This article was originally published by Brandon Smith at Alt-Market.com
Since the beginning of this year, I have been warning that trade tariffs initiated by Donald Trump would develop into a full-blown trade war with China, and perhaps other nations, and that the timing of this trade war is rather suspicious. Suspicious how? Almost every instance of further escalation was made by Trump around the exact time that the Federal Reserve was also making a large cut to its balance sheet or raising interest rates. Instead of focusing on the fact that extreme volatility has returned to markets because central banks are pulling the plug on life support, the mainstream media is holding up the trade war as the ultimate culprit behind the accelerating crash.
In other words, Trump’s trade war is acting as a perfect distraction from the crisis which the banking establishment has now deliberately triggered.
The initial response to my suggestion by a minority of liberty movement activists and skeptics was outright denial. Some people argued that the trade war would be over before it even began and that China would immediately capitulate in fear of losing the U.S. consumer market. Others argued that the trade war “had been started by the Chinese years ago” and Trump was simply “fighting back.”
Clearly, the trade war is not fading away as many assumed. As I predicted, it is only continuing to grow. And the notion that a trade war is necessary at this time in defense of the U.S. economy ignores certain realities. For example, the trade deficit itself was never “theft” by the Chinese, but a BARTER between the Chinese and the U.S. government and U.S. corporations. In exchange for the Chinese and other trade partners using the dollar as the world reserve currency (and petro-currency) and buying up US treasury debt, U.S. elites have arranged a deficit advantage for China. One could also add China’s cheap labor and low cost manufactured goods as part of that barter as well.
While the American working class got the short end of the stick in this deal, the government and the corporate cabal certainly benefited.
Now, if Trump had pressured corporations to bring manufacturing back to the U.S. in order to reap the rewards of his dramatic tax cuts, tariffs after the fact might make a little more sense. With production back on U.S. soil we would have more economic stability to weather future crisis events. Instead, Trump gave corporations a tax cut for nothing. And instead of using that extra capital to innovate or add value to the real economy, companies used the money to continue artificially propping up their own stock prices through stock buybacks.
It should be obvious to most people at this point that Trump has no intention of “winning” the trade war. As I noted just after the G-20 conference and the dinner negotiations with China:
“Of course, the outcome is being touted by both sides as a “win,” but it is clear that the goal was to head fake the public rather than actually resolve trade disputes. Will the 90-day delay be seen as “good for markets?” Possibly. Though, the housing market, auto market, and credit markets will continue to crash as they have been for the past few months. I expect this development might buy stocks another week of rest, but little else. As the next Fed meeting approaches this month and it becomes clear that they intend to continue hiking rates into 2019, the false optimism will fade. I also expect that negotiations with China will fall apart yet again well before the 90-day delay is over…”
The G-20 honeymoon ended even faster than I imagined.
The arrest of Chinese CFO of Huawei Technologies, Meng Wanzhou, has immediately destroyed any possibility of legitimate diplomatic negotiations going forward, and this seems to be by design. The 90 day “truce” set apparently by verbal agreement during G-20 is likely over mere days after it started. National Security adviser and CFR ghoul John Bolton admitted in an interview with NPR that he was aware that Canada was preparing to arrest Meng at the request of the U.S. while he was eating grilled sirloin with the Chinese. The claim that Trump was not aware of the situation, to me, sounds absurd.
The detainment of Meng and the targeting of Huawei comes with a host of significant potential consequences. First, as noted the trade truce is likely dead on arrival. While Trump continues to claim that progress is being made and that “soybeans are being sold”, we have heard this kind of rhetoric for the past several months. These claims are designed to produce headlines that create a steam valve for stock markets, bringing them down slowly instead of collapsing them outright.
Second, the possibility of further escalation of tariffs is much higher (U.S. farmers should not expect a reprieve anytime soon, despite rumors of “progress”).
