China to US: America is a disgusting thief spying over his neighbor’s fence, The Role of Inflationism

A recent dangerous aerial close encounter between a US government Navy P-8 surveillance craft and a Chinese Chinese interceptor at the Hainan Islands has prompted two countries to hurl accusations at each other. 

Sovereign Man’s Simon Black gives the Chinese interpretation of the event (bold original):

As for the rest of the article– I present it below with only one comment– it should be obvious to anyone paying attention that the US is no longer the world’s dominant superpower. It’s certainly obvious to the Chinese.

——–

Stop thief: China rejects the U.S. government calling our aircraft “dangerously close”
 

(Source: Sina News, http://mil.news.sina.com.cn/2014-08-23/1620797098.html)

Sure enough, it is the American government who stamps its foot first after a similar event.

First the famous anti-China military scholar Bill Gertz played his “danger close” speech for the Washington Free Beacon.

And then the Pentagon also followed and said that it was a “dangerous intercept”. The White House called it “deeply worrying provocation”.

Adm. John Kirby, the Defense Department spokesman, said Washington protested to the Chinese military through diplomatic channels, and called the maneuvers “unsafe and unprofessional.”

Deputy National Security Adviser Ben Rhodes said it was “obviously a deeply concerning provocation and we have communicated directly to the Chinese government our objection to this type of action.”

Such remarks are laughable. As we all know, the United States is the world’s largest hegemonic force and biggest rogue country.

Their various reconnaissance aircraft have been wandering around foreign airspace for decades and watching the military secrets of other countries like a disgusting thief spying over his neighbor’s fence.

However, when the neighbor comes back with a big stick, the thief will turn tail and run away, blaming the neighbor.

When you show people weakness, they will bully you. When you show people strength, they will respect you.

We [the newspaper] believe the Chinese Air Force and Naval aviation should maintain a high level of vigilence and morale in southeast coastal region to prevent the further US action.

Mr. Black concludes (bold original)…

 America has lost face and does not want to show the world they are sick. They have been lording over other countries for so long, and they will never let it go after they eat this loss.

The US government has sent a second carrier into the area. So more signs of escalations or potential risks of war.

It is interesting to see that of heightened geopolitical pressures amidst soaring stock markets in the backdrop of the massive central bank interventions.

As I previously wrote all these brinkmanship politics have been intertwined with monetary policies, the ramifications of which are vented into the political spectrum

Today’s interventionism has become more pronounced through central bank inflationism. And war financing has intrinsically been tied with inflationism…

War has always been used as opportunities to exploit society through financial repression)8 and suppress internal political opposition in order to advance the interests of the ruling political class whose interest are interlinked with the politically favored banking class, the welfare and the warfare class.

Political insider and analyst Dr. Pippa Malmgrem has an insightful discussion  on how inflationism by both the FED and the Chinese government has been driving a chasm in between them (source international-economy.com)

Here are some slices: (bold mine)

There will be more such problems given that China’s shadow banking system seems to have grown by the size of the entire U.S. financial system in last year alone. In the main, the fast-growing, highly leveraged financial system has been used to fund more and more building and infrastructure projects with dubious cash flow-generating ability. With all this bad news, and given China’s inability to provide sufficient food, energy, or raw materials at tolerable prices to its public, it starts to become apparent to Chinese leaders that there is a need to shift blame abroad and do whatever is necessary to protect the national interest. As Oscar Wilde said, “It is not whether you win or lose but how you place the blame.” It is worth dissecting the ways in which blame is being allocated today in China. The United States is a prime target. It is perceived to have “caused” the crisis through mismanagement of not only its own economy, but the world economy. Now it is said that the United States threatens the world by attempting to foment and export inflation…

From a Chinese point of view, it is argued that America always defaults on its debts through inflation. That’s how America paid for the American Revolution, the Civil War, and the war in Vietnam, when the currencies of each era—the consols, the continentals and greenbacks—became devalued or worthless. And, some Chinese are quick to note, such inflation is not a victimless crime…

For China, and many other emerging market governments, a default by the United States and other industrialized economies is not just an economic event. It is a national security issue. The problem is not simply that these investors are going to be paid back in pieces of paper hat are losing value… 

Inflation is occurring. It is just occurring in the weakest, poorest part of a highly integrated world economy: the emerging markets. As the Chinese saying goes, “Wars are fought with silver bullets.” The opening salvo in this new war has been fired, in their view, by the export of inflation from the United States and other industrialized economies to emerging markets. So access to food and energy at the right price has now become a national security requirement. It is not only about averting an Arab Spring..

It is all too human, and especially easy for politicians, to look for ways to divert attention from domestic pressures to externally imposed disruptions, especially when the cauldron of domestic pressure is intensifying. After all, the more China bails out domestic institutions and stimulates the domestic economy, the more they risk stoking the very inflation that would further foment social protest. China has a finer line to tread than many other places. Too much inflation and too little growth can also inflame the public. The Fed’s view, in theory, is right. China and many other emerging markets should just let their currencies appreciate to offset any inflationary impulses. But the political reality is that you cannot expect policymakers to hit the public when they are already down 

Dr Malmgren’s conclusion…

To the emerging markets, it is deeply ironic that the U.S. authorities expect China to raise interest rates and to revalue when U.S. officials deny U.S. monetary policy has any spillover effects, especially when many emerging markets experienced historic capital outflows and devaluations once U.S. monetary policy began to reverse. Similarly, the Chinese cannot be blamed for being suspicious that the United States and the West might be choosing inflation as a means of defaulting on debt, especially given that U.S. policymakers seem committed to avoiding any risk of deflation—which implies taking all the risk with inflation. And they wonder, what if the inflation rate the industrialized world needs to resolve its debt kills or severely damages emerging markets along the way? China cannot be blamed for fearing the normal consequences of inflation: higher prices. Nor can they be blamed for being paranoid. By one measure, China is being defaulted upon, encircled, and threatened on multiple levels. One cannot really be surprised that China may respond to their rising duress using whatever means necessary.

Ernest Hemingway was right when he wrote, The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. And this applies to both the US government and the Chinese government.