It wouldn’t be the end of the world if China restricted its exports of rare earth elements. From Doug Casey at internationalman.com:
International Man: Rare-earth elements (REEs) were in the news recently. What is the significance of these 17 obscure elements from the periodic table?
Doug Casey: Obscure elements seem to come into public view every few decades, typically during a commodity bull market. I remember the so-called “strategic metals” boom, back in the early 1980s, when everybody went wild about cobalt and tantalum, among other elements. I remember there was a well-known broker in New York who was actually selling 55-gallon drums full of cadmium to naïve clients. There are probably, even now, some poor people with the stuff stored in their garages.
This is a cyclical phenomenon, not unlike what’s happening with stocks like GameStop. It’s mostly a consequence of too much money being printed and lots of it looking for a place to hide.
Now it’s the turn of rare-earth elements. Many readers will recall them from chemistry class. More technically, most of them are also known as lanthanides, in their own row at the bottom of the periodic table. They’re actually not all that rare. Fun fact: Cerium is more common than copper in the earth’s crust. That is indicative of the problem. REEs are generally widely dispersed, but there are relatively few places where deposits are concentrated enough to be considered ore.
Economic deposits of REEs may be somewhat hard to find, but there are scores of known REE resources, not counting the millions of tons of electronic junk that can be recycled for them. But the lack of minable reserves is solvable with higher REE prices. There are also problems in mining, concentrating, and refining that are peculiar to REEs. Mining anything can be messy, of course, but REE’s chemical characteristics make them more of a problem than many minerals. Although, this is nothing that can’t be solved with inputs of capital and technology.
Trying to keep China “in line” according to US government standards is not going to work. From Finian Cunningham at strategic-culture.org:
The mere playing with war rhetoric is reprehensible and speaks of American desperation to salvage its diminishing global power.
In an extraordinarily provocative move, the U.S. foreign policy establishment has warned China that it is pushing for a more aggressive strategy – all the way up to instigating war. In a tome-like article published by the Washington-based Atlantic Council, there are foreboding demands for numerous “red lines” to confront China over.
Entitled ‘The Longer Telegram’ the article is a strange throwback to Cold War thinking. It is ostentatiously mimicking the famous document authored by George Kennan in 1946 who as a U.S. diplomat based in the Moscow wrote ‘The Long Telegram’ prescribing a hostile strategy of containment against the Soviet Union.
Thus the Atlantic Council is billing the recent article as a seminal historical contribution to formulating U.S. policy towards China, and one that is more bellicose and “comprehensive”.
Moreover, the author’s identity is not revealed, going simply by the description of a “former senior government official” with expertise on U.S.-China relations. That is odd. It suggests that the author is close to the new Biden administration, if not a member of it in a new capacity such as national security advisor or intelligence chief.
The timing of the publication would indicate it has the purpose of forming the Biden administration’s policy. Many of its talking points and themes, such as defining China as the “main threat” to the U.S. and working more closely with allies to confront China, have been reiterated elsewhere by the Biden administration. But rather than making it an explicit U.S. policy document, the tactical choice appears to have been to publish it through the Atlantic Council think-tank since that would give a preferred nuanced distance from the White House. It’s more of a discreet telegram.
Trump’s heart may have been in the right place but his policies often weren’t. From David Stockman at davidstockmanscontracorner.com via lewrockwell.com:
The everlasting irony of Donald J. Trump’s presidency is this: He had all the right enemies, but virtually without exception made all the wrong decisions during his hapless four-year sojourn in the Oval Office.
The list of his enemies is enough to make any right-thinking supporter of peace, prosperity and liberty proud. That starts with the TV networks and print organs of the mainstream stenographers club, who peddle the state’s propaganda and call it news. This most especially includes the masters of mendacity at CNN, the New York Times, and the Washington Post.
It also includes the bipartisan national security mafia, the climate change howlers, the race card hondlers, the Russophobes, the Neocon War Brigades, the NATO/IMF/UN acolytes, the Washington nomenclatura, the careerist racketeers of Capitol Hill, the beltway shills of the Lincoln Project, the Silicon Valley thought police and the celebrity scolds of entertainment and media, among others.
With so many worthy enemies it is amazing that the he managed to do so little good and so very much wrong. But there is really no mystery to it when you cut to the essence of Donald J. Trump, the POTUS Poseur.
Posted in Collapse, Debt, Economy, Financial markets, Foreign Policy, Government, Military, Politics, Trade
Tagged American empire, Military spending, Trump
With Biden in office, the usual suspects want to take back the control of international trade Trump so rudely grabbed from them. You know, free trade agreements that have nothing to do with free trade. From Tyler Durden at zerohedge.con:
Proponents of the QAnon “conspiracy theory,” which the NYT can’t seem to stop writing about, are going to love seeing this.
A memo that has reportedly been circulating among policymakers on both sides of the aisle for weeks was finally released to the press on Tuesday when Dealbook editor and CNBC “Squawk Box” host Andrew Ross Sorkin got the scoop: a memo penned by a group of senior-level bureaucrats, including – who else? – Henry Kissinger and former British Prime Minister Tony Blair has provided a kind of “blueprint” for the Biden Administration to undo all of President Trump’s trade-war tactics and other policies that didn’t exactly help promote free trade.
