionist province. They don’t recognize its independence, much as Lincoln didn’t recognize the Confederacy. I think it’s great the Taiwanese are independent, but it’s not our problem. It’s just as stupid for the US government to chance a war there as it would be for the Brazilian government to make Taiwan its business.
International Man: What does it mean for the economy and US politics?
Doug Casey: Well, there’s a huge trade deficit between the US and China, which Trump loves to point out.
I don’t see that as a problem at all.
The Chinese produce stuff and the US consumes it. It’s one-sided—to the American consumer’s benefit. We pay them in US dollars, which will soon be treated like Old Maid cards, created by the trillions. If the US government wants the deficit to stop, it only has to stop its printing presses.
The fact is that the Chinese economy has been tremendously successful because it dumped communism starting in 1980 and free-marketized. The progress that they’ve made in the last 40 years is totally unprecedented in world history as a result. Well, unprecedented for a country that size—because Singapore, Hong Kong, Dubai, all city-states—have done at least as well by implementing low taxes and almost no regulations.
That said, the Chinese economy could actually collapse. Why? Because the expansion that they’ve gone through over the last 40 years has been financed by hundreds of millions of Mrs. Wongs saving half of their income. They save it in Chinese yuan, and they put it in the banks. The banks lend it to governmental entities and businesses.
It’s a debt-driven economy, not an equity-driven economy. The PRC has made huge progress, but—unlike Hong Kong, Singapore, or Taiwan—it’s built on bank debt. The yuan isn’t a sound currency.
China has an active stock market, and it’s true that Mrs. Wong is involved in the stock market. But the Chinese stock market doesn’t raise capital so much as substitute for a casino. Mrs. Wong trades the stock market but treats it like a version of the Macau casinos.
Because the Chinese economy is built on debt from the banks, and because the government controls so much of the economy, a lot of that debt has been misallocated. And can’t be repaid. Remember, whenever the State is involved, things are done mainly for political, not economic, reasons. And there’s always corruption whenever government is involved.
How so? Everybody’s heard about the scores of new Chinese cities that have been built but largely unoccupied, combined with roads and bridges that go nowhere. Is it brilliant strategic thinking or a gigantic example of State “planning” and bureaucratic stupidity? I can’t say from a current boots-on-the-ground standpoint because it’s been about five years since I’ve been to China proper. But I believe that there’s been a huge waste of capital—because it’s being politically allocated.
If Mrs. Wong goes to take her yuan out of the bank and she can’t because it has been put into uneconomic projects or if she gets her yuan back and they’re worth nothing—there could be a revolution in China.
As the US descends into the Greater Depression, a lot of Chinese factories producing for the US market are going to be in trouble. That will result in a lot of Chinese unemployment, mostly urban. China has had one of the great mass migrations of history since 1980—most peasants have moved from the countryside into the city.
If people in the cities become unemployed, they’re going to blame the government, and their government will blame the US. The whole world revolves around government today. It’s not just true in the US and China, but all countries.
What’s the upshot of this? Will manufacturing return to the US? I don’t think so because the US isn’t very business-friendly. For one thing, taxes in the US are going to go up.
Most governments—the US government, the states, cities, and local governments—are more bankrupt than ever before because of the COVID hysteria. These governments are also adding regulations—they’re not deregulating. Why should businesses come back to the US and be subject to vastly more regulations than in the Orient? US labor costs are also higher, even though labor is less and less an element in manufacturing.
As taxes and regulation grow, at some point the US is likely to have foreign exchange controls to keep capital from leaving. A word to the wise on that subject—diversify abroad. In any event, during a depression, the general standard of living goes down. It’ll go down both for the Chinese, who will be producing less. And for the Americans, who’ll be consuming less.
International Man: What are your thoughts on China’s future overall?
Doug Casey: First, I’d like to point out that a lot of people still refer to the country as “Communist China.” That’s a huge misnomer.
It hasn’t been a communist system for 40 years, since Deng Xiaoping reformed the economy. China may still have pictures of Mao on their currency, but it has nothing to do with communism anymore.
The Communist Party is just a scam, benefitting its members alone. They get to live high off the hog. The Communist Party is nothing more than the Chinese Deep State. It no longer has anything to do with Marx, Lenin, or Mao—an unexpected plus.
We shouldn’t call it communist China, because it’s not communist. It’s not even socialist. They have a fascist system, just like we have in the US. In other words, business is privately owned, and consumer goods are widely available—but it’s all controlled by the State. It’s an authoritarian system. The Chinese have moved towards the US system, even while the US is moving towards the Chinese system.
What’s next for China?
There’s an excellent chance China will go the way of Yugoslavia, which broke up into six smaller countries, or the USSR, which broke into 15. Czechoslovakia broke up into two. Or the United Kingdom, for that matter, which is probably going to become disunited. This is a trend all over the world today. Countries are subdividing into smaller ethnic-based units. It could happen in China. And the US as well—but that’s a whole different conversation.