Third, there is a chance that China will retaliate by snatching up U.S. corporate representatives (many of them just as embroiled if not more so in criminal enterprises). This is a development I realize the average liberty activist could not care less about, but the average American will see such actions as a slight by the Chinese against the U.S. as a whole. The narrative once again turns to the idea that China should be our focus rather than the banking elites. Thus, the false East/West paradigm is further entrenched in the American mindset.
If this trend continues, the trade war will eventually expand into a war on the U.S. dollar itself, and when it does, the U.S. will suffer the worst fiscal crisis in its history. Without the world reserve status of the dollar as well as continued foreign investment in U.S. debt, what’s left of our economy will disintegrate.
Meng’s arrest is a deliberately engineered “linchpin.” I have written extensively in past articles on DARPA’s “linchpin theory,” which is a kind of propaganda exercise more than a theory. According to DARPA, overly complex systems invite growing instability, and like a chain of dominoes, the smallest part of that system could be knocked over by a minor event causing a chain reaction that ends in total collapse.
Of course, this is a misrepresentation of reality. Complex systems do not invite instability, they create redundancy, making the system stronger and more resistant to disasters. Instability is actually caused by oversimplification of a system; that is to say, CENTRALIZATION is the true cause of large-scale crisis. As we have seen time and time again with globalism, the more economically interdependent and centralized the world becomes, the more vulnerable each nation is to the calamities of other nations.
DARPA loves centralization and is certainly not going to point a finger at it as the cause of global distress. And so they have created a scapegoat of decentralization through linchpin theory.
Linchpin theory also asserts another lie — the lie that most disasters are a product of “random chance.” The problem is that the only way that linchpin theory works is if disasters are created through conspiracy, not coincidence.
A system must be purposely weakened over time to the point that any crisis will translate into a collapse of the entire edifice. Central banks have done this quite expertly through the use of debt-based bubbles, followed by fiscal tightening into economic weakness. When you build up an economy like a great Jenga tower and begin pulling the most vital pieces in a calculated manner, eventually it’s going to come crashing down.
So which piece represents the supposed “linchpin” in our system today? Well, any piece might do the trick, but the arrest of a Chinese corporate executive (which the Chinese will consider hostage taking) at the very onset of a fragile trade truce is an excellent catalyst and also an excellent distraction.
As Meng sets bail awaiting trial and possible extradition, it does not matter if she leaves for China or remains to be prosecuted. If the Chinese arrange for Meng to escape her surveillance and escape Canada, then this will be seen as damaging to trade negotiations on the American side. If she stays and is held up in what will be a very drawn out public trial as an example of Chinese trade villainy, this will be seen as damaging to negotiations on the Chinese side. Either way, the negotiations are walking dead.
But here is where we need to ask the most important question of all questions: Who benefits?
In my article ‘The Everything Bubble: When Will It Finally Crash?’ published in September, I predicted that:
“The Fed’s neutral rate efforts suggest a turning point in late 2018 to early 2019. Balance sheet cuts are expected to increase at this time, which would also expedite a crash in existing market assets. The only question is how long can corporations sustain stock buybacks until their own debt burdens crush their efforts? With such companies highly leveraged, interest rates will determine the length of their resolve. I believe two more hikes will be their limit.
If the Fed continues on its current path the next stock crash would begin around December 2018 into the first quarter of 2019.”
The timing of the arrest of Meng coincided perfectly with the Fed’s expanded balance sheet cuts. The Fed has now shifted from $30 billion per month to $50 billion per month in dumped assets. While Trump and the mainstream media hyper-focus on interest rates, there is little to no mention of the OTHER fiscal tightening that the Fed has undertaken.
The Fed is also set to raise interest rates to meet their neutral rate of inflation this month. This is something that has not happened in decades. And, corporate stock buybacks are dying in the last quarter of 2018, as the cost of borrowing to prop up equities is now too high. In response, stock markets are beginning to plunge, and this time there will be no significant bounce back because without Fed stimulus or buybacks, there is nothing left to keep things afloat.
To reiterate, the trade war is hitting a nexus, a point of extreme escalation just as the central bankers are about to kill the U.S. economy by tightening into economic weakness. The Meng snafu will be used by the mainstream media to draw the public’s attention away from central bank activities and toward the trade war. Everything Trump is doing is HELPING the banks to hide their culpability for the crash.
