Whether or not one agrees with the reasonings for why; one thing can not be dismissed: The current global standing of politics, trade, monetary policies, energy, and more are in a commingled stage of flux rarely seen but for very few periods in time, usually reserved for the aftermath of some form of all-out war, and rarely, if ever, before it.
We may be in just that moment of history where it comes before, as in pushing the threat back, rather, than trying to pick up the pieces afterwards. That is, if, there would be pieces large enough to find, at all.
Today those threats, real threats as in WW, are once again here. Threats that are very much to be taken as real. As a matter of fact, very real is the working assumption for those who have cared to take notice with the sudden tit-for-tat which just played out with Syria, N. Korea’s latest missile launches and threats.
And that is just today’s latest headlines, for we still have the South China Sea escalating tensions with China, Japan is suddenly testing missiles for the first time, Turkey’s continuing hostility against Germany and others, Iran, Yemen, and of course Russia. And that’s all I can remember of the top of my head, one would think it was enough, however, it’s not.
If something doesn’t stop the ever-increasing saber-rattling emanating across the globe; the next shoe to drop might not be in the form of anything conceived by most populations. i.e., I have the feeling anything involving the term “”WW3” or “nuclear” will be far worse than anyone has ever dreamed possible. Regardless what they’ve seen at the movies.
Said differently: Most understand (although they try never to contemplate) conventional warfare with standing armies, ships, and alike and think WW3 would probably be a lot like WW2 only with updated versions of the same weaponry and tactics. Some when they theorize the potential ramifications from a nuclear threat mistakenly think it’ll be something like Hiroshima, Nagasaki, and its aftermath. Hint: It wont, it’ll be far worse, even if it’s still only 2 bombs. For today’s nukes are thousands of times (yes – thousands) more powerful than those used during that war.
Don’t let that last line be lost on you. Far too many just don’t “get it” when contemplating the destructive powers and inevitable ramifications with its resulting aftermath of just one of today’s nukes. If you need a reference point? Think of the destruction unleashed in WWII via “Fat Man” and “Little Boy. Now think instead of only 1 falling to Earth: 3000+ “Fat Man’s” on one target, and another 3000+ “Little Boy’s” on the other, and you begin to have a sense of what today’s ICBM saber-rattle truly entails.
Again: and all you need to unleash that much devastation is just 2 – and there a thousands stored, and at the ready, across the globe. And I haven’t even discussed the threat of an EMP (eltromagnetic pulse) and its implications.
There’s also one other consideration which far too many see as almost impossible: The bulk of the next war, with all its fighting, bombing, destruction, and more could take place where it’s been near inconceivable for generations – directly on U.S. soil.
Yes folks – we’re currently in one frightening moment of history. Yet, where it goes from here is not only an open question; precisely what that “question” is could mark a moment that may (and I do mean may) be a turning point as to bring prosperity not only back for the U.S., but spread it around the globe in ways we haven’t seen in generations.
Wait, did I just raise the idea of hope and prosperity while also talking nuclear annihilation? Yes, yes, I did, and here’s why…
So what is that question?
It comes from none other than the recently departed Don Rickles when he suggested to Telly Savalas in the movie Kelley’s Heroes (1970, MGM) when things seemed all but lost: Rickles, “Then make a deal!” Savalas, “What kind of a deal?” Rickles, “A deal, deal! Maybe the guy’s a republican.”
That’s correct, in my opinion it’s not the question of the ages as Shakespeare put it “to be, or not to be” , rather it’s, “Deal? Or no deal?” That is the real question of today.
But exactly what deal, and precisely to whom is just as important. I believe everything, and I do mean everything, revolves on one deal, with one country, and it changes the world. e.g., a “New Deal” with China. Here’s my reasoning…
(The following is not an endorsement of any political side or person, it is meant as a “big picture” viewpoint with the current players that can, will, or won’t make any decisions going forth. Again, this is not about ideology, or political preference. These are the stakes, these are the players, these are their traits. Period.)
With the above for context we should all be on the same page as to why some form of “deal” that may foster some form of new grand alliance as to walk back a lot of this saber-rattling from the brink is needed.
I’m also of the opinion that “walk back” can only happen if the powers that be can do it within the framework of a business type arrangement, where the issue of “saving face” or “not looking weak” is afforded to the politicians, or leaders at the heads of their citizenry.
Without it? All bets are off, and everything from war, and more are squarely on the table. Possibly, even inevitable. And sooner, much sooner, rather than later.
This is where Donald Trump just may be in the precise position in history – to make history. For when it comes to “making that deal” it requires two very distinct traits which he is not only known for, but also, has spent a lifetime honing. And they are these:
High stakes (and I mean just that) deal making via mutual business interests, and pursuits – and – Thinking Big. And again, I mean just that as in “very big.” I believe these are the two, and only two requisites that apply.
If you say “politics” is also needed? I believe that to be not only wrong, but dead wrong.
