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America can’t do wthout an enemy. An enemy is what funds America’s largest industry—military spending—and an enemy provides a national security focus which holds our tower of babel together.

During the Obama regime Russia was re-established as The Enemy. Trump’s intent to normalize relations with Russia, that is, to erase Russia’s enemy status, brought fire and brimstone down on his head from the military/security complex. The CIA Director actually denounced the elected American president as a traitor. The defeated Democrats, seeing the formidable military/security complex aligned against Trump, jumped in to recover their political loss by concocting “Russiagate.” Trump survived, but lost three years of his first term to a hoax created to drive him from office.

In Trump’s fourth year, the enemy has been relocated. Now it is China. Several developments contributed to changing the enemy to China. One was China’s growing willingness to stand up to Washington’s provocations and to speak back. One was Washington’s need for someone to blame for America’s large trade deficit. Another was the realization of China’s manufacturing and industrial prowess and the leadership China is taking in technology as exemplified by Huawei’s lead in 5G. Disturbed US communications technology companies, neoconservative hegemonic ambitions, and prospects for more military spending to contain China were given lobbying power by Trump’s verbal fight with China. These conflicts were given more potential by the rise of Covid-19 blamed on China.

A US Senator and right-wing radio speak of Washington making China pay for the cost of Covid-19 to the US by reneging on US Treasury debt obligations to China. It is hard to imagine a more stupid or implausible idea. As China could simply sell the bonds into the international market, Washington would need a list of identification numbers on China’s holdings and post them as instruments on which interest and principle would not be paid. As Treasuries are bought and sold in the market, it is not clear that the US Treasury knows who holds which bonds.

Assuming this scheme could be successfully implemented, the problems begin. Reneging on debt is the practice of third world countries. If the US adopts this practice, other countries will wonder if their holdings are next. The market for Treasuries could disappear, leaving the Federal Reserve as the only purchaser. There would be no point in issuing bonds. Money would be printed to finance the deficit.

This, in turn, could affect the willingness of other countries to hold dollar-denominated assets such as equities. This would have negative effects on the stock market. The US dollar could lose its role as world reserve currency, which would mean that Washington could no longer pay its bills by printing money.

Additionally, China has a range of retaliatory measures. The production facilities of many US corporations, such as Apple, are located in China. China is the favored location for the offshored production of US corporations. These facilities could be nationalized. In a number of cases the production facilities are not owned by the US firms. Instead, the US firms contract out their production to Chinese firms. China could stop the production of the products for US firms, steal the patents or brand name, or simply continue the production and re-brand it as a Chinese product. As the US does not respect laws of other countries or international law, there is no reason for China to respect US law.

The Chinese have mistakenly purchased a number of assets within the US. If the values of these assets equal or exceed the US assets located in China, the retaliatory policy would not pay for China.

When it comes to law, the US does not play fair. Washington has tried to hamstring Huawei by blacklisting the company and by pressuring NATO allies to reject Huawei technological products such as 5G. This policy has probably done more harm to US semiconductor corporations than to China as it has complicated US sales of chips to Huawei.

Washington’s effort to constrain Huawei’s international business also comprises an attack on the supply chains of global manufacturing, which has to displease first world global corporations. It assaults the idea of global dependence.

The US trade deficit with China is not China’s fault. It is the fault of the global US corporations that offshored their production to China. When the offshored products, such as Apple computers and iPhones, are brought back to the US for sale, they count as imports. Thus, it is US firms such as Apple, Nike, and Levi that are responsible for the US trade deficit, a responsibility shared by neoliberal economists who touted globalism, which has come at the expense of first world work forces.

Globalism gave China its manufacturing base. China should use this base to develop its massive consumer market. It is not globalism that any longer serves China’s interest. With the largest consumer market in the world, China should shift its focus to internal development. The internal market is so vast that exports should be of no concern to China. China, awash in US dollar reserves that Washington threatens to disavow, has no need for foreign reserves. China’s strength is in her economy. This strength should be developed. The intelligent path for China is to throw away neoliberal junk economics and develop a Chinese economy.

This was the American way during the first half of my life. The US economy was so large that US firms were awash in profits without recourse to sales abroad. Producing domestically for domestic consumption meant that high value-added, high productivity jobs remained in the US where they fueled the growth of real income that guaranteed a rising aggregate demand, which supported a growing economy and ladders of upward mobility. Once offshoring began, these ladders were dismantled, and today the result is that American consumers lack the income growth to drive the economy.

