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The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2)

Politics / GeoPolitics Dec 28, 2016 - 06:50 PM GMT

By: Nadeem_Walayat


This is Part 2/2 of my comprehensive analysis on the implications of the Trump Reset of why Trump will War on China both economically and militarily. Part 1 dealt with why Trump represents regime change in the US, and the role Putin's Russia, the Fake News SuperPower played in his election victory and what Russia can expect in gratitude going forward - Regime Change, Russia the Over Hyped Fake News SuperPower (1/2)


The reality is that the United States and much of the rest of the West have effectively been employing hundreds of millions of low paid chinese slave workers for decades, all without the labour laws or environmental consequences resulting in very cheap goods in western shops, low inflation maintenance of purchasing power for the western masses mostly for the purpose of buying the latest junk imports from Chinese factories designed by western corporations, and by doing so have completely transformed the Chinese economy from inconsequential GDP of $300bln 30 years ago to $12 trillion today, and thus exponentially strengthening a totalitarian state ruled by a communist dictatorship that increasingly seeks to spread its tentacles beyond its borders.

Remember that the Soviet Union was defeated not militarily but through economic warfare. The current economic trend trajectory has the Chinese dictatorship clearly winning the economic war as the Chinese economy converges towards becoming the world’s largest economy within the next 10 years unless action is taken to halt this trend.

"First, the North American Free Trade Agreement, or the disaster called NAFTA. Second, China’s entry into the World Trade Organization. NAFTA was the worst trade deal in the history – it’s like – the history of this country. And China’s entrance into the World Trade Organization has enabled the greatest job theft in the history of our country." Donald Trump

The cost of cheap Chinese goods in the shops has been western unemployment and depressed wages. For instance an estimated 20 million US jobs alone have been offshored by US corporations to China resulting in the employment of approx. 100 million Chinese workers i.e. Apple alone employs 750,000 Chinese workers. So at least President Trump will attempt to rectify the jobs theft to some degree as he seeks to dismantle the mechanisms through which China has prospered in terms of jobs creation at Western workers expense. However there will be a price to pay for this and that will be in much higher priced goods in the shops whilst the benefit will be many millions of new jobs created in the US.

The real big loser here will be China, for China has gone out of its way to maintain the current trade flow system to its huge advantage, allowing it develop at an unprecedented pace through several primary mechanisms such as currency manipulation which is why China holds $1.3 billion US government debt and many other dollar assets so as to force the Chinese Yuan lower against the US Dollar so that more Chinese jobs will be created whilst at the same time more US jobs will be destroyed. So yes, China has been engaged in an economic war against the west and winning it through mechanisms such as currency manipulation amongst many others.

So much of that which Trump has been spouting is actually true. China does not play fair, and in exchange for Chinese junk that fills up western garages, China has destroyed at least 20 million US jobs alone! Though it should be noted that ALL nations central banks manipulate their currencies, after all that is what the policy of the zero interest rates for the past 8 years means.

Thus Trump's economic war will cause Chinese unemployment to rise and thus economically and socially destabilise China, especially if the rest of the West decides to take a leaf out of Trumps economic warfare book by enacting similar anti-China dumping policies that will put the communist dictatorship on the defensive as China lacks safety valves such as free and fair elections and referendums to cope with social unrest.

Whilst on the other side of the equation is the estimated $1.3 trillion of US government debt held by China the steady sale of which will contribute towards higher US interest rates as the market supply of US government bonds increases, a trend that is already well underway. So the key message from Trumps economic war on China is to expect a lot higher INFLATION!

And where economic war is concerned it won't be just limited to China for Trump has made clear during the election campaign that Mexico is also up there with China on Trumps economic hit list, and so the list will probably extend to include the likes of Japan, South Korea and Germany. Friend or Foe does not matter Trump's economic war will go global!


With each passing year China closes the economic and military gap with the US Empire that brings conflict between the two several steps closer. In the first instance we are likely to see a series of flash points across the South China Sea. However the chances of a hot war are many years down the road in advance of which there will be many, many events of which during 2016 we just got a taste of i.e. the grabbing of the US marine spy drone in the South China Sea as China attempts to extend its military influence beyond its own territorial waters.

