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Trading the Trend

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“We are in the foothills of a Cold War.” Those were the words of Henry Kissinger when I interviewed him at the Bloomberg New Economy Forum in Beijing last November.

The observation in itself was not wholly startling. It had seemed obvious to me since early last year that a new Cold War — between the U.S. and China — had begun. This insight wasn’t just based on interviews with elder statesmen. Counterintuitive as it may seem, I had picked up the idea from binge-reading Chinese science fiction.

First, the history.

What had started out in early 2018 as a trade war over tariffs and intellectual property theft had by the end of the year metamorphosed into a technology war over the global dominance of the Chinese company Huawei Technologies Co. in 5G network telecommunications; an ideological confrontation in response to Beijing’s treatment of the Uighur minority in China’s Xinjiang region and the pro-democracy protesters in Hong Kong; and an escalation of old frictions over Taiwan and the South China Sea.

Nevertheless, for Kissinger, of all people, to acknowledge that we were in the opening phase of Cold War II was remarkable.

Since his first secret visit to Beijing in 1971, Kissinger has been the master-builder of that policy of U.S.-Chinese engagement which, for 45 years, was a leitmotif of U.S. foreign policy. It fundamentally altered the balance of power at the mid-point of the Cold War, to the disadvantage of the Soviet Union. It created the geopolitical conditions for China’s industrial revolution, the biggest and fastest in history. And it led, after China’s accession to the World Trade Organization, to that extraordinary financial symbiosis which Moritz Schularick and I christened “Chimerica” in 2007.

How did relations between Beijing and Washington sour so quickly that even Kissinger now speaks of Cold War?

The conventional answer to that question is that President Donald Trump has swung like a wrecking ball into the “liberal international order” and that Cold War II is only one of the adverse consequences of his “America First” strategy.

Yet that view attaches too much importance to the change in U.S. foreign policy since 2016, and not enough to the change in Chinese foreign policy that came four years earlier, when Xi Jinping became general secretary of the Chinese Communist Party. Future historians will discern that the decline and fall of Chimerica began in the wake of the global financial crisis, as a new Chinese leader drew the conclusion that there was no longer any need to hide the light of China’s ambition under the bushel that Deng Xiaoping had famously recommended.

When Middle America voted for Trump four years ago, it was partly a backlash against the asymmetric payoffs of engagement and its economic corollary, globalization. Not only had the economic benefits of Chimerica gone disproportionately to China, not only had its costs been borne disproportionately by working-class Americans, but now those same Americans saw that their elected leaders in Washington had acted as midwives at the birth of a new strategic superpower — a challenger for global predominance even more formidable, because economically stronger, than the Soviet Union.

It is not only Kissinger who recognizes that the relationship with Beijing has soured. Orville Schell, another long-time believer in engagement, recently conceded that the approach had foundered “because of the CCP’s deep ambivalence about the way engaging in a truly meaningful way might lead to demands for more reform and change and its ultimate demise.”

Conservative critics of engagement, meanwhile, are eager to dance on its grave, urging that the People’s Republic be economically “quarantined,” its role in global supply chains drastically reduced. There is a spring in the step of the more Sinophobic members of the Trump administration, notably Secretary of State Mike Pompeo, deputy National Security Adviser Matt Pottinger and trade adviser Peter Navarro. For the past three and a half years they have been arguing that the single most important thing about Trump's presidency was that he had changed the course of U.S. policy towards China, a shift from engagement to competition spelled out in the 2017 National Security Strategy. The events of 2020 would seem to have vindicated them.

The Covid-19 pandemic has done more than intensify Cold War II. It has revealed its existence to those who last year doubted it. The Chinese Communist Party caused this disaster — first by covering up how dangerous the new virus SARS-CoV-2 was, then by delaying the measures that might have prevented its worldwide spread.

Yet now China wants to claim the credit for saving the world from the crisis it caused. Liberally exporting cheap and not wholly reliable ventilators, testing kits and face masks, the Chinese government has sought to snatch victory from the jaws of a defeat it inflicted. The deputy director of the Chinese Foreign Ministry’s information department has gone so far as to endorse a conspiracy theory that the coronavirus originated in the U.S. and retweet an article claiming that an American team had brought the virus with them when they participated in the World Military Games in Wuhan last October.

