Will United States And China Go To War Against Each Other?

I’m no expert on China or Asia, because all I know about the current events and past events from China and Asia is and was from the news and various sources online. Nonetheless, I feel that China is rising to the point that certain countries — found themselves to be suspicious of China — feel very uncomfortable.  This means these countries have two choices.  Perhaps, they either decide to go against China in International geopolitical agenda, or they might just act really weak and be supportive to China so China won’t target them as potential enemies.

United States was the absolute world hegemonic power right after World War II, and now is still somewhat playing a role of a sole super power.  Nonetheless, China is rising to the point that can undermine United States’ sole super power status in all categories.  Especially, China’s economy is rising still and soon to overtake the United States as the biggest economy, it’s certain that United States will not welcome this phenomenon.

Countries around the world might slowly behind the scene find themselves busy in making a choice between being friend and foe to either United States or China.  Moreover, as United States is making Russia an enemy lately, China suddenly finds herself to have a very powerful ally which has a vast border with her.  After all, Russia needs China as a friend to amplify her influence on Europe.  Ukraine situation is quite clear in term of how Europe could not make an all out sanctions against Russia, because Europe not only depends on Russia’s energy but China’s economy also.  Nonetheless, whether China will be Russia’s instrument of containing Europe or not, it’s clear that with China as a friend Russia has more global clout than otherwise.

As United States is undoubtedly competing against China and Russia on many fronts.  With Russia, the United States might compete head to head on energy front.  With China, United States is competing in so many fronts since China is rising to replace United States as a most powerful force in the world.  Whether China would want to be a world hegemony or not, the outsiders will never know.  Nonetheless, one rising power is sure to clash against an established power unless either rising power and established power can make a compromise somehow.

Countries that are not as strong as the United States but very powerful on their own still might not want to make themselves a target by looking so powerful, because they fear that either the United States or China will target them for whatever reasons.  The world hierarchy system is an imperial one, because we got the super power and then the rest.  Just imagine the super power as a king, and the rest as officers and pawns.  Do you think officers and pawns want to stand out so much to the point of irritating the king?  Nonetheless, right now there are countries that irritate United States and please China, and there are countries that irritate China and please United States.  These countries are already picking side, and they may never be able to change side without serious consequences.

The future is bleak, because we are witnessing the two most powerful forces in the world that are at odd with each other.  Of course, these two forces can be friend or foe according to the leaders that are working for these two forces.  It’s easy to say that these two forces, United States and China, are so intertwined economically to a point that they will not want to make each other as an enemy.  It’s a lot harder for us to know if this is the case since the future is unknown.  Any small conflict can be the fuel to start a conflagration.

There are countries that do not want to see the United States and China work together so closely.  Imagine two most powerful forces in the world work as one, countries that are not viewed as favorable to either powerful force will be the targets for both most powerful forces in the world.  If United States and China are working against each other, certain countries can feel more secure for they could always find a friend in the world.  Moreover, the benefits for small countries are immense when the two giants are not thinking like one, because in the end the two giants act like two tigers that will exhaust themselves out, leaving the small cubs go unchecked.

The question is on everyone mind nowadays, will there be something so unfortunate that will start a war between United States and China?  Of course, nobody will know, because nobody knows the future.  Nonetheless, the trend is not looking very good, because the media of the United States and China are painting the other country as a potential enemy and not as a friend.  Meanwhile, around the world, smaller countries are assessing their standings between United States and China.

“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” — by Albert Einstein

Advertisements

Can The Euro Replace The Dollar As The Next Reserve Currency?

After finishing my reading of Chapter 5 for “Death of Money: The Coming Collapse of the International Monetary System,” it seemed at this point of the book the author viewed Euro as a potential challenger to the dollar as the reserve currency.  The author James Rickards surmised that the Eurozone could regain strength and vitality as long Germany and other Eurozone member countries could go ahead and reform several internal problems.