Why do the banking elites want a crash in the U.S.? There are numerous reasons and gains to be had. For an in-depth explanation, I recommend my article ‘The Economic End Game Explained.’ To summarize, globalists are setting the stage for what they often refer to as the “global economic reset.” This reset is essentially a major crisis event which will be exploited by globalists to centralize the system even further, into a one world currency and one world economy, governed by the banking elites through institutions like the IMF and the BIS.
The U.S. economy and the U.S. dollar must be diminished in order for this to happen. And with conservatives supposedly “in control” of the U.S. government and the U.S. economy at the time of the crash, guess who is slated to get the blame? I’ll give you a hint: Not the central bankers…
In the meantime, the globalists hope that the majority of the world will buy into the fallacy of linchpin theory. They hope everyone will blame decentralization and “complexity” instead of centralization and over-simplicity in the system. And it is certainly possible that the hijacking of a Chinese corporate official will be held up as one of the dominoes that started the collapse.
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Back to the basic problem is the Central Bank. It’s all one bank with many names.
Somebody should have put an arrow through that red shield way back before Napoleon was in long pants.
It’s a bit late but there is no time like the present. End the Fed.
Trump is a mixed bag. I really like that he has identified the Fake News. I like that he said there were good people on all sides but I would have liked it more if he had said that the white nationalists were good people. I guess we have to be content with what we have. The alternative would have been Hillary.
Looking at symbolism
I see coinage being set free. Article 1 Section 10….
End the Fed.
You won’t have to worry about Trump much longer, he’s on the way out as soon as the Dems take over in January.
Another financial corruption investigation has been launched on him to add to everything already in progress.
Further, if he actually makes good on his threat to shut down government if he doesn’t get border wall financing (something that he is unlikely to actually do) then it will give both the Republicans and Democrats a viable reason to impeach and remove him from office and restore valid government processes in Washington.
The right wing movement will die along with him, Trump being their last desperate attempt to take over the country. Things will be returning to normal by the end of next year, I think.
That’s all we need is a libturd named anonymous. We’re trying to SAVE this country, NOT DESTROY IT, moron. We don’t want your socialist BS.
Indeed, Communist China awaits leftist imbeciles. We need to round them up and ship them off to a communist country where they can be ‘happy-useful-idiots’ and live in the most oppressive of countries ever.
China, Russia, North Korea, Venezuela ?
Ready the planes.
Trump is a puppet and a distraction from the banksters. They want him in the White House for the full term. An impeachment would just be another circus to distract people. But it would go nowhere, just like Clinton’s impeachment.
The Senate will not impeach him, but the House will. That is how Slick willie managed to stay in power. 🙂
“For example, the trade deficit itself was never “theft” by the Chinese, but a BARTER between the Chinese and the U.S. government and U.S. corporations. In exchange for the Chinese and other trade partners using the dollar as the world reserve currency …”
Yes, the trade deficit was never “THEFT” by the Chinese. But neither was it a “BARTER”. In a barter, two or more parties exchange goods and/or services at market value where all parties are informed about the value of the transaction, negotiate in good faith, and receive either a good or service of comparable value.
The dollar was already the world’s reserve currency. China had no choice but to accept it if China wanted to participate in the USA world economy, as gold had already been removed as a facilitator of global transactions. There was no substitute.
It was a BRIBE (bribery is what the NWO does best) to induce China into becoming a capitalist country because the NWO Globalists wanted access to 1.2 billion potential customers and slave labor to massively increase their profits; and because they MISTAKENLY believed that capitalism could and would eventually undermine and replace the Chinese Communist Party.
It still might. But not without a Christian religious movement throughout China: a REVIVAL as it were, but Xi is clamping down on all opposing ideologies. That said, Christianity has flourished HISTORICALLY where it has been repressed by the local authorities. Will that happen in China ???
