China and US are posturing for dominance (again)

Posted: May 22, 2015 in Uncategorized

Again China and US are asserting their intentions on the South Pacific.

China is expanding its “island constructions” as a way to have almost unsinkable aircraft carrier in the midst of the Pacific (much closer to Philippines than China).

The US keeps harassing them with the surveillance flights…but there is nothing (short of a war) that can do, but watching and pushing allies (Japan) to re arm itself.

The real battle in reality is a crescendo of hostility for October/November.

In October/November the IMF (International Monetary Fund dominated by the US) discusses the Special Drawing Rights basket – practically which are the accepted reserve currencies (currently USD, EURO, GBP and YEN).

In October China wants the Yuan to enter this basket (that is why they increased so much the gold reserves and even bought gold mines).

For them it is extremely important as all the projects (as ports in Pakistan, the Silk road China-germany) can be then financed in Yuan, not in US Dollar.

For the US this is an issue. It could mean the starts of the downfall of the USD and would give away one of the primary advantages of the US over China as a superpower.

On the other side, they could block them, but, as China showed in Asia with the new Asian Infrastructure Bank, China could well found its alternative IMF and be pushed more towards Russia and a real cold war.

No easy solution for the US – I am not sure if we are seeing the downfall of an empire (never underestimate the US, specially when is cornered) – but the cards are stacked against them this time.

UPDATE

The media attack and focus on the South Pacific increased pace in the last two weeks. It seems the US Government is preparing the public to a more aggressive positioning of US against China.

So prepare for tension ramp ups leading to the November IMF meeting.

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