Just as implausible are Chinese claims that the U.S. is somehow behind the recurrent waves of pro-democracy protest in Hong Kong. The current confrontation over the former British colony’s status is unambiguously Made in China. As Pompeo has said, the new National Security Law Beijing imposed on Hong Kong last Tuesday effectively “destroys” the territory’s semi-autonomy and tears up the 1984 Sino-British joint declaration, which guaranteed that Hong Kong would retain its own legal system for 50 years after its handover to People’s Republic in 1997.

In this context, it is not really surprising that American public sentiment towards China has become markedly more hawkish since 2017, especially among older voters. China is one of few subjects these days about which there is a genuine bipartisan consensus. It is a sign of the times that Democratic presidential candidate Joe Biden’s campaign clearly intends to portray their man as more hawkish on China than Trump. (Former National Security Adviser John Bolton’s new memoir is grist to their mill.) On Hong Kong, Nancy Pelosi, the Democratic speaker of the House, is every bit as indignant as Pompeo.

I have argued that this new Cold War is both inevitable and desirable, not least because it has jolted the U.S. out of complacency and into an earnest effort not to be surpassed by China in artificial intelligence, quantum computing and other strategically crucial technologies. Yet there remains, in academia especially, significant resistance to my view that we should stop worrying and learn to love Cold War II.

At a forum last week on World Order after Covid-19, organized by the Kissinger Center for Global Affairs at Johns Hopkins University, a clear majority of speakers warned of the perils of a new Cold War.




    • Eric Schmidt, the former chairman of Google, argued instead for a “rivalry-partnership” model of “coop-etition,” in which the two nations would at once compete and cooperate in the way that Samsung and Apple have done for years.
    • Harvard’s Graham Allison, the author of the bestselling "Destined for War: Can America and China Escape Thucydides's Trap?", agreed, giving as another example the 11th-century “frenmity” between the Song Emperor of China and the Liao kingdom on China’s northern border. The pandemic, Allison argued, has made “incandescent the impossibility of identifying China clearly as either foe or friend. Rivalry-partnership may sound complicated, but life is complicated.”
    • “The establishment of a productive and predictable US/China relationship,” wrote John Lipsky, formerly of the International Monetary Fund, “is a sine qua non for strengthening the institutions of global governance.” The last Cold War had cast a “shadow of a global holocaust for decades,” observed James Steinberg, a former deputy secretary of state. “What can be done to create a context to limit the rivalry and create space for cooperation?”
    • Elizabeth Economy, my colleague at the Hoover Institution, had an answer: “The United States and China could … partner to address a global challenge,” namely climate change. Tom Wright of the Brookings Institution took a similar line: “Focusing only on great power competition while ignoring the need for cooperation will not actually give the United States an enduring strategic advantage over China.”
All this sounds eminently reasonable, apart from one thing. The Chinese Communist Party isn’t Samsung, much less the Liao kingdom.

Rather — as was true in Cold War I, when (especially after 1968) academics tended to be doves rather than hawks — today’s proponents of “rivalry-partnership” are overlooking the possibility that the Chinese aren’t interested in being frenemies. They know full well this is a Cold War, because they started it.

To be sure, there are also Chinese scholars who lament the passing of engagement. The economist Yu Yongding recently joined Kevin Gallagher of Boston University to argue for reconciliation between Washington and Beijing. Yet that is no longer the official view in Beijing. When I first began talking publicly about Cold War II at conferences last year, I was surprised that no Chinese delegates contradicted me. In September, I asked one of them — the Chinese head of a major international institution — why that was. “Because I agree with you!” he replied with a smile.

As a visiting professor at Tsinghua University in Beijing, I have seen for myself the ideological turning of the tide under Xi. Academics who study taboo subjects such as the Cultural Revolution find themselves subject to investigations or worse. Those who take a more combative stance toward the West get promoted.

Yan Xuetong, dean of the Institute of International Relations at Tsinghua, recently argued that Cold War II, unlike Cold War I, will be a purely technological competition, without proxy wars and nuclear brinkmanship. Yao Yang, dean of the National School of Development at Peking University, was equally candid in an interview with the Beijing Cultural Review, published on April 28.