China must capitulate to the USA and face massive disruption to it’s economy, currency, & financial system; or the USA will continue to decline in power & influence as its wealth is siphoned off by the Chinese. Neither is likely with both Xi & Trump in power: both of whom are ardent nationalists. Eventually this disparity between the two powers will come to a head.
Make no mistake. The PTB will not give up their power under any circumstances and they have still have the power to reduce China to a third world economy, while lifting India and/or other nations as China recedes.
It is unlikely that current differences can be resolved amicably. War is coming. Maybe not this next year, or the year after. Maybe not the year after that. But war is coming between these two adversaries. China is stalling for time hoping that TRUMP will be removed from power. Let me note here that SO FAR every leader who has opposed TRUMP in the West; indeed every adversary whether at home or abroad has succumbed for one reason or another after opposing him.
War with China, as distasteful as that may be, is better sooner rather than later if the USA is to win the war and dominate the planet. In the end there can be only one. 🙂
Wrong again DK. The dollar wasn’t the world reserve currency until a few years after Nixon took it off the gold standard completely in 1971-1972. That’s when they arranged the trade deals with China and the dollar as the petrocurrency with the Saudis. It all happened at the same time and the China deal was essential. Now they don’t need the dollar anymore. They’re ready to go completely global with one economy, one currency and one government.
This war with China will keep going until TPTB have eliminated the US as a major economic center. Then they’ll introduce their NWO model which China is already following. Your American exceptionalism is like a mental illness that keeps you from seeing reality.
“Wrong again DK. The dollar wasn’t the world reserve currency until a few years after Nixon took it off the gold standard completely in 1971-1972. That’s when they arranged the trade deals with China and the dollar as the petrocurrency with the Saudis. It all happened at the same time ….”
The dollar has been the DE FACTO world currency since WWII.The agreement with the Saudis trace back to King Abdallah when the US agreed to defend Saudi Arabia after the British could no longer afford their Empire.
No, the deal with China was NOT struck in 1971-72 with Nixon. China did not begin to participate in the world economy in a meaningful way until GHWB became President in 1988.
GHWB brokered the deal and INITIATED ” Most Favored Nation Status” for China. GHWB ordered American defense contractors to set up parts shops in Chinese FREE TRADE ZONES almost 20 years after Nixon.
For example, Honell Avionics on West Bell Road in Phoenix AZ shut down its operations there and transferred 55 high tech. high paying manufacturing jobs to China. This was one of the first transfers of jobs & technology to China. Even NAFTA was signed before these events; and that’s when the Chinese jumped at the chance to participate in the USA world trade system.
(NAFTA was America’s Belt & Road Project and the Chinese could see the writing on the wall. They were broke and in complete disarray after MAO & the Gang of Eight. China was basically a failed state at that point and on the verge of complete Chaos. They had nothing to lose and everything to gain from implementing a capitalistic economic system, if only on a trial basis in the Free Trade Zones.
That experiment was wildly successful and was expanded from Shanghai to seven other locations and then eventually across the entire country as the NWO rushed to magnify their profits with cheap labor and a manipulated currency.) 🙂
Still wrong. The Sterling was the defacto world reserve currency during WWII, not the dollar. The Sterling lost world reserve status after WWII, but the dollar the dollar did not truly take over the role until it had petrostatus, which did not happen until the early 1970’s.
The economic relationship with China started in 1972 with Nixon opening direct diplomatic relations. Everything that happened after came out of that meeting, including how trade developed.
Kissinger’s deep involvement in the economic side of negotiations shows just how interested the globalists were in locking down China into the NWO. Now they are going to end the dollar’s role.
“They’re ready to go completely global with one economy, one currency and one government.”
FALSE. ABSOLUTELY FALSE. THEY ARE NOT READY AND I AM ASSUMING THAT BY “THEY” YOU ARE REFERRING TO THE GLOBALISTS. RIGHT NOW THE GLOBALISTS ARE IN COMPLETE CHAOS.
The One World Currency already exists. It is the US dollar. Why create a different one ??? The dollar has worked amazingly well for the One Percent. One World Government is a FANTASY. Never happen. Simply because the people who populate nation states around the world want independence and do not want to relinquish their sovereignty. The European experiment is OVER.