Politics (as in the governmental sense) is the last thing that is needed to make a grand bargain. That particular “politics” is what you use to handle the process – after – not before. Hint: Think about the current debacle of Ryan/TrumpCare currently taking place. Here is where politics was placed first, before any proper deal was put forth. How’s that currently working out is all I’ll ask?
So what is the grand deal you’re asking? Fair question, just remember this is made to be oversimplified, and in very generalized sweeping terms as to propose the idea, not some “white paper.”
What would happen if China and the U.S. made some form of grand bargain both monetary, as well as trade related where the Yuan, and the $Dollar could, or would remain stable to each other, as well as trade imports and exports both to each others benefit?
Nonsense you say? We can’t do that now without one getting the better of the other? Maybe, but what if there was one product that the U.S. has in spades, and that China needs much like the U.S. needs China’s current cheap manufacturing?
That deal and its vehicle is: Natural Gas.
It’s well documented that the U.S. is the “Saudi Arabia” (if not larger) of proven natural gas reserves. It’s also well-known that natural gas is a far cleaner, and efficient resource than coal. This is something that is desperately need in China as their issues of smog, and its health hazard across their industrialized cities have become an unrelenting front page news source.
(On a side note: Please save the environment impact emails that I have no understanding about “clean” and more. I, unlike most, not only lived near a gas-fired energy plant; my property actually abutted it; and needed my approval as to even build it. So any forms of “NIMBY” rationales or “you don’t know!” don’t apply, because actually – I do.)
I’m not the only one who thinks this, noted Austrian economist Andy Xie also laid out and made the case for this back in February in the South China Morning Post™. Here’s a little from that article. To wit:
“The US has experienced a revolution in oil and gas production. Its shale oil accounts for over half its total oil production, making the US one of the largest oil producers in the world. Its shale gas has surged in output, making it one of the largest gas producers in the world.
On the other side of the Pacific, China’s oil production is falling. Its natural gas production is stagnating, despite repeated government prodding for higher output. China remains stuck with coal for two-thirds of its energy needs. Lately, use of the dirtier but cheaper brown coal has grown rapidly, adding to the environmental nightmare.
America’s success in shale energy and China’s failure reflect better endowment for the former but, more importantly, the triumph of entrepreneurial drive and the free market. The oil and gas sector is usually dominated by state-owned enterprises, like in China and Russia, and, in some countries by huge multinational companies. The US shale sector is very fragmented in ownership and production. Entrepreneurial dynamism is driving its rapid technological innovation.”
When I was reading that article back in Feb. (Mr. Xie is one of the few economists I follow) it was much like any other “insight” or “think” piece: sounds great in theory – and should be followed up on. But probable? Hard to tell, at least in the short-term.
But today? All I can say to that is – it just might be the right time for such a deal as never before. Because circumstances for the fruits of such a deal have never been more enticing. Here’s a little more from Mr. Xie:
“The US economy depends on the growth of its energy sector. But demand saturation seems to be limiting its growth despite the low price. Its ability to export depends on building very expensive liquefaction plants. Without long-term offtake agreements, this sector is unlikely to take off.
This is where China could come in. If China could offer long-term contracts, it would immediately spark an investment boom in the US and lift its economy. In the long run, China’s demand could eventually make the bilateral trade balanced, removing a major thorn in the Sino-US relationship.
China would benefit greatly. The shift to a clean fuel would help remove the biggest barrier to its growth. Stable and low-priced gas supply is in its long-term interest. As an added benefit, the demand for LNG tanks could revive its troubled shipbuilding sector. This is a big win-win.”
I agree, but also, I believe a much larger win-win has evolved than just a China – U.S. centric agreement. That “win-win” could inevitably end up altering the entire economic landscape, and current hostile threats in a way never conceived possible. All for the better as I’ll try to explain. And please remember, the following is supposed to be a broad brush, and over simplified example. That said – the ramifications could be utterly extraordinary. So here we go with the “What if” part of this…
What if for the sake of arguments Mr. Trump proposes the following to Mr. Xi:
“If you (China) take complete control whether it be military, or economically, and remove N. Korea as a threat by whatever means you see fit; what we’ll do is offer and negotiate a treaty and trade deal to supply China with a stable supply of natural gas that can traded in Yuan, $Dollars, SDR basket or whatever we both agree to, and, we’ll also recognize your claims to the South Sea with the caveat that we, and others, can traverse it as always without fear of incident.”
What might this do?
You would immediately calm China’s fear of losing the U.S. consumer good base where a populist uprising of suddenly out-of-work Chinese would take to the streets and revolt in the millions, causing the politburo untold headaches. Next, you would immediately take away the monetary finger-pointing issues such as devaluation and more. Then, you would begin a manufacturing revolution in both the U.S., as well as China in real wage paying manufacturing jobs as infrastructure and retrofitting takes place.
