Segment 1: Between a Rock and a Hard Place SEGMENT BEGINS AT 00:38 Economist Jerry Robinson provides his signature commentary on the momentous news stories that have been making waves in the financial world and shares profitable investment strategies, as well as...
by Jerry Robinson
Many modern mainstream economists believe the global economy is currently experiencing a recovery. After all, China appears to have avoided a hard landing, Europe has not spontaneously combusted yet (as many economists predicted) and the aggressive monetary stimulus shoveled out by the Federal Reserve has not yet translated into a dreaded widespread inflation. And despite many obstacles, the United States and Europe are seeking a much anticipated Trans-Atlantic free trade agreement which would be the largest formalized trading bloc in the world. So are things beginning to look up? Is the worst of the financial crisis behind us?
Not so fast.
Beyond all of the government press releases and mainstream publicity campaigns lie a myriad of potential dangers to the U.S. and global economy. For example, mounting tensions in the Middle East have driven oil prices to their highest levels in nearly a year, causing gas prices to spike 13% in the last month alone. (Currently, the national average is $3.75 per gallon.) Meanwhile, U.S. unemployment remains at unsustainable levels and millions of Americans have no money in savings.
But the threats facing all of us are not just financial in nature. Geopolitical tensions have created a growing number of current global conflicts, or flashpoints, that threaten the existing global financial order.
Without a doubt, we live in very dangerous times. Let’s briefly examine seven of the most pressing current global conflicts below.
1) The North Korean Menace
The rogue North Korean regime recently launched a nuclear weapons test in spite of United Nations resolutions. North Korea followed up their nuclear test by threatening South Korea with “final destruction” during a fierce debate at the U.N. The South responded by issuing its own stern warning and beefing up the firepower along the border. Until recently, it was believed that North Korea’s motives, while dubious and various, ultimately sought diplomatic talks with the U.S. According to a new report, however, the U.S. has already been in direct talks with North Korea recently, and on numerous occasions. Additionally, the connection between North Korea and China is highly suspect. You can hear me explain my thoughts regarding the China/North Korea connection on our latest radio show here.
2) China/Japan Tensions
Geopolitical observers have been closely monitoring China and Japan as the two countries continue to trade barbs in their growing spat over natural resources in the waters that divide them. Recently, Japan scrambled fighter jets to head off a Chinese government plane flying towards disputed islands in the East China Sea. The incident occurred after three surveillance ships from the Chinese government entered the territory in dispute. Adding to concerns is an aggressive and militaristic tone being adopted by the new Japanese Prime Minister Shinzo Abe. He seeks to fully re-militarize Japan and restore the island nation’s former military prowess. China does not appear impressed.
3) Military build-up in Taiwan
Another showdown involving China is the lingering tension between it and the nation of Taiwan. Taiwan recently began responding to China’s increased naval capabilities by expanding its supply of supersonic anti-ship missiles. Thanks to a 1979 law, the U.S. has committed itself to being an arms supplier to Taiwan. This relationship has complicated U.S. relations with China, which views Taiwan as its own. The Taiwan/Chinese split is an unhealed wound that will eventually bubble over without a diplomatic solution… and soon.
4) The U.S. ‘Pivot’ to Asia-Pacific
Last year, the Obama administration announced a major ‘pivot’ of its military strength by increasing its troop levels and armed warships within the Asia-Pacific region. Perhaps former U.S. Defense Secretary Leon Panetta expressed America’s pivot towards Asia best when he stated that U.S. security in the 21st century would “be linked to the security and prosperity of Asia more than any other region on earth.”
Over the next decade, expect to see the U.S. dramatically increase its military presence and might within this volatile region.
But also note that the ‘pivot’ to the Pacific is not just a strategic move on the part of the U.S. It also presents a financial incentive as America will serve as the primary weapons dealer in the region that is fraught with emerging nations intent on arming themselves against the behemoth that is China.
5) Chinese Cyber Attacks on the West
The surprise that the U.S. government and mainstream media portrayed in the recent days after the latest round of Chinese cyber attacks is quite comical. Anyone who does not believe that China is waging stealth information warfare upon America is asleep. America has long been under a series of full-scale cyber attacks by some of the highest levels of power in China, i.e. the Chinese military. These wide and varied attacks are targeting important corporate data and physical infrastructure and according to one report, the Chinese military is to blame for 141 major U.S. companies who have experienced breaches, or the complete theft, of their sensitive data.
China has turned the tables and has claimed that the U.S. was responsible for two-thirds of the cyberattacks against its own military web sites in 2012. Geng Yansheng, a Chinese ministry spokesman who released the information on the cyberattacks, noted that the U.S. had recently planned to expand its cyber-warfare capabilities. Russia is also waging highly advanced cyber attacks around the world.
6) The Coming Iranian Conflict
The war drums continue to intensify regarding the nuclear intentions of Iran. The West has made it clear through numerous military interventions that it displays little patience for nations who dare to defy its demands. Iran is blessed with an abundant amount of natural resources. But its curse is existing in a time of empire. The Middle East is the playground of empires. It is the backyard of Russia, the neighbor of Europe, and the prize of China. Meanwhile, the U.S. military has staked its claims all throughout the region. The situation in Iran is a powderkeg and is nearing its boiling point. Regional experts warn that an attack on Iran by the West would risk all out war in the Middle East. Iran’s anti-Semitic rhetoric has enflamed relations between that nation and Israel in recent years. Israel has threatened to unilaterally launch a pre-emptive military strike on Iran’s nuclear facilities. While the U.S. has not ruled out taking military action against Iran, it has publicly urged Israel to first exhaust all diplomatic solutions.
Recently, Iran met with officials from the U.S., U.K., Japan, Russia, China, and Germany in order to continue negotiations for the discontinuation of its uranium enrichment program. The talks were a so-called “positive step,” but all these peace talks are not slowing down the war drums coming out of the U.S. and Israel. Iran defends its self-declared inalienable rights to enrich uranium, and denies any motives of developing nuclear weapons. But, Iran’s attempts at self-determination are unacceptable in an age of resource wars.
7) The Syrian Civil War
Over 70,000 people have died in the brutal battle being waged in Syria between government opposition forces and the Assad government. The U.S. is bankrolling the opposition forces while Russia and Iran are openly financing the Assad government. Over 4 millions Syrians have been affected by the fighting, including 2 million displaced within war-torn Syria and almost 1 million who have fled the country into neighboring Turkey, Jordan, and Lebanon. A political solution to the Syrian fighting has not emerged, nor does it appear to be forthcoming.