There is a framework in place for a One World Economy, however it is flawed and that is what TRUMP is attempting to fix.
There will never be a single currency. EVER. Logistics & monetary authority aside, a single global currency would eliminate the largest share of the financial communities profit: FX.
The closest that it will ever come to a single currency is when a SINGLE digital currency is married to quantum computers and OVERLAID on the existing financial infrastructure as I have described here repeatedly. 🙂
More disinformation from DK. The globalists aren’t “in chaos”. Not at all. What evidence do you have to support that? They’re going right along with their plan for a one world order just as they always have. The IMF is even publicly talking about how they are planning to switch to a digital monetary set up, meaning a global cryptocurrency.
You can deny it all you want, but this is what the globalists are doing right now. Your American exceptionalism makes you blind to what TPTB are doing right in front of your face. The dollar’s days are numbered.
They’re getting ready to pull the plug.
ZOG-Zombie USSA walking off a cliff.
This guy is pretty harsh on Trump. I think Trump is thinking long term. Like Andrew Jackson, long term.
This kid, Brandon, is smart. But I am a skeptic. I am not going to just bend over and let the globalists win. Why is Brandon ready to concede defeat, so quickly? Odd. For a true patriot.
Bitch I bet ud bend over if you saw me at the bar hittin on you.
Trump ain’t gonna help white people.
Eisen, go back to sleep.
You are the Walter Mitty of the SHTFplan website.
If you’re not smart enough to realize that Trump is a puppet, then you’ve already been defeated by the globalists. True patriots accept the reality of the problem in front of them because that’s the only way to solve it.
TRUMP is not a puppet or the Globalists, LSM, Deep State, FBI, and the Intelligence Community would not be working so hard to stop him in every way possible.
In a world full of globalists, you cannot be a “puppet” and be a Nationalist & a Patriot. Wrong again MM !!! 🙂
Endless disinfo from DK. Trump is definitely a puppet. Controlled opposition. He was saved from his debt in his Taj Mahal casino in the 1990’s by Wilber Ross, a Roathschild banking agent. Ross is now the Commerce Secretary in Trump’s cabinet, and Trump has brought in a bunch of other banking creeps and CFR people including Kudlow who is a former fed official, Mnuchin who is Goldman Sachs, Bolton who is CFR, etc.
If Trump is not a puppet, why is he surrounded by puppet masters?
I’m wondering whether the Western businessmen knew about the Chinese businessman, who was detained, and they decided to go to China, anyway.
Also, why is any of their stuff allowed to be sold, here, at all, if they are openly talking about going to war.
Another concern is that Trump is going forward with the plan to put in 5G Wireless Frequency. In China, pregnant women wear special protective clothing in the form of an apron.
WiFi is dangerous, especially to children and babies. Other Countries are limiting its use and keeping it out of places where children will be.
The effects are cumulative over time. Damage to DNA, brain damage, immune system damage, sterility. This new 5G is a radar weapon for crowd control. It can cause skin irritations, hallucinations, ringing in the ears, Cancer and illness.
We don’t need the improvement in reception. We can’t be stupid enough to trade our survival for better improvements for Bluetooth. Yeah, it causes damage to your teeth, and makes you have a hard time with fat metabolism, sleep, and more.
Forced vaccines could be next as the effects of 5G make people suffer from an invisible force and paid scientists confuse the public with lies about the real cause, 5G WiFi.
It really is time to move far out of urban areas. Either that or put protections in your house to deflect WiFi which would be expensive.
I made many of the same points Brandon did in this article, a couple articles past, and was REALLY criticized. Thanks.
Don’t pat yourself on the back too hard. There is a good reason why Brandon Smith’s initials are B.S.
It’s amazing what convoluted “theories” you can dream up if you’re trying to reach a preconceived end.
Smith is always right on his predictions. I don’t think I’ve seen him make a bad call yet. Ankle biting him with preschool insults doesn’t change his winning track record.