“To a certain degree we already find ourselves in the situation of a New Cold War," he said. “There are two basic reasons for this. The first is the need for Western politicians to play the blame game” about the origins of the pandemic.

“The next thing," he added, "is that now Westerners want to make this into a ‘systems’ question, saying that the reason that China could carry out such drastic control measures [in Hubei province] is because China is not a democratic society, and this is where the power and capacity to do this came from.”

This, however, is weak beer compared with the hard stuff regularly served up on Twitter by the pack leader of the “wolf warrior” diplomats, Zhao Lijian. “The Hong Kong Autonomy Act passed by the US Senate is nothing but a piece of scrap paper,” he tweeted on Monday, in response to the congressional retaliation against China’s new Hong Kong security law. By his standards, this was understatement.

The tone of the official Chinese communiqué released after Pompeo’s June 17 meeting in Hawaii with Yang Jiechi, the director of the Communist Party’s Office of Foreign Affairs, was vintage Cold War. On the persecution of the Uighurs, for example, it called on "the US side to respect China's counter-terrorism and de-radicalization efforts, stop applying double standards on counter-terrorism issues, and stop using Xinjiang-related issues as a pretext to interfere in China's internal affairs."

And this old shrillness, so reminiscent of the Mao Zedong era, is not reserved for the U.S. alone. The Chinese government lashes out at any country that has the temerity to criticize it, from Australia — "gum stuck to the bottom of China's shoe" according to the editor of the Party-controlled Global Times — to India to the U.K.

Those who hope to revive engagement, or at least establish frenmity with Beijing, underestimate the influence of Wang Huning, a member since 2017 of the Standing Committee of the Politburo, the most powerful body in China, and Xi’s most influential adviser. Back in August 1988, Wang spent six months in the U.S. as a visiting scholar, traveling to more than 30 cities and nearly 20 universities. His account of that trip, "America against America," (published in 1991) is a critique — in places scathing — of American democracy, capitalism and culture (racial division features prominently in the third chapter).

Yet the book that has done the most to educate me about how China views America and the world today is, as I said, not a political text, but a work of science fiction. "The Dark Forest" was Liu Cixin’s 2008 sequel to the hugely successful "Three-Body Problem." It would be hard to overstate Liu’s influence in contemporary China: He is revered by the Shenzhen and Hangzhou tech companies, and was officially endorsed as one of the faces of 21st-century Chinese creativity by none other than … Wang Huning.

"The Dark Forest," which continues the story of the invasion of Earth by the ruthless and technologically superior Trisolarans, introduces Liu’s three axioms of “cosmic sociology.”

First, “Survival is the primary need of civilization.” Second, “Civilization continuously grows and expands, but the total matter in the universe remains constant.” Third, “chains of suspicion” and the risk of a “technological explosion” in another civilization mean that in space there can only be the law of the jungle. In the words of the book’s hero, Luo Ji:

The universe is a dark forest. Every civilization is an armed hunter stalking through the trees like a ghost … trying to tread without sound … The hunter has to be careful, because everywhere in the forest are stealthy hunters like him. If he finds other life — another hunter, an angel or a demon, a delicate infant or a tottering old man, a fairy or a demigod — there’s only one thing he can do: open fire and eliminate them. In this forest, hell is other people … any life that exposes its own existence will be swiftly wiped out.

Kissinger is often thought of (in my view, wrongly) as the supreme American exponent of Realpolitik. But this is something much harsher than realism. This is intergalactic Darwinism.

Of course, you may say, it’s just sci-fi. Yes, but "The Dark Forest" gives us an insight into something we think too little about: how Xi’s China thinks. It’s not up to us whether or not we have a Cold War with China, if China has already declared Cold War on us.

Not only are we already in the foothills of that new Cold War; those foothills are also impenetrably covered in a dark forest of China’s devising.

jog on
duc
interestingly, I was introduced and read "Three-Body Problem."within my stay in Shenzhen..typical start up nerds literature, and I can share the views exposed.
There was only one surprising item: a surprisingly honest and frank description of cultural revolution within the depicting of one of the character youth.
Did you know that there were actual tank battles in Beijing during that time between different factions, army and youth ?
Anyway, watch movies in China now and we have the Hollywood style, but saved by the red army instead of the marines, with muscle, strong invincible warriors and most often near future scenario.
SCi Fi but in 2030 or so...
China population is primed to go past the cold war if need be.
 
