Monday, April 22, 2013

4/22/2013 Naval Interest


                          NAMAZU HAS ANSWERS BUT NO GOOD NEWS


 In this blog we have been following in detail the aggression of the Dragon, China, in the East and South China Seas. The national media has paid far less attention to this issue, so little attention in fact that outside of professional maritime circles few Americans are even aware that Japan and the Philippines, two formal U.S. allies are in almost daily confrontation with Chinese Coast Guard like forces. So we have concentrated on this maritime dispute because we are a maritime organization with some unusual informational resources and these developments need to be covered coherently somewhere.

  There is however another Chinese confrontation going on seemingly beyond the national media's surveillance. China is busy trying to undermine America's currency. The U.S. dollar is the world's reserve currency. This campaign against U.S. interests is being covered mostly in U.S. media specializing in economic issues and is not well known among the general public. China is leading a coalition of states including Western powers such as France in a campaign to replace the U.S.dollar as the world's reserve currency. Their first successful inroad is the most important and it is a partial success already. The U.S. dollar for so long the world's soundest fiat currency was the World's "Petro dollar". Most OPEC and other oil producing, exporting nations wanted payment in U.S. dollars. In a de facto sense the U.S. dollar, long ago no longer backed by gold, was in effect backed by oil. Since you could buy oil anywhere in U.S. dollars and had to buy oil in most places in U.S. dollars, the dollar value held while the U.S. production of worthwhile high quality manufactured items shifted to Chinese control.

 Now China , France and others have convinced at least some OPEC nations to at least accept a certain "basket" of currencies that don't include the U.S.dollar in oil payment in lieu of the U.S. dollar. At this moment oil may be purchased in U.S. dollars anywhere, but the dollar's status as THE petro currency is slipping under the weight of deliberate attack. Once the dollar is no longer the world's reserve currency there will be rapid and massive inflation. Finally there is the problem of North Korea which the U.S. media does cover and which China offers no real help. We have barely touched on the transfer of manufacturing capacity of high quality products with global brand name recognition from the United States to China. The most recent example is the transfer of General Motors research and development activities to China. This is of course, the same General Motors that U.S. tax payers bailed out with billions of tax payer dollars. GM just recently transferred 20,000 high paying U.S. jobs to China without a whimper of protest from the U.S. Government. China has moved coastal rocket batteries to her coast able to reach Guam, and Okinawa.

 We have going with China a one sided economic engagement which could at any moment degenerate into a at least an at sea shooting war. Working temporarily against that is the level at which the Chinese and American economies are intertwined and the amount of U.S. debt that China holds. If the U.S. engaged in a shooting war with China big U.S. companies would lose billions in investments made in China, but China would lose the markets for the products and the jobs, the U.S. lost the jobs years ago. More over even in a limited naval engagement the U.S. would be highly unlikely to continue debt service on a nation shooting at the debtor. Most of the world's nations would understand the legitimacy of not financing an enemy nation's war efforts so repudiating the U.S. debt to China probably would have little effect on the U.S. credit rating.

 So the tension continues at a somewhat subdued level. China confronts her neighbors like Japan and the Philippines whose maritime out lying territory the dragon intends to steal, with Coast Guard like forces vice her large Navy, and couches things in terms of soverignity patrols, fisheries enforcement, mineral leasing. Occasionally China makes a token protest over North Korean aggression, the Dragon takes things to the brink and then pulls back wearing down the nerves of the U.S. and allied states. The dragon simply estimates that the Eagle is still capable of too much fight to go ahead and make the final run on all the eggs in her nest.

 What we face with China is not a Cold War, this is not Communism vs Capitalism. They have no intent to try and invade and take us over and win us to some intellectual philosophy that they long abandoned in favor of state/crony capitalism in its most amoral form. China is and has been a Confucian state, centrally controlled by a governmental elite, which envisions the Chinese state as the "Middle Kingdom" drawing all nations on to itself. China wants us as vassals, not conquered territory. They simply want to be in the position that we are forced to provide what they want us to provide at the price they want to pay. They want any level of prosperity that we may enjoy to be dependent on the Dragon, so that we are unlikely to protest anything that they may do in the world to bring all of the world to a vassal relationship with the Middle Kingdom.