Although I don’t remember all of the internal problems James Rickards described that needed to be reformed for Eurozone, I think he’d mentioned about labor mobility and several others.  Nonetheless, James Rickards imagined that if Eurozone could move the unemployed workforces from Eurozone member countries to employment resource scarce countries such as Germany, then the unemployment problem for the Eurozone could be alleviated.  In effect of this, the revitalized workforces that were moved could once again contribute growth in terms of consumption and investment and so on in general.

I have to wonder though, would Germany and other employment resource scarce countries, assuming jobs are abundant and requiring to be filled, want a flood of migrants from Eurozone member countries to disrupt the local employment flow?  Nonetheless, it seemed that China had successfully implemented something like this by allowing migrants from rural area to migrate into the cities, consequently expanding the cities’ size, reach, productivity, and so on. As Chinese migrants are readily earned city’s incomes, they can then export some of their earnings back to the rural areas for whatever.  Perhaps, some of the migrants will have enough money to go back home and open up businesses of whatever, and this in turn slowly urbanizes the rural areas.  As China’s urban cities got crowded, overused, overpopulated, and so the labor demand for such cities cannot grow more — wages for such cities might be higher as workers expect cities’ wages and not of rural areas’ wages — the flood of migrants will slow down.  Nonetheless, China’s coastal cities can relocate factories and other essential industrial capacities into the inner China where rural areas are common, and in this process China finds cheaper labor and urbanizes the inner rural cities.

James Rickards imagined Eurozone member countries could do something as China’s labor mobility but without the factor of urbanization.  After all, many Eurozone member countries may not need urbanization at all if I’m not wrong on this.  I think Eurozone member countries can definitely improve the labor mobility to improve the Eurozone as a whole, but internal political strifes among Eurozone member countries may prevent this to be done without danger.

Imagine Germany’s political force may not want to see the German workforce order to be disturbed too much, because once the workforce order got disturbed it could be a lot harder for such a workforce order to be reversed back to its normal flow.  To make my point, let’s assumes that Germany is experiencing growth in general and demanding bigger labor workforce, migrant workers from Greece and elsewhere within Eurozone can migrate to Germany to fill up the labor demand.  The problem is when Germany begins to experience economic downturn, the huge number of migrants will not be viewed favorable to the local population.  At this point the migrants will stop migrating to Germany, and the migrants that are already in Germany will go elsewhere within Eurozone to find jobs.  If everything works out the way the supply and demand force is meant to behave for the labor demand in Eurozone, things will not be so bad.  Nonetheless, will Germany in an economic downturn easily find it to be easy to accept migrant inflow when the economy picks up again?  The bigger question is what if the whole Eurozone experiences economic downturn, where the migrants who work in Germany migrate to within the Eurozone?  Perhaps, the migrants may have to go beyond the Eurozone for jobs, but it’s not easy for the migrants to migrate beyond the Eurozone for jobs for obvious reasons (i.e., documentation issues, immigration issues, etc…).

It’s hard for me to imagine Eurozone as a whole uses a single dominant language for facilitating economic conditions.  French will forever speak French, German will forever speak German and so forth for the whole Eurozone.  I assume this will be the same for writing too for the Eurozone member countries.  My point is that every time migrants from Eurozone relocate themselves elsewhere within Eurozone, they may have to learn new language (e.g., writing, speaking) in order for them to be effective at their new jobs.  This won’t be easy if the economies within the Eurozone change too frequently (e.g., economic downturn, economic upturn).