Anton Kreil's just released a video related to trend trading, one of the very few guys worth listening to/watching IMO:

 
The current CCP checklist.

Hong Kong. Tick.
Taiwan. In progress.
South seas. Tick.
New Zealand. In progress.
Australia. Stalled.

Sorry, wrong thread. Meh.
 
Shame that no-one really paid any attention to this chart. In it resides important information that frames where the markets potentially could go in a number of scenarios. It also ties in with the question of reserve currencies and their importance (critical) on again, which way markets (could) move in a number of possible scenarios. This is the 'macro'.

jog on
duc
On y semblait au contraire plutôt hostile.
I see the chart is mirror imaging from the 1914 period....is basic TA indicating war Duc?
As we know, history repeats, and logic states that this v rally is illogical. More situation based.
Please explain to a Nimrod...aka me.
:xyxthumbs
 
There will probably need to be several posts simply to keep the subject to a manageable length in each post.

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The 1914-1945 era is the one that I shall start with. Today we have a pandemic, protectionism and nationalism. None of them are as serious as the historical ones. As to war, we have (potentially) a Cold War II.

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Falling industrial production was a function of the Smoot-Hawley Tariff legislation. The US today is less exposed to purely industrial production than it was then.

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That falling production impacted the market to a greater degree, due to a far higher component of industrial based stocks.

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The Fed. raised interest rates, which was calamitous. This was driven by the exodus of gold. Gold at that time was the Reserve Currency of the world.

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Unemployment, obviously largely driven by industrial production, was decimated.

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As a result of world wide tariffs, exports/imports around the world collapsed. We are seeing currently, due to tariffs falling trade. We may see due to COVID a further reduction in international trade due to supply chain issues, just-in-time and production in total brought back onshore to home nations. In other words a severe contraction in globalisation.

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We do currently have low (disinflationary) commodity prices. This is due more to increased supply (and during COVID falling demand) rather than deflationary due to tariffs.

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The British pound was the Reserve Currency (being directly exchangeable with gold) and Britain had to default (much as Nixon did in 1971) as we could not redeem. That ended the pound as the primary reserve currency of the world and pretty much Britain as a world power. It saw the rise of the US to pre-eminence. Is China seeking similar?

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The gold drain in the US is the driver of the Fed. raising the discount rate. The US is no longer tied to gold and can therefore via the Fed. manipulate monetary policy as it wishes (clearly the Fed. has already stepped outside of the law and its 1913 Charter with some of the current programmes). This is a good thing in the short term. Longer term is it?

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Because bank failures on an epic scale would (as they did then) cripple the economy.

The takeaway is this (and this is why I queried Mr 9K): while we have some of the issues of the Great Depression present, some we have only in a mild form. Will those symptoms develop into a fully fledged disease? If they did, how would the following questions be answered? Consequences?

(i) Is the loss of industrial pre-eminence an issue for the US in retaining the primary reserve status?;
(ii) In a Cold War with China, would the same tactic as employed against the USSR work again?
(iii) How and why did the US take reserve currency status from the UK?
(iv) Trump or Biden? Which has the intellectual capability to take on China?;
(v) Would negative answers drive a serious bear market?

jog on
duc

 
Looking at the WWII years.
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The unemployment and loss of industrial production (the two went hand-in-hand) remains an issue right through the 1930's.

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Not until America enters the war are the employment and production issues solved. The US being the factory of the West.

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Stockmarket rips higher.

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Germany's collapses. If there were charts of Japan, they would show similar. Western Europe (France, UK, Holland, Belgium etc) were all depressed from wartime damage. The Russians exported vast swathes of German industry East along with as many scientists etc that they could lay their hands on (the US also went on a brain grab).

The US moving into the 1950's was the productive centre of the world. It became the creditor nation of the world, hence, the US dollar was tied to gold and was the de facto 'Reserve Currency'.

