'..We have to keep in mind that the CCP regime is a Marxist-Leninist regime. General Secretary Xi Jinping is a true believer in a bankrupt totalitarian ideology. It’s this ideology, it’s this ideology that informs his decades-long desire for global hegemony of Chinese communism. America can no longer ignore the fundamental political and ideological differences between our countries, just as the CCP has never ignored them..
..
..it’s time for a new grouping of like-minded nations, a new alliance of democracies. We have the tools. I know we can do it. Now we need the will. To quote scripture, I ask is ‘our spirit willing but our flesh weak?’ If the free world doesn’t change – doesn’t change, communist China will surely change us. There can’t be a return to the past practices because they’re comfortable or because they’re convenient. Securing our freedoms from the Chinese Communist Party is the mission of our time, and America is perfectly positioned to lead it because our founding principles give us that opportunity.'Pompeo: “Next year marks half a century since Dr. Kissinger’s secret mission to China, and the 50th anniversary of President Nixon’s trip isn’t too far away in 2022. The world was much different then. We imagined engagement with China would produce a future with bright promise of comity and cooperation. But today – today we’re all still wearing masks and watching the pandemic’s body count rise because the CCP failed in its promises to the world. We’re reading every morning new headlines of repression in Hong Kong and in Xinjiang. We’re seeing staggering statistics of Chinese trade abuses that cost American jobs and strike enormous blows to the economies all across America… And we’re watching a Chinese military that grows stronger and stronger, and indeed more menacing.”
“Look, we have to admit a hard truth. We must admit a hard truth that should guide us in the years and decades to come, that if we want to have a free 21st century, and not the Chinese century of which Xi Jinping dreams, the old paradigm of blind engagement with China simply won’t get it done. We must not continue it and we must not return to it… The free world must triumph over this new tyranny.”
“The truth is that our policies – and those of other free nations – resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it.”
“…A quote from the speech that General Barr gave…‘The ultimate ambition of China’s rulers isn’t to trade with the United States. It is to raid the United States.’ China ripped off our prized intellectual property and trade secrets, causing millions of jobs [losses] all across America.”
“President Nixon once said he feared he had created a ‘Frankenstein’ by opening the world to the CCP, and here we are.”
“…We have to keep in mind that the CCP regime is a Marxist-Leninist regime. General Secretary Xi Jinping is a true believer in a bankrupt totalitarian ideology. It’s this ideology, it’s this ideology that informs his decades-long desire for global hegemony of Chinese communism. America can no longer ignore the fundamental political and ideological differences between our countries, just as the CCP has never ignored them…”
"That the only way – the only way to truly change communist China is to act not on the basis of what Chinese leaders say, but how they behave… President Reagan said that he dealt with the Soviet Union on the basis of ‘trust but verify.’ When it comes to the CCP, I say we must distrust and verify. We, the freedom-loving nations of the world, must induce China to change, just as President Nixon wanted. We must induce China to change in more creative and assertive ways, because Beijing’s actions threaten our people and our prosperity.”
“We know too that if our companies invest in China, they may wittingly or unwittingly support the Communist Party’s gross human rights violations.”
“…Our Department of Defense has ramped up its efforts, freedom of navigation operations out and throughout the East and South China Seas, and in the Taiwan Strait as well. And we’ve created a Space Force to help deter China from aggression on that final frontier… We reversed, two weeks ago, eight years of cheek-turning with respect to international law in the South China Sea.”
“But our approach can’t just be about getting tough. That’s unlikely to achieve the outcome that we desire. We must also engage and empower the Chinese people – a dynamic, freedom-loving people who are completely distinct from the Chinese Communist Party… The CCP fears the Chinese people’s honest opinions more than any foe, and save for losing their own grip on power, they have reason – no reason to… For too many decades, our leaders have ignored, downplayed the words of brave Chinese dissidents who warned us about the nature of the regime we’re facing. And we can’t ignore it any longer. They know as well as anyone that we can never go back to the status quo.”
“But I call on every leader of every nation to start by doing what America has done – to simply insist on reciprocity, to insist on transparency and accountability from the Chinese Communist Party. It’s a cadre of rulers that are far from homogeneous. And these simple and powerful standards will achieve a great deal. For too long we let the CCP set the terms of engagement, but no longer. Free nations must set the tone. We must operate on the same principles.”
