China & Russia are deleveraging from American dollars, increasing gold stores & preparing for a future when the dollar is no longer the world’s reserve currency.
War between Russia and Ukraine looks imminent. Israel and Iran are engaging in tit for tat maritime altercations. And China is ratcheting up provocative incursions into the airspaces and waters of Taiwan, Japan, and the Philippines.
Any one of these regional conflicts is incendiary enough to ignite World War III (or, more accurately, each one is capable of transforming the cold, hybrid warfare of cyberhacks, technology thefts, financial markets manipulation, and perhaps even biological attacks that has been underway for many years into total and unrelenting global bloodshed), yet trading markets and news media are largely ignoring what’s unfolding. It’s as if the Cuban Missile Crisis, the 1999 Kargil War between nuclear-equipped India and Pakistan, and the Soviet and Nazi Invasion of Poland were all happening concurrently, and the world decided it was too busy enforcing face mask mandates upon religious congregants and following the turmoil of Khloe Kardashian to care.
Barbara Tuchman’s The Guns of August paints a vivid picture of European elites so mentally imprisoned by the mores and cultural etiquette of the nineteenth century that they failed to grasp the reality of the geopolitical chessboard before them or the likelihood of the monumental carnage of WWI. Something eerily reminiscent of those miscalculations is going on today.
In the thirty years since the fall of the Soviet Union, the United States has squandered much of its time as the world’s sole superpower. Rather than winding down NATO’s mission in a post-Soviet world, the West redirected and revitalized the alliance after 9/11 into a global military engagement against “extremism,” with the U.S. fortifying its role as the world’s policeman. And rather than using the end of the Cold War to balance budgets and fix America’s unstable financial footing, the U.S. aggressively burdened itself with new and unsustainable levels of debt. In effect, the U.S. rejected the possibility of multipolar peace, assumed the role of global hegemon, and never saved up for a rainy day.
Instead of broadly integrating a shaky post-communist Russia into European and trans-Atlantic institutions, the U.S. has wobbled between treating Russia as an ally in the “war on terror” and as a Cold War adversary that must be contained by driving the expansion of NATO-allied member countries all the way to Russia’s borders. One moment Hillary Clinton is promoting a “Russia reset,” and the next moment Barack Obama and Victoria Nuland are orchestrating a Ukrainian coup d’état to swap a Russia-friendly government with a fiercely anti-Russian replacement. In order to prevent Russia from becoming a thorn in the side of New World Order types utilizing the IMF, WTO, and World Bank as engines for maintaining American-led global governance, U.S.-controlled NATO and E.U. technocrats intent on building a European superstate have kept Russia relegated to the sidelines. And in recent years, Democrats in the U.S., “Remain” Brits opposed to Brexit, and European integrationists who have taken umbrage at Central European countries such as Poland and Hungary defending their own sovereignty have tried to scapegoat lost referendums on illusory “Russian disinformation” campaigns. The effect of this intentional ostracism has been to push Russia closer to communist China and into adversarial brinkmanship with U.S.-E.U. interests.
Likewise, by largely ignoring China’s decades of human rights abuses and normalizing trade relations at the turn of the millennium in an effort to tame a large but poor communist country through globalization and cultural assimilation, the United States has instead elevated China to an economic powerhouse increasingly capable of bending the West to its will. After hollowing out America’s manufacturing and industrial capabilities and orchestrating the largest intercontinental transfer of wealth in history from America’s post-WWII middle class to China’s emerging middle class, the U.S. now finds itself in a defensive geopolitical posture with a combination of national debt, crumbling infrastructure, and dependence on Chinese raw materials and imports endangering America’s rules-based international order. In what should be seen as a shot across the bow of the U.S. financial system, the recent (and almost certainly intentional) self-destruction of the Chinese-controlled family firm Archegos that destabilized Western credit markets and threatened the solvency of numerous Western investment banks was a pointed reminder from China to the U.S. that the latter’s days of unilateral control of the global economy are over.
Both China and Russia are deleveraging from American dollars, increasing their gold stores, and preparing for a future when the dollar is no longer the world’s reserve currency. Without that ace in the hole, the U.S. loses not only its ability to continue printing and spending money without enduring the normal consequences of monetary devaluation and collapse but also its ability to inflict financial sanctions as a way to “club” other nations into obedience. A Sino-Russian alliance that utilizes Russia’s oil, coal, and natural gas leverage over Europe and its outsized military capabilities; China’s manufacturing dominance and Belt and Road Initiative extending across and linking Asia, Europe, Africa, and South America; and both nations’ wealth of natural resources puts them in a strategic position to forge a stable gold-backed digital currency that will instantly interconnect most of the world’s population.
It is in this volatile reshuffling of global power that an often addled and confused Joe Biden attempts to confront the military chess moves of Russia and China while somehow transforming Iran from a destabilizing regional belligerent (almost certainly already in possession of nuclear weapons) into some kind of U.S. and European partner capable of playing nice with Israel, Saudi Arabia, and the rest of the Middle East.
U.S. Secretary of State Antony Blinken and NATO’s Secretary-General Jens Stoltenberg have laid out a military strategy in NATO 2030 that explicitly calls for the alliance to combat “Russian threats and hostile actions,” to “expand and strengthen partnerships with Ukraine and Georgia,” and to defend against Chinese “security challenges.” Ol’ Joe has reportedly given personal assurances to President Zelensky that the U.S. stands with Ukraine, and he’s publicly committed to defending Taiwan’s freedom. But “red lines” coming from America are not the same after Barack Obama’s presidency.
U.S. warships have entered the Black Sea and are sailing through the Taiwan Strait. Meanwhile, even though the Biden administration has capitulated to Iran by unilaterally dropping sanctions, Iran has promised to “respond” against the U.S. and Israel for the recent Red Sea mine attack against a vessel purportedly used as a covert Islamic Revolutionary Guard Corps forward base.
Russia has been very clear. It will not allow Kiev to reacquire Crimea or the Russian-aligned breakaway proto-states of Luhansk and Donetsk. It has responded to Ukrainian President Zelensky’s signing of Decree No. 117/2021 directing the Ukraine Army to recapture and reunify these areas by flooding the Ukraine-Russia border with weapons, troops, tanks, and elite paratroopers. Russia is ready for war.
China has been very clear. It considers Taiwan a renegade province and the Senkaku Islands in the East China Sea and the Spratly Islands in the South China Sea as territorial possessions. It has promised to use military force to safeguard these claims and has built artificial islands in disputed territorial waters and sent fleets of “fishing vessels” to surround disputed island chains. China is ready for war. And Taiwan is ready, too.
Israel has been very clear. It will not allow a nuclear-empowered Iran to become a Damocles sword threatening Israel’s very existence. Israel is ready for war.
How will Joe Biden respond to these three powder kegs? The more important question is this: Is his mind so trapped in last century’s geopolitics that he’s now overestimating American strengths, miscalculating other nations’ resolve, and stumbling headfirst into global conflagration?