With the ending of the war, there was again 'globalisation' as trading took place on an expanded basis. This was restricted somewhat by the Iron Curtain and the Cold War I as Stalin shut off the East.

jog on
duc
 
Into the 1950's

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We have another 'hot' war in Korea. What should be clear by now is that conventional 'war' is not a driver of Bear markets. What we are starting to see is the emergence of consumer based technology. This has largely (in part) been driven by wartime based technology. In this case Cold War technology via the Space Race with the USSR. Cold Wars are not drivers of Bear markets.

Currently China and the US are engaged in a Tech. war. This has echoes of the US/Soviet tech. war that ran for 40 years.

Also important to the trends are: (i) who is President and (ii) policy decisions made. At this point, the US is still a creditor nation.

jog on
duc
 
A bit macro time wise for the thread but applying these lessons of history, do you see China now as the Germany of late 1930..talking economy not ideology.irrelevant to the subject
The current industrial and i include high tech power of China is mind-blowing, as were the advances of Germany industry just before WWII.
One does not need to be a genius to believe that in absence of markets to sell phones and junk goods, China might redirect this production toward both domestic production:.happy people...
AND defence..hum..industry: proud Han people.
I sée some DFEN good outcome there but doubt the US can win that one.It has a demographic advantage but is loosing currently its social integrity and its attractions.this can be reverted but the timing is wrong.
Rotten from the inside
Before Reagan,the US was in a bad state socially and economically yet it managed its rebirth.
Trump tried the same imho but he faced an internal enemy which wasn't there for Reagan.
Reagan ultimately put USSR to its knees, Trump has low chance to do the same with China and the democrats will not even try..
In the spirit of the historical graph but a bit long .feel free to move to other thread
 
A bit macro time wise for the thread but applying these lessons of history, do you see China now as the Germany of late 1930..talking economy not ideology.irrelevant to the subject
The current industrial and i include high tech power of China is mind-blowing, as were the advances of Germany industry just before WWII.
One does not need to be a genius to believe that in absence of markets to sell phones and junk goods, China might redirect this production toward both domestic production:.happy people...
AND defence..hum..industry: proud Han people.
I sée some DFEN good outcome there but doubt the US can win that one.It has a demographic advantage but is loosing currently its social integrity and its attractions.this can be reverted but the timing is wrong.
Rotten from the inside
Before Reagan,the US was in a bad state socially and economically yet it managed its rebirth.
Trump tried the same imho but he faced an internal enemy which wasn't there for Reagan.
Reagan ultimately put USSR to its knees, Trump has low chance to do the same with China and the democrats will not even try..
In the spirit of the historical graph but a bit long .feel free to move to other thread


I'll come to conclusions eventually, just outlining the history currently.

jog on
duc
 
There is not going to be a cold war 2.0. China imports the overwhelming majority of its energy and exports the overwhelming majority of its goods. It also has the worst demographics of any country in the world other than japan, and is the most overcredited nation in human history. It's also completely surrounded geographically, with terrible relations with basically all of its neighbours.

All the U.S needs to do is pull the rug out & it's all over.
 
There is not going to be a cold war 2.0. China imports the overwhelming majority of its energy and exports the overwhelming majority of its goods. It also has the worst demographics of any country in the world other than japan, and is the most overcredited nation in human history. It's also completely surrounded geographically, with terrible relations with basically all of its neighbours.

All the U.S needs to do is pull the rug out & it's all over.
I highly recommend for the experts to have a nice little travel in both countries: China/US, once obviously the planes fly again and if we are ever allowed to put a foot back in Chinese soil.
It might change your views, or do you ever change your view?
 
So the 1960's

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Interest rates low and relatively stable. The hot war in Vietnam was however inflationary. Added to that was the 'oil' issue for the US: Add to that the social unrest (similar to current times) of black activisim, which resulted in President Johnson signing into law Kennedy's civil rights bills.

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The US had reached 'Peak Oil' (at that time it was limited by technology) and this was followed by the first oil shock.

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Which was further compounded by Nixon defaulting in August 1971, causing the US dollar to crumble

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During the late 1960s, persistent US balance-of-payments deficits steadily reduced US gold reserves as some Central Banks exchanged dollars for gold (French). By 1971, the world held x3 dollars:gold. Nixon defaulted.

Add to that strong Trade Unions with legal protections via COLAs in their employment contract, the US suffered stagflation.