Think of what the drilling, and refining industry employs alone, along with what it would entail turning diesel-powered into natural gas, or propane powered infrastructure. The trucking industry alone would be worth untold $Billions of both savings, as well as, the tradesman that would be needed to actually build it. That is, these jobs would be true, wage earning, family supporting jobs.
And that’s just for starters. But it also sets the stage for more – and I do mean – much more.
As the U.S. built out, and retrofitted, along with the unimaginable possibilities of what further efficiencies could be possible as the minds, and money would be focused into what “natural” could do. (i.e., remember when under 10 miles a gallon was the norm before we needed to change that?) It would do something only dreamed of. but never envisioned as possible:
Cut our dependence on Middle Eastern oil once and for all.
If the U.S. could reduce our current oil demand even in 1/2 with a retrofitting of our current trucking and other infrastructure usage with home generated and refined natural gas that would change everything when it comes to Middle East supplied oil and all its political baggage, and melee.
Yes, it’s always been a “dreamed” option. But the China angle could get the ball rolling supplying the much-needed catalyst to end break the inertia in earnest.
However, if the above was possible (and why not when you factor just the diesel angles alone) the remaining 1/2 could be supplied by current U.S. shale, along with the addition of Canada’s supply. But that’s not all…
If you were to make such a “deal” it would make one other entity very nervous, and maybe even nervous enough to scuttle it by interjecting itself into it in an even more menacing fashion. That “entity” of course is: Russia.
However, it doesn’t need to be that way as I’ll lay out further…
What if you made the “deal” into a “Grand Bargain?” In other words as you propose to China, you also propose to Russia something along the lines of the following:
“Look, all of this “Middle East” stuff needs to end or it’s going to end up consuming all of us in a giant mushroom cloud, rather than the death by a thousand cuts we’re all currently experiencing. And all of us need it to stop, and stop now.
You know of what we’re proposing to China, so let’s talk about a proposal to Russia. If the U.S. no longer needs to be subject to Middle Eastern oil and its politics, that leaves Russia open to supply Europe with its oil unimpeded or with any considerations from a U.S. perspective. Run your pipelines through, or around whomever gives you the best deal. We don’t care because this whole Middle East thing is going to take us all down if we don’t stop supplying them one way or another.”
We could then possibly (and I do mean possibly) wait for the inevitable coming collapse of the Maduro government in Venezuela and make another deal with the near crippled, and desperately needing of economic income from the vast oil reserves it currently has as to help provide a re-birth of a capitalistic driven economy and principle leaving the sham, and shambles of socialism in its wake. Right in our own back yard.
The same could be offered to Brazil as to further import oil from their reserves providing another much-needed boost to their currently flailing economy. Again – right in our own back yard!
The real prize here is this:
If, and I do mean – if – the U.S. alone could move to become just 50% less dependent, never-mind 100%, the entire Middle East and all its problems become just what these nations scream they want: Their problems to be left alone and to do with as they wish. All while sitting upon a resource the world no longer needs, or wants (at least “needs” less of to start, but sure no longer wants) along with all its terror related exports combined with a whole lot smaller of a cash pile as to fuel it.
This could be a very small window of opportunity where East meets the West by way of the Pacific – leaving the entire Middle (as in Middle East, and all its warring factions) entirely isolated as to do with each other as they see fit.
If they want to kill each other, that’s their decision. Throwing American (and others) blood, treasure, and money as to try to stop them? Personally, I’m done. And I know a lot (i.e., the vast majority of the U.S.) feel the same. We’ve had enough. Somethings got to change. Period.
There is the possibility, especially with a Secretary of State in place who’s not only a former energy executive, he’s also dealt with all of the requisite players and knows how the details work, and how they need to be presented. Mr. Trump, on the other hand, has the wherewithal and the presence of mind as to propose such an audacious deal. This point can’t be trivialized.
And, what may be more important: A nation (possibly even nations) absolutely sick to death of worrying about some fanatic once again blowing themselves up in a crowded area, or driving a vehicle, or __________ (fill in the blank) demanding we, or our allies get out, or leave their nations alone. It’s time to do just that.
Instead of changing our laws, violating our constitution, subjecting our populace to ever-the-more violations of privacy, making business or vacation travel almost unbearable, and more as to deal with it, while simultaneously turning our own country (and now others) into a more totalitarianism looking “empire.”
Let’s give them (the Middle East) what they ask for and leave them – and their oil – alone. Leaving them to fight all their differences amongst themselves. What they do from that point on? Who knows. But the one thing I do know is this: Many of us (not just here in the U.S. but across the globe) are done with it all. Done, as in – finished, want it over and done with now. End of story.
It’s quite possible that an idea borne of capitalism, real unadulterated capitalism, just might be what brings the world back from the brink.
Will it happen? Nah…probably make too much sense. And you know what politics needs more of, but wants less of. i.e., Anything that shows they might not be needed. And making sense has a way of doing just that, which is why they hate it so.
But, you still have to dream, and dream big, regardless.
© 2017 Mark St.Cyr