 With the clueless, divided, and inept U.S. Government ignorantly aiding and abetting the dragon you would think the Dragon is enjoying smooth sailing into World dominance but that isn't the case. Strongly authoritarian governments have difficulty with rapid business and technological change. Technological developments like 3 D printing, and management practices like reduced inventories and the demand for "just in time delivery" are starting to bring manufacturing back to the U.S. and other Western nations, not in the old factory model that moved to China but in small plant, small run factories near customer bases. China is still in the grip of an authoritarian, central regime in firm control of the economy and unable to to change directions rapidly. The West, particularly the U.S is in a state of total government incompetence, which produces heavy taxes, annoying business obstructions, etc. but is basically totally ineffective. The West and particularly the U.S. are in a sort of state of nominal anarchy but with an identifiable government structure, printing money, running armed services, and collecting taxes but otherwise having little real impact on the economy despite taking credit for anything positive that happens and pointing fingers at someone else when things go wrong. In this type of governmental environment business has little problem adapting to and adopting new technologies and management systems. China's growth is slowing. If the central regime starts to feel threatened it could start shooting to draw the general population off the scent of the real issues.

 The Dragon at times appears to cooperate with the Bear. The Bear hates the U.S. in part because it is now in the hands of an old Cold Warrior who is still smarting over that loss. But the Bear also has ambitions on its neighbor's natural resources in the High Arctic.  The U.S. could be in the way there. But at the moment thanks to budget issues and a lack of public understanding and demand on the High Arctic issues the U.S. is a weak to non existent force above the Bering Sea. Russia would like to keep it that way. So anything that causes the U.S. armed services, particularly the Navy and Coast Guard to be elsewhere engaged works to Russia's advantage. Russia quietly encourages North Korea, and openly supports Iran. Russia often appears to be working in concert with China. But the truth is there is no grand alliance of anti U.S. interests only temporary alliances of convenience. Russia and China are rivals with a common border and disputed territory between them. They have simply put off these disputes in favor of damaging a common rival. No one is a natural fit with North Korea which richly deserves the title "The Hermit Kingdom". Curiously, while suffering terrorism at the hands of its own Chechen Muslim Minority Russia cooperates with every non state entity in the Islamic world including terrorist organizations that are anti U.S.. Again these folks are not natural allies. And of course, there is ample U.S. News coverage of  political Islam's war on America and the west, mostly involving non state entities but with some failing states in the foreground of semi open support.

 The net result is a U.S. Naval establishment, and economy challenged all over the globe not by a centrally organized, really coherent alliance but by three ententes loosely coordinating with each other but at their core are at cross purposes. The enemies are the Dragon (China), The Bear (Russia) and the Camel ( Political Islam, the Caliphate movement and its loose associates). Keep this symbolism in mind , us former demigods as the personification of forces of nature like the use of animal personifications in explaining highly complex political/ economic developments. It is doubtful that the present U.S. government will be able to deal these three enemies any meaningful set backs . However economic and technological events that they can't control as well as their own internal weakness as an alliance of sorts is likely to deal them a major blow in the future. Their reaction might well be a real state on state war with all of the dangers of nuclear exchange that shooting wars always carry these days. The democratic states, especially the English speaking states need to build stronger alliances based on their real affinities for each other. The Dragon, the Bear, and the Camel at heart hate each other and they know it. There is nothing they fear as much as real alliances. We've seen thug states arise before and they have always come to a bad end by the actions of real alliances of free peoples.

 While we await the next developments we note that we have been deliberately avoiding much discussion of the Bear and the Camel with all of our concentration on the Dragon. As a partial remedy we provide a link below to a recent New York Post article focused on the Bear and in part, its curious relationship with the Camel. Our conclusion is that what we are involved in here is different from the Cold War. The Dragon and the Camel are bitter economic, political/military rivals of each other and the West with their own feud on temporary hold. The Camel is simply a revisited political idea trying to pawn itself off as a religious movement and actively engaged in making war on the West by terrorism because it is weak. It will make a lot of trouble before it wears itself out. every year it kills more Muslims than anyone else, it brings more Muslims to ruin, makes more Muslim lives miserable than any real or imagined "offenses" of the Jewish, Christian, and secular societies. It will eventually be put down by Muslim societies meanwhile the West has to hold the line on its own security. The only similarity between the current sorry state of affairs and the Cold War is that this is a global containment operation that also could last 50 years and must be planned and budgeted for. The problem at the moment is Western governments lacking a clear vision of what is really going on and thus the appearance of the West as a "deer caught in the headlights".

"London-- John Kerry may not have noticed it, but a day of futile diplomatic gesticulation at the G-8 meeting here made it clear that a new Cold War is raging with some of the old usual suspects pitted against the United States and its allies.
This time, though, the US appears in denial about the new Cold War waged under Russian leadership. Kerry is clinging to the illusion that membership of the G-8 has transformed Russia into a partner rather than an adversary."
Click on the link below to read the full story

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