Screen Shot 2020-07-20 at 7.13.37 AM.png


jog on
duc
 
SHANGHAI, July 20 (Reuters) - The yuan traded lower at
midday after swinging in a tight range around the critical 7 per
dollar level on Monday morning, as ongoing Sino-U.S. tensions
pressured sentiment but investors were yet to gauge any
substantive actions.

China's embassy in Myanmar on Sunday accused the United
States of "outrageously smearing" the country and driving a
wedge with its Southeast Asian neighbors over the contested
South China Sea and Hong Kong, reflecting the increasingly
fraught relations between the superpowers.

Yuan traders said recent news headlines suggested that
tensions between the world's two largest economies were
escalating, but impact on the currency remained limited as
neither side mentioned they would break the Phase 1 trade deal.

"The trend of a weaker dollar has not yet changed
significantly, as long as the Sino-U.S. trade agreement is not
substantially disrupted, market's optimistic expectations for
the yuan will sustain," analysts at China Construction Bank
(Asia) said in a note.

jog on
duc
 
In the 1980's things started to change into the structure that we (more or less) see today.

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Inflation is no more and interest rates start their great bull market. The stock market also starts its epic run into 2000. Here we see the Tech embryo launch. MSFT and CSCO were penny stocks in the 1980's.

The US trade balances shifted.

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This also marked the rise of China.

The US stock market continued into the entire 1990's:

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The break-up of the Soviet block increased the forces of globalisation and drove the offshoring of US manufacturing and supply chains to China. China would grow to the major exporter to the US.

Did the dollar suffer? No not really. The same buying that propelled the stock market was present in the bond markets,

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Essentially what happened is: the US imported cheaper low end goods from China et al. The rest of the world bought US stocks/debt. Net net, the Balance of Payments balanced.

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Which brings us pretty much up to date. The US dollar is the Reserve Currency primarily for 2 reasons:

(i) The US buys (debtor) more goods and services than pretty much the rest of the world combined; and
(ii) The US can continue to do this because they are the Tech leaders of the world and the rest of the world buys US Tech in such a quantity, that the Balance of Payments balances when;
(iii) As the most stable destination (flight to safety) US debt is held in preference to any other.

Screen Shot 2020-07-20 at 5.55.58 PM.png


Above you see the US dollar as against just Tech. Combine that with the flight to safety and because exporting economies to the US do not not want their currency to appreciate against the US dollar thereby making their goods expensive by comparison, the US can create dollars without any fear of inflation.

The Cold War with China is over Tech. China wants control of it, the US is resisting. If China wins, the US overconsumption and debt loads become an issue as the continued creation of US dollars will have the inflationary effect of the 1970's and stagflation of the economy. No foreign funds will flow to US dollars as the safe haven if China wins this war.

Oil prices are a weak point for China.

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The POO follows China. The US pretty much broke their dependency on the Arabs, until of course just recently. It will be important for the US strategically to regain oil independence and work at pushing the POO as high as possible, putting strain on China's economy, which is still oil dependent, although in the other thread there was a hint that China will build nuclear power stations.

I'm sure China would just love Aus for the mineral wealth and NZ as a giant farm to grow food on having devastated their own arable land through pollution. Of course China is as nearly Imperialistic as the US, with footholds worldwide, particularly Africa and food could well be an issue down the road.

Trump also limited visas for US Tech. companies (primarily from India) which enraged the US Tech. industry. That policy needs to be reversed quickly. It is in effect a form of tariff and history demonstrates just how damaging tariffs can be.

Anyway the combatants are squaring up.

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jog on
duc
 

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All of which is completely irrelevant when china is completely dependent on U.S security of its energy and materials imports and trade exports, is the most overcredited nation in human history, is the fastest ageing nation in history, is completely surrounded by hostile neighbours that control its seafaring supply lines, and even imports its food.

The U.S is one of the least trading economies in the world. Trade to/from the U.S is vanishingly unimportant. The only thing it imported was oil, and it's now oil independent. The world can burn and it can just sit back & watch.

China's tech is years and years and years behind the rest of the world. It can't even secure a deep water trade route from the persian gulf. Japan could defeat its current navy and do so easily.

