Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Sunday, August 3, 2014

The World at Undeclared War

"Between the idea And the reality Between the motion And the Fact falls the shadow." 
Eliot 'The Hollow Men'

Such is the world we live in today. To even the casual observer, our world is torn by strife, hatred and malice. Wars are erupting in every corner of the globe as if some great match had lit the place on fire. Seemingly disconnected, seemingly indirect, they are erupting everywhere around us. But, is it happenstance,  or is an undeclared world war?

The one thing most people will agree on is "money turns the world". It always has and it always will. The chase for resources. The right to consume them above others. Also known as greed - one of the deadly sins. In a previous posting, I detailed the economic transformation happening to the world as this is written - The Great Uncoupling . Essentially, it described the economic uncoupling of the current "New World Order" into a bipolar economic world: North America and Western Europe vs Russia, China and the BRICs. Since that time it is coming together:

The economic realignment isn't a coincidence, but rather the culmination of decades of work by Russia and China to defeat the West economically. Apparently, they feel satisfied enough at this time to proceed formally, and they are. They have even gone so far as creating  their own IMF. India has just torpedoed a $1 trillion dollar treaty with the IMF. Argentina has just defaulted on its debt. And this was just this week. What all this amounts to is a revolution of sorts. The revolution being a complete undermining of the Western dominated financial system to a system based on Eurasian control. Included in this push, of course, is excluding the US dollar as a currency to purchase Eurasian or even BRICs supply contracts or orders. 

The next step, in such a financial war would be China exiting from its close relationship with US debt and dollars. It seems logical that once the new Eurasian financial system is on solid footing, that China would drop its US debt holdings and its massive reserve of US dollars. A final coup de gras (death blow) if you will. US economists already call the possibility of China selling off its massive holdings in US debt as the "Chinese Nuke". The consequences of such actions by the Eurasians would be catastrophic for economies in the Western world, and will lead to massive unrest. 

Some say that China would never do this, because it would be devastating for their economy as well. However, therein lies the lessons of history that people seem not to learn - even very recent ones. After the 2008 financial collapse China sent about 250 million people back to their villages around the time of the Chinese New Year - and left them there. They were instantly unemployed. There was no revolution. No chaos. Nothing. If a similar thing were to happen in the Western world, unrest would be a mild way to put it. It's all about expectations - the Chinese have few - the West has many.

That brings me back to the world in conflict today. The US and the West now knows it is in a financial war it cannot win. It risks losing the world dominance its dollar gives it, and its military defends. With the financial war gone, and unless it is willing to accept a "Brand New World Order", the only choice it has is to use its military strength - and that appears to be happening. The only problem with using direct military power is the Russians and Chinese have it to, and that would be "mutually assured destruction".  Instead, the West appears to have adopted a shadow war approach aimed at destabilizing both Russia and China. 

With China there are tensions with Japan, and some other Asian countries over the South China Sea. The US has shifted its military forces world-wide to the Asian theater . However, based on current events, it seems the West is targeting Russia first. The Western backed over throw of Ukraine's President resulted in a direct provocation to Russia - as t knew it would. Rather than react formally with an overt invasion, Putin has chosen to fight a shadow war back. He has in fact lured the primary forces of Ukraine into the east and south east of Ukraine, which allows him to: quickly resupply rebels; provide air superiority when and if necessary; provide artillery interdiction when necessary; and essentially corral the Ukraine army into an area that, if he chose, he could destroy quickly from Russia and take all of Ukraine within a week. I detailed it here The Mouse Trap. Action. Reaction.

This week tensions grew on Russia's southern border between Armenia (where Russia has a base) and Azerbaijan, resulting in open battle . Not to be out done, this week a relatively unknown group popped its head up wanting Siberian independence . Then of course there is the conflict in Transnistria. Transnistria is a separatist region of Moldova that essentially is almost an independent (albeit tiny) state now. It also has a Russian base, and strategic ammunition facility there. Among Russian commentators, most expect this area to be the next flame fanned by Western powers. In broad strokes, these conflicts around all of Russia's borders have one thing in common - they are flames being fanned by Western resources to destabilize Russia -that's my take on it. 

Then, of course, there is the "imperial" interest score card. Iraq has become essentially another proxy battleground mixing strange bed fellows with religion. The ISIS (Sunni) forces have fanned out from Northern Syria (an ally of Russia) into Iraq (a Shia ally of both Iran and Russia). Iran (an ally of Russia) has intervened to keep the Shia-dominated government of Iraq in control of the country. Saudi Arabia (a US ally) has funded the ISIS forces to first overthrow Syria and now Iraq. In fact, Saudi Arabia has even moved 30,000 troops to Iraq's border. The US could have ended this crisis quickly by providing air support to Iraq, but it refused. ISIS was then able to make large gains in Iraq. In case you weren't aware, prior to taking out Hussien, the US propped up mostly Sunni minorities to rule over Shias in the past. However, whenever "the enemy of my enemy is my friend" phase loses its place, "interests" take back over. This week the ISIS forces attacked the Kurds (also a US ally) in northern Iraq. The Kurds were quite happy with what ISIS did at first, because it allowed them to seize Mosul and other lands for a future "Kurdistan". Not so much now. 