I think we can pretend that many economic models and facts and equations can point out the problems and provide solutions for an economy, but we fail to realize that what matters most is the irrational behavior of humans.  We humans don’t behave rational all the time, because we are not the robots.  Robots follow the rules of the algorithms without theirs own rationalization.  Us humans tend to do things on our own as if we know best, thus when we become irrational we don’t think that we are irrational.  As a collective whole humans can be very irrational, and this shows why our history is full of wars and tragedies.  Our economies behave the way we are, and so when we are not so rational, our economies become irrational.  With this notion, I don’t think few simple suggestions such as labor mobility and so forth can be implemented with certainty.  Even with labor mobility and so forth could be realized, the global economy as a whole has too many moving parts, and these moving parts can be counter productive to the positive trends that occur within the Eurozone.  For an example, United States will not want to see the Euro rises for obvious reason (i.e., dollar’s reserve currency status must be upheld).  China too wants its currency to become a reserve currency in the near future.  With the two biggest economies in the world, United States and China, with very powerful military mights to back their agendas, it’s easy to imagine there are so many more moving parts within the global economy as a whole.

I think the author is too optimistic about the whole Eurozone as a whole.  I do think the author does have many good points on why the Euro won’t collapse and Eurozone won’t be breaking apart, because he explained well why United States and China do not want to see the collapse of Euro and Eurozone.  James Rickards mentioned that the United States had been wanting to keep inflation high in the United States and interest rate low for revitalizing exports and easy debt payments.  By printing more dollars, the United States can push inflation up.  By printing more dollars, the United States also keeps the Euro strong.  Besides United States exports deflation to Eurozone member countries, China too wants the Euro to stay strong for many reasons.  One noticeable reason which James Rickards mentioned is that China wants to diversify its foreign investments.  Instead of only investing in United States treasury bonds (i.e., dollar holding), China wants to convert some of its Dollar holding to Euro holding and other Eurozone investments.  This way, China does not have to put all of its eggs in one basket.  After all, how can one be sure that the dollar will be alright for indefinitely?

Entering Russia and so the picture of global economy becomes even more complex.  Russia does not want the dollar to be the only reserve currency, and Russia isn’t having a good relation with the United States since forever.  Especially since Syria, Libya, and Ukraine crises/conflicts, United States-Russia relationship has gotten worse than ever before.  In fact, many people think this relation is making a full circle (i.e., getting worse to the freezing point of the cold war).  Russia is an energy export country, and so Russia’s energy geopolitical maneuver has great impact on the world.  As United States boosts its own energy export sector, it’s in conflict with Russia in the energy export market.  Meanwhile Eurozone member countries are depending on Russia for energy supplies such as natural gas.  This is a big security issue for Eurozone member countries, because Russia can blackmail Eurozone member countries into submission by raising prices or producing less energy resources.  Can the United States help Eurozone member countries to rely less on Russia’s energy resources?

Anyhow, Russia with its own geopolitical agenda can make the whole global economy a lot more complex.  It’s already happened as Russia and China signed the $400 billion natural gas deal.  With this deal Russia will not have to worry about too relying on Eurozone member countries for natural gas export.  As Ukraine conflict continues, United States and Eurozone member countries continue to sanction Russia.  Returning the favor, Russia cuts more ties with the United States and Eurozone member countries.  With these economic sanctions between them (e.g., Russia vs United States and Eurozone member countries), the outlook for the global economy might be dampened by a lot.  Meanwhile Japan, Philippines, and Viet Nam are in territorial disputes against China.  China might play hardball and sanction these countries.  If the tension between these countries against China are not dying down, the global economy as a whole might get even worse.  Simply put, there are way too many uncertainties and moving parts for the author, James Rickards, to be certain that Eurozone will be able to reform without issues.  Without reforming appropriately, the Eurozone will not be able to perform.  If things got really bad, the Eurozone might even see the collapse of the Euro.  This is why China isn’t exactly put all of its eggs into the Eurozone.  Although China is cutting back on the buying of the United States’ treasury bonds, China isn’t exactly cashing out all of United States’ treasury bonds.  It means that China is still hedging between the United States’ dollar and the Eurozone’s Euro.