Why is America warring on China inevitable? We'll for that one only needs to look at the key fundamental indicators for the answer of why the United States will not tolerate an emerging Chinese superpower breaking out of its territorial waters, threatening US hegemony, steadily displacing the United States Global Empire first from the South China Sea and then from much of the Asian Pacific region, much as the United States steadily displaced the British Empire, the Red Empire many decades ago. Where today it is all lost to history that up until the outbreak of World War 2 the greatest perceived threat to the United States was that from the British Empire, considering the huge British land mass of Canada along the United States long northern border which the US eyed both as a threat and as an opportunity to invade and annex large tracts of!

So for most of the 1930's the United States was NOT actively planning for war against either Germany or Russia but against Britain. Which gives a taste of the nature of the American beast. However post World War 2 the US set about replacing a bankrupt British Empire with an American Military Empire that today straddles the whole world with over 1000 military bases outside of the United States, including 400 in Asia. So whether a nation is a friend or foe does not matter, if that nation poses a threat to US global strategic interests then that threat will be neutralised through a strategy of containment and so it was with the British Empire that was forced to dissolve and give way to the American Empire, and so it was for the Soviet Union and so it WILL be for the emerging Chinese superpower regardless of what the Chinese politburo may delude themselves into thinking that if they stay and build their forces within the South China Sea then they won't be on the receiving end of the American Empires time tested strategy of containment. The only way China can avoid the inevitable confrontation with the US Empire is through military capitulation by unilaterally reducing its military capability, which unfortunately China is not likely to do, hence why China is clearly on a path towards confrontation with the US Empire.

Military and Economic Power 2016

  United States China India Russia UK Japan France Germany Saudi Arabia
Military Spending $600bn $220bn $50bn $66bn $58bn $45bn $47bn $40bn $85bn
Economy $18.6tr $11.5tr $2.25tr $1.3tr $2.7tr $4.7tr $2.5tr $3.5tr $0.65tr
Population 0.33bn 1.38bn 1.35bn 0.145 0.065 0.127 0.065 0.082 0.033


Today, as expected the US ranks No1 in the world, with China 2nd. However whilst in terms of military coupled with economic power Russia may rank fourth in the world today, the gap between the US and China and the rest is such that even the likes of India does not even come close to equating to 3% of the overall capability of the United States as the following global power pie chart better illustrates.

In global power terms today's world breaks down clearly into two blocks, that of the US Empire and that of the Chinese emerging superpower that is determined to breakout of its territorial waters. In comparison below is the breakdown of global power in terms of economy, population and military spending in 1950 which illustrates the transformation that has taken place since, as today China has replaced the USSR and where today's Russia does not even factor into the geopolitical equation.

Whilst during the 1980's Ronald Reagan was busy propagandising the threat posed by the Soviet Union, the so called 'Evil Empire' the threat of which had all but evaporated by the end of the decade as the Soviet economy had collapsed following 40 years of a relentless cold war that defeated the Soviet Union economically and sowed the seeds for its ultimate collapse.

It should be noted that at the time (1989) China ranked behind the UK, France, Japan and Germany in terms of Global Power with an economy that was less than 1/10th that of the United States, roughly where the Russian economy stands today, therefore presented no strategic threat to the America's Global Empire.

In terms of global power the past decade has witnessed the explosive emergence of a new superpower, China that given as few as five and no more than 10 years could on the current trend over take the United States and thus be in a position to start to flex its military and economic muscle right across the globe, just as the Soviet Union was on the cusps of doing during the early 1950's that triggered an escalation of the cold war, sparking a series of proxy wars across the globe claiming millions of lives whilst in the background thousands of nukes sat in the silos, ready to launch on 3 minutes warning.

A decade ago China rated less than 8% in terms of Global power, today China rates 32% against the US on 69%. Therefore it is inconceivable that on the current trend trajectory that the American Empire does not see China as a threat to its global supremacy, one of China displacing the United States as the key global power within the next 10 years. Because as things stand today then it WILL HAPPEN! So why would a US global military empire now be fast asleep as China arms itself to the teeth? The answer clearly is the American Empire has NOT been asleep, instead for more than a decade has been pivoting towards Asia towards containing the growing Chinese threat. Though I would imagine that most Americans are not even aware of the fact that the US is a global military empire that has been busy encircling China with military bases for well over a decade. For instance the US has over 400 military bases across Asia Pacific region.

