Tag Archives: China

Russia, China preparing to eliminate our reserve currency status

Recently, at the Asia Pacific Economic Cooperation (APEC) summit in Beijing, dignitaries from around the world gathered to promote greater economic cooperation. At APEC, the United States and China finalized a new deal that would limit greenhouse gas emissions. President Obama hailed the agreement as a “milestone in the U.S.-China relationship”.

But is this the flowering of a renewed relationship?

The climate deal itself places China at an advantage. The U.S. has agreed to double the pace of its carbon-dioxide reductions after 2020 and set new targets for reducing overall greenhouse gas emissions by 26% to 28% by 2025. However, China did not commit to cut emissions by any specific amount, giving merely a vague promise to set a peak in emissions by 2030. China will also continue to build new coal plants and grow emissions.

While President Obama is touting his success and using it to promote a climate change agenda at the G20 summit, the deal that everyone should be paying attention to is the energy deal between Russia and China. The preliminary deal is the second large energy deal between the two nations this year. Russia’s state owned oil firm OAO Gazprom will supply China with as much as 30 billion cubic meters of gas annually, for the next 30 years. Additionally, the China National Petroleum Corp. will purchase a 10% stake in the Siberian unit of Russia’s oil producer OAO Rosneft.

While this deal is minor in comparison to total global consumption, the 30 billion cubic meters per year is on top of a 38 billion cubic meters per year deal already signed, with more potential deals in the future. The biggest headline of this deal is how China will be paying for it. In a deliberate shunning of the dollar, Russia will be receiving renminbi as payment for the oil.

Currently, the U.S. dollar holds the status of the world’s reserve currency. As the world’s reserve currency, the majority of global trading is in U.S. dollars. Because nearly everybody uses the dollar, this creates a tremendous demand around the world and gives the U.S. government an advantage in international borrowing.

Upset at the built-in advantages America gains by being the world’s reserve currency and lone super power, China and Russia have been looking to diminish the dollars international status and America’s role in the world, for years. Last year, China’s official Xinhua News Agency called for a “de-Americanized world” by establishing a new international reserve currency to replace the dollar.

Over the past several years, both countries have been seeking to chip away at that the dollars status. Last year China worked out a major currency swap agreement with the eurozone moving the Yuan closer to global currency status.

Russia and China have engaged in currency swap agreements, between themselves, to bypass the dollar in bilateral payments and both countries central banks have been stockpiling large gold reserves.

The massive accumulation of gold is a way to hedge against a potential currency crisis and legitimate their domestic currency with a gold reserve. For the past few months, Russia has engaged in a massive gold buying spree, both to help offset the effects of western sanctions and to hasten their independence from western financial systems.

The only thing to come out of the APEC summit is a weaker America. While President Obama expresses excitement over the agreement with China, it is a hollow victory. The agreement provides many substantive promises by the U.S. in return for vague promises on behalf of China. The agreement will result in more EPA regulations on coal, ensure higher energy rates to U.S. consumers, and hurt middle class families.

Russia and China are pushing the U.S. into a currency crisis. The massive national debt accumulated through massive U.S. borrowing is unsustainable. The growing interest on our debt will soon consume the majority of our federal budget. With the international community relying less and less on the dollar, eliminating our reserve currency status will result in higher interest rates, a rise in prices, and a greater difficulty servicing our debt.

President Obama has failed to treat China and Russia as the dangerous global competitors that we know them to be. These countries are actively attempting to diminish our standing in the world. We should not work out agreements with these countries without keeping this in mind, nor should we rely on vague promises, which can be easily broken.

Free Fire Zone: Iranian Nuclear Poker

The Obama administration is desperate to make a nuclear deal with Iran for his legacy. As the carbon deal they just made with China shows it doesn’t matter if it hurts us (and the world) as long as it sounds good in a headline. They have enlisted their friends to help sell an Iran sell out to the public.  We can’t afford to let our freedom be sacrificed for a chapter in the President’s post White House book.

 

The Significance of King Cobra’s Death

After months of medical treatment and rumors he was ill, President of Zambia Michael Sata died last night at King Edward VII Hospital in London. Elected to the presidency in 2011 after many attempts to unseat his predecessor, and political nemesis, Rupiah Banda, President Sata was soon nicknamed “King Cobra” for his comebacks, his personality, but also for his sharp remarks and criticisms.

President Sata was most critical of Chinese companies and foreign investors in Zambia, often claiming them to be exploitative. The shooting of 13 workers protesting wages by two Chinese supervisors fueled his promise to protect the Zambian workers from all foreign investors, and did so effectively by forcing all companies that invested in his country to abide by strict labor laws. Zambia has a record of being one of sub-Saharan Africa’s most stable countries when it comes to political transitions. Therefore the primary focus of a Zambia post-Sata is what will happen to foreign investment. There is no frontrunner at this time in Zambia, but there is the possibility foreign investors could come flocking back to the African country.