ORDER IT NOW

China has won from globalism while America has lost. To avoid the American decline, China needs to cash out of globalism and construct its domestic economy. Not only would this be very advantageous for China, it would benefit the cause of peace by reducing points of conflict between the US and China.

(Republished from PaulCraigRoberts.org by permission of author or representative)
 
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  1. “To avoid the American decline, China needs to cash out of globalism and construct its domestic economy. Not only would this be very advantageous for China, it would benefit the cause of peace by reducing points of conflict between the US and China.”
    This might be wise advice, not to follow the US path. But history shows the challenge of the task. If China was to retreat from globalism it might be seen as weakness by the West, and the process of destabilizing it to open its economy as in the 19th century would begin again.
    https://www.ghostsofhistory.wordpress.com/

    • Agree: Realist
  2. Realist says:

    America can’t do wthout an enemy.

    The American wealthy and powerful can not do without an enemy.

    FIFY

  3. Realist says:

    In Trump’s fourth year, the enemy has been relocated. Now it is China.

    Trump did this to himself.

  4. “During the Obama regime Russia was re-established as The Enemy. Trump’s intent to normalize relations with Russia, that is, to erase Russia’s enemy status, brought fire and brimstone down on his head from the military/security complex.”

    After 3.5 years of betrayal, how can you still take this position? It was clear early on that Trump never had any intention to normalize relations with Russia, just as he had no intention to cooperate with Russia in fighting ISIS, or to withdraw from Syria, end Mideast wars, etc.

    If you’ll recall, he announced his intention to nominate the Russophobic Nikki Haley as UN ambassador before he was even inaugurated. And then, shortly after being inaugurated, one of his very first acts of “diplomacy” toward Russia was to demand that Russia give back Crimea, something he knew Russia could not do.

    Having thus started off by poisoning relations with Russia, he then went on to directly and indirectly further bitch-slap Russia by attacking the Shayrat airbase in Syria, illegally seizing Russian diplomatic property in the U.S. (e.g. the Russian consulate in San Francisco, where he insultingly gave Russian personnel only two days to vacate their building); in each case clearly making it known that the HE HIMSELF made these decisions of his own volition.

    “The CIA Director actually denounced the elected American president as a traitor. The defeated Democrats, seeing the formidable military/security complex aligned against Trump, jumped in to recover their political loss by concocting ‘Russiagate.’”

    So his every sincere pro-American initiative was not just stymied but reversed by bad actors who somehow continually force him to do reckless anti-American acts (e.g. withdrawing from the INF treaty) that go against the spirit and word of everything he promised, yet he desperately seeks re-election? I’m skeptical.

  5. anonymous[400] • Disclaimer says:

    It’s only a matter of time before the US dollar loses its world reserve currency status. This of course would be bad for Americans. However, instead of planning for the future the policy seems to be to fight to keep it as such, a losing battle in the long run. This ensures increasing conflict with countries who may try to bypass or opt out of the dollar system. US companies showed their loyalty by rushing their production to China and handing over a lot of knowhow and intellectual property in the process, being glad to dump troublesome American workers. The US government allowed all this to take place. Having become dependent upon China to the extent we have would result in bad consequences should any cold or trade war ensue, as pointed out in the article. We’re pretty much stuck and so have to find a way to manage without resort to bluster.

  6. antibeast says:

    The US trade deficit with China is not China’s fault. It is the fault of the global US corporations that offshored their production to China. When the offshored products, such as Apple computers and iPhones, are brought back to the US for sale, they count as imports. Thus, it is US firms such as Apple, Nike, and Levi that are responsible for the US trade deficit, a responsibility shared by neoliberal economists who touted globalism, which has come at the expense of first world work forces.

    Correct. Some 60% of the so-called “Chinese” exports to the USA are actually US goods such as Apple’s iPhone which account for the bulk of the alleged trade deficit between the USA and China. US politicians are blaming China for outsourcing which is a US invention.

    Additionally, China has a range of retaliatory measures. The production facilities of many US corporations, such as Apple, are located in China. China is the favored location for the offshored production of US corporations. These facilities could be nationalized. In a number of cases the production facilities are not owned by the US firms. Instead, the US firms contract out their production to Chinese firms. China could stop the production of the products for US firms, steal the patents or brand name, or simply continue the production and re-brand it as a Chinese product. As the US does not respect laws of other countries or international law, there is no reason for China to respect US law.