As Trump recounted in his farewell video published earlier Tuesday afternoon, his administration dramatically altered the American trade landscape, pulling the US out of the TPP, renegotiating Nafta into the USMCA, and – most consequentially, at things would turn out – the trade war with China, which inspired waves of hysterical lobbying by the Chamber of Commerce and special-interest groups from Big Tech to Wal-Mart and other major retailers, and others.
So, as Biden prepares his first 100-day blitz of policy directives, many of the architects of the globalist system created by groups like the Trilateral Commission are joining with a gaggle of former cabinet-level officials (both Dems and GOP) along with the CEO of one of America’s largest banks, former British Labour Party Prime Minister Tony Blair and – who else? – Henry Kissinger, have essentially penned a manifesto that is being circulated among lawmakers, along with top-level officials in the cabinet and the West Wing, to help restore the globalist system that Trump helped to disrupt.
If China can achieve the kind of development it has while keeping its people subdued, it offers the world another model than US “exceptionalism,” which often isn’t all that exceptional. From Richard Hanania at palladiummag.com:
U.S. Department of State/Chinese President Xi Delivers Remarks at a State Luncheon in His Honor at the State Department
Across the political spectrum, there is widespread agreement that America must get serious about the threat posed by China. As the Trump administration comes to a close, the State Department has just released a document called ‘The Elements of the China Challenge’. A distillation of conventional wisdom among national security experts and government officials, it argues that the U.S. needs a concerted effort to push back against Beijing. On its first page, the document tells us that “the Chinese Communist Party (CCP) has triggered a new era of great-power competition.” If there was a major intellectual thread running through Trump’s foreign policy, or at least that of the people he appointed, it was that confronting China was the national security issue of our time. America during the Trump era was single-minded in its focus on turning up the pressure on Beijing, including unprecedented support for Taiwan, sending ships more often through the South China Sea, and attempting to stop the spread of the telecom giant Huawei.
The idea of the China threat will not end with the Trump administration. Michèle Flournoy, once thought to be the frontrunner to become Biden’s Secretary of Defense, argued in Foreign Affairs that the U.S. has not been steadfast enough in its military commitments in East Asia. Sometimes, great power competition is presented as an imperative of history; in the formulation of Graham Allison, a former Pentagon official and the current professor at Harvard’s Kennedy School of Government, the two powers are involved in a “Thucydides Trap.” Looking at the last 500 years of world history, Allison believes that when the ambitions of a rising power conflict with those of an established power, war becomes likely.
It’s becoming increasingly difficult for many people in Europe to see any benefits from the EU and a lot of downsides and costs, including the loss of freedom and sovereignty. From Bruce Antonio Laue at takimag.com:
It was just supposed to be a trading organization, a way to make commerce easier and in so doing build a sense of friendship and understanding on a war-ravaged Continent. In fact it was called “The Common Market.” But even after having joined (after years of being blocked from membership by President Charles de Gaulle of France), Britain had doubts.
For decades a parade of prime ministers implored the E.U. to halt its efforts for the closer integration of nations. Their entreaties fell on deaf ears. On came the E.U. flag, the E.U. anthem, rules and regulations on literally every facet of human life. Officials began talking about a “federation” of states, with a common foreign policy and army. And then came the common currency: the euro, a fraud of monumental proportions because it sought to replace national currencies that are based upon the economic realities of each nation with the illusion of fiscal strength based on “solidarity.” It is, in reality, deeply dishonest with a distinctly anti-American flavor. Ever suspicious of Continental combinations, the British looked on in anger. When they finally had their say, they wanted out.
Brexit sent shock waves throughout Europe because it was the beginning of the realization among Europeans that it didn’t have to be this way, life could be different and it was in their power to make it so.
In an interview following the referendum the very pro-E.U. French president was asked if he would hold a similar one for the French. “Non,” he replied. But why not? “Because we might lose.” That is the essence of E.U. strategy: If you think the people might vote against our policies, don’t hold the vote. So much for E.U. democracy.
The Covid=19 economy has wreaked havoc on container shipping. From Wolf Richter at wolfstreet.com:
US Federal Maritime Commission investigates container carriers’ “abandonment” of American agricultural industry. Weirdest Economy Ever.
The freight rates from Asia to the US West Coast and East Coast, and to Europe, have exploded since the stimulus economy kicked in, where consumers shifted spending from services – such as airline tickets, haircuts, and even rents under the eviction bans – to goods, powered by money from the stimulus and from refinancing their mortgages at lower rates.
The average spot rate that container carriers charge for shipping containers from Shanghai to the US East Coast shot to a new record of $4,874 per 20-foot-equivalent unit, or TEU, a standard measuring unit in the shipping industry. The average spot rate from Shanghai to the US West Coast, after hitting a record of $3,948 per TEU in the prior week, dipped a smidgen to $3,900 last week, according to the Shanghai Containerized Freight Index (SCFI). For all 13 major global routes that the SCFI tracks, the overall index as of December 18 rose to a record reading of 2,412, up roughly 165% from a year ago.
