Notes From the Field By Simon Black July 27, 2020 Bahia Beach, Puerto Rico
Most people realize that 2020 has thrust two game-changing trends upon us that will change the world for years to come.
The first is Covid.
In less than six months, this virus has created extreme global hysteria and economic devastation. Countless businesses have gone bust or are teetering on the edge. Tens of millions of jobs have been lost. Government debt around the world has exploded higher. And their heavy-handed abuse of power has been astonishing… often incomprehensible.
Politicians and public health officials have suspended many of our most fundamental freedoms, threatened to come into our homes and take our family members away, and even banished us from our own private properties.
We’ve also seen a breakdown in basic social conventions. Family and friends have stopped gathering together in person out of fear that someone may be a carrier. Weddings and funerals are virtual. And a simple handshake is practically considered an act of biological terrorism.
And, just like 9/11 nearly two decades ago, many effects of Covid will never return to ‘normal’.
Then there’s the social justice movement… which tore onto the world stage two months ago with a desire to make important cultural changes.
At its core, the movement is virtuous. After all, it’s supposed to be about freedom.
But it has quickly become divisive, menacing, and pointlessly violent.
Everything is offensive. Intellectual dissent must be immediately squashed. People lose their jobs, receive death threats, or are censored, merely for expressing completely valid (and even supportive) opinions.
And some of the largest corporations in the world have all submitted to the Twitter mob, like Nazi collaborators in France who began goose-stepping with the Wehrmacht the moment Hitler took Paris.
History is being rewritten. Vocabulary is being replaced. And any civil discourse results in persecution.
Just like lingering Covid effects, this social turmoil will also be with us for years. Don’t fool yourself into believing it’s some some flash in the pan that will be over in a few weeks.
But what I wanted to tell you today is that there is a THIRD, major trend brewing right now. And it could prove to be even bigger than Covid, bigger than the social justice movement.
It’s not one that evokes the same emotion. So you won’t see too many people marching in the streets or cowering in fear in their homes. There’s no hysteria.
This third major trend is rational. And that’s why it’s largely been ignored. But its impact could be far bigger and longer lasting.
I’m talking about conflict with China.
Over the past several months we’ve witnessed a minor trade dispute between the United States and China escalating into a major diplomatic conflict, and now, into full-blow Cold War.
US Secretary of State Mike Pompeo left no doubt about this when he essentially declared cold war against China’s communist party in a speech late last week:
“If we bend the knee now, our children’s children may be at the mercy of the Chinese Communist Party, whose actions are the primary challenge today in the free world.
General Secretary Xi is not destined to tyrannize inside and outside of China forever, unless we allow it.
Richard Nixon was right when he wrote in 1967 that ‘the world cannot be safe until China changes.’ Now it’s up to us to heed his words.
Today the danger is clear. And today the awakening is happening.
Today the free world must respond. We can never go back to the past.”
It’s pretty incredible how China has already managed to get most of the world to bend to its will.
There are so many examples of this; major US airlines like Delta and American, have scrubbed references to “Taiwan” on their websites so as not to offend the Chinese communist party.
Hollywood, despite constantly thrusting its woke social justice politics in everyone’s faces, refuses to utter the slightest criticism of China, simply so they can squeeze out more box office revenue there.
And the National Basketball Association squashed an executive for Tweeting support to Hong Kong protesters last year.
Even the league’s biggest and most outspoken star, Lebron James, meekishly told reporters that China has “a complicated issue with racial, socioeconomic and geopolitical layers” and that he saw “little upside in speaking up” against the Chinese communist party.
Comparing sports team owners to ‘slave owners’ is perfectly fine. But don’t say anything bad about China!
In addition to Pompeo’s speeech, the US-China conflict escalated last week when the US government ordered the Chinese to close its consulate in Houston, Texas.
The Chinese government retaliated by closing a US consulate in China.
This is after months of sanctions, asset seizures, tariffs, arrests, expelling of foreign journalists, and plenty of tension about the Coronavirus.
I know there’s a lot of fear that an actual shooting war will break out between the US and China. And that is a possibility.
I’m probably biased as a West Point graduate, but I’m convinced that the US Marine Corps and Army Rangers are the most proficient fighting forces in the world.
But the reality is that China has a bigger army. It’s better equipped with newer, better technology. Its tanks are superior, and it has more of them.
China has also been investing heavily in its Navy and Air Force; it already has more ships than the US Navy, and it has also rolled out a fifth-generation fighter jet, the J-20, to compete head-to-head against the US military’s F-22 and F-35.
But that’s just conventional warfare. The next war will be highly unconventional… and the Chinese are dominant in “system destruction warfare”.
They could take down the US power grid, hack multiple defense and intelligence networks, and remotely disrupt key US command and control elements, before a single shot was fired.
This is not my assessment; the Pentagon has been wargaming conflict between the US and China for years. And in the words of one researcher who has participated in these scenarios, the US “gets its ass handed to it.”
Fortunately, a shooting war is unlikely. Why would China want to invade the US and deal with 400 million guns in the hands of the civilian population?
Why would the US want to invade China and deal with another Vietnam war?
War doesn’t benefit either nation, and on that basis it’s possible… but not probable.
What is likely is a total reset in the global financial system.
The current “Bretton Woods” financial system in which the US economy and US dollar are at the center of the global economy is decades old.
The US has derived extraordinary wealth and prosperity from this system for years.
Bretton Woods is the reason why the US national debt can be nearly $27 trillion (over 100% of GDP) without the dollar collapsing in value.
It’s the reason why the Federal Reserve can conjure trillions of dollars out of thin air and keep interest rates at 0% for years, but still be taken seriously.
Losing this advantage would be nothing short of catastrophic for the US economy.
And continued conflict with China is the one thing that is practically guaranteed to make it happen.
That’s why this trend– conflict with China– could be the biggest thing happening right now.
It’s not as scary as Covid, it’s not as emotional as social justice… but the effects may be permanently devastating.
To your freedom & prosperity, Simon Black, Founder, SovereignMan.com