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Thursday, August 17, 2017

The Cold War Reheats-Will it be a…21st Century Apocalypse?

Poor Man Survival

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The Cold War Reheats-Will it be a21st Century Apocalypse?

 Every report by the mainstream press makes the most fundamental of errors, which is that they fail to understand that North Korea is a Chinese proxy. Kim Jong Un is not just North Korea's Dear Leader but also a puppet of the Chinese Empire.

The US continues to firmly trend towards war with China as the mainstream press media spotlight on North Korea during 2017 continues to displace the other dozen or so US/China flashpoints such as China's land grab underway in the South China Sea as I wrote about last week.

The only reason North Korea has nuclear weapons is because China gave them the technology, and the same goes for its ballistic missiles. And the same goes for the other Chinese proxy in the region, Pakistan. While India is America's nuclear proxy in the region.

Therefore, if the press fail to get this fundamental fact then everything else they write is pretty much gibberish. North Korea is a basket case where at least 90% of its soldiers would fail to even fight for the Kim 'God' dynasty, instead would likely celebrate the demise of their Dear 'Fat' Leader.

The only reason why North Korea has nuclear weapons is because the Chinese want them to so that they can be used to put the United States and its Asian allies under pressure which the United States military fully understands hence why the US long term strategy is for the military encirclement of China. In respect of which having a North Korean rogue state that openly threatens the United States is in China's strategic interests. And thus all of the noises coming out of China regarding their inability to control North Korea can be taken with a huge mountain of salt for China WANTS THIS version of North Korea to exist so that it can be used to attack US interests without triggering war between China and the US.

While the US confronting North Korea is in terms of sending a message to China as North Korea is merely a stepping stone towards the containment of China. Thus an attack and destruction of North Korea's military capability would amount to degrading Chinese military power in the region.

Here’s another analysis of these events…


7 Horsemen of the 21st Century Apocalypse

What’s truly driving world leaders to increasingly bellicose behavior is not merely their own rational or irrational decision-making. Nor is it the reasons and excuses that our leaders themselves believe and cite.

Rather, what’s ultimately behind these new winds of war is a bundle of seven economic, social and political megatrends that, like an invisible fist, are pushing the U.S., Russia, China and others toward a dangerous confrontation.

I call them the Seven Horsemen of the 21st Century Apocalypse …

1. The Horseman of Debt

The first megatrend is the vast accumulation of government debts. Back in the early 1970s, the U.S. government had only 30 cents in debts for each dollar of goods and services (GDP) produced per year. Now, its debt burden has more than quadrupled in size — to $1.32 per dollar of GDP.

That’s bad enough. But even that big debt burden does not include trillions in U.S. government obligations for Social Security, Medicare and veterans’ benefits. Nor does it include debts piled up by U.S. corporations, consumers and local governments — let alone the trillions in high-risk bets made by New York megabanks, called “derivatives.”

Moreover, the United States is not the worst offender. Other major economic powers have plunged even deeper into debt, with Japan leading the pack. It has a government debt load per GDP that’s twice as big as America’s.

The result has been a series of financial collapses, crashes and panics that have appeared like recurring tidal waves, each larger than the previous: The historic collapse of the U.S. dollar in the late 1970s; a monumental crash in the U.S. government bond market in 1979-’81; a flood of bank failures in the 1980s, followed by giant insurance company failures in 1989-’91; the great housing bust of 2007; the Great Debt Crisis of 2008; the Great Recession of 2008-’09; the near-bankruptcy of multiple European governments in the 2010s.

2. The Horseman of Money

The second megatrend is radical easy money and money printing, a core aspect of governments’ desperate strategy to paper over the debts and escape the severe financial panics that they cause.

This money-printing desperation was particularly evident in the wake of the granddaddy of debt crises that struck the globe in 2008.

Indeed, it was the watershed event of that debt crisis — the failure of Lehman Brothers on Sept. 15 of that year — that set off the greatest wave of money printing in the history of civilization.

That’s when the U.S. Federal Reserve — along with the European Central Bank, the Bank of Japan and the Bank of England — broke all tried-and-tested rules of monetary policy, embarked on a multiyear binge of money printing, and helped fuel other megatrends that are now leading toward global conflict.

The U.S. Federal Reserve started the ball rolling. It went stark-raving mad, abandoning any semblance of restraint, expanding its assets (the best measure of money printing) by a mammoth $3.6 trillion through 2017.

The European Central Bank immediately followed in the Fed’s footsteps, expanding its assets by $1.5 trillion. Plus, for extra measure, they cut their official interest rates to zero and even below zero.