These distortions have created a global chain reaction that includes a shortage of empty containers in the US that has hammered farmers that grow crops for exports, but have trouble finding enough containers to ship their crops. The resulting uproar has caused the US Federal Maritime Commission to investigate container carriers, amid allegations they are violating the US Shipping Act of 1984 (chart via Shanghai Shipping Exchange):
Not much will change in the US’s crumbling empire with Biden as president. From Patrick Lawrence at consortiumnews.com:
The Biden people are unlikely to speak of a new cold war with China, but they appear likely to wage one all dressed up as a sophisticated trans–Pacific strategy.
Those boneheaded Trump people explained their hostile, xenophobic, fated-to-fail policy toward China by telling the rest of Asia that America stood for “a free and open Indo–Pacific.”
No, no and no, say the big shots President-elect Joe Biden has named to shape and execute his foreign policy. Instead, they mean to tell Asians to line up behind their hostile, xenophobic, fated-to-fail policy toward China in the name of “a secure and prosperous Indo–Pacific.”
It is simply remarkable to watch as the party that howled in response to everything the Trump regime attempted on the foreign-policy side adopts one Trump-era strategy after another more or less intact but for the cosmetics.
The sin of those egregious hawks who commandeered the outgoing regime was to conduct the business of empire imperially. This new crew offers what we had better recognize now as nothing more than empire with a human face.
Of all the Biden regime’s failures in the making one can already see in prospect that none will be greater than its insistence that the U.S. must continue to treat China as a predatory competitor and strategic adversary.
No, the US cannot win a war with China, and it would be a commercial and economic disaster. From Fred Reed at unz.com:
The Correlation of Armed Forces: U.S. goods and services trade with China totaled an estimated $634.8 billion in 2019. Exports were $163.0 billion; imports were $471.8 billion. The U.S. goods and services trade deficit with China was $308.8 billion in 2019. Trade in services with China (exports and imports) totaled an estimated $76.7 billion in 2019. Services exports were $56.5 billion; services imports were $20.1 billion. The U.S. services trade surplus with China was $36.4 billion in 2019.
There is talk within the Washingtoniat of a possible war with China. Steve Bannon, who apparently was dropped on his head as a child, actually favors such a war. We hear the usual shoo-the-boobs alarm about how the Chinese are doing something terrible and we must gird our loins and American values and show them what for, bow wow, woof. The danger is that the current game of who-blinks-first in Asian waters might actually provoke a shooting war. You know the kind of thing: One warship refuses to get out of the way of another, a collision ensues, some retard lieutenant who signed up on waivers opens fire, and we’re off and running. It is not a good idea to let children play with matches.
The said war is discussed either in emotional terms by idiots or in purely naval terms by those familiar with such things, so we hear of the First Island Chain and the Second Island Chain and whose missiles against the other’s missiles and so on. This would be appropriate if we were fighting World War Two again. Which we aren’t. Let’s take a quick-and-dirty look at how such a war might go.
Posted in Business, Currencies, Debt, Economy, Foreign Policy, Geopolitics, Governments, History, Military, Science, Technology, Trade, War
The Brexit negotiations continue to highlight the weakness of the EU. From Martin Jay at strategic-culture.org:
Too many signs have shown us that the EU is in real trouble. The worst one possibly is that its own outdated idea about governance is replicated by a French leader facing defeat. What losers!
In practical terms, it is clear to see that the EU as a viable project is not only in a panic mode currently, but actually going backwards in its desire to model itself on a United States of Europe federal model. And there can be no better examples than Brexit negotiations, Covid and France’s current malaise.
At the eleventh hour we have seen how, despite Britain remaining steadfast to its demands at the negotiations for a departure from the European Union, the EU itself shoots itself in both feet and looks even to its own supporters to be a loser of the highest order. Last minute demands are thrown into the negotiations by France’s Macron who is fearful of his own presidency hopes being scuppered if he has to deal with the wrath of thousands of French fishermen who will be out of a living by January 1st – if Britain is to get back full control of her own waters. To counter this with new demands about how the UK, as a non-member of the EU, goes about its business internally is both hilarious and desperate. Of course as a non-member of the bloc the UK will have its own ideas about how government interacts with business and state aid rules. How did a desperate French president threw this into the negotiations at really the eleventh hour demonstrates how weak the EU is and when it is presented with important matters, how it plays the role of a cheap girlfriend to its real masters. The fact that France could be allowed to do this is shocking. But the truth is that Macron is not playing for a deal. He prefers a no deal which he can use as political capital for his own fishermen. And the EU almost fell for it. Clearly there are divisions within the EU as to how to go about getting a Brexit. Many member states, like Germany, for example, are happy to give back fishing rights to the UK in exchange for a Brexit deal. Doesn’t the EU have billions of euros at its disposal to compensate and retrain out of work citizens? Of course it does. Structural funds run into billions and there is no viable reason why the existing EU rules would not favour out of work French fisherman.