China Preps For War: Spy Balloon Belies The spy balloon is an easily digestible situation that should make it clear for most of the U.S. that China is not our friend - but what's been going on economically should be even more concerning. BY quoth the raven
Much Larger Economic Warning Signs
By now you probably know the Chinese spy balloon that, for some reason, was allowed to traverse the entire United States despite us knowing about it days ago, has been shot down.
Put simply, it was too little, too late for several reasons - and there’s been shuffling, specifically economically, by China over the last 10 years that shows the country’s aggression toward the U.S. could only be getting started.
First, China (and Russia) both now have a gauge of our reluctance to secure our own airspace. If the deployment of the balloon was to see how we’d react, they got their answer: slowly and uncertainly.
Second, if the balloon’s purpose actually was surveillance, and nothing more nefarious, it was likely able to get whatever data it set out for, after floating above numerous military installations.
Third, we have to be acutely aware of the potential for the balloon to be a test run for another balloon, many of which have speculated could be the means for an EMP:
High-altitude balloons, such as the one China has floated over mountain state military bases this week, are considered a key “delivery platform” for secret nuclear strikes on America’s electric grid, according to intelligence officials.
Spy balloons, used by Japan to drop bombs during World War II, are now far more sophisticated, can fly at up to 200,000 feet, evade detection, and can carry a small nuclear bomb that, if exploded in the atmosphere, would shut down the grid and wipe out electronics in a many-state-wide area.
You have to assume that China would know that this balloon - and the two other ones being reported (one over Latin America and now a third potentially outside the U.S.) - would be discovered. Additionally, there were reports yesterday that the balloons were maneuverable, ostensibly meaning the balloon had been directed on its path.
If this is the case, I have to believe it is either a test of how aggressively they could humiliate President Biden publicly (similar to how the Saudis did months ago), or it’s a distraction for something else going on.
The balloon was over Alaska nearly a week ago. Instead of dealing with it then, we allowed it to go untouched, giving China the upper hand, regardless of whether they set out for surveillance or to test us.
"They got a lot of intelligence they couldn't get from their satellites. There's a lot that China learned from this," Gordon Chang said on Fox News today.
I’ll leave the speculation about the balloon and military response to cable news and your own critical thinking. But what I do want to point out is what has been going on behind the scenes economically from China.
While we focus on the obvious, it’s important to also understand that from a monetary and financial perspective, it looks like China is preparing for war.Notably, China is continuing to stockpile gold while selling U.S. Treasuries, an obvious step that a country readying either for war or to challenge the U.S. dollar on a global stage (or both) would be taking.
I was also one of the few outlets last summer to report on the fact that Russia and China openly announced a “new global reserve currency” (announced in July 2022, predicted by me in February 2022). And of course, Russia and China can’t do it on their own: they are working with nations like Saudi Arabia to help put their plans into practice.
Crucial to dethroning the U.S. dollar would be the removal of its use for buying and selling oil - a system that has been in place since the 1970s when the U.S. promised security for the Saudi Kingdom in exchange for the petrodollar system that underpins the dollar’s strength as global reserve currency.
Saudi Arabia looks like it has just ended the petrodollar as of days ago. The admission came on a very public stage, in front of the whole world, at Davos.
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The sequence of these events telegraph escalation and we need to take the prospect of China’s threat very seriously.
Espionage on the part of China shouldn’t be a surprise - but have we noticed the economic espionage that has been taking place? For example, I wrote last summer about how China spied on the U.S. Federal Reserve and threatened a U.S. economist for policy information.
All the while, China has been allying itself with Russia further. It was reported today that China is openly now helping Russia with the war in Ukraine, likely in violation of sanctions:
China’s state-owned defense companies have shipped navigation equipment and parts to fighter jets and other military technology equipment to Russian defense companies, according to Russian customs data.
China has sent tens of thousands of shipments of goods to service Russia’s military (some goods had multiple purposes and could be used commercially, the Journal reported).
Meanwhile, China has also expressed its desire to eventually take back Taiwan - it is hardly a secret at this point. Those who know the space the best seem to agree, as recently as last month when General H.R. McMaster said on CBS’s Face the Nation that China is all but guaranteed to try and re-take Taiwan.
"Xi Jinping has made it quite clear, in his statements, that he is going to make, from his perspective, China whole again by subsuming Taiwan. And preparations are underway," he said.
Anybody who has read my 23 Stocks To Watch For 2023 (or any of my other recent articles discussing how I am personally positioning myself for this thesis) knows that I believe we are on the precipice of an unprecedented era geopolitically. We’ve now seen China steal intellectual property globally, stockpile gold, spy on the Fed, openly state it will challenge the dollar, plan to back its currency with gold or oil, and physically enter U.S. airspace (without any meaningful recourse).
I don’t know what the spy balloon means - but what I do know is that it likely belies additional coming aggression, potentially both physically and economically.
What is it going to take for us to take China seriously as a threat?