Trump's goal to keep China from using 'nuclear option' of dumping US debt – Max Keiser
RT,
23
June, 2018
President
Donald Trump is cutting US military spending to be less exposed to
the skyrocketing interest rates that would become unavoidable when
China opts to dump US Treasury bonds, Max Keiser has told RT.
“To
understand US trade policies – and in particular Trump’s policies
on China – from Trump’s point of view you have to think like
Trump,” the host of RT's Keiser Report explained. “When Trump
took office, he inherited the biggest debt load that any country had
ever accumulated. He also inherited a military budget that eats up 50
percent of America’s annual tax revenues of $1.5 trillion.”
According
to Keiser, after taking the helm as president, Donald Trump realized
it was vital to reduce defense spending to pare the huge US debt.
“He
looked at the geo-political chess board and saw that – the low
hanging fruit, in terms of saving money – is America’s huge
military spending in South Korea,” said Keiser, stressing that
after the historic summit with North Korean leader Kim Jing-un the US
would start pulling military presence out of the region.
The
US president is currently arranging deals with Saudi Arabia and
Israel, in preparation for the US pulling out of the Middle East as
well, Keiser added, highlighting that Trump had previously signaled
to Germany that the US would to cut its military presence in NATO
there too.
“That
brings us to China, and the ‘nuclear option’ they have of dumping
US treasuries to financially attack America. This is their one big
play. Trump knows it, and he’s been protecting the US against it,”
the financial commentator said.
Downsizing
the Pentagon, according to Keiser, will shrink US debt, diminishing
the possibility of a Chinese financial attack via the dumping of US
bonds.
Dumping US securities moved Russia to 22nd place on list of major foreign holders of US debt on.rt.com/97yf
The
Central Bank of Russia (CBR) commonly factors in all kinds of risks
when allocating the country's reserves, said the CBR chief,
commenting on a major sell-off of US Treasury bonds.
“By
reducing its debt load, the US becomes a smaller target, and less
exposed to the skyrocketing