Food:

alorie+import+and+export+%28global%29?format=2500w.png


Trade:

pz007.jpg


And that's 2015 numbers, before the yanks went completely oil independent.

Finance:

China+Capital+Shortage?format=2500w.png


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(That's scared chinese money realising they had to get their money out before it's too late)

Supply lines:

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It takes an aircraft carrier battle group to keep the persian gulf open. The saudi's & iranians have wanted to wipe each other out for decades. The rest of the world has been piggybacking off the U.S security of it every day since the bretton-woods agreement made to fight the cold war, and doubly so once the soviet union collapsed and a massive international alliance to fight the soviets hasn't even been needed.

Demographics:

5.2-us-demography-2015.jpg


DdupLR_UwAACAMe.jpg



China, even if the Americans continue to secure their supply of basically everything, is f***ed. Once the yanks just pack their bags & go home, they'll find themselves unable to secure the supply of basically everything they need to produce anything, or indeed even exist (including food and oil), bankrupt, with an extremely expensive population of geriatrics, no internal consumer market to sell their stuff to, and no way to get it to a foreign market either.

America doesn't even need to pull the rug out for china to be f***ed, but it'll be 10x as bad if they do, and they're already in the process of doing so. It would have already started properly if not for coronavirus - remember this one little attack that took 5% of the world's oil supply offline quite literally overnight:

https://en.wikipedia.org/wiki/2019_Abqaiq–Khurais_attack

That was just the beginning. Coronavirus has just put everything on hold.
 
Here's the 5 minute youtube version:



The past four years has seen over 7 trillion dollars in capital flight to the united states for precisely the reason(s) I explained above:

If you can't secure your trade, you need to build where you sell, and you also need to be sure you can actually build there, i.e secure your inputs. You need both sales and supply security. China has neither. Simple example: Toyota's two largest manufacturing plants are now in kentucky & texas.

This is the real reason for the economic rebound the U.S has seen lately - not trump. This was all going to happen anyway, trump just kicked it into high gear. Hence the huge capital flight in 2016/2017 in the graph I posted previously: Everyone thought the end was going to be nigh far sooner than if clinton won.

They were right.
 
All of which is completely irrelevant when china is completely dependent on U.S security of its energy and materials imports and trade exports, is the most overcredited nation in human history, is the fastest ageing nation in history, is completely surrounded by hostile neighbours that control its seafaring supply lines, and even imports its food.

The U.S is one of the least trading economies in the world. Trade to/from the U.S is vanishingly unimportant. The only thing it imported was oil, and it's now oil independent. The world can burn and it can just sit back & watch.

China's tech is years and years and years behind the rest of the world. It can't even secure a deep water trade route from the persian gulf. Japan could defeat its current navy and do so easily.

Food:

alorie+import+and+export+%28global%29?format=2500w.png


Trade:

pz007.jpg


And that's 2015 numbers, before the yanks went completely oil independent.

Finance:

China+Capital+Shortage?format=2500w.png


49861294-15717902318860402.jpg


EBi-MqNUIAA_7UY.png


(That's scared chinese money realising they had to get their money out before it's too late)

Supply lines:

8-3-the-asian-battlespace-updated-1024x951.jpg


url.jpg


Trump+Tweet?format=2500w.png


It takes an aircraft carrier battle group to keep the persian gulf open. The saudi's & iranians have wanted to wipe each other out for decades. The rest of the world has been piggybacking off the U.S security of it every day since the bretton-woods agreement made to fight the cold war, and doubly so once the soviet union collapsed and a massive international alliance to fight the soviets hasn't even been needed.

Demographics:

5.2-us-demography-2015.jpg


DdupLR_UwAACAMe.jpg



China, even if the Americans continue to secure their supply of basically everything, is f***ed. Once the yanks just pack their bags & go home, they'll find themselves unable to secure the supply of basically everything they need to produce anything, or indeed even exist (including food and oil), bankrupt, with an extremely expensive population of geriatrics, no internal consumer market to sell their stuff to, and no way to get it to a foreign market either.

America doesn't even need to pull the rug out for china to be f***ed, but it'll be 10x as bad if they do, and they're already in the process of doing so. It would have already started properly if not for coronavirus - remember this one little attack that took 5% of the world's oil supply offline quite literally overnight:

https://en.wikipedia.org/wiki/2019_Abqaiq–Khurais_attack

That was just the beginning. Coronavirus has just put everything on hold.