In summary, I think the author is too bullish on the Euro even though the Eurozone isn’t exactly doing too well at the moment.  If the Eurozone fails to reform as how James Rickards had advised in “Death of Money: The Coming Collapse of the International Monetary System” book, the Euro may suffer great setback.  Furthermore, Ukraine conflict might add more energy, economic, and political issues for Eurozone to be dealt with.  If the United States sees the Euro as the potential rival for the dollar’s currency reserve status, the United States might not want to see the Euro rise.  China might not want to see the Euro rise also, because this might dampen the potential for the Yuan to become the sole reserve currency.  Nonetheless, what if the Euro rise will happen anyway and China will insist the Yuan to become another reserve currency?  This will be very problematic for the United States for obvious reasons.  One noticeable reason would be the world will use the dollar even less as the reserve currency, and this will make it harder for the United States to print more dollar to pay off debts.  In a nutshell, the global economy is a mess and a battlefield, and James Rickards might be very wrong for being too bullish on the Euro.

Nobody Is Foolishly Enough To Have Another Korean War?

According to the news, North Korea is menacing again.  Just in, North Korea and South Korea were showered each other’s water with artillery rounds.  Furthermore, North Korea is threatening to do another nuclear test.  Some commenters on Yahoo expressed that if North Korea doesn’t change its ways, U.S. and NATO might attack North Korea to end Kim Jong-Un regime.  This sounds all good, and I bet it does make these commenters feel good too.  Nonetheless, I don’t think U.S. and NATO want to do something this foolish like keyboard warriors suggested.  Sure, I’m also a keyboard warrior, but at least I don’t suggest going to war so easily.  By the way, it’s not like U.S. hadn’t tried to attack North Korea before, right?  We did, and it wasn’t all that easy.

The Korean war in 1950 was just as gruesome as any war.  Nonetheless, at the time, we used 1950s’ warfare technology.  Imagine nowadays, North Korea does have better warfare technology plus nuclear weapons.  Sure, the United States and NATO do have better warfare technology, but it still won’t make going to war with North Korea a simple matter.  Millions could die, and that is probably understated.

If one versus one just like in a video game, going to war must be fun since everybody got to watch a game being played out.  Unfortunately, if United States and NATO ever attack North Korea, China might not be so idled by.  How about Russia?  What about Iran?  So on and so on.  North Korea is nobody business until it becomes the whole world’s business, because North Korea is not so isolated even though we may like to think she is being isolated.  Especially, China isn’t taking it easy when it comes down to North Korea.  Imagine if you’re China, and North Korea is menacing right next door, how do you feel?  Especially North Korea does have nuclear weapons.

Kim Jong-Un might not have a lot of choice even if he wants more choices.  His country isn’t friendly with the West and South Korea, otherwise it would have been a buddy to the West and South Korea already.  Thus, whatever the West and South Korea is doing, North Korea is not going to take it lightly.  Kim Jong-Un knows that his regime is shaky since he is young and inexperienced.  Nonetheless, he is not all stupid unless I’m wrong on this.  Nonetheless, I think he feels that his country and himself have to act strong, because the otherwise isn’t an option.  Acting weak might undermine his ruling.  Furthermore, acting weak only invites the United States and NATO to undermine him even more.  Since he got no choice, he has to act strong.

Nonetheless, when you’re acting strong, you must have already made up one’s mind in following through, right?  After all, what if the enemies call your bluff, what are you going to do?  Are we talking about poker?  Unfortunately, in North Korea case, I don’t think it’s poker at all.  Why?  If Kim Jong-Un’s bluff got caught, he would be attacked from all angles.  After all, his regime could not be shaken even a tiny bit, otherwise things will just gradually slip away into the oblivion.  Thus, he would back his bluff with an all out war.  I think Kim Jong-Un would bluff, but in the end he would go all out even though he would bluff.  It means that Kim Jong-Un would sacrifice his whole country just to back his bluff.  Why?  Either you’re strong or not!  Why?  Kim Jong-Un doesn’t have a choice unless his country could be seen just as another friendly nation to the West.  Unfortunately, I don’t see how the United States and NATO would like to cuddle up to North Korea, and Kim Jong-Un would be too suspicious to believe anything the United States and NATO have to offer.

