Wednesday, June 1, 2016

Tension Between USA and China Creates Unstable World

History shows us that nations don't typically just start shooting at each other just out of the blue. Wars are the result of conflict and tension that has built up over time.  And many times the conflict starts with currency wars, then moves to trade wars and when one nation has had enough of the economic pain caused by the trade war....they start shooting and it erupts into a real war.

The world is currently focused on the atrocities being fomented by ISIS and figuring out how we can get all the Allah Akbar! screamers to quit gassing, raping, pillaging and disrupting huge portions of the Middle East...BUT....what if the real danger coming to America isn't ISIS but the growing conflict with China over currency, trade and the island building China is doing in the South China Sea?

What happens when the two largest economies on the planet start fighting a trade war with one another?  Well, we are about to find out.  As you will see below, the U.S. has gone "nuclear" on China in a trade dispute over steel, and the Chinese response is likely to be at least as strong.  

Meanwhile, events in the South China Sea have brought tensions between the Chinese government and the Obama administration to a boiling point.  The Obama administration strongly insists that China does not have a legal right to those islands, and in China there is now talk that it may ultimately be necessary to confront the United States militarily in order keep control of them.  

Most Americans may not realize this, but the relationship between the United States and China is officially going down the tubes, and this is likely to have very significant consequences during the years to come.

Let's start with the trade war that has erupted.  About a week ago, we learned that the Obama administration had decided to "go nuclear" on China by imposing a 522 percent duty on cold-rolled steel from China that is used in certain kinds of manufacturing...

In some regard, China has reason to be angry: the US unleashed what is nothing short of a nuclear bomb in its rapidly escalating trade war with China, and recently imposed duties of 522% on cold-rolled steel used in automobiles and other manufacturing,  In doing so it has rendered Chinese exports to the US unsustainable and will force even more excess Chinese production to remain landlocked within China's borders, making the domestic glut, and price collapse, that much worse.

Subsequently, it was announced that a 450 percent duty will be imposed on corrosion-resistant steel from China...

Corrosion-resistant steel from China will face final U.S. anti-dumping and anti-subsidy duties of up to 450 percent under the U.S. Commerce Department's latest clampdown on a glut of steel imports, the agency said on Wednesday.

Needless to say, the Chinese are less than amused, because these "shock and awe" trade duties were clearly designed to punish China.

And of course the truth is that China has been abusing us for years, so there is definitely a case to be made that they deserve even harsher treatment.  However, we need to keep in mind that the Chinese will retaliate for this.  And when they retaliate, it will likely be quite painful for us.  But for the moment, they are just issuing vague threats...

China's Commerce Ministry said it was extremely dissatisfied at what it called the "irrational" move by the United States, which it said would harm cooperation between the two countries.

"China will take all necessary steps to strive for fair treatment and to protect the companies' rights," it said, without elaborating.

Meanwhile, events in the South China Sea continue to push the United States and China toward conflict.  Let me summarize a few of the most important things that we have seen over the past month...

-In early May, Chinese authorities refused to give permission to the U.S.S. John C. Stennis battle group to make a routine port call at Hong Kong.  The Chinese had not turned away a U.S. aircraft carrier in almost a decade, and many believe that this was in direct response to comments that U.S. Defense Secretary Ashton Carter had made regarding China's territorial claims in the South China Sea.

-Subsequently, the Obama administration sent the U.S.S. William P. Lawrence sailing within 12 nautical miles of the disputed islands in the South China Sea.  This was the third time that Obama has sent naval vessels cruising by those islands, and it provoked an extremely angry response from China.

-Just last week, two Chinese fighters and a U.S. spy plane nearly collided in mid-air approximately 50 miles away from Hainan island.  This incident made headlines all over the planet.

Most Americans seem to believe that the Chinese are our "friends", but in China the perspective is completely different.

The Chinese consider the United States to be their number one long-term strategic adversary, and they have been working feverishly to prepare for a future conflict with us.

For example, China just conducted a successful test of a new hypersonic glide vehicle that we do not have any defense against.  The following comes from the Washington Free Beacon...

China successfully flight tested its new high-speed maneuvering warhead last week, days after Russia carried out its own hypersonic glider test, according to Pentagon officials.

The test of the developmental DF-ZF hypersonic glide vehicle was monitored after launch Friday atop a ballistic missile fired from the Wuzhai missile launch center in central China, said officials familiar with reports of the test.

The maneuvering glider, traveling at several thousand miles per hour, was tracked by satellites as it flew west along the edge of the atmosphere to an impact area in the western part of the country.

Let us hope that a full-blown shooting war with China does not erupt any time soon, but the reality is that we are already locked in a conflict with the Chinese on a number of different levels.


Yes!  Let us hope that we don't get into a full blown shooting war with China!

No China is not our friend.  They have an entire branch of their military devoted to hacking into US corporations trying to steal patented technology.  They have successfully hacked in and stolen hundred of billions worth of trade secrets and patents and clearly have no problem producing knock-off products that they sell for a fraction of the cost of the real thing.  So they steal our intellectual property, set up a factory to produce it, hire workers for a fraction of the cost, then put it on a boat and ship it to America for us to buy and then use their trader surplus to purchase US Treasury Bonds which one day they may use as a lever to punish our financial markets or implode the US dollar.

Sound good?

"Dennis, why do you have to constantly point out the bad things that could happen or are happening in America?  Can't you just be happy that gas is cheap and that Americans are buying pickups and SUV's like they are going out of style...again?  And that real estate has rebounded and people are once again making big bucks on selling their homes?...or that the stock market has come roaring back making everyone feel better?" seems that Americans have already forgotten what 2007-2009 felt like.  The good times are here again!...and THIS TIME they will never disappear!....because we have FAITH that the FEDERAL RESERVE can simply wave it's magic wand and FIX everything in our economy by PRINTING MONEY thereby guaranteeing we NEVER have a recession again!!

Friends, I certainly hope that America doesn't implode while most of us sit here enjoying our lives of abundance and relative ease...BUT it is my hope that my readers will fully understand how tenuous our situation is and that our wealth and lives of ease could vanish in a day.  Once we realize that we can then start to come out of the American dream...which has turned into the American delusion.

The next step would be for followers of Christ to say, "If my life of ease and wealth in America suddenly came to an end....would I still follow Christ?...or would my faith be in total crisis if we ended up like Venezuela?"

Another good question we all need to ask ourselves, "If this American dream we have all been chasing for most of our lives has occupied so much of my much time, effort and treasure have I put into making disciples for Christ?"...which is really the ONLY reason Jesus has left us on this earth.


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