War Games in the Pacific

WASHINGTON/BERLIN (Own report) – German soldiers will soon participate in maneuvers in the Pacific and will be on hand as observers on patrols in the South China Sea, according to announcements by the US Navy and the French Minister of Defense, Florence Parly. At a top-level conference in Singapore last weekend, Parly declared that Paris will dispatch warships to the South China Sea in the next few days and will also navigate through the territorial waters of Islands China claims as its territory. According to Parly, German military observers will embark on these ships. At the same time, German soldiers are preparing their participation in the US led RIMPAC 2018 maneuver, taking place mainly near Hawaii. RIMPAC is the world’s largest international maritime exercise. During RIMPAC 2016 German soldiers trained in “liberating” an island, which, according to the scenario, was held by the “Draco” militia. “Draco” is the Latin term for “dragon” – a symbol for China.

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A Recession Is Coming… And the Fed Can’t Stop It

A Recession Is Coming... And the Fed Can't Stop It

(Shutterstock)

 

Is the Fed ready for the next recession?

The answer is no.

Extensive research shows that it takes between 300 and 500 basis points of interest rate cuts by the Fed to pull the U.S. economy out of a recession. (One basis point is 1/100th of 1 percentage point, so 500 basis points of rate reduction means the Fed would have to cut rates 5 percentage points.)

Right now the Fed’s target rate for fed funds, the so-called “policy rate,” is 1.75%. How do you cut rates 3–5% when you’re starting at 1.75%? You can’t. Continue reading

A Global Systemic Collapse – Opportunity & Risk

 

QUESTION: Mr. Armstrong; FX Street named you forecaster of the year for your Swiss franc euro peg forecast that also nobody else saw coming. I remember you were named here in Canada as Economist of the Decade for your calls during the 1980s with the 1987 crash and the crash in Japan. I by no means want to be on the opposite side of Socrates. My question is this. You have said that 2018 is just the beginning. This is all coming unglued very rapidly. Is this the Monetary Crisis Cycle and how the world will be torn apart in just a few years? Continue reading

What will India’s role be in the SCO?

Next month the heads of state of India and Pakistan will attend, for the first time as full members, the Shanghai Cooperation Organization Summit, being held in Qingdao, China. Pakistan was already engaged with SCO member states through the Belt and Road Initiative (BRI). Joining the SCO will reinforce Pakistan’s position and integration into the region.

However, regarding India, there are few clarifications needed. What will India’s role be in the SCO? How well can India integrate into the SCO? What are the expectations? Continue reading

China’s naval build-up is a threat to regional peace

China’s first home-built aircraft carrier has recently undergone sea trials and is expected to enter service as early as next year. The Asian power already has one carrier in active service, the Liaoning, a refurbished Cold War-era vessel bought from Ukraine and commissioned in 2012.

In an editorial on May 13 — the day the as-yet-unnamed 50,000-ton Type 001A vessel and the country’s first “combat” aircraft carrier headed out for its first sea trial — the Global Times said “China is gradually stepping into an era of dual aircraft carriers” and its “second aircraft carrier highlights the country’s major progress.”

But, the paper, an influential offspring of the People’s Daily, the mouthpiece of the ruling Communist Party, stated that “as a major power, China should have multiple aircraft carriers.”

The view that the rising superpower needs to build more aircraft carriers — at least six such vessels, with at least four of them being nuclear-powered — in the future is widely maintained by other Chinese state media outlets and analysts. Continue reading

Russia’s Navy Establishes Permanent Presence in Mediterranean Sea

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Russian President Vladimir Putin said a naval standing force, including warships with Kalibr long-range land attack cruise missiles, will be permanently deployed in the Mediterranean Sea. The statement was made at a meeting with top military officials and defense industry leaders that took place in Sochi on May 16. One of the missions is delivering strikes against terrorist targets in Syria. 102 expeditions of ships and submarines are planned in 2018. The force will go through intensive training.

The Russian Black Sea Fleet has become a much different force in comparison to what it was just three years ago. Since 2015, the year the operation in Syria was launched, it has received 15 new ships, including two frigates and six conventional submarines armed with Kalibr cruise missiles. With S-400 and S-300V4 air defense systems, Krasukha-4 electronic warfare systems and shore-based anti-ship Bastion batteries deployed on the Syrian coast, the ships in Eastern Mediterranean operate in a relatively safe environment. Kalibr missiles have already been fired from frigates and submarines at terrorist targets in Syria. Continue reading

China ‘Dream’ Is Global Hegemony

China's President Xi Jinping

China’s President Xi Jinping / Getty Images

 

U.S. urged to counter Beijing’s military, economic expansion

China’s large-scale military buildup, regional coercion, and economic aggression are part of plan for global domination, experts told Congress on Thursday.