As the United States and NATO continue to keep North and South Korea at war status, I don’t see how these prolonging hatreds could turn out peacefully.  Hostility will be piled up to the point of you know what, but by then nobody will care about how many millions will die.  Kim Jong-Un by then will not be able to be in control anymore but just have to defend to his death.  Obviously, one North Korea will never be able to win the day!  It’s a no brainer!  Nonetheless, nowadays, I doubt North Korea would be fighting alone!  You never know when the time comes, out of the woodwork came friends that we thought North Korea would never have!  Thus, North Korea isn’t as easy as Iraq’s Saddam Hussein.  Otherwise, North Korea would have been conquered by United States & South Korea in 1950s already!

Peace should be reigned supreme, but when war came peace would be a sore loser.  In time of war, millions will die, but eyes would be blinded by hatreds; ears would be deaf by war cries; nobody would care who is right and who is wrong until all of the dusts got settled by…

Perhaps, North Korea is like a drunker or an addict.  Thus, North Korea can only change within her own country!  The outsiders like the United States and South Korea can only infuse more hatreds from North Korea.  The more the outsiders bash North Korea, the more hatreds of North Korea will have for the outsiders.  Thus, such growing hatreds can only manifest into all out war one day, and by then whatever the outsiders have to say about North Korea will be even more pointless.  If North Korea economy improves, and if the world is willing to be friend to North Korea, I think as long North Korea is seriously wanting to change for the better, things might get better.  Moreover, the United States and NATO should never fear North Korea, because North Korea would not be foolishly enough to attack the United States and NATO without her friends’ backings.  Nonetheless, North Korea will grow 100 times stronger if the United States and NATO start to make the first move!  How come?  North Korea’s allies will come to her aid since she wasn’t the one who had made the first move!

In summary, I think the North Korea situation is very unique in today world!  She has nuclear weapons, because we think so and she had tested some sorts of nuclear tests.  She has the manpower for a really big war!  She is mysterious enough that the United States, NATO, and South Korea might not have good enough intelligence to make the right decisions.  She is a buffer for China!  Her allies do not want to see a united Korea!  She would become 100 times stronger if she got attacked first (i.e., as long she doesn’t make the first move like starting a war without good reasons).  Thus, I think North Korea will go on and poke at United States, NATO, and South Korea with whatever tricks she has, because she knows nobody is foolishly enough to think she is another Saddam Hussein!  Nonetheless, things cannot go on forever like how they are, because the hot air balloon might just pop.  I think the West and South Korea and North Korea need to find ways to be friendly, otherwise the hot air balloon is just going to grow bigger until it pops.  It won’t be pretty!  North Korea might regret, but the world would pay a hefty price!

Sources:

World Conflicts Are Not That Simple!

In this day and age, 21st Century to be exact, conflicts around the world are never going to be simple.  Heck, even in the ancient time, the conflicts then were not so simple.  Now, we have so many countries that are doing overlapping business, because there is so called a chain of supply this and that.  For an example, United States imports from China most, China relies on neighbors and far West for technology and raw materials to produce stuffs for United States, and countries such as Australia love to sell energy products to China to support the supply chains in China.  Obviously, the example I mentioned is to be simplistic, because China is not only exporting goods to United States, but China is exporting to the whole world at large.  United States is obviously not only importing from China, but United States is importing from the whole world at large.  Still, the whole world is importing from China most!  The last sentence does implicit a weakness of globalization.  It begs the question what if China’s supply chains are in trouble, what will the implications be for the world’s economics at large.  It’s not so simple to just say that my country will become self sufficient immediately.  Any country can’t just magically wave a wand in the air, and then the technology and infrastructure and various vocations of expertise — that take decades to build — suddenly and magically materialize for whatever production purposes.  The complexity of the world nowadays begs the question that even small conflict can put any country which depends on the world’s economics in a very uncomfortable position, especially in economics sense.