This is way off-topic.

However, China will be securing their maritime trade routes in the coming years/decades with naval ports along its maritime trade routes. This is known as the string-of-pearls theory. China will also push into the Central Asian plateau nations where there is an enormous amount of natural resources that can be exploited within close proximity to their nation.

China are forecast to be the largest economy by 2024, according to World Bank and IMF projections:

upload_2020-7-20_19-36-27.png


Guess your bet with me isn't looking too good ;)
 
This is way off-topic.

However, China will be securing their maritime trade routes in the coming years/decades with naval ports along its maritime trade routes. This is known as the string-of-pearls theory. China will also push into the Central Asian plateau nations where there is an enormous amount of natural resources that can be exploited within close proximity to their nation.

China are forecast to be the largest economy by 2024, according to World Bank and IMF projections:

View attachment 106250

Guess your bet with me isn't looking too good ;)

Rofl china doesn't even have a decade left. Why do you think they're cracking down on hong kong in the way they are?

Let's say the yanks stop securing their (and everyone else's) oil supply from the persian gulf, what happens then? They can't secure it themselves, their navy can barely fight its way out of a bathtub and it has to make it past 12,000km of hostile coastline through major choke points.

Why do you think japan's built out the navy that it has? And india? And europe for that matter?

Where is the financing going to come from? Who are they going to sell their goods to? Where is their food going to come from? Where are their raw inputs like energy going to come from?

America provides the entire global structure/system which makes china possible, and it's stopping doing so. China has never in history managed to economically integrate with anything beyond the island chain(s) that surround them, except right now, because the yanks have enabled it. The past 30 years has been, historically speaking, a total aberration.

Their finance(s) & demographics alone have bankrupted them even ignoring all of this. It's the most overcredited country in history and the fastest ageing nation in history too iirc (certainly the fastest ageing now).

Why do you think all that money bailed when trump was elected? It realised it didn't have nearly as much time to GTFO as it thought it did. It was right.

None of this is actually unique to china - plenty of other countries import/export all kinds of stuff (read: needs) like oil, food etc. We're just focused on china here because it's the biggest. Plenty of other countries like south korea are just as f***ed for almost identical reasons.

Want to double the bet?
 
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Rofl china doesn't even have a decade left. Why do you think they're cracking down on hong kong in the way they are?

Let's say the yanks stop securing their (and everyone else's) oil supply from the persian gulf, what happens then? They can't secure it themselves, their navy can barely fight its way out of a bathtub and it has to make it past 12,000km of hostile coastline through major choke points.

Why do you think japan's built out the navy that it has? And india? And europe for that matter?

Where is the financing going to come from? Who are they going to sell their goods to? Where is their food going to come from? Where are their raw inputs like energy going to come from?

America provides the entire global structure/system which makes china possible, and it's stopping doing so. China has never in history managed to economically integrate with anything beyond the island chain(s) that surround them, except right now, because the yanks have enabled it. The past 30 years has been, historically speaking, a total aberration.

Their finance(s) & demographics alone have bankrupted them even ignoring all of this. It's the most overcredited country in history and the fastest ageing nation in history too iirc (certainly the fastest ageing now).

Why do you think all that money bailed when trump was elected? It realised it didn't have nearly as much time to GTFO as it thought it did. It was right.

None of this is actually unique to china - plenty of other countries import/export all kinds of stuff (read: needs) like oil, food etc. We're just focused on china here because it's the biggest. Plenty of other countries like south korea are just as f***ed for almost identical reasons.

Want to double the bet?

Have a read of the Chinese treasure ships under Admiral Zheng during the 15th century Ming dynasty; China were a superpower then.

I see China's major pivot will be in expanding their regional influence westward into the Central Asian Plateau states to get their energy and food. This will be coordinated with their string-of-pearls, essentially building military naval ports along the old maritime trade routes to Europe for trade.

Also, China are the largest producers of most of the world's industrial commodities, while still being a massive importer of them. I suspect China are hoarding commodities.

Not interested in doubling the bet, the bet is based on tokenism.
 
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