At its present birth rate China cannot sustain the growth rates that have made it an economic powerhouse. From Tyler Durden at zerohedge.com:
China finally abandoned its controversial one-child policy in November 2013. But more than six years later, millions of Chinese couples are still unwilling to have a second child. And that’s a huge problem for the Communist Party, whose legitimacy in the eyes of the public depends on its ability to deliver on promises of unbridled growth and prosperity.
And who can blame them? Entrenched behaviors die hard, and after the government’s brutal treatment of citizens who defied its policy (which was initially imposed to ward off famine), we can sympathize with Chinese who simply believe that having two children isn’t in keeping with the fundamentals of patriotic socialism with Chinese characteristics.
Even though Trump refuses to comply with the Iraqis’ request and leave Iraq, count that nation as yet another Eurasian nation slipping out of the US orbit of influence and coercion. From Thomas Luongo at tomluongo.me:
A protester waves the Iraqi flag in Baghdad on Wednesday. Both the U.S. and Iran have launched attacks in Iraq in the past week — including the Iranian missile strike on bases housing U.S. military personnel.
In the aftermath of the killing of Iranian IRGC General Qassem Soleimani a lot of questions hung in the air. The big one was, in my mind, “Why now?”
There are a lot of angles to answer that question. Many of them were supplied by caretaker Iraqi Prime Minister Adel Abdul-Mahdi who tried to let the world know through official (and unofficial) channels of the extent of the pressure he was under by the U.S.
In short, President Trump was engaged in months of what can best be described as gangsternomics in directing the course of Iraq’s future economic and political development.
According to Iraq’s acting Prime Minister, Adel Abdul-Mahdi, Trump is trying to muscle Iraq into abandoning a lucrative oil deal with China. From Whitney Webb at mintpressnews.com:
The U.S. is adamant that its assassination of Qassem Soleimani and refusal to leave Iraq is about protecting Americans, but a little known Iraqi parliamentary session reveals how China increasingly strong ties to Baghdad may be shaping America’s new Mideast strategy.
Since the U.S. killed Iranian General Qassem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis earlier this month, the official narrative has held that their deaths were necessary to prevent a vague, yet allegedly imminent, threat of violence towards Americans, though President Trump has since claimed whether or not Soleimani or his Iraqi allies posed an imminent threat “doesn’t really matter.”
While the situation between Iran, Iraq and the U.S. appears to have de-escalated substantially, at least for now, it is worth revisiting the lead-up to the recent U.S.-Iraq/Iran tensions up to the Trump-mandated killing of Soleimani and Abu Mahdi al-Muhandis in order to understand one of the most overlooked yet relevant drivers behind Trump’s current policy with respect to Iraq: preventing China from expanding its foothold in the Middle East. Indeed, it has been alleged that even the timing of Soleimani’s assassination was directly related to his diplomatic role in Iraq and his push to help Iraq secure its oil independence, beginning with the implementation of a new massive oil deal with China.
Nobody knows just how much of China’s economic miracle was bought with a credit card. We may soon find out. From Brett Redmayne-Titley at watchingromeburn.uk:
In emulating the American economic raison d’etre,China has attempted to develop its unique capitalist model while ignoring that it too will soon suffer the same fate for the same reason: Unsustainable debt. When examining the recent realities of Chinese banking and finance over the past year it seems the steam that president Xi Jinping touts as powering the engine of his purported economic miracle of a master-planned economy is only a mirage, now almost completely evaporated before his eyes.
Like the many other similarly foolish western nations, China seeks only one path out of this fiscal death spiral, one that will likely spell doom and/or revolution in many countries soon: More debt.
The US sees a huge challenge to its power coming from Russia, China, and Iran and it’s going to do everything it can to stop it. From Pepe Escobar at asiatimes.com:
Iranian seamen salute the Russian Navy frigate Yaroslav Mudry while moored at Chabahar on the Gulf of Oman during Iran-Russia-China joint naval drills. The photo was provided by the Iranian Army office on December 27, 2019. Photo: AFP / HO / Iranian Army office
Coming decade could see the US take on Russia, China and Iran over the New Silk Road connection
The Raging Twenties started with a bang with the targeted assassination of Iran’s General Qasem Soleimani.
Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great Game in Eurasia, which pits the US against Russia, China and Iran, the three major nodes of Eurasia integration.
Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be analyzed in connection to this epic clash.
The Deep State and crucial sectors of the US ruling class are absolutely terrified that China is already outpacing the “indispensable nation” economically and that Russia has outpaced it militarily. The Pentagon officially designates the three Eurasian nodes as “threats.”
Hybrid War techniques – carrying inbuilt 24/7 demonization – will proliferate with the aim of containing China’s “threat,” Russian “aggression” and Iran’s “sponsorship of terrorism.” The myth of the “free market” will continue to drown under the imposition of a barrage of illegal sanctions, euphemistically defined as new trade “rules.”
Chinese money is proving more attractive in the Middle East than US bullets and bombs. From Simon Watkins at oilprice.com:
Following the political and popular backlash in Iran over details of its plans to make the Islamic Republic effectively a client state through various multi-layered oil and gas deals, China has switched its attention for the moment to Iran’s close ally and neighbour, Iraq. Like Iran, Iraq has enormous and still relatively underdeveloped oil and gas reserves, it is an irreplaceable geographical stepping stone in China’s ‘One Belt, One Road’ programme, and it is in need of major ongoing funding. China already has leverage over Iraq as the leading oil company (Rosneft) of its close geopolitical ally, Russia, already has effective control over the oil and gas infrastructure of the north Iraq semi-autonomous region of Kurdistan, and Chinese companies operate on a number of fields in south Iraq. Last week saw key developments in China’s cornerstone project of making Iraq into a client state.
The first of these developments was the announcement from Iraq’s Finance Ministry that the country had started exporting 100,000 barrels per day (bpd) of crude oil to China in October as part of the 20-year oil-for-infrastructure deal agreed between the two countries. As highlighted by OilPrice.com, the broad framework of this arrangement was agreed last September during a visit by Iraq’s then-Prime Minister Adel Abdul Mahdi to Beijing, with the purpose of expanding China’s then US$20 billion of investment in Iraq in addition to the US$30 billion or so in annual trade between the two countries. According to last week’s statement, Chinese firms Zhenhua Oil and Sinochem were the importers of the Iraqi barrels involved, and OilPrice.com understands that all trade financing surrounding these exports – and many of those to come – have been done by the China Export and Credit Insurance Corporation.
Posted in Business, Energy, Eurasian Axis, Foreign Policy, Geopolitics, Governments, Trade
Tagged Belt and Road Initiative, China, Iraq, Oil, Trade
The next financial collapse will owe it all to debt and central banks. From David Stockman at internationalman.com:
International Man: You have sounded the alarm on a coming financial crisis of historic proportions. How do Trump’s trade policies figure into your view that a crisis is coming?
David Stockman: Trump’s trade policies only create more risk and rot down below.
They’re just kicking the can down the road. With this latest move by the Fed, they have cut the interest rates three times and short-term rates are back at 1.55%. They’re pumping their balance sheet back up—it’s up $300 billion just since September.
The Fed has reverted to all of the things that have created the underlying rot—and that means when finally things break loose, it’s going to be far worse than it would have otherwise been.
Given that they’re kicking the can down the road, they’re building the pressure in the system to really explosive levels.
The trade chaos that Trump’s creating is probably the catalyst that will bring down the whole house of cards.
At end of the day, it’s about the Red Ponzi. The world economy would be not nearly as good as it looks had the Chinese not been borrowing like there’s no tomorrow and building regardless of whether its efficient or profitable.
Posted in banking, Business, Collapse, Currencies, Debt, Economy, Financial markets, Governments, History
Tagged central bank policies, China, Federal Reserve