I think one thing people fail to realize is that nuclear factor is even more important as a war deterrent for world peace than ever before.  Although some of us probably have wished that humankind should have never been able to figure out the nuclear technology, thus nuclear would never have existed.  Nonetheless, such wish is rather foolish since nuclear age has been here for a while already.  This is why nuclear weapons have been employed by various countries for deterrent purposes.  Nuclear weapons are not a figment of the imagination for a long time already!!!  Countries that have nuclear weapons know this, thus these countries use nuclear weapons as war deterrent strategic maneuver.  It’s a very effective war deterrent strategy indeed!  With this knowledge, we can see that United States, China, India, Pakistan, Russia, UK, France, Israel, and North Korea cannot be invaded outright.  The big three countries that for sure cannot be invaded outright are United States, China, and Russia.  Why these three countries have the power to fully destabilize the world or prolong the world peace?  Simply put, their military, economic, and world influence mights ensure their power to dictate world order!  Smaller countries, with nuclear technology or not, cannot compete or go head to head with United States, China, and Russia.  Of course, there is always something that is not on people’s mind and yet will be the exception of whatever rigid order.  In today’s world balance, for United States, China, and Russia to go to war against one another, the exceptional culprit behind this global catastrophe would be a psychopath with powerful positions that can manipulate a country’s foreign policy.

Although the big three in the world will not wage war against one another outright, but they can definitely use their smaller allies to wage proxy wars.  This is why we, people with brain, know that small conflicts around the world might not be so simple.  I can safely assume that all conflicts nowadays are a sort of game for the big three to push and pull against one another, and so in the end of the day the winners will always be the big three!  In short term though, the players who gain something in whatever conflict that the big three are manipulating can also be said that they’re the winners, too.  Nonetheless, in the end of the day, they might not be the ultimate winners!  This is why, I think we, the people of the world, should be more informed, open minded, and less judgmental, and only in this way we can see the events that break out around the world with clearer sense.

In conclusion, United States, China, and Russia know they will not benefit in an all out war, but they’re more profitable in term of controlling the events of the world.  This is why I think the ongoing chaos in East and South China seas, Ukraine, and the Middle East are small events that will dictate the world influence of the big three!  In these events, the big three cannot claim their innocent!  Nonetheless, the big three are acting in their own interest, because the big three after all have to lookout for their own people.  It’s just unfortunate that the smaller players in the world stage have to be manipulated by the big three!  Of course, nobody knows how the world map will look like in the future, thus we can never say that the big three we have now will be the big three of 300 years later.  Remember Roman Empire?  Remember how big they were in ancient time?  If I’m not wrong, they’re no longer here since AD 476.  That’s a long time ago.  Let just say that, the big three are not invulnerable, but at the moment and years to come, these are the players that make the world spins.  At the moment, Ukraine crisis is just another event that the big three are positioning themselves for their own future!  Unfortunately, the West and Ukraine itself will have to be manipulated by the big three!  Russia is looking to gain the most in Ukraine crisis, and Russia does have the popular vote as Crimea’s people are voting for Russia.  China is not yet making a hard stand for Ukraine crisis since it’s playing a waiting game.  Meanwhile, United States is anxiously preventing Russia from annexing Crimea.  Who’s right?  Who’s wrong?  It’s hard to tell, because the big three are never innocent!  Nonetheless, I hope after Ukraine crisis, the world will be more peaceful, however Ukraine crisis will turn out to be!  Let’s not see someone is so stupid enough to push for World War III, OK?  As Albert Einstein had said something along this line, he knew we will have to use nuclear weapons in World War III, but he suggested that we might fight with sticks and stones in World War IV.  It’s a long conclusion, I know!