    This is a stupid idea because US MNCs use offshore entities to register their foreign investment in China. For example, Apple (Ireland) not Apple (USA) does business in China so that all profits earned in China are booked to Ireland not the USA. So why should the Chinese government target US MNCs which are private entities registered in offshore tax havens anyway? The US government owns very little of the US economy so the only thing the US government could do is to tax US MNCs or impose tariffs on US goods manufactured in China and imported back to the USA.

    The Chinese have mistakenly purchased a number of assets within the US. If the values of these assets equal or exceed the US assets located in China, the retaliatory policy would not pay for China.

    Chinese companies — whether State or private — own very little assets and does very little business in the USA. US MNCs own far more assets and does far more business in China but targeting those US MNCs for asset seizure is a stupid idea.

    Globalism gave China its manufacturing base. China should use this base to develop its massive consumer market. It is not globalism that any longer serves China’s interest. With the largest consumer market in the world, China should shift its focus to internal development. The internal market is so vast that exports should be of no concern to China. China, awash in US dollar reserves that Washington threatens to disavow, has no need for foreign reserves. China’s strength is in her economy. This strength should be developed. The intelligent path for China is to throw away neoliberal junk economics and develop a Chinese economy.

    That’s exactly what China has been doing for the past ten years since the GFC in 2008 forced the restructuring of China’s economy away from low-value export-oriented labor-intensive manufacturing industries to high-value advanced manufacturing, technology and services industries serving the domestic-market. Since 2014, China has stopped piling up USD reserves and has been expanding its trade/investment with Europe, Asia, Africa and Latin America which was the impetus behind Xi’s New Silk Road and China’s BRI.

  7. By the internal logic of his own article, the author should conclude that losing international reserve currency status would be a good thing.

    Erecting a cold war style firewall between our economies would be totally beneficial to the American nation in countless ways. Why is PCR not cheering it?

    Having a pro-reserve currency stance is textbook brainwashing: adopting a position at odds with your own interests, beneficial to those who would exploit you.

    • Replies: @animalogic
  8. America can’t do wthout an enemy. An enemy is what funds America’s largest industry—military spending—and an enemy provides a national security focus which holds our tower of babel together.

    Second largest industry.

    China makes a good enemy. If we need one, China is better than Iraq was. We could shoot up Iraq without any blowback. Attacking China would be out of the question. This doesn’t preclude belligrent posturing and bullying up to a point.

    To illustrate why this is so, consider what might happen if China really decided to infect the rest of the world with multiple variations of Corona virus. At the same time. Think about recent events with only one virus.

    How would you ever be able to prove they did it deliberately, and if you did, what could you do about it?
    Nuke them? I don’t think so.

  9. Ko says:

    I’m calling bullshit on anyone suggesting China is not an enemy, at least economically. The globalists have fallen all over themselves trying to suck up as much Chinese money as they can get, selling American technology, and giving trade benefits that hurt the US economy. America no longer produces anything because everyone from Bill Clinton to Obama, and Walmart to the thousand of other companies who moved to China, have destroyed production, killed jobs, unions, and safety. Screw China. Trump inherited the corruption of the past 32 years of Bush-Clinton corruption. Screw globalism, and screw globalists. And while I’m at it, screw the Chinese, communism and the US Democratic National Communist Party, aka the Democrats.

    • Agree: Getaclue
    • Troll: Harold Smith
    • Replies: @d dan
    , @Anon
    , @animalogic
    , @Biff
  10. Bob Gwen says:

    Problem with the above plan is that once China has decoupled from the US, the US would proceed with bombing Chinese interest abroad. All in the name of spreading freedom. The first targets are China’s overseas source of raw materials, particularly oil. This has actually already been happening for decades.

  11. anon[225] • Disclaimer says:

    Ko, you can be China’s enemy all you want. They don’t give a shit. That goes for the castrated US government too. You trying to understand China is a like a dog trying to figure out why he shouldn’t chase cars. (Have you ever been there? Do you speak any Chinese? Do you know any native Chinese?) They are a different species than you. Their IQ is way higher, for one thing.

    Unlike your state-imposed culture, China is not constantly obsessing about threat threat threat, who’s the threat, are they the threat, are they the threat? China acts in accordance with its Five Principles of Peaceful Coexistence. That’s utterly alien to you because of the US government propaganda swamp you live in. Four of the five principles are straight out of the UN Charter. The fifth I’ll leave as an exercise for the reader. That’s also inconceivable alien to US indoctrination. They’re going to kick your ruling class’ ass without firing a shot. And if you know what’s good for you, you’ll take that opportunity to overthrow them like the Russians and Romanians and Slovenians and East Germans and Czechs and Slovaks did to their failed states.