Thus Trump is merely acting like the bugle wakeup call that the American Empire is about to go into overdrive at countering the Chinese threat before it becomes manifest in several fleets of aircraft carriers. For China has reached that critical stage which galvanises the American Empire into open action towards neutralising the emerging Chinese threat by all means necessary.

So in fact the chaos born of a Trump Presidency acts as good cover story towards galvanise the American people to Chinese threat, that in less than 10 years’ time would be in a position to DISPLACE the United States in terms of military supremacy in Asia and then target much of the rest of the pacific region. Especially given the fact that the US military is spread thinly across the whole world whilst China is concentrating its military in a few key strategic areas such as in the South China Sea where it has been busy building artificial islands, 7 during 2016 alone far beyond its territorial waters as a sign of China greatly accelerating its military programme, new islands with runways to enable China to quickly launch bombers and fighters and missiles across the whole region.

So a mumbling, bumbling, buffoon actor as President who out of sheer luck may be hailed as the saviour of the West who through pure chance of electioneering rhetoric of wanting to con his way into the White House will play into the US military industrial complexes hands and in the American Empire's long-term strategic interests by promoting the neutralisation of the Chinese threat. Where peaceful engagement with an over hyped Russia is key i.e. it is far better to engage with the Russian dictatorship towards the goal for the total encirclement of the China by playing into Putin's game of over-hyping Russia's presence on the world stage. Today Russia is NOTHING in terms of global power, not even 1/40th of what the Soviet Union was at its peak and with little sign that this is likely to change even a decade on from now.

The threat of China surpassing the United States far outweighs that of Czar Putin's viscous evil totalitarian state that can barely manage to project its military beyond its own borders, and even then can only pick on defenceless states such as a devastated Syria and a weak bordering eastern Ukraine. Russia in Global power terms is NOTHING! Definitely not that as presented by Russian AND western media hype. Russia should be seen for what it is, a potential proxy tool for a US war against China.

Especially since it should not be forgotten that Russia itself fears the rise of China for the dark secret that Russian's don't tend to talk about is the large chunk of North East China that Russia stole after the Second Opium War in the 1860's that includes the island of Sakhalin which is about the size of Scotland. Something that China up until now has never been in a position to reclaim, and once China gets going in the land grab business it won't stop with North East Manchuria and Sakhalin Island but that Russia could lose the whole of Siberia to China. So definitely it is in Russia's best long-term interests to play along as the junior partner in the US Empires war on China, else in a few decades time Russia may find that it ends up losing most of its land mass to a Chinese Imperial Empire. So whilst today Russia is busy annexing parts of Ukraine, an unchecked China a decade down the road may start annexing much larger parts of Siberia.

Of course the worst case scenario is that a delusional and maniacal Trump actually does literally rip America apart, thus allowing BOTH China and Russia to step in to fill the sunken global void, the worst possible outcome for everyone in the West. However, at this point in time I am going to take it for granted that the United States is strong enough to with stand a Trump Presidency and thus the United States is NOT going to disintegrate or even retreat under Trump.

Therefore the economic and military containment of China by foggy on the facts President Trump could allow the current trend towards the emergence of China as a competitor superpower be halted and likely reversed. It won't play out as the cold war against the Soviet Union had for there the Soviet Union clung onto a bankrupt economic ideology of central command control. Instead this cold war is more likely to literally mean for the containment of China to within its own borders, both economic and military containment which involves ramping up of the militaries of regional economic powers such as South Korea, Japan and Australia. With Trumps threats of withdrawal of US military support fostering the militarisation of these nations. And then there is the icing on the cake of India, I can imagine it would not take much to pump up the former British colony into warring on China, especially given the fact that India and China have gone to war in the past over disputed territory.

Meanwhile China is busy developing Pakistan as a proxy to use both as a tool against India and for a land route to the West Indian Ocean and beyond. Which is why China is investing billions in developing Pakistani road infrastructure all the way to the new Pakistani deep water port of Gwadar on the Arabian Sea which has been leased to China until 2059, and which once complete will station as many as a dozen Chinese warships allowing China access to the Middle East, Africa and beyond. And perhaps in the not too distant future may house Chinese troops and medium range ballistic missiles, amongst other Chinese military infrastructure.