Zambia is one of Africa’s largest Copper producers, as well as Cobalt. Copper is used for the following: electrical wiring, telecommunication systems. piping systems, and more. President Sata’s death now opens the possibility that foreign investors, especially Chinese, will rush back to Zambia. This all depends on who will be President after the elections to be held in 90 days. Should that happen, the United States needs to be prepared to act before another opportunity to gain influence on the African continent slips once again to the Chinese.

Checkmate China

With the world’s attention focused on the atrocities being committed by the evil Islamic State in Iraq and Syria, plus Russia’s de facto invasion of eastern Ukraine, China has continued its bullying tactics in pressing its illegal claims in both the South China Sea and East China Sea.

China is mounting a direct attack on the “freedom of the seas” concept, which has been the cornerstone of our maritime strategy for more than 238 years. With almost 90 percent of the world’s commerce traveling by sea, the exercise of the “freedom of the seas” concept is critical to the world’s economy, particularly ours.

China’s most recent challenge to this concept was its dangerous Aug. 19 intercept of a U.S. Navy P-8 Poseidon anti-submarine and reconnaissance plane in international airspace southeast of Hainan Island. A Chinese fighter at one point came within 30 feet of the P-8, and then did a barrel-roll over the top of the P-8. This maneuver was not only unprofessional, but could cause a major incident.

There have been a series of close encounters between Chinese forces and U.S. Navy aircraft and ships operating in clearly recognized international waters and airspace. The most serious incident occurred April 2001 when a Chinese F-8 fighter collided with a U.S. Navy EP-3 reconnaissance aircraft while attempting a close pass 70 miles from China’s Hainan Island. The fighter crashed into the sea while the EP-3 had to make an emergency landing on Hainan Island. The 24 crew members were held for 11 days, while the Chinese dismantled the EP-3’s sensitive equipment.

The Chinese have built underground submarine pens on Hainan Island for their nuclear attack and JIN-class ballistic-missile submarines and are attempting to enforce an exclusive zone around the island. Nonetheless, international law is clear that “all” aircraft have a recognized right of overflight in ocean areas beyond a country’s 12 nautical mile territorial sea.

The Chinese party line is that the dangerous situation occurs because of “U.S. surveillance flights,” and therefore, that would be the “root cause” behind any accidents.” Nonsense.

While some of our officials try to downplay these incidents as not being officially sanctioned, Rear Adm. Zhang Zhaoghong from the Beijing National Defense University debunked that line when he recently stated that China must fly even closer to U.S, surveillance aircraft to put more pressure on them. Clearly, with a U.S. president they do not fear, they are trying to intimidate the United States and force a cessation of such legitimate flights and other naval operations embodied in our “freedom of the seas” concept.

China’s illegal claim to almost all of the South China Sea is part of its bullying tactics embodied in their Anti-Access, Area-Denial (A2AD) strategy to drive the United States out of the western Pacific. China wants hegemony over the first island chain, which includes Taiwan, and eventually, out to the second island chain, including Guam, which is now our key western Pacific base.

To provide the muscle to implement their strategy, for two decades China has pursued a massive military-expansion program for both their conventional and strategic forces. Their naval-expansion program is clearly designed to challenge the U.S. Navy. They also have a very aggressive space and cyberwarfare program. In addition, they have an ever-expanding conventional- and nuclear-missile capability.

Of critical importance to the U.S. Navy is the fact that the Chinese have developed an anti-ship ballistic missile, the DF-21C, which is clearly targeted against our major surface ships, particularly our aircraft carriers. With this threat, they hope to be able to successfully implement their A2AD strategy at a time of their choosing.

Last March, it was confirmed that China has developed a new intermediate-range nuclear missile, the DF26C, which reportedly could reach Guam. It is supposed to be capable of being launched from a road-mobile chassis and uses solid fuel. This combination gives it the capability to be hidden in China’s underground — 3,000 miles of strategic reinforced tunnels — until ready for use. According to reports, these new missiles are capable of firing conventional or nuclear warheads along with maneuvering anti-ship and hypersonic warheads. There is speculation that a DF26C could follow the DF-21C.

These new Chinese missiles are a formidable threat and will be difficult to counter with our current anti-ballistic missile systems. However, fortunately, an algorithm and software application has been developed that can be used to immediately upgrade current U.S. missile interceptors such as the PAC-3 and the SM-6 to counter this threat. The application is also scalable to several other missile-interceptor systems. Based on 15 years of testing, it has proven its capability to predict and effect intercepts against classified maneuvering and hypersonic targets. Further, I understand this algorithm to be the only one that has been successfully converted to actual computer software and has been shown to improve the performance of existing systems against a wide range of threat targets, with an average probability-of-kill in the mid-to-high 90 percent range.