The Bank of England, although smaller, was equally aggressive, expanding its balance sheet by $435 billion between 2008 and 2017. After the Lehman Brothers failure, their money printing went ballistic; and during the European debt crisis, it went ballistic again.

But if you think all of the above is crazy, wait till you see what the Bank of Japan did! After the Lehman Brothers blow-up in 2008, it expanded its balance sheet by a whopping $2.5 trillion. Adjusted for the smaller size of Japan’s economy, that’s the equivalent of a $9.4 trillion surge in the United States, or more than 2½ times the Fed’s expansion

ll of this adds up to a big-bang of monetary expansion unprecedented in all of recorded history:

The Fed’s $3.6 trillion, plus the Bank of England’s $435 billion, the European Central Bank’s $1.5 trillion, and the Bank of Japan’s $2.5 trillion give you a grand total of more than $8 trillion in monetary expansion after the Lehman Brothers failure.

3. The Horseman of Inequality

The trillions of new money that the Fed and other central banks poured into the global economy didn’t go into industry to create more high-paying jobs. Instead, it flowed into the world’s largest banks. It fueled widespread speculation benefiting a small minority of large, risk-oriented investors. And at the same time, it flattened interest rates, reducing to a pittance the income of risk-adverse investors, savers and retirees. Result: Extreme income inequality.

But the Horseman of Inequality didn’t first gallop onto the scene in 2008. It actually appeared three decades earlier. Consider the stats for the United States:

·         In 1978, the top 1% of Americans controlled 22.9% of the nation’s wealth. That’s not unreasonable. In a capitalist society, some level of inequality is acceptable and even desirable. In the most recent reckoning, however, their wealth share has doubled.

·         The concentration of wealth and economic power has grown even more extreme among the nation’s top 0.01% (one of every 10,000 families). In 1978, they controlled 2.2% of the nation’s wealth. Now their share of the nation’s wealth pie has grown fivefold!

·         The wealth disparities in Russia are even more severe. According to New World Wealth, Russian millionaires control 62% of the wealth, or nearly double the nosebleed levels reached in the United States. And according to Credit Suisse, the top 10% of Russia’s population control a staggering 85% of the country’s wealth, with just 111 individuals controlling nearly one-fifth.

·         In China, meanwhile, wealth disparities have grown more rapidly than virtually any other country in the world.

·         Between 1990 and 2016, the Gini Index, a widely accepted measure of poor income distribution, rose by 20 points in China.

·         That’s nearly triple the rise that took place in India, also a country of great wealth disparities. Worse, it’s more than ten times the rise that took place in advanced OECD countries, in the world’s Newly Industrialized Countries (NICs), and in Asia’s Low Income Countries (LICs).

·         Even this measure understates the large regional discrepancies in China — between the impoverished countryside and the industrial megalopolises; between the small coastal provinces (see blue in map) and the giant Western regions (brown).

·         No matter how you slice the numbers, China has clearly suffered the most radical shift from equality to inequality among nearly all countries of the world.

4. The Horseman of Corruption

·         Widespread corruption is both a cause and a consequence of income inequality. Wealth empowers certain elites and government officials to cheat and steal. That behavior, in turn, is a big factor in the impoverishment of middle and lower classes.

·         This is not only a pandemic in government, but also in business; not only via criminal activity, but also in the form of hidden, technically “legal,” schemes deliberately designed to deceive the public. I call it “corruption by deception.”

·         To properly document corruption globally would require volumes greater than the Encyclopedia Britannica. So let me cite just two countries:


·         The United States of America: In the late 1990s, the Big Five U.S. auditing firms, their large corporate clients, and some of the most widely respected Wall Street analysts effectively conspired to deceive investors and the general public about the earnings and ratings of the nation’s leading companies, especially in the technology sector. The result was the Tech Wreck of 2000-’02, crushing the wealth of middle-class investors.

·         In the mid-2000s, it happened again. But this time, the corruption was more widespread; the losses, much larger.

·         The deceptions were perpetuated by big “nonbank banks” that specialized in subprime mortgages like New Century Financial and Countrywide Financial; the nation’s largest commercial banks, such as Bank of America and Citigroup; the biggest investment banks such as Bear Sterns, Lehman Brothers, JPMorgan and Goldman Sachs; the nation’s giant government-sponsored mortgage agencies, Fannie Mae and Freddie Mac; Wall Street’s Big Three rating agencies, Standard & Poor’s, Moody’s and Fitch; plus a long list of prominent government officials.

·         The result was the Housing Collapse, the Debt Crisis and the Great Recession, crushing the wealth of an even broader swath of middle-class America.