“We cannot repeat the mistakes of these past years. The challenge of China demands exertion, energy from democracies – those in Europe, those in Africa, those in South America, and especially those in the Indo-Pacific region. And if we don’t act now, ultimately the CCP will erode our freedoms and subvert the rules-based order that our societies have worked so hard to build. If we bend the knee now, our children’s children may be at the mercy of the Chinese Communist Party, whose actions are the primary challenge today in the free world. General Secretary Xi is not destined to tyrannize inside and outside of China forever, unless we allow it.”
“So we can’t face this challenge alone. The United Nations, NATO, the G7 countries, the G20, our combined economic, diplomatic, and military power is surely enough to meet this challenge if we direct it clearly and with great courage. Maybe it’s time for a new grouping of like-minded nations, a new alliance of democracies. We have the tools. I know we can do it. Now we need the will. To quote scripture, I ask is ‘our spirit willing but our flesh weak?’ If the free world doesn’t change – doesn’t change, communist China will surely change us. There can’t be a return to the past practices because they’re comfortable or because they’re convenient. Securing our freedoms from the Chinese Communist Party is the mission of our time, and America is perfectly positioned to lead it because our founding principles give us that opportunity.”
“Indeed, Richard Nixon was right when he wrote in 1967 that ‘the world cannot be safe until China changes.’ Now it’s up to us to heed his words. Today the danger is clear. And today the awakening is happening. Today the free world must respond. We can never go back to the past.”
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It’s intriguing to see both the dollar and renminbi underperform global currencies in a week when U.S./China relations took a turn for the worse. “The truth is that our policies – and those of other free nations – resurrected China’s failing economy,” Pompeo asserts. How China was capable of rising to global superpower status in only a couple decades will be debated for decades to come. Many were complicit. Virtually everyone wanted to participate in the historic boom. Who wasn’t willing to overlook longer-term ramifications, while disregarding red flags flying in abundance?
I’m not confident history will fault the Federal Reserve and decades of unsound money. The U.S. has run persistent Current Account Deficits for going on thirty years, flooding the world with dollar liquidity. Serial Bubbles began in Japan in the mid-eighties, then to Mexico, SE Asia, Russia, Brazil, Argentina, Iceland and so on. It would eventually make it to China.
Here at home, the bursting on the ‘90s “tech” Bubble spurred reflationary policymaking and the resulting mortgage finance Bubble. What was not to like about “globalization.” The U.S. could deindustrialize – and clean its air in the process. Services suited policymakers just fine. And all the cheap imports kept CPI low, ensuring endless easy money to inflate equities, bond and asset prices more generally. Besides, all those dollars flooding the world from Current Account Deficits would just be recycled back to U.S. Treasuries and financial assets. Miraculous. What could go wrong?
China ended 2002 with international reserve holdings of less than $300 billion. U.S. Bubble period trade deficits saw Chinese international reserves spike to almost $2.0 TN by the end of 2008. Things then went crazy. QE1 was instrumental in China’s reserves inflating another $1 TN by 2011 – on their way to 2014’s $4.0 TN.
I seriously doubt China’s banking system inflates from $8 TN to $43 TN during this cycle without Trillions of “Bubble Dollars” flooding the world. U.S. crisis and QE1 provided China a blank check for a massive $600 billion 2009 stimulus plan. And Chinese Credit – along with investment, manufacturing, apartment Bubble, economic boom, technological advancement, military buildup, global influence peddling, and ambitions for superpower status – never looked back.
For years now, CBB analysis has focused on the interdependence of historic U.S. and Chinese Bubbles. “Decoupling” has commenced – spurred on by COVID. Myriad uncertainties and fragilities ensure intense pressures on both the Fed and PBOC to keep their respective systems afloat. Crazy equities, for now, luxuriate in the thought of ultra-easy money for as far as the eye can see.
Meanwhile, the safe havens sense one hell of a crisis brewing. Ten-year Treasury yields this week traded below 0.6%, with German bund yields holding at negative 0.45%. And the metals are on fire. Gold was up 5% and silver jumped almost 16% this week. Surging industrial metals prices add further intrigue. I doubt prices are surging on economic prospects. In a world of such uncertainty and unfolding mayhem, all the metals are viewed as Stores of Value..'
- Doug Noland,
Crossing Red Lines, July 25, 2020
Context(The New Alliance)(China is 'threat to world') - '..an end to Hong Kong’s special status with the U.S..'(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'(Focus Fusion) - Nuclear fusion the easy way