Since maneuvering and hypersonic warheads are now in the inventory of our potential enemies, we can no longer afford to delay bringing this software forward by conducting unnecessary, redundant testing and leverage available test results. We also need to avoid falling into the “not-invented-here” syndrome. This software is a “game-changer” and should be made available now. It will “checkmate” Chinese current anti-ship ballistic maneuvering and hypersonic missiles, and dramatically change the strategic equation.

Will Cuban Totalitarianism Die With the Castro Brothers?

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Secure Freedom Radio is made possible by listeners like you.

With Claudia Rosett, Maria Werlau, Gordon Chang, Bing West

CLAUDIA ROSETT, Journalist in Residence at the Foundation for Defense of Democracies:

  • Is the UNWRA program encouraging malicious Hamas behavior?
  • The enormous U.N. relief effort essentially being transformed into an overly-generous entitlement program
  • Concerns that Hamas is using the cover of UNWRA facilities to launch rockets

MARIA WERLAU, Director of Cuba Archive:

  • The rekindling of the strategic relationship between Cuba and Russia
  • The future of the Castro totalitarian regime after the deaths of Fidel and Raul
  • Can Cuba still be accurately described as a communist country?
  • Thoughts on the reports of a recent USAID covert operation in Cuba

GORDON CHANG, author of “The Coming Collapse of China”:

  • Pope Francis’ attempts to have an open dialogue with the Chinese communist government
  • Is the Chinese regime creating its own state-based sect of Christianity?
  • Security concerns over Apple’s move of its cloud-based data to servers in China

BING WEST, author of the upcoming book, “One Million Steps”:

  • In Iraq, the war won by boots on the ground and the peace lost by politicians
  • America’s fatal mistake of enabling Nouri al-Maliki’s rise to power
  • Chances that CIA operators and U.S. Special Forces Advisors are covertly re-inserted into the Anbar Province

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Alibaba…And The 40 Thieves? Hard Questions About The Chinese Internet Giant’s Planned I.P.O.

 
ALIBABA…AND THE 40 THIEVES?
HARD QUESTIONS ABOUT THE CHINESE INTERNET GIANT’S PLANNED I.P.O.
 
Experts to Discuss Threats to Investors, Privacy and National Security
 
Washington, D.C.:  Against the backdrop of press reports indicating that an imminent initial public offering by the giant Chinese Internet provider Alibaba is receiving kid-glove treatment by U.S. government securities regulators – and a complete pass by those responsible for national security, the Center for Security Policy will convene a panel discussion to illuminate concerns about this transaction that demand close scrutiny.
Alibaba’s proposal is expected to raise over $20 billion through the New York Stock Exchange, making it the largest initial public stock offering in U.S. history.  The appetite for the financial windfall such a transaction will make possible has apparently induced official willful blindness to what a recent staff study by the U.S. China Economic and Security Review Commission concluded was an IPO that poses “major risks” for investors.
On Tuesday, 15 July, the Center will host a luncheon symposium at the National Press Club aimed at exposing the various risks for Americans associated with the Alibaba IPO with respect to: their investment in the company; the privacy rights and proprietary information of users of Alibaba’s services; and the national security.
A panel of experts will address among other issues: Chinese intelligence operations; economic warfare; cyber espionage and other penetrations of the U.S. internet space; problems with the Alibaba IPO for U.S. securities law and procedures; and other topics bearing on U.S. national security.
WHO:
  • Frank Gaffney, President and CEO of the Center for Security Policy, Moderator
  • Michelle Van Cleave, Former U.S. National Counter-Intelligence Executive
  • Kevin Freeman, Chartered Financial Analyst and Founder, National Security Investment Counselor Institute and author of Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again and Game Plan: How to Protect Yourself from the Coming Cyber Economic Attack
  • Fred Fleitz, Career CIA Analyst and former Professional Staff Member, House Intelligence Committee
  • David Yerushalmi, Securities litigator and Co-founder and Senior Counsel of the American Freedom Law Center
WHERE:
National Press Club
Murrow Room
529 14th St NW, 13th Floor
Washington, D.C.
WHEN:
Tuesday, July 15, 2014, 12:00-1:30 pm
For more information contact:
Jordi Chervitz
202-719-2405

Seth Cropsey: Conflict in the South China Sea

Seth Cropsey, Director, Center for American Seapower, Hudson Institute; Former Deputy Undersecretary of the Navy; Former Principal Deputy Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict speaks at the Center for Security Policy’s National ASecurity Group Lunch on Capital Hill regarding the latest developments in the South China Sea.