·         The Russia Federation: Surveys by OPORA, a Russian business association, finds that 90% of entrepreneurs have encountered corruption at least once. Similarly, a survey by the Institute of Contemporary Development in Moscow concludes that Russian citizens view corruption as the second biggest problem in the country. Meanwhile, Transparency International, a global nonprofit active in 100 countries, says that corruption in Russia is worse than in Brazil, China, India and the 34 member nations of the OECD. This leaves virtually no space for a middle class, and few escape hatches for Russia’s urban or rural poor. It is a deeply ingrained, pernicious driver of public discontent in Russia.

·         But President Vladimir Putin effectively turns this sentiment around to his great advantage. His vehicle: A Russia-first foreign policy that routinely blames domestic ills on foreign enemies, galvanizes public opinion, and has helped establish Putin as the most popular Russian leader since Lenin. Putin knows it is the single best vehicle to convert domestic shame into international pride. And he pursues it aggressively, deftly portraying the United States as the ringleader of Western nations seeking to undermine, sabotage and destroy Russia.

5. The Horseman of Division

·         In parallel with the widening income inequality, we have also witnessed a global trend toward extreme political divisiveness.

·         Let me start with the United States …

·         In the chart above, income inequality (black bars) is measured by the wealth share of America’s top 0.01%; the higher the bars, the more inequality.

·         Political division (red line) is based on an exhaustive study of voting patterns in Congress; the higher the line, the more extreme the partisanship.

·         Most Americans are aware of “government gridlock.” But what most do not realize is that the political divisions in America today exceed those which prevailed during Reconstruction, the extremely divisive period that followed the U.S. Civil War.

·         That’s when the federal government enacted a series of new laws to enforce equal rights for black Southerners, encountered violent opposition from citizens, and ultimately abandoned its efforts to forcefully mold Southern society. During that period, this widely respected index of political divisiveness in the United States reached an all-time high of 0.79. Today, that same index is even more extreme, at 0.97.

·         The divisive trends in Russia and China are less evident on the surface, but potentially more powerful in their ultimate impact. The big difference: There, they have emerged in the form of mass protests and rebellion. And there, they’ve been promptly squelched by repressive federal governments.


·         6. The Horseman of Tyranny

·         Sixth, we’ve seen the rise of authoritarianism and dictatorships. Back in the 20th Century, it took two world wars, countless wars of independence, plus decades of struggle to slowly but surely rid most of the world of colonialism, neocolonialism and military dictatorships. In the 21st century, however, it has taken only a fraction of that time for similar kinds of authoritarian regimes to again rear their ugly heads. I’ll save the many examples for a future column.

·         7. The Horseman of War

·         Finally, the global rise of authoritarianism has been accompanied by a global rise in nationalism, militarism, and the irresistible urge by the world’s most powerful autocrats to blame their domestic ills on foreign adversaries.

·         The blame game was rampant first in countries like Russia, China and North Korea. Now, it may also be rearing its ugly head in the United States. On both sides, weapons of choice include propaganda and fake news. On both sides, foreign enemies are powerful mechanisms for rallying domestic political support and unity. And everywhere, this is what connects the dots between domestic division and international conflict.

·         The Invisible Fist is Powerful

·         Yes, the boldness, rashness and sheer recklessness of individual leaders are specifically to blame for the events of the past week and earlier. It’s our leaders who push the envelope of diplomatic wars, cyber wars, trade wars, proxy wars and regional wars. They’re the ones who ultimately issue the commands to send troops into battle or press the buttons of ballistic missiles.

·         But it is the Seven Horsemen — Debt, Money, Inequality, Corruption, Division, Tyranny and War — that cause booms and busts; create a climate of envy and disdain; encourage dishonesty and abuse; catapult autocratic leaders to power; give them the mandate to build their military power and ultimately, to wage war.

·         I repeat: This bundle of seven megatrends is a powerful, invisible fist. And it’s this invisible fist that’s pushing, shoving, sometimes forcing our leaders toward the chest-pounding, bellicose behaviors that we are witnessing all over the world today

More Resources:.

Yours for better living,

Bruce, the Poor Man



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DAR said...

There are so many hot spots around the globe it certainly makes one pause and wonder why Congress and the media seem to ignore them. Enough of the BS about Russia and Trump already-all it is more wag the dog nonsense which prevents them from the real work that needs to be done...they're just trying to get rid of the 'outsider' and they're doing a major disservice to the nation in the process.

Larry said...

Idiots in the US are too busy rewriting history, tearing down statues, and beating up Trump for stating the truth to realize anything about what is going on in the world. The pinheads that pass for people in the press are deluded as well.