In any case, the point is that, as is the standard operating procedure for the US and other powers, piecing together groups here and there to achieve short term goals can blow up in your face. It appears the "coalition of the willing" this time around can't be expected to last too long before the bigger powers get involved. For instance, if Iran gets more involved in Iraq, and the ISIS forces are getting defeated, it would not be surprising at all to see Saudi Arabia move those 30,000 troops into Iraq. That sets up a direct confrontation between the two on Iraqi soil - to begin with. That is a very real possibility. The US has a number of bases in Saudi and directly supplies it militarily. That could draw the US in as well. If Saudi Arabia were to begin to lose a war with Iran, US intervention is guaranteed. So as you can see, a simple invasion by a group of fanatical types (ISIS) can quite easily develop quickly into a region wide conflict of biblical proportions. 

For every action there is a reaction. So it is in science and so it is in life - which includes politics and warfare - unfortunately. The truth is that the world is already at war, but nobody seems to recognize it. Nor, does it seem, do they see the underlying causes. There is this and that about the usual "You're a nazi, we are democracy, yada yada", but in the end as in the beginning, it's simple rhetoric. The truth is far more serious. It's a war, a hot war, happening on multiple fronts before our eyes. Sure much of it lies in the shadows, not yet ready to be overt, but it's there nonetheless. People are dying, cities are being destroyed, countries and families are being ripped apart. Interests are acting. Daring each other to go to the next level. Seeing who will blink first. Seeing if anyone will blink. It appears that the days of blinking maybe over, and the ante will only rise. Until that unfortunate day happens, we will still be at world-wide war. It just remains undeclared.


  1. Great Post. In your opinion: What is Washington's primary objective? What result do they want to accomplish in relation to Russia and China? Especially taking into account the ThermoNuclear Power that Russia and China possess?

  2. Hi Alex, it's hard to say for certain what the US endgame is. I would think on an intermediate level the destabilization of Russia, China and key allies. Of course the preferred goal is to put an immediate end to the Eurasian + BRICs (EB) economic alliance, and to that end I would suspect destabilization in South America and Africa. Key to these moves would be to panic and cause fear in key trading nations of the EB so they would reconsider and withdraw back into US dominated influence. Should that fail, and perhaps in combination with, I would expect to see direct confrontation in the China/North Korea/Japan area, the peripheral states close to the Russian border, and especially and most violently in the Middle East. That's just my take. Will they go to all out thermal nuclear war - I doubt it. If they do, we won't have to worry about it anymore in any case.

  3. Thanks for your answer Brad! So, in your opinion, Washington is going to use proxy wars to weaken Russia, China, and its allies? Won't this lead to the US Dollar collapsing faster? I mean US debt is outrageous, with Federal debt being only the tip of the iceberg. All other debt, including Personal debt of US citizens, is estimated to be from 300 to 500 trillion USD.

    That is an amazing amount of debt, and plus the derivitive paper market being around 1200 Trillion, which is absurd in itself.

    If this financial system starts to fall apart, with the help from Russia and China, then US might directly intervene, since the Central Bankers most likely will see that as the only option.

    What do you think?

  4. I would say it's not a matter of if, but rather when. A collapse like this has to be an all encompassing collapse given the nature of the US sovereign, corporate and personal debt loads. That does not include the hopelessly dysfunctional political relationship between Congress, Senate, and President. As I see their, and I suppose our, predicament as having diminishing returns demographically which translates to internal markets unable to consume. The markets that consume are in the Eurasian-BRICs block. So, combining the problems together, and throw in the cost of the associated militaries, and the system cannot upright itself. It's physically impossible. A military intervention only deepens the cost, and might delay somewhat the inevitable. We lost the "Gold War" and they won. The only logical conclusion is for the US and the West to accept that we have over consumed and under produced, take our place in a multi-polar world - and RESPECT our differences. Is that possible for the US? Therein lies the question.

  5. My take is that goals of US & Russia are asymetrical. US want - as stated above to weaken Russia & China - while Russia wants first to Build up BRICS Alliance and second NATO Breakup. US wants to drag Russia into open war while Russia wants to avoid it and instead use Ukraine conflict to drive a wedge between Europe and USA.

  6. Consider the numbers.

    Why else would you want to bring “democracy” to a country that is majority Shia in a region where all your ostensible allies are tetchy Sunnis if not to inflame a political/religious situation that is already, at best, tense?

    When you cut through the noise, destabilisation is the only answer.

    When you then understand the West's economic predicament then you must, inevitably, also come to the conclusion that we are willingly inducing macro instability in order to induce a medium term goal of resetting the credit dynamic.

    Consider the diminishing marginal utility of debt.
    Consider who are the largest holders of sovereign debt.
    Consider the off shoring that resulted from the past 60 years of deliberate erosion of purchasing power.

    Then you should realise what the end result should be?


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