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WHY KOREAN TENSIONS SHOULD SOON EASE - effect on Dollar and Precious Metals...

By: Clive Maund

 -- Published: Tuesday, 5 September 2017 | Print  | Disqus 

The tensions centered on the Korean peninsula should soon ease, leading to a rally in the dollar and a (mild) reaction in Precious Metals and other commodities like copper, for reasons that we will consider in this essay.

There can be no denying that what we have previously referred to as “The Empire” is intent on world domination. The evidence is there for all to see in the form of a vast network of military bases spread across the globe, and a history of invasion of various countries by the Empire in recent years in pursuit of its geopolitical objectives. The economic engine that drives the Empire and supports its imperialistic ambitions is the dollar, whose Reserve Currency status means that infinite quantities of it (or proxy derivatives like Treasuries) can be printed up and swapped for goods and services with any and all countries around the world, and it is this dynamic that supports the formidable US military machine.

The last Empire that tried to take over the world was Nazi Germany, which recruited Japan to take over the Far East, so that together they became a global axis. As we know this led to an enormous titanic struggle for over 5 years to contain it and defeat it, resulting in immense destruction and loss of life. The reason that Hitler failed was good old fashioned imperial overreach – he didn’t know when to “call it a day” and consolidate his gains, instead he tried to do what has been the undoing of most Empires in the past, take over the entire planet. Actually he got very close to creating a sustainable 3rd Reich, but made several key mistakes. The first was not overrunning Britain while he had the chance, instead he made the fatal mistake of leaving it and starting a war on a second front with Russia, which meant that, in addition to his logistical support being spread too thin, the US was later able to use Britain as an aircraft carrier to bomb Germany back into the Stone Age, which needless to say resulted in its defeat. The second mistake was permitting eastern henchman Japan to bomb Pearl Harbor, and thus bring the US into the war against both Nazi Germany and Japan. Perhaps due to parochial ignorance, Germany and Japan made the catastrophic miscalculation that they could somehow overcome the United States, which at the time was an emerging economic powerhouse. The bombing of Pearl Harbor awoke the sleeping giant and meant the beginning of the end for the Germany – Japan Empire.


Politicians and other megalomaniacs never change of course, and in the power vacuum that arose after the end of the Cold War, the victors decided to press home their advantage and go for world domination, just as you would expect. The absurdly named “War on Terror” was an invention that provided an excuse to invade countries on their “hit list” and strip citizens at home of their rights under the guise of protecting them – witness the daily fiasco of going through airport security in the US.

Right now the three most important countries standing in the way of global hegemony by the Empire are China, Russia and Iran. Since China is a major trading partner of the United States and a powerful economy with a highly developed military deterrent it is “the toughest nut to crack” so they have decided to go after Russia first, but as Russia is also heavily armed with nukes, the assault has been and is largely economic, rather than military. In pursuit of this objective they proceeded to collapse the oil price several years ago in an effort to weaken Russia (and Iran) and largely failed, except for the “windfall” collapse of Venezuela of course. They also demonized Russia in their controlled media, portraying it as an aggressor for invading the Crimea, when all Russia was doing was moving to secure its interests in the region after the Empire instigated a coup against the democratically elected government in the Ukraine to install a pro-Empire puppet government on Russia’s doorstep. The portrayal as Russia as an aggressor provided them with the excuse to impose sanctions on Russia, in a further effort to weaken it. The Europeans, who have a lot to lose by antagonizing Russia, in addition to Gas supplies, foolishly went along with this, and have facilitated further provocation of Russia by allowing NATO to conduct military exercises right up against the Russian border.

The Chinese have been watching the Empire’s relentless efforts to damage and take down Russia with interest, because they know that if Russia goes down, they are next, which is why we have seen China and Russia forging strong economic and military ties in the recent past, and why Korea has just come to the fore in this geopolitical chess game.

South Korea is the Empire “forward base” in the Far East. Although Japan is a servile US sidekick, it has little appetite for getting involved in conflict with its neighbors and is still pacifist, which is kind of understandable after it got its backside thoroughly kicked and was dragged through the mud at the end of the 2nd World War.

China is only too well aware of what the Empire has planned for it, which is why it is not going to permit it to overrun North Korea, and thus gain a foothold on the entire Korean peninsula. North Korea itself is a poor insignificant little country, that has somehow managed to develop a relatively sophisticated nuclear deterrent, a happy coincidence for China. In the Western media Kim Jong Un is portrayed as a dangerous fruitcake, but the truth is that he knows only too well that without such a nuclear deterrent he could end up like Gaddafi or Saddam Hussein, and China has every interest in making sure that the Empire does not overrun North Korea and become an increasing threat to China. It is therefore considered very probable that the huge strides being made by North Korea with respect to a credible nuclear deterrent are thanks to support from China – without China’s help how would this poor little backward State be able to afford it?

The fact is that the Empire is being presented with a “fait accompli” – “North Korea now has a credible nuclear deterrent, so what are you going to do about it?” – the answer is nothing, unless they want to start a 3rd World War with China (and Russia). Trump and US Generals can huff and puff about how they are going to come down on North Korea like the proverbial “ton of bricks”, but the reality is that they have been outplayed, and they know it, so this aggressive rhetoric is just face saving posturing for the media, leaving aside the fact that China and Russia have surface hugging supersonic guided missiles that can send US carrier battle groups to the bottom before they even know they are coming.

So what now? It looks like the Empire is going to have to accept the fact that North Korea has just joined the nuclear club, even if they don’t have the fancy signed and embossed certificate to hang on the wall, and skulk off to content itself with meddling in Pakistan to try to disrupt China’s grand Silk Road project, and keeping the pot boiling in Afghanistan for the same reason. The tension centered on Korea should therefore ease, the dollar rally from its current oversold position, and the Precious Metals and other metals react back somewhat, although the longer-term outlook for them remains excellent.

There are two ways to stop Empires bent on world domination in their tracks. One is brute force as happened in the 2nd World War, and the other is to choke off their economic power, and unfortunately for this Empire, that is relatively easy to do, since its power rests almost entirely on the dollar being the global Reserve Currency. China and Russia and various other States know this, and are moving towards displacing the dollar as the global Reserve Currency, with the first step in this direction being the amassing of a vast quantity of gold, which at some point can be used to back their currencies, whereupon it will be “bye-bye dollar”. This is the point at which Imperial Reach quickly becomes Imperial Overreach. If the dollar loses its Reserve Currency status, the severely debt-wracked and highly leveraged Empire will quickly implode. This is what makes the next several years so dangerous, because the Empire may decide to try to impose its will by force while it still has the chance to do so, leading to catastrophic consequences, and Larry Edelson of Weiss Research has repeatedly pointed out that there is a confluence of war cycles peaking in 2019 – 2020. Looking on the bright side we know the world is grossly overpopulated, which “unintended consequences” may go a long way towards addressing.

To conclude: the tensions centered on Korea should now ease as the Empire is forced to accept the new reality that North Korea has joined the nuclear club, and the dollar rally from oversold – Commercial Hedgers have been slashing their short positions, and the Precious Metals (and metals like copper) react back for a while, opening up another opportunity to accumulate the sector before the expected major bullmarket gets underway.

 


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 -- Published: Tuesday, 5 September 2017 | E-Mail  | Print  | Source: GoldSeek.com

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Web-Site: CliveMaund.com



 



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