Following one of the most “news-free” weekends in memory, I returned home from the gym this morning with, for one of the few times ever, no specific topic to highlight. Not that I wouldn’t have come up with something, as I always do. However, nothing stood out as particularly worthy of featuring. That is, until I just clicked on Zero Hedge – as I do several dozen times a day – to see the headline that catalyzed this, one of the most important articles I’ve ever penned. Of which, I haven’t even put the substance together yet – given that I’m just in the first paragraph – but undoubtedly will, as the piece unfolds.
“China says it’s ready to assume world leadership”; a title that needs little additional qualifying, given how stark, and threatening, it already is – particularly given that it was published in China’s top state-owned newspaper, the People’s Daily, just two days after Donald Trump was inaugurated. Donald Trump, the “loose cannon” who, before even being inaugurated, has burned more bridges than any President in an entire term; particularly, regarding key political and economic allies like the sovereign nations of Mexico, Germany, and China. The latter, via a mutually symbiotic relationship between Washington, Wall Street, and Beijing, to maximize profits for the few; and consolidate power for the still fewer; at the expense of the world’s “99%.”
Frankly, even I’m in awe of the lengths Trump has gone in such a short period of time to antagonize some of our largest trading partners; geopolitical allies; and in China’s case, our largest creditor – particularly given that most of the “advantages” they have garnered at America’s expense were the result of trade deals initiated by, and fought vociferously for, by American bankers, politicians, and corporate titans. Not to mention, the fact that any attempt to “reverse” said advantages – like devaluing the dollar, or enacting tariffs or “border adjustment taxes” – will only, in the big picture of things, weaken America’s financial position further. Not to mention, its political and economic hegemony; or, for that matter, the purchasing power of the rapidly dying dollar. Which amidst such a confrontational environment – like, say, the thermonuclear currency war Trump declared last week by espousing that the dollar is “too strong” – may start to decline at a not so “slow” pace – particularly against items of real value like physical gold, silver, and platinum.
Yes, a “clash of civilizations” is coming, on countless political, economic, social, and monetary fronts. Seeing 500,000 women march on Washington to protest Trump’s election – and countless tens of thousands elsewhere – should tell you all you need to know of the dangerous direction America is heading; which I assure you, will NOT be assuaged by four years of “Trump-flation.” I mean, think about it, close to a million people protesting the new President one day after Inauguration Day? Which, if said event was not limited to women, would easily be twice that much. That is the definition of a polarized nation beset by social unrest – which ironically, is exactly why Trump was elected!
Before I get back to China, America’s mortal political, economic, and monetary enemy of the next century, don’t forget for a second that similar, violently polarizing civilization clashes are ongoing elsewhere; in my view, catalyzed by the secular, and completely irreversible trends of worldwide overpopulation and the death of history’s largest, most destructive fiat Ponzi scheme – not necessarily in that order.
Most notably in Europe, the world’s largest political and economic bloc – which realistically, is on the verge of collapse. And by collapse, I don’t just mean the European Union and Euro currency, but governments of not just a few, but many individual members – in large part, due to the horrifying economic ramifications of the ill-fated political union, which has decimated the finances of at least a dozen sovereign governments, whilst attempting to hid the rot in those not yet considered basket cases. Even the continents’ top “leaders” know it – such as German Vice-Chancellor Sigmar Gabriel, who last week said “a breakup of the Eurozone is no longer unthinkable”; and Mario Draghi himself, who this weekend let the cat out of the bag regarding what’s been discussed at recent ECB meetings, in stating “if a country were to leave the Euro system, its national central bank’s claims on or liabilities to the ECB would need to be settled in full.”
Of course, if one more major nations were to leave the Eurosystem – such as, for example, France or Italy, there likely would be no more ECB to “settle” with. And trust me, if this were to occur – in a worst-case scenario, this year – America would be caught in the middle of an unprecedented political, economic, financial, and monetary maelstrom. As not only do American banks and corporations have massive exposure to the European continent, but Trump has made it clear that he has little respect for historical ties with its major players – as for now in, whatever we do, will be “America First.” Which is fine and good in some ways, of course. However, saying he doesn’t necessarily trust Angela Merkel – whilst overtly blaming her for many of Germany’s current woes – does not appear a particularly prudent strategy, given America’s position as the world’s largest creditor and goods importer, heading into a major economic and geopolitical crisis. To wit, the analysis of Trump’s inauguration speech by Gabor Steingart, the editor-in-chief of Handelsblatt, Germany’s leading economic newspaper; i.e., “that was no presidential speech; that was a veritable declaration of war.”
As for China, more anti-American – and anti-West – propaganda has been published by State-owned publications since Trump’s election than any time I can recall. With good reason; as not only is Chinese Ponzi economy collapsing – prompting explosive capital outflow; which in turn, has prompted massive capital controls and PBOC U.S. Treasury bond sales; but this Fall’s 19th National Congress is rapidly approaching – at which, China’s entire leadership structure will be restructured. Not to mention, as the Yuan has been accepted into the IMF’s strategic currency basket (and subsequently devalued); whilst the BRICS bank has been dramatically expanded; and with it, political and monetary alliances with countless U.S. “competitors.”
Last week, China “warned” America – through state-owned newspapers, of course – that if Trump doesn’t back off, China will be forced to “take the gloves off.” Consequently, it couldn’t be clearer that a “world-changing clash of civilizations” is upon us, as the world’s power base inexorably shifts East. East, where the majority of the world’s low-cost manufacturing base now resides; and in all likelihood, its unencumbered physical gold and silver. To that end, last night’s People’s Daily commentary is by far China’s most antagonistic mockery of the West in general, and the U.S. specifically – in citing Chairman Mao’s 1949 poem, asking citizens to “range far your eyes over long vistas,” as “the ultimate defeat of capitalism will enable Communism to emerge victorious.”
In fact – quite ironic, for a government that for years has spread propaganda of its successful transformation to capitalistic business philosophy – it’s clearly playing on its citizens’ collective fear of free markets, by “capitalizing” on the collapsing global economy to suggest “the emergence of capitalism’s social crisis is the most updated evidence to show the superiority of socialism and Marxism“; and “Western style democracy used to be a recognized power to drive social development, but now it has reached its limits – kidnapped by the capitals, as a weapon for capitalists to chase profits.” And finally, from the mouth of an actual person – Zhang Jun, Director General of the Chinese Foreign Ministry’s international economics department – “China does not want world leadership, but could be forced to assume that role if others step back from that position.”
I don’t have the exact quotes, Confucius and Sun Tzu would likely have advised strongly against misjudging your enemy – or your enemies’ intentions. And in the case of what will unquestionably be an “unprecedented, world-changing clash of civilizations”; as the “West” desperately tries to maintain leadership, against an “East” holding all the cards – it would be wise to consider why China is making such aggressive statements, and what they may do to back them up. Which whatever they are, I assure you will shake the dying monetary regime to its core, catalyzing equally unprecedented capital flight to said “real items of value, “like physical gold, silver, and platinum.