China Prepares For War

[Wiz]

China Preps For War: Spy Balloon Belies
Much Larger Economic Warning Signs

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

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.

Today’s post is free because I believe the content to be too valuable to put behind a paywall. If you’d like to support my work and have the means, I’d be humbled if you became a paid subscriber. Today I can offer 50% off annual subscriptions - for life.

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?

[Manny]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

[Markje]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

Yes, its strange that they shot it down over heartland-america, but somehow the debris entered the atlantic ocean.

[Wiz]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

Manny

I am very angry with you spoiling my fun..... Spoil of sport.....

And I thought you were a clever boy!

[Contrarian]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

Yes, its strange that they shot it down over heartland-america, but somehow the debris entered the atlantic ocean.

Do you need more coffee?

They did not shout it down "over heartland", they shot it down over the Atlantic ocean just beyond Myrtle Beach, South Carolina but within the 12 nautical miles of US control.

[Markje]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

Yes, its strange that they shot it down over heartland-america, but somehow the debris entered the atlantic ocean.

Do you need more coffee?

They did not shout it down "over heartland", they shot it down over the Atlantic ocean just beyond Myrtle Beach, South Carolina but within the 12 nautical miles of US control.

Yeah my bad, I mixed up South-dakota.... there are actually 2 states named south-something.

[mhr7]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.

[Texan77]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.

It is turning out this balloon off course thing over the USA has been a regular thing and now there is another one off-course over central America. I guess China is supposed to have these off-course balloons off course events several times a month. Now look at the title of this tread and put it into context.

[andrewfi]

I was surprised at the number of weather balloons the United States sends up every year under.

Have guess at the number. I'll bet that it's an underestimate by an order of magnitude.

[andrewfi]

75,000!

They blow all over the place. It's normal and expected.

Of course, this story was bigged up for various other purposes, but it's going to blow back with the usual unintended consequences.

[rosco]

75,000!

They blow all over the place. It's normal and expected.

Of course, this story was bigged up for various other purposes, but it's going to blow back with the usual unintended consequences.

Context is always key........

There's talk of this distraction being over hyped in the media whilst Nordstream should have precedent? Are satellites not a thing anymore...

[andrewfi]

They are and that's something that's going to arise from this. Now that it's ok to shoot down balloons in 'near space' it's only a teeny tiny step to apply the same logic to satellites.

My guess is that the Chinese shot down the balloon over their land not because they really thought it was spying on them but to start that process of applying the same process as the USA did.

Teeny tiny steps. But this little steps get to a place.

IMHO, that might have been a consideration and calculation made by SpaceX in respect of their Starlink satellites when they closed them down for drone usage in Ukraine.

[AvHdB]

75,000!

They blow all over the place. It's normal and expected.

Of course, this story was bigged up for various other purposes, but it's going to blow back with the usual unintended consequences.

At 40,000 plus feet the ballon’s do not blow all over the place.

[Manny]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.

Keeps Ohio off the front pages I guess.

[Contrarian]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.

Keeps Ohio off the front pages I guess.

I believe we agree here, the situation in Palestine, Ohio certainly should be on the front pages!

[Contrarian]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.

Keeps Ohio off the front pages I guess.

I believe we agree here, the situation in Palestine, Ohio certainly should be on the front pages!

https://www.reuters.com/world/us/angry-ohio-townspeople-seek-answers-trains-toxic-spill-2023-02-16/

[cufflinks]

The good folks of "East Palesteen" (Phonetic Pronunciation in Media)  would get more attention if they would just protest
TOXIC TRANS SPILLS...

[Wiz]

The whole "spy balloon" narrative is hogwash. It was a weather balloon blown off course. The US has seized on this to grow domestic hostility to China to get public support for their next military defeat, Taiwan maybe.

I didn't know you were such an expert on balloons and satellites, oh wait, you're not.o

              

Keeps Ohio off the front pages I guess.

I believe we agree here, the situation in Palestine, Ohio certainly should be on the front pages!

[Lon]

I wrote this in the "joe biden thread" previously.  and repeat it here in case it might have been missed

Peter Zeihan had some interesting comments...an easy find on utube

the balloon was simply a non issue for the U.S., it could not learn anything that was not already open source or seen from a satellite.  the U.S. just closed all the doors on the
missile silos and shut down emissions.
as for shooting it down earlier, a shoot down over land would have left a very large debris field and the U.S. wanted to recover the parts, the waters off the east coast in that
area are very shallow.  Alaskan waters not so shallow.   also the intelligence community was learning quite a bit while it floated serenely over.

Peter Zeihan has further remarks on the whole disfunction of the China government concerning this incident, but I will leave it to you to peruse the vid.


"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."

I suppose that is one narrative


"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."

all while being followed by a U-2 of course


"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."

wah wah wah...the sky is falling

[2tallbill]

Note: These Balloons can fly up to 60,000 feet (18,000 m). The very Lowest Earth
Satelites (LES) fly at 525,000 ft or (160,000 m).

Most LES fly much higher up to 6,600,000 ft. or (2,000,000 m) Satelites and fancy
spy weather balloons are not comparable. If you shoot a spy balloon it falls to the
ground, because it's in your airspace. If you shoot a satelite the wreckage stays
in orbit for years because it's not in your airspace.

A U2 spyplane was shot down over Russia in 1960 while flying at 80,000 feet. It
was in the Soviets airspace and absolutely nobody denies that.

LES are governed by the International Space Law and Satellite Telecommunications
and spy/weather balloons are considered in a countries airspace and not governed
by such laws. There are several military jets that can fly much higher than any
spy/weather balloon ever could.

If anyone was stupid enough to fly an aircraft at 60K feet or higher above Russia
or China, should 100% expect to be shot down, if they lived they would probably
spend the rest of their life in prison as a spy. Off course weather or spy balloons
would not have a better life expectancy.

[2tallbill]

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.

Biden has been bought and paid for, but your author is making some inaccurate
assumptions. When I was a boy, I read all sorts of science fiction. Including men
from Jupiter that were super strong because of the greater gravity there. They didn't
write about the 400 mph winds that occur daily on Jupiter. Your author has ignored
or has mistaken many things, similar to the science fiction writers of my boyhood.

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:

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

An EMP would have to be set off way higher than balloons can fly to have any
coverage. I looked up balloons for quite some time on Google before making
this post, but no balloon has ever flown half the heights claimed by your author.

The USA has mountains and the curvature of the Earth mean that the only realistic
way to do an EMP is with an ICBM. Sneaky weather/spy balloons won't work. Setting
a balloon aloft with a nuke on it would be very, very, very risky. A million things could
go wrong, you would expose your technology and commit an irreversable act of war
that could make your country glow in the dark for a thousand years. The Chinese
are way smarter than that.