Recent comments on a hardcore India based bitchy anti-China media site, Firstpost, is saying that the USA does not know how best to deal with China. That was a shockingly, and surprisingly rare and direct criticism and a reality slap, which will be denied vehemently by the USA for sure.
The modus operandi of taking from its usual playbook in dealing with Russia as with others, is now brought down to earth, with all the sanctions largely failing to work. Russia is not yet on the level of the intertwined economy between China and the USA, and yet Russia's tenacity and ability to endure in response is unsettling for the USA, even with the support of all of Nato. Therefore the USA realises that sanctioning China or even decoupling from it is going to cause unimaginable destruction for both of them economically, when it eventually pivots to the South China Sea.
While the USA, throughout the decades of its dominance, been used to taking out countries like Iraq and Libya like a morning exercise in the Park, Russia and China presented it with a different kettle of fish, where force will be met with force and more, with nuclear no longer the unilateral option it can deploy, like in Hiroshima and Nagasaki, without any fear of reprisals from the Japs.
Decoupling was almost the de facto way forward, as espouse by many USA hawks, and Trump took up the challenge by igniting the fuse with his trade war, attempting to lure back manufacuturing to the USA and bring down China. Instead, most of foreign owned Chinese manufacturing migrated to India and Vietnam among others. Added to the inability to decouple is now the looming rise of BRICS threatening the USA with the de-dollarisation move, and eating away the US$ hegemony. The USA and its allies can deny the inevitable and calling it 'over blown', but slow it may be, the outcome is ominous. They can brush that aside at their own risk, like the rise of China and now India. But I think the USA is deeply worried, nervous and paranoid.
With cheap labour, good skills availablity and even cheaper energy to boot in India in particular, the choice of destinations for such companies moving out of China is decisively not the USA. The USA basically lacks the kind of skills and talents needed, after the rush to China decades ago, as evidenced by the acute shortage of skilled its chip innovation talents to fill the gaps, with all the foreign chip makers flocking to take advantage of the subsidies dangled by the USA Government, whose intention is discreetly engineered to help their own chip manufacturers, killing two birds with one stone by destroying those foreign ones like TSMC and Samsung, who are now overshadowing them in innovation. So much so that the USA had to resort to force to bring back those talents, with loss of US citizenship if they refuse. Talk about their protection of 'Freedom of Choice' and all those bullshit.
Now, the new narrative of the USA on display is 'de-risk' knowing that decoupling is going to be devastating for them as well, with Russia already providing the perfect example. China is not going to fall for that 'de risk' line, and China should from now on take innovation into its own hands in chip manufacturing and everything else, whatever the difficulties and be self reliant in all important fields. Most importantly, have enough deterrents to counter any possibility of a sneak attack. A wounded tiger is the most dangerous animal.
Anonymous
6 comments:
JP Morgan bought over First Republic Bank and they are claiming the banking crisis is over, but again talking about smaller banks still going to face problems, knowing the Fed is still going to raise interest rates. Crisis over but still got problems? What are they saying? Word salad again?
Suffice to say, the message to banks is that they can continue to do the same risky hanky panky stuff, as the Fed will always be behind to bail them out by backing too big to fail banks to take over. The banksters are so relieved and are so happy and it is back to business as usual. Actually, the underlying problems have not been solved and they are just kicking the can further down the road, until the next crisis.
Oh, they assured depositors that new guidelines will be put in place, but actually saying nothing and just doing cosmetic changes. This is just like the assurance of both Parties to pacify voters that they are doing something, after each and every shooting, but actually nothing ever gets done. That underscores the power of the gun lobbies and other lobbies in the USA. They control the White House with their campaign donations. Who pays the piper calls the tune, right? It never varies.
Treasury Secretary Janet Yellen on Monday warned that the United States could run out of cash and default on its debt repayments as early as June 1, should the government fail to raise the debt limit.
"Our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time," Yellen said in a letter to House Speaker McCarthy.
The June 1 warning is earlier than some on Wall Street had expected, with late July previously touted as a potential deadline.
