by Alasdair Macleod, GoldMoney:
America’s renewed desire to escalate military tensions is a front for America’s continual financial war, this time directed at North Korea, Syria and possibly Iran. This is likely to be the opinion of China’s strategic advisors. We analyse the geopolitics and economics behind America’s war strategy from China’s perspective, concluding that it is entering its final phase. China’s exit plan appears to be to tie the pricing of energy and then other major commodities to gold, returning to the pre-1971 status quo, when the dollar was just a settlement link between commodity prices and gold. Except this time, the dollar itself will be side-lined, so far as China is concerned, which will use the yuan instead for its empire, which will be far larger than that of the US in time, measured by GDP.
The day President Trump assumed office, it appeared that at last there would be détente with Russia, leading to America’s withdrawal from unwinnable conflicts and towards a new peaceful agreement between these long-term enemies. However, within the traditional presidential bedding-down period of one hundred days, Trump has gone from his electoral platform of disengagement from foreign ventures to overt aggression in multiple locations.
Something major has changed his thinking. Trump has committed no less than five acts of foreign aggression in that short time, with a sixth pending. The first was a joint operation with Emirati commandos in Yemen, which backfired, leading to the death of a Navy SEAL. The second was the recent attack on a Syrian airfield, in response to an alleged poison gas attack. The third is the escalation of military threats against North Korea. The fourth is the bombing of a cave network in Eastern Afghanistan. And the fifth is the deployment of more troops to Northern Iraq and Eastern Syria to step up the fight against ISIS. The rhetoric is also being ramped up against America’s long-term bogeyman, Iran.
The three theatres of war that offer the best prospects for further escalation are Syria, Korea, and Iran. They are in two regions where significant quantities of dollars are owned and invested, offering the potential for capital flight, which should be kept in mind, when reading this article.
Trump is also seeking congressional approval for an increase in defence spending totalling $54bn, a massive increase which, to put it in perspective, compares with Russia’s total defence budget of $66bn.
The default assumption is that American military power and weapons technology guarantees battlefield objectives will be achieved. This hasn’t usually been the case since the first Iraq invasion in 1990. Since then, any initial success has been more than outweighed by subsequent failures and unintended consequences. It is because of American-led operations in Iraq, Afghanistan, Libya and Syria that Europe is flooded with refugees, bringing undercover terrorists with them. There can be little doubt that a dispassionate analyst would recommend America abandons military action, so there must be other reasons behind America’s war-mongering.
China, itself a long-time strategic target for American aggression, is sure to be worried about the escalation of threats to North Korea, and with good reason. In terms of trade, South Korea is now an important trading partner, and for that reason, China will not want to see the situation on the Korean peninsula deteriorate. She will also not want America securing territory which abuts her border. Russia has a small border with North Korea as well and is likely to share that view. However, Russia’s trade is not so much with South Korea, but she is a major arms supplier to the North.
The only leader with good access to North Korea’s president, Kim Jong-un, is Russia’s President Putin. When Trump was first elected, negotiations with North Korea were a realistic option, and there was even talk of Trump meeting Kim Jong-un to negotiate. The route to negotiations was always through Putin, and if that is not actually closed, it is made much more difficult, because of America’s action launching missiles against Russia’s interests in Syria.
While the renewal of hostilities in Korea threatens to resume (they never officially ended in 1953), China and Russia are sure to avoid escalating the situation. President Xi will have made his own assessment of President Trump to this end, which was probably the most important reason for the meeting at Mar-a-Lago, from Xi’s point of view. The rather casual way in which Xi is reported to have been told about the missile strike against Syria over chocolate cake looks like a businessman’s power-play to impress an opponent. It was not an action of statesmanship. Xi is likely to have thought it amateurish, even a sign of weakness, and might have given Putin a debrief of the meeting including this view.
The relationship between Russia and China is strong, and they are likely to coordinate their strategic responses to American aggression in both Korea and Syria. The question is, if America continues to escalate its bellicose actions against North Korea, Syria, and possibly Iran, what will their response be? For clues, we should look at this from China’s point of view. The People’s Liberation Army’s most influential strategist, Major-General Qiao Liang laid out his overall strategic philosophy at a book-study forum of the Communist Party’s Central Committee in Autumn 2015. His view can be taken to be that of the Chinese leadership.i
China’s working assumptions
Qiao’s economic analysis and conclusions are both interesting and important, but it should be read for what is not said, as much as what is said. His paper will have been examined and cleared by China’s leadership, before being made publicly available. To that extent, there is likely to be an element of disinformation involved as well. It will also have been intended to be studied by foreign governments, alerting them to America’s true motives.
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