Brandon does make some good/interesting points from time to time but Stuart you are absolutely correct when you talk about his “convoluted theories trying to reach a preconceived” conclusion.
Brandon is interested in economics and that is great, but he has NO formal education in these related subjects and NO experience in the financial industry to draw upon. That’s OBVIOUS.
Bottom line it shows to those who are. If I were one of the knowledgeable contributors at Zero Hedge I would be mortified to think that they run his rantings alongside of mine. Really.
Sadly, his articles for the most part are the moral equivalent of CNN, except his is based upon ignorance and CNN is pure, deliberate, propaganda. In both cases the audience is poorly served. 🙂
Boom! On the money! Trump is just another banker owned President. He is the ultimate distraction for the financial tsunami that’s coming.
Far more important is the fact that Israel, China and Russia are a Bolshevik Communist cabal that are aligned AGAINST the United States and Europe.
Israel steals the technology and sells it to Russia and China. The trade war is moot compared to this.
Ted Lieu, a HR from California is obviously a Chinese agent working toward the Communist end-game with Israel and Russia. His sponsorship of H.R. 6725 United States-Israel Directed Energy Cooperation Act of the 115th congress is proof of this.
DEW has been used in California to start most of the ‘wild’ fires over the last two years – at least.
Ted Lieu needs to be shipped off to the ‘Hotel Guantanamo’ as soon as a plane is available.
The Bolshevik corporation, Boeing, has just opened an 737 production facility in China. Just another fine example of treason by the ‘elite’ class.
A trade war is a joke. An all-out hot war with Russia and China is the only way to ‘solve’ the Bolshevik Communist problem. And subsequent invasion and subjugation of Israel will be necessary.
All true. China IS the New World Order. Dumb Americans need to get that into their thick skulls.
I remember travelling around China on business and everywhere there were giant screens with the most douchy American men (all white by the way) pitching for some product or service. They all had that fay, liberal way of talking. I would even be in empty squares – enormous squares – and the screens would be blaring away.
So, let’s be fact-based. This arrangement with China is tight and is totally driven by the needs of the American elite. They screwed the American working class, but to be fair, by the 1970s the American working class were a pain in the ass, demanding high wages, going on strike, taking drugs while on shift, ‘going postal’ etc. Don’t get me started on the British working class, an even more scummy group of dental-hygiene-wanting wastrals and low IQ, low gene pool morons (Brexit is going to corn-hole them like Mr T in the Supermax prison showers).
America’s business elite had had enough. They turned to China to be the workshop of the world. And the Chinese have lived up to expectations, being smarter, more hard-working, more ambitious than Americans. Asians will be the class that run the show going forward.
It is, to be frank, too late. The technology, the finance, the structures are all in place and this beast is going ahead on full steam.
Now let me get this straight Frank…you’ve been frisked by female “hijab” wearing customs officers. When challenged to prove this (even when there was a big no risk to you bet) you ducked the issue.
You stated that you travelled freely in the USSR when it was in virtual shutdown to all from the west.
You’ve worked for secret government organisations.
High level building projects? No problem to Frankie.
You’ve also been declared bankrupt in Britain in the 1970’s, hence your virulent hatred towards Britain, even though
your bankruptcy was due to your own financial ineptitude.
Now you’re telling us you were a businessman operating in China. Pray tell me, whereabouts in China did you do business…I’d love to swop travel stories with you.
You also have a visceral contempt, verging on hatred for women, yet claim to be married. No woman would put up with your attitude!
All of the above is easily checked out by looking in the archives of this site.
To be frank, Frank, you are full of BS!
Frank you are right about the American working class of the 1970’s. Labor had too much power and workers were doped up half of the time …. that was the half of the time that they actually showed up for work; but that isn’t justification for the PTB to commit economic treason against the Nation.
Reagan killed the Unions and new regs were put in place to monitor drug users at work. It basically comes down to greed with American Capitalists siding with Global Fascists to magnify their profits.
Treason can only be forgiven by the end of a rope. 🙂