Extracts from 'America's Empire Is Bankrupt':
'Francis Fukuyama insisted in a 1989 essay that having won the top slot, the US was destined to stay there forever. He was, of course, wrong, but then he was a Hegelian and couldn’t help it. (If a follower of Hegel tells you the sky is blue, go look.) The ascendancy of one empire guarantees that other aspirants for the same status will begin sharpening their knives. They’ll get to use them, too, because empires invariably wreck themselves: over time, the economic and social consequences of empire destroy the conditions that make empire possible. That can happen quickly or slowly, depending on the mechanism that each empire uses to extract wealth from its subject nations.
The mechanism the US used for this latter purpose was ingenious but even more short-term than most. In simple terms, the US imposed a series of arrangements on most other nations that guaranteed the lion’s share of international trade would use US dollars as the medium of exchange, and saw to it that an ever-expanding share of world economic activity required international trade. (That’s what all that gabble about “globalisation” meant in practice.) This allowed the US government to manufacture dollars out of thin air by way of gargantuan budget deficits, so that US interests could use those dollars to buy up vast amounts of the world’s wealth. Since the excess dollars got scooped up by overseas central banks and business firms, which needed them for their own foreign trade, inflation stayed under control while the wealthy classes in the US profited mightily.
The problem with this scheme is the same difficulty faced by all Ponzi schemes, which is that, sooner or later, you run out of suckers to draw in.'
'One of the interesting consequences of the shift now under way is a reversion to the mean of global wealth distribution. Until the era of European global empire, the economic heart of the world was in east and south Asia. India and China were the richest countries on the planet, and a glittering necklace of other wealthy states from Iran to Japan filled in the picture. To this day, most of the human population is found in the same part of the world. The great age of European conquest temporarily diverted much of that wealth to Europe, impoverishing Asia in the process. That condition began to break down with the collapse of European colonial empires in the decade following the Second World War, but some of the same arrangements were propped up by the US thereafter. Now those are coming apart, and Asia is rising. By next year, four of the five largest economies on the planet in terms of purchasing power parity will be Asian. The fifth is the US, and it may not be in that list for much longer.
In short, America is bankrupt. '
Link to article:
https://www.zerohedge.com/geopolitical/americas-empire-bankrupt
The USA can continue to chalk up debts by printing fiat money and hoping the world at large will continue to hold large quantities of US$. When de-dollarisation picks up pace, that thinking is not going to work anymore, as countries are beginning to realise that they can indeed do trade outside the US$, as they did before with the British pound.
No more are countries afraid of being targeted for regime changes like in Iraq and Libya should they try to change the status quo. BRICS, with Russia and China, is basically providing the backing for countries joining as members, which the USA can do nothing about.
Argentina is the latest country to jump on the de-dollarisation wagon. Argentina got itself into the debt trap set by the IMF and is still trying to extricate itself without much success and facing extreme difficulty. Paying for Chinese imports using the Yuan is a step in the right direction.
There is this saying, those that lived by the sword would die by the sword. Similarly, those that lived by printing fiat money would die by fiat money.
And the Americans are trying to save every failing American banks, not letting the sick banks to fail. Contrast this to what they demanded of Asian banks during the financial crisis, demanding that the Asian governments to let their banks failed, not to save them.
Thailand and Indonesia became instant victims. Malaysia was saved because of recalcitrant Mahathir that got the guts to say no to the West.
Mahathir, like LKY, is a strong leader when he was in power. Give the man the credit that he deserves for his guts. That is why the USA dislike him and Lee. Only leaders that can say 'yes sir' like Yoon and Kishida are favoured and which the USA likes, and there are also dime a dozen like these two in Europe.
The USA is now facing a group of strong leaders like Putin, Xi, Mohammed bin Salman, Lula, Modi and particularly the leaders of Myanmar, Cambodia and Laos. Dealing with them is not as easy as in the days of Saddam Hussein and Gaddafi. Even African leaders are not easily threatened. The USA knows weak leaders like Marcos Jr, Yoon and Kishida are easy to manipulate together with those in the EU.
Post a Comment