About 80% of the people in China are ethnic Han Chinese; most speak Mandarin as their mother language as well.
At the same time, there are scores of other languages and cultures within China, representing over 300 million—that’s a lot of people.
For instance, in Southern China—Hong Kong, Guangzhou—the native language isn’t Mandarin. It’s Cantonese. They use the same ideograms as Mandarin does, but the language is as unintelligible to a native Mandarin speaker as, say, Danish is to an English speaker.
We’re talking about 68 million native Cantonese speakers. That’s a huge number. It’s larger than most countries in Europe.
The same is true of the Shanghai-ese.
I’m not even counting Mongolia, Tibet, and Xinjiang—which are all actually separate countries with ethnically, culturally, and linguistically different natives. They’re being purposefully overwhelmed, demographically conquered, by the Han Chinese. There are a dozen other seriously different countries within China itself.
I don’t doubt that when the going gets tough, they’re going to look to independence, as opposed to being bossed by Beijing. Of course, the central government will resist violently, the same way the Russians recently did with the Chechens, the Burmese did with the Karens and Rohinga, or the Indonesians with the East Timorese. But there are scores of other examples.
It’s not unlikely China will break up into autonomous regions run by warlords, much the way it was during the 1930s. As outlandish as that might sound.
International Man: What are the odds of a military clash over Taiwan, Hong Kong, or the South China Sea, and what would be the consequences of that?
Doug Casey: Well, it’s quite possible. But why does that have to be the problem of the US?
It’s almost impossible for the US to invade China. What kind of attack can the US mount? Is the US going to launch a bunch of ICBMs onto Chinese cities?
That makes no sense because the Chinese have their own ICBMs to fire back. That’s not what World War III is likely to look like. And there will be something resembling World War 3. History hasn’t ended, contrary to Fukuyama’s silly book of some years ago.
So if the US can’t and won’t invade China and won’t do an ICBM strike, what will they do? If it comes to a hot war, it will look like what I described in our recent interview.
But, along the way, the US government will try to destroy the Chinese economy.
Getting into a military dust-up with the Chinese—using aircraft and aircraft carriers—would be a catastrophe for the Americans. The Chinese have sophisticated bases all along their shore. This makes the dozen or so US aircraft carriers nothing but sitting ducks.
They’d be turned into artificial reefs. I’m sure divers of the next century will enjoy that—but today’s Americans won’t. A war is not out of the question, but, again, it won’t be a conventional war using today’s military junk. It’s not really feasible, although the generals and admirals will be the last ones to figure that out.
International Man: Recent polls suggest that nearly 2/3 of Americans have a negative view of China. What role will China play in the upcoming presidential election?
Doug Casey: That is an interesting question, especially in the context of the race riots now taking place in the US right now.
When the going gets tough in any country, it makes all the sense in the world for that country’s government to find a foreign enemy to unite the people. In the case of the US, they’d hope to change the equation from whites versus blacks and browns, to Americans against the Chinese.
Of course, they’ve played this card against Iraq and Iran. They played it against Russia.
When we talk about racism, the fact is that almost every ethnic group considers itself to be special or superior. That absolutely includes the Chinese. In fact, the Chinese, as a group, probably have more belief in their racial superiority than any other group. That augurs poorly for world peace.
But will the Chinese have anything to do with the coming election? I’d say very little. In so far as they do, however, they’re going to be Democrat-leaning. The US still thinks it has a monopoly on interfering with other countries’ elections and governments.
The Chinese dislike nationalists such as Trump. Trump is capable of all kinds of foolishness, as he’s already shown, with import duties and quotas. They’d much rather have a globalist who would try to cooperate with them.
As you know, I made a money bet that Trump would win in 2016. This time, I don’t care about Trump losing, per se. He’s a guy with no philosophical core, although he is a cultural conservative, and against PC types and cultural Marxists on a gut level.
What I really care about is the Democrats not winning, because that would be a catastrophe. Unfortunately, however, the collectivists have momentum on their side. Why? They have an actual philosophy, even if it’s a very bad one. The Republicans, however, have none. They only counter by saying their enemy is going too far, too fast. That’s why they always come off as confused and weak hypocrites.
If I was going to put money on it this time, the winner is likely to be whoever cheats best. Both sides are going to stuff the ballot boxes and do all kinds of things with electronic voting and voting by mail.
The Democrats, however, are much more professional and experienced at this type of thing than the Republicans. They’re likely to win.
Editor’s Note: The US empire has overstretched itself across the world. Today, the US is actively at war in about half a dozen countries. But perhaps the biggest danger is the rivalry with China, which has the potential to dethrone the US as the top global power.
China has a secret weapon that could bring the US to its knees. China can cut off the supply of rare commodities that are crucial to powering modern life. The US is scrambling to find a way to neutralize this threat before it’s too late.
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