The nuclear and conventional weapons buildup, militarization of islets in the South China Sea and global infrastructure investments aimed at controlling nations are signs Beijing has emerged as America’s most significant national security challenge, a panel of specialists told a hearing of the House Permanent Select Committee on Intelligence. Continue reading

China Plans Network of Indian Ocean Bases: Security Analyst

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The Maldives is moving closer to China and Beijing may be interested in taking over the old British air base on Gan in the south of that archipelago

China has plans to establish a network of naval and air bases in the Indian Ocean, according to an article by David Brewster posted on the website of the Lowy Institute, the Australian think-tank, on May 15.

Brewster, who is with the National Security College at the Australian National University in Canberra, argues that Beijing’s aim is to support China’s growing strategic imperatives in the region. Continue reading

China sends fighter jets and bombers near Taiwan in latest show of force

 

China sent fighter jets and other military aircraft near Taiwan Friday in the latest of a series of drills which Beijing has said are aimed at the island’s “independence forces”.

Taiwan’s defence ministry said multiple H-6K bombers, reconnaissance planes and transport aircraft flew over the Bashi Channel, south of Taiwan, and over the Miyako Strait, near Japan’s Okinawa Island, in a drill Friday morning. Continue reading

China Rapidly Building Advanced Arms for Use Against U.S.

China Holds Military Parade To Commemorate End Of World War II In Asia

China Holds Military Parade To Commemorate End Of World War II In Asia (Getty Images)

 

Space weapons, drones using artificial intelligence priority in Beijing military buildup

China is rapidly building space weapons and other advanced arms infused with artificial intelligence capabilities as part of Beijing’s bid for military dominance, according to a congressionally sponsored study.

Anti-satellite missiles and orbiting killer satellites, swarms of attack drones, hypersonic missiles, maneuvering warheads, lasers, and high-speed rail guns are key systems China is fielding in the coming years in a bid to leap ahead of the U.S. military supremacy. Continue reading

Another Step Towards Collapse of Petrodollar

Note: Please see the source for currency swap agreements chart.

 

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For the past year and half a major topic throughout the alternative press has been the new Chinese oil futures contract settled/priced in yuan. The fact that China is directly challenging the Federal Reserve Note, U.S. dollar, is quiet a significant change. For those that have been paying attention this new futures oil contract is nothing more than the next step in China moving completely away from the Federal Reserve Note, and the “world reserve currency” system and towards a multi-polar world with several currencies being used for international trade. Continue reading

US cannot stop China’s innovation advancements

It would appear that the US is seriously worried about China’s technological advancements. Fearing the loss of the last comparative advantage over the Asian superpower has caused a genuine concern over national defense and competitiveness among America’s ruling elite.

The US using every possible means to curb Asia’s technological rise, including the banning of sales of essential chips to ZTE for seven years, invoking Section 301 of the Trade Act to investigate China’s “unfair trade practices” and barring investment in the information-technology sector. The Donald Trump administration’s target might be the Asian power’s “Made in China 2025”, a strategy meant to make China self-sufficient in an array of technologies.

The 301 investigation was meant to slow down China’s technological advancements by imposing stiff tariffs on a host of Chinese imports and barring the sales of US technology to Chinese firms. In addition, the anti-China faction of the US Congress and the Trump administration have barred Chinese investment in technology sectors. Continue reading

Latin America’s new geopolitical reality

Professor Niall Ferguson visited São Paulo in April to address Itaú’s annual MacroVision conference, and found time to sit down with Euromoney to talk fintech, social media and trade. In particular he focused on China and how it will impact Latin America’s future.

Experience

Euromoney meets with Ferguson later that day, a little uncertain about Ferguson’s range of knowledge and experience of Latin America. Such concerns were laid quickly to rest with Ferguson’s response to the opening question, which picked up on a point that he had made in his speech about the relative speeds of adoption of mobile payments in Asia (and China in particular) compared with the US. Could emerging markets in Latin America reach Asian levels of near-universal adoption of new payment technologies?  Continue reading

U.S. Hints at China Truce as World Warns of Trade-War Threat

Mnuchin speaks during a briefing at the IMF spring meetings April 21. Photographer: Andrew Harrer/Bloomberg

 

  • Treasury’s Mnuchin considers China trip amid trade dispute
  • China’s Commerce Ministry confirms U.S. has requested visit

U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing.

Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade. Continue reading

Pacom Nominee: China Military Islands Now Control South China Sea

Chinese President Xi Jinping

Chinese President Xi Jinping / Getty Images

 

Admiral urges rapid U.S. buildup of hypersonic and medium-range missiles to counter China threat

China has deployed electronic attack systems and other military facilities on disputed islands in the South China Sea and is now capable of controlling the strategic waterway, according to the admiral slated to be the next Pacific Command chief.

Additionally, the command nominee Adm. Philip Davidson told the Senate Armed Services Committee in a written statement this week that the military urgently needs hypersonic and other advanced weaponry to defeat China’s People’s Liberation Army in a future conflict. Continue reading