  12. d dan says:
    @Ko

    “I’m calling bullshit on anyone suggesting China is not an enemy, at least economically. “

    And I am calling you bullshit for calling others bullshit. China is a competitor, not an enemy. China is no more enemy to US than Germany or Japan are. Competitors can compete in a friendly and fair manner – sometime even mutually beneficial. If you think China doesn’t compete fairly – then it is called a dispute – and it requires diplomatic skills and negotiations – not belligerence.

    People like you just want to have an “enemy”, no matter what. It helps to distract you from your own internal problems and allow people NOT to take responsibility of their own failures.

    • Replies: @Getaclue
  13. swamped says:

    “China has won from globalism while America has lost”…which is what President Trump & key advisors like Peter Navarro, have been trying to tell everyone all along. And as the President has repeatedly reminded, “The US trade deficit with China is not China’s fault. It is the fault of the global US corporations that offshored their production to China”…& the trade negotiators that let them do it. As that doyen of establishment economic orthodoxy Paul Krugman admitted in an opinion piece in Bloomberg last fall:

    “To make partial excuses for those of us who failed to consider these issues 25 years ago, at the time we had no way to know that either the hyperglobalization that began in the 1990s or the trade-deficit surge a decade later were going to happen. And without the combination of these developments, the China shock would have been much smaller. Still, we missed a crucial part of the story. ..What else did the 1990s consensus miss? A lot. Developing-country exports of manufactured goods grew far beyond their level at the time that consensus emerged. The combination of this rapid growth and surging trade imbalances meant that globalization produced far more disruption and cost for some workers than the consensus had envisaged.”

    Therefore, “China has won from globalism while America has lost”… thanks in part to ‘consensus’ economists like Krugman & his ilk who helped to grease the skids, but even now they are not about to join the protectionist camp. So you can side with the President or you can side with Krugman but it’s unlikely that China will “cash out of globalism and construct its domestic economy” in order to “avoid the American decline.” Or build a free domestic society. More likely China will continue to do what is “advantageous” for the totalitarian CCP. And so the Chinese state will naturally be an enemy -just like the U.S. at times – to anyone, at home or abroad who values individual freedom.

    • Troll: Harold Smith
  14. Getaclue says:
    @d dan

    Except China doesn’t do this — they don’t play fair and allowing flights out of WuHan to the USA and Europe AFTER they knew this contagious CVirus was present before quarantining WuHan wasn’t “fair” either, it was Mass Murder — even the pro-ChiCom CNN has weighed in on the Tech stealing, because it is so obvious even they can’t deny it — there is lots of research on this out there just look — it’s a fact: https://money.cnn.com/2018/03/23/technology/china-us-trump-tariffs-ip-theft/index.html

    China doesn’t play fair with Minority Groups in China, it doesn’t play fair in Trade, and spreading a Plague Worldwide purposely after they knew about it wasn’t being “fair” either — the Chinese Communist Party is not designed for “fairness”.

    • Troll: d dan
    • Replies: @antibeast
  15. antibeast says:
    @Getaclue

    Here comes the chinadidit trolls!

    • Replies: @Astuteobservor II
  16. Anon[368] • Disclaimer says:
    @Ko

    Ahh a de-coupler. I wish the USA would do that quicker. All Chinese students and professors should leave the US ASAP so they can help China flourish. And don’t stop there…de-couple Hollywood too. That way China doesn’t have to import that type of degeneracy either.

  17. Franz says:

    The US trade deficit with China is not China’s fault. It is the fault of the global US corporations that offshored their production to China.

    You bet!

    China did not come to the USA as a thief in the night, they took what US corporate jackals gave them in broad daylight.

    Rather than seeing China as an “enemy” why not look at the box they put us in (with lots of American plutocrat help) as an opportunity to wisely re-industrialize along state and regional lines? The current mess can be used as an excuse to keep essential industries as decentralized as possible.

    The US weakness was having big manufacturing sectors in mostly one place. Steel: Pittsburg. Cars: Detroit. When industry was banalized, it should have been scattered all over the nation, wherever there was a population they could serve. Outsourcing and the insane profits a few made on it stiffed the whole nation of a true industrial revolution. One that is still possible.

    • Replies: @Ann Nonny Mouse
  18. @Jedi Night

    “By the internal logic of his own article, the author should conclude that losing international reserve currency status would be a good thing.”
    I won’t debate the “internal logic” of the article — you maybe right. But — PCR accurately describes the inevitable blowback of the lose of reserve currency status. Depending on the time-line of such a loss, the US could be ground up.
    It’s hard to over estimate the advantages of having a reserve currency… it’s not quite a license to print money, but it’s close…. Expect a wall & main street collapse if such an outcome comes to pass. (the US has become fat & flabby, spiritually corrupt, on the back of its post WW II advantages)

  19. @Ko

    Hey Ko, you admit the US did itself in economically, so why jump to China “the enemy” ?
    Implied, is that the US has no other option than this “china = enemy” is the path to take.
    Why shouldn’t the US “reconstruct” itself, & try to beat China at the “economic” game?
    The “enemy” path is an admission of US corruption. It’s an admission that the US is entering it’s senescence.

  20. Biff says:
    @Ko

    Democratic National Communist Party, aka the Democrats.

    Partisan ideological idiot! The democrats are owned by the same people who “OWN YOU”!
    Your enemies are a distraction invented by your “OWNERS”!

  21. @antibeast

    If only they were smarter, make good anti China comments. The comments would at least be interesting to read.

    • Replies: @Erebus
  22. This is amusing – the project to frame China for CIA germ warfare is such a hopeless global laughingstock that the Beast is using it to shore up Bellingcat’s ruined reputation.

    https://www.thedailybeast.com/pentagon-contractors-report-on-wuhan-lab-origins-of-coronavirus-is-bogus?ref=home

    We’ve got the CIA’s hipster propaganda apparat debunking CIA’s own failed war propaganda with “expert” judgment from CIA’s discredited Syria propaganda platform.

    Outside CIA’s iron curtain, the facts are clear. Biowarfare researchers cooked this up and released it on the world.

    https://arxiv.org/ftp/arxiv/papers/2005/2005.06199.pdf

    The Burnett Womack Center. Battelle Life Sciences. CIA DO. Hostis humani generis. Gina got away with torture (so far,) but she really caught a droopy tit in the wringer this time.

  23. Why should the USA and China be enemies at all? An article by Sylvain Laforest suggests action by Trump and Xi, joined by Putin and Modi, that could be transformative not only for their four countries but for the entire world. Paired with other moves, he suggests telling the globalist bankster class to simply piss off:

    The world will change drastically between 2020 and 2024. Trump’s second and last mandate coincides with Putin’s last mandate as President of Russia. There may never be another coincidence like this for a long time, and both know that it’s now or perhaps never. Together, they have to end NATO, Swift, and the European Union should crumble. Terrorism and anthropogenic global warming will jump in the vortex and disappear with their creators. Trump will have to drain the swamp in the CIA and Pentagon, and he has to nationalize the Federal Reserve. Along with Xi and Modi, they could put a final end to private banking in public affairs, by refusing to pay a single penny of their debts, and reset the world economy by shifting to national currencies produced by governments, as private banks will fall like dominos, with no more Obama-like servant to bail them out at your expense. Once this is done, unbearable peace and prosperity could roam the planet, as our taxes pay for the development of our countries instead of buying useless military gear and paying interests on loans by bankers who didn’t even have the money in the first place.

    Full article here: https://orientalreview.org/2019/11/15/about-trump/

    • Replies: @Astuteobservor II
  24. Erebus says:
    @Astuteobservor II

    When the facts are on your side, pound the facts.
    When the law is on your side, pound the law.
    When neither the facts nor the law are on your side, pound the table.

    Pounding the table convincingly requires talent. Talent costs money and goes where it’s most needed and most advantageously leveraged. We get the B-Team.

    • LOL: Biff
  25. anon[230] • Disclaimer says:

    Spot on Paul. Even before Trump’s belligerence, factories were moving to Southeast Asia seeking more lucrative labor arbitrage causing China’s growth to decline. This may even have been why China reversed course from its initial Covid-19 response and instituted a lockdown – control growing dissent over decreasing economic opportunities. Although I agree that China needs to stimulate its domestic market to be less dependent on foreign markets, its not clear to me what steps Chins can take to do it. Any ideas Paul?

  26. @Buck Ransom

    Because USA doesn’t want to go from super power to major or regional power.

  27. @Franz

    Legislate that a corporation is not a person so does not have to right to invest in other corporations. And de-merge all past corporate mergers. The mere existence of giant multinational corporations … They wouldn’t exist.

    • Agree: Franz

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