The world’s three largest economies — the U.S., China and Japan — may be squaring off for the most destructive and costly war since the end of World War II.
The main protagonists will be China and the U.S. The cause of war will be a Chinese invasion of Taiwan, which may be coming much sooner than the world expects.
China would start the war with an invasion across the Taiwan Strait. The U.S. would be obliged to come to the defense of Taiwan and take measures to disable the Chinese fleet and its air support. But, Japan is no bystander.
A glimpse at a map shows that if Taiwan were in Communist China’s hands, Japan’s own sea lanes would be threatened, including its access to imported oil. Japan has its own island disputes with China. If China were to capture Taiwan, Japan’s islands in the East China Sea would likely be the next to fall.
The U.S. could fall back to a line of islands, including Guam, Hawaii and the Aleutians, but no fallback is possible for Japan. If China seizes Taiwan and the U.S. falls back, Japan would be under the thumb of China, and they know it.
Of course, a fallback by the U.S. would be an enormous blow to U.S. credibility, as well as its economic power. That’s why an alliance of the U.S. and Japan against China to defend Taiwan (along with Taiwan’s own formidable defense capability) is the most likely response to a Chinese amphibious assault.
“Wolf Warrior” Diplomacy
The question for the world is whether China will get the message and refrain from attacking Taiwan. Unfortunately, signs point in the opposite direction. China has left its non-threatening style of diplomacy in the past.
Today, China pursues “Wolf Warrior diplomacy,” named after a popular Chinese movie that features aggressive Navy SEAL-style tactics as practiced by Peoples’ Liberation Army commandos.
China has come out of its shell and seeks regional hegemony to be followed by global hegemony. It is aggressively pushing on its neighbors in India, Myanmar, and the six nations that surround the South China Sea. Taiwan is the prize, and China is preparing to seize it.
This attack will be Xi Jinping’s legacy and his attempt to rival the reputation of Mao Zedong. Will Team Biden be able to see it coming?
U.S. investors should not take Chinese restraint for granted. Allocations to cash, gold and U.S. Treasury notes will preserve wealth when the worst happens.
The question for the world is whether China will get the message and refrain from attacking Taiwan. Unfortunately, signs point in the opposite direction. China has left its non-threatening style of diplomacy in the past.
Today, China pursues “Wolf Warrior diplomacy,” named after a popular Chinese movie that features aggressive Navy SEAL-style tactics as practiced by Peoples’ Liberation Army commandos.
China has come out of its shell and seeks regional hegemony to be followed by global hegemony. It is aggressively pushing on its neighbors in India, Myanmar, and the six nations that surround the South China Sea. Taiwan is the prize, and China is preparing to seize it.
This attack will be Xi Jinping’s legacy and his attempt to rival the reputation of Mao Zedong. Will Team Biden be able to see it coming?
U.S. investors should not take Chinese restraint for granted. Allocations to cash, gold and U.S. Treasury notes will preserve wealth when the worst happens.
- Source, The Daily Reckoning via Jim Rickards