Obama’s Empty Reassurances

Barack Obama’s chickens are coming home to roost in Asia. During his ongoing trip to America’s most important allies in the region, he has been buffeted by ill-concealed anxieties at every stop that, these days, it is better to be an enemy of the United States than its friend.

That is a formula for having more enemies, and fewer friends.

According to the Wall Street Journal, in the run-up to Mr. Obama’s visit to the Western Pacific, U.S. military planners were busy drawing up “muscular” contingency plans in the event Communist China or North Korea engage in further “provocations.”

Of course, what is worrying our allies is not simply the prospect of more provocations. It’s the steadily growing capacity of such hostile powers to act on their stated intentions to threaten America’s friends, their sovereign territories and vital interests.

The examples of U.S. responses the Journal says are under consideration involve various, mostly symbolic gestures. These include B-2 flights in the region, more port calls by naval forces and intensified exercises with allied forces. Among the other options that have, evidently, not yet been approved by the Commander-in-Chief are intensified surveillance near China and the transiting of carrier battle groups through the Strait of Taiwan.

Welcome as such gestures would be to nations in the Western Pacific who have been promised an American “pivot” to the region, but seen little evidence of it, they still fall far short of what is required to deter the increasing ability of China and its proxy, North Korea, to exercise hegemony over their neighbors. Even the laudable conclusion of an agreement with the Philippines (just in time for President Obama’s visit to the country) will allow renewed use of bases there by U.S. forces, but not a permanent presence.

Which brings us to the heart of the matter. Unless and until the Obama administration reverses course on the wrecking operation it has conducted against the American military over the past five years, the United States will be hard pressed to present a serious deterrent to Chinese aggression, both in its own right and via its North Korean cut-out.

Absent the wherewithal and resolve to maintain in-theater the sort of power-projection assets that would constitute a serious impediment in the future to the sorts of things Beijing and Pyongyang have engaged in of late – including declarations of sovereignty, seizures of territory, threatening actions at sea and ballistic missile tests – we must expect more of the same. And worse.

Even on those rare occasions when the Obama administration has recognized the need to establish a more powerful and enduring military presence in the area – as with Secretary of Defense Chuck Hagel’s recent announcement that two additional ballistic missile defense-capable destroyers will be stationed there, the effects of the hollowing out of the U.S. military are palpable. Due to the contraction of the Navy to the smallest levels since before World War I, it will take until 2017 to effect even this modest force-enhancement.

The truth of the matter is that President Obama and the Congress must agree to halt the further decimation of the armed services’ force structure, steps that will ensure in the future – even more than today – that we cannot credibly engage in successful pivots from one theater to another. In the absence of this sort of course-correction, we can forget about preventing, or even effectively contending with, simultaneous conflicts in Eastern Europe, the Middle East and East Asia. In fact, the gestures Team Obama is now contemplating may simply catalyze conflict with a People’s Liberation Army spoiling for a fight for which we are unprepared.

Such a reversal will require: abandoning the sequestration-driven defense spending cuts; restoring the readiness; reinvesting in operations and maintenance; and abandoning the deferring and, in many cases, outright cancellation of urgently needed modernization of the military’s front-line weaponry.

The same goes for our strategic deterrent forces. Make no mistake: China and North Korea (to say nothing of Russia and Iran, among others) are emboldened by their assessment that the United States is going out of the nuclear weapons business – even as they are ramping up both their own nuclear strike capabilities and their talk of attacks against the U.S. and/or its allies.

A failure on our part to demonstrate that our nuclear deterrent will be kept effective and reliable for the foreseeable future is not simply a green-light for aggressors. It is also an inducement to those in the Western Pacific, and perhaps elsewhere, who have relied upon this protective “umbrella” to conclude that they can no longer safely do so. And that is a formula for the proliferation of nuclear arsenals with unpredictable – but possibly devastating – consequences.

If President Obama is serious about the reassurances that he has been assiduously providing to friendly East Asian nations over the past week, he must take tangible steps to show that he not only wants actually to walk the walk, but is able to do so.

Obama Should Stand Up For America

The Washington Free Beacon today captured several more instances of a curious – and troubling – aspect of President Obama’s international travels. He seems to be hardwired to bow to those he meets.

In some cultures, this is a common practice, particularly when meeting with royalty or other heads of state – not just as a sign of respect, but as a symbolic gesture of subservience.

The leader of our powerful, free nation shouldn’t behave submissively towards anyone, however.

Yet, Mr. Obama has previously bowed to the king of Saudi Arabia, the emperor of Japan and China’s top communist.

During his current trip to Asia, he has bowed again to Japan’s emperor – and even to a Japanese robot!

President Obama must stop diminishing our country. One place to start is by literally standing up for America.