Unleashing Imperial Japan

Japan will be one of the more eager economically and technologically capable Asian nations wanting to join the war on China club for the fact that Japan has always topped the emerging Chinese Empires hit list for what Japan inflicted on the Chinese people for several decades during the first half of the 20th century. And ironically it was Japan's earlier collective guilt prompting the urge towards normalising of relations since the late 1970's, of wanting to put the horrific past behind both of these neighbouring nations as Japan and the US had done that has played a large part in the rise of today's Chinese economic giant developed through $100's of billions in Japanese investments on mainland China.

Of course the Chinese threat could result in Japan gradually reverting to its wicked ways, taking the Chinese threat as an excuse to literally go nuclear, arming itself with ballistic missiles and launching a fleet of its own aircraft carriers which could once more spark the emergence of an Imperial Japan. That after neutralising the Chinese threat through mutually assured destruction (MAD) would then target the other much weaker Asian nations after having shaken the US Military noose that has kept Japan contained since 1945 through the dozens of giant US military bases across Japan. So I doubt the US would ever really want Japan to go nuclear for it could literally result in opening a Pandora's Box, one of ultimately watching Japan and China carving up East Asia between themselves before heading outwards across the Pacific and Indian oceans.

And so whilst today the US Intelligence and security apparatus and media foster the Russian threat given the cyber hacking of the US election. However, by far the real greatest threat that the American Empire has faced since the death of the Soviet Union is China that apparently will soon increasingly be publicised by an a ignoramus TV reality star President. You could not make up a fictional story any more bizarre than what the next 4 years are likely to resemble, especially when Trump starts to encourage Japan to re-arm itself without even realising the significance of Pearl Harbour and what a militarily unleashed Japan would be capable of!


Could a new cold war with China turn hot? Well given that we will have someone as unhinged as Donald Trump in the White house then yes it is probable that a sequence of events could result in a hot war with China and more likely than not that a conventional war between the US and China could go nuclear! We only have to look at the rhetoric during the election campaign for instance of accusing China of raping America.

"We can't continue to allow China to rape our country, and that's what they're doing,"

We're going to turn it around. And we have the cards, don't forget it. We're like the piggy bank that's being robbed. We have the cards. We have a lot of power with China,"

"They suck the blood out of us and we owe them money,"

"We're like their whipping post, the United States. We have people who don't understand the system. We have people that don't get it. We are being ripped by many countries, China being the No. 1 abuser. They do it better than anybody else,"

"I have very big relationships with China, but the fact is China is the great abuser of the United States economically and we do nothing about it, and it would be very easy to stop."

Yes, under Trump things could get out of hand quite quickly and escalate into a full blown hair trigger military standoff in for instance in the South China sea, and all it would take is one miscalculation on either end for war to break out that could go nuclear.

Whilst the big mega flash point bubbling away is Taiwan, as a boxed in China has always seen the close proximity of Taiwan as a limiting factor to its ability to project its force beyond China's territorial waters. So a hot war to invade and seize Taiwan that has always been seen as a breakaway province is highly probable.

However, clearly during an all-out nuclear exchange China would effectively cease to exist whilst several major US cities would be vaporised. Whilst the rest of the world could look forward to a near decade long global nuclear winter, which no doubt will result in mass starvation and effectively the end of civilisation as we know it. So it is highly likely a nuclear exchange will be very, very limited i.e. tit for tat detonations, probably EMP weapons more aimed towards disabling economic and military infrastructure then nuclear destruction.

The bottom line is that the US is literally running out of time as 10 years from now it will be too late to contain China within the South China Sea. Therefore the only logical response is for the American Empire to both economically and militarily crush the emerging Chinese superpower for which it has only a small window of opportunity of no more than the next few years before China has reached the stage of breaking out of the South China Sea towards becoming a global superpower to rival that of the United States.

My conclusion is to definitely expect an economic war and very likely a convention war against China during the Trump Presidency in advance of which the US will relocate much of its fire power to Asia. This will be a REAL bloody and costly war, probably centred on Taiwan aimed at decisively destroying China's military capability of extending itself beyond its territorial waters. However, it is unlikely that the war would turn nuclear other than maybe for a couple of tit for tat detonations as the alternative would be for the total annihilation of China and a global nuclear winter that would bring civilisation to an end.

Maybe China is planning its own Pearl Harbour first strike? Whilst the US is likely planning several red flag's so as to pull the likes of Japan and India into a war against China. And China too is busy developing the likes of Pakistan into a proxy including a land route to its new deep water naval port off the Pakistani coast.

Meanwhile in Blighty whilst the US Empire is gearing up for war with China, an inept British government is letting China build a nuclear bomb, I mean nuclear reactor in Southern England with literally an inbuilt kill switch!


Whilst US direct military engagement with China is probably a couple of years away. However a real cyber war has been underway for at least the past decade. One of a nation with advanced cyber warfare capabilities that are not just targeting US military infrastructure but all aspects of US national infrastructure from the power grid to commerce and the financial system. China could literally bring the US financial system to the brink of collapse within hours which likely the US can only defend against through use of EMP detonations.

Whilst China's cyber offensive capabilities have been built up so has China been engaged in military and commercial mass espionage, which means that China did not need to spend billions of dollars designing and testing the latest jet fighters or ships, they just stole the US plans to the likes of F22 and F35 stealth fighters on which Donald Trump commented during the election campaign of how China's J-20 stealth fighter looks like a direct copy of the US F22 stealth fighter.

Therefore at the top of the list for early targeting in any hot war on China will be China's cyber warfare and espionage centres. In the meantime the US has little defence against Chinese espionage for it cannot exactly work the other way i.e. there's no point in the US cyber warriors hacking to steal chinese plans that are effectively just copies of plans stolen from the US.

Similarly China's economic miracle is in large part built on copyright infringement, theft of western intellectual property, so it's not just western movies that China is pirating, but virtually every technology that is developed in the west, China steals. For instance China's search engine Bidu is built on stolen Google source code, and the same goes for the whole of Chinese tech sector which are built on stolen western tech R&D.

At least where Russian hacking and theft of technologies is concerned, Russia does not have the capability to capitalise on the stolen western designs to sell as products in the global market. Has anyone ever seen a made in Russia label on any product sold in the shops? Instead Russia is a full-fledged consumer state, which is another primary reason why Russia's hacking is mostly overlooked, and why instead there will be an economic war against China so as to neutralise the theft of western intellectual property developed at huge cost that China just steals and then mass produces, flooding western markets that put domestic producers out of business.

In terms of cyber war, expect the US gloves to come off as soon as Donald Trump takes office, which means Chinese cyber-attacks will be increasingly countered with escalatory retaliations on Chinese systems and infrastructure, whilst American will mostly look the other way to Russian hacking.


In terms of the financial markets i.e. profiting from the new cold war with China then there are five key implications:

1. MILITARY INDUSTRIAL COMPLEX INVESTING - Investing in the western defence and the military industrial complex as the US and other Asian nation’s ramp up defence spending too far out match that of China's growing defence budget as Trump's statements implied would be required of Asian allies.

"You know we have a treaty with Japan, where if Japan is attacked, we have to use the full force and might of the United States". "If we're attacked, Japan doesn't have to do anything. They can sit home and watch Sony television."

"They're paying us a tiny fraction of what it's costing. I'd love to continue to defend Japan, I'd love to continue to defend South Korea - we have 28,000 soldiers on the line between North and South Korea right now. It's costing us a fortune, which we don't have, we're a debtor nation,"

Whilst European nation are also expected to increase defence spending to counter the perceived (over blown) Russian threat as the US withdraws and redirects its military forces increasingly towards the containment and suppression of China. China is NOT going to be allowed the chance to become the next Soviet Union.

2. SELL CHINA - disinvesting from China is a no brainier, as China is going to suffer several magnitudes greater economic damage than the US as a consequence of Trump waging an economic war against China as Trump attempts to repatriate millions of jobs back to the US. So whilst today's academic economists are fussing over China's economic slowdown to 6% or 7% of GDP, what no one is even considering is that China could during the Trump Presidency be forced in an economic Depression, which is on NO ONES RADAR, we'll apart from this lowly analyst's.

Worse still would be the consequences of a hot war that could bring Chinese international trade to a halt because China is not going to do what it should do to avoid the coming war which is to CUT military spending, instead it is going to try and out compete the US militarily and probably badly lose.

3. DEBT and INFLATION - The increase in defence spending and less reliance on cheap Chinese workers will result in increasing global indebtedness of all actors, which is supportive of rising interest rates, falling bond prices and rising inflation and thus rising commodity prices, therefore plenty of market trends to profit from for many years. Whilst Trump has already stated - "I'm gonna build a military that's gonna be much stronger than it is right now. It's gonna be so strong, nobody's gonna mess with us. "

4. CHINA PROPERTY MARKET CRASH - I don't track China's housing market as I have never intended on investing in it. However in real terms i.e. after inflation, the multi-decade bull run could likely be soon over for quite a number of years! And we may even see a Chinese property market CRASH during 2017. I will definitely take a closer look at China's housing market during 2017. But for now all those exposed to the Chinese housing market should take this as a warning to GET OUT before the SHTF.

5. RUSSIA - As of writing Russia is in recession and is on course to stagnate during much of 2017. However allowing Russia to be used as an US Imperial pawn against China for the next few years at least should reap some economic benefits for Russia, for instance in the lifting of economic sanctions amongst other positive developments which means Russian stocks should outperform as in military terms the US Empire will mostly turn a blind eye to Russia's limited actions whilst the US seeks to cripple China, as the last thing the US will want to do is to confront BOTH China and Russia at the same time.

The china cold war mega-trend as well as other implications of Trump such as his ignorance of climate change will factor into my future series of market analysis and trend forecasts. In terms of stock portfolios, my immediate response is to seek to liquidate those stocks most adversely effected by the war with China. And then a reappraisal towards favouring US domestic producers, defence contractors and further dis-investment of those stocks heavily reliant on production in China or Mexican cheap labour.

I expect this mega-trend to result in a great deal of sector and broad stock market volatility over the coming year which will sow the seeds for the re-emergence of the bull market once the dust settles, but for now it’s a case of battening down the hatches and waiting for the Trump storm to hit, which where China is concerned looks certain to be hit hard.

The bottom line is that democracy and freedom are an illusion and the Trump election victory demonstrates that the American people are just as susceptible to delirium as are the Russian people, or Chinese people or any peoples, so whilst today after having read this you might think war with China is never going to happen. However, understand this that it does not take much to pump up a population into a frenzy against a new enemy, nope, a couple of false flags would do the trick and going by what Trump has already said about China for instance of "raping America", then I am pretty sure he would be more than willing to go along with any crackpot plan from any one of the Dr Strangeglove's on his administration's payroll that would result in a hot war with China.

America the Least Worst Evil Empire

I am sure most Americans won't like reading this having been exposed to a lifetime of propaganda that there is no such thing as a 'good' empire, thus the US being a global military empire IS an evil empire because all empires are evil. For instance what the US Empire has done in Vietnam and Iraq and more than a dozen other places is evil, empires tend to be addicted to warfare and America is no exception, friend or foe does not matter, if any nation threatens American Hegemony then they will be neutralised, else the American Empire will collapse, just as all past dominant empires have collapsed.

However, it’s just that some empires are more evil than others. Now before you all start thinking that China is going to be the victim of American imperial aggression (which it is). However, living under an American global military empire is the least bad outcome for most peoples of the world given the alternatives. For instance if the US was not the worlds supreme military power wrapping its tentacles around the globe then that void would be filled by another. Where in the case of China, a totalitarian state, to imagine even a regional Asian Chinese empire would result in a better outcome for ordinary people is delusional, for if China treats its own citizens so badly then imagine how an Imperial China would treat the citizens of other nations, there is little concept of human rights, freedom of speech and justice in China. Instead the Chinese ruling elite treats most of its own people as slave workers, cannon fodder or even body parts as an estimated 50,000 prisoners are executed each year for their organs.

Whilst those who argue that historically China does not have any imperial ambitions, we'll yes, when China lacked the capability for such was true, but not today. NO, China is busy building the military infrastructure for first an Asian regional Chinese empire as a stepping stone towards world domination. For this we only need to look at the artificial Islands China is building near 1500 miles away from the Chinese mainland or the fleet of aircraft carriers under construction or the fact that this year (2016) China began construction of its first overseas military base in Djibouti, East Africa, these are all signs of regional and global Imperial ambitions.

So whilst the worlds people living under the umbrella of an American Military Empire is bad in terms of attaining freedom, however clearly a world living under a Chinese Empire would be infinitely worse with far less individual freedoms. So we have to make do with the lesser of alternative evils, an American Empire being less worse than the alternatives of a Russian, Chinese, Japanese, German or even a British Empire.

In conclusion the only way out of this path towards War is for China to realise that this is not going to end well for China and thus the most intelligent response is to reduce military spending to a level which does not threaten neighbouring nations and to instead seek bilateral peaceful agreements with its neighbours and the American Empire.

Ensure you are subscribed to my always free newsletter and youtube channel for forthcoming analysis and detailed trend forecasts aimed at capitalising on Trumps Coming War on China. And don't for get to read part 1 - Regime Change, Russia the Over Hyped Fake News SuperPower)

Source and Comments:

By Nadeem Walayat

Copyright © 2005-2016 (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction.

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29 Dec 16, 02:20
benign super power


Brilliant article. you have written clearly how US is the least evil of the Super power. I call it "benign super power", compared to others.

Look at the neighbours of China and Russia, most of them hate those two countries, compared to US's neighbours.

Following you, I have been long US stocks for many years. is 2017 the year the time to change it ? Please share any info you have.

NOTE : Battery cars are flying off the shelf here in California. Tesla has a 3 month wait. Look at it's AI based faetures(NVDA technology). AI is going to go through the roof. I am highly optimistic of the future.

Do you have any future articles on DOW, US housing.

Eagerly waiting for all your articles,

Thank you.

29 Dec 16, 02:27

Wow wow wow

Amazing recount of events and analysis. So lucid and straightforward. There is nothing like this on the www.

This article is an eye opener and a must read.


29 Dec 16, 16:46
False Chinese GDP

I am not sure just how robust this Chinese economic miracle is. It just looks like they played the same debt bubble game times ten that we did. Why would it have a different result? Producing millions more tons of steel than you could possibly place in the market may boost GDP in the short term, but really you are just wasting resources. As for this "dumping" charge, if China think they are going to get rich by selling stuff to us at a loss then they are in for a shock. Their building boom is just absurd.Countless buildings and entire ghost cities that will probably fall down before anyone occupies them (think watered down cement!). They do sell us a lot of stuff true, but what do they get in return? IOUs really, you could say they have been conned. As you say, what they do have is mainly stolen tech, and as the more innovative economies of the U.S, Japan, aided by UK Europe and of course Israel, home of world class software and tech, gang together, I do not see China having a chance in this. All we probably need to do is prod their debt based pyramid scheme of an economy into falling over and the job will be half done anyhow. I admit there is plenty of scope for me to be wrong for there will be a lot that I cannot factor in, but based on what I see I just cannot see China progressing much over the next say 20 years.

29 Dec 16, 18:09

Hi Nadeem,

Following up with your vision, here are some thoughts:

If there an economic crisis in China, most commodities will drop in value as their demand fall along with Chinese growth.

Emerging markets' currencies, and developed markets' companies that export to China will suffer.

US dollar and treasuries will be bid at that time.

Gold and oil stocks will fall, as they move in opposite direction to the dollar.

All the more with the prevailing instability in Europe.

It would be a repeat of the 2008 crisis for the world, this time with epicenter in the Chinese markets, but with US growth and accelerating inflation, leading to a stock and real estate boon.

What do you think?


30 Dec 16, 16:18
depth of thought

Great analysis. I don't know how you achieve such depth of thought.

There is no much I can add.

Oil price didn't spent much time below $30. Low price was necessary to kill Russia economically. So it looks it was lowered to help the negotiations with Russia and to show them that they have no choice. If so, oil will be trading between $50 and $100 in 2017. I can sense an appetite for the upside in the current trading range.

If China have been out-smartitng the West, they may continue to do so, adopting measures nobody is thinking about. Asian people are more intelligent than white people. With a silk road in Eurasia, the US will be the enemy to peace and trade.

China is stealing designs, but unreasonably long patent terms in the US are justified only by imperial ambitions.

Void after a fall of America? Russia will not conquer the world. Germany won't. Japan won't. China has grown at the expense of American empire, so it will go without America. A collapse of America would mean a return to a diversified world we had in the past. American empire exists only thanks to a printing press. It's not that evil...Europe survived bolshevism, hitlerism, Jesuits, Teutonic Knights, Napoleon, Turks and Mongols, but only the current neomarxist structure is likely to kill Europe culturally and genetically.

30 Dec 16, 20:36
China War Analysis

Thanks guys.

it took about 7 weeks to do, which is why I never bothered with developing a paid subscriber base becuase they would want at least weekly analysis which would not work.

Yes, I could add more, but wanted just enough analysis to arrive at a firm conclusion that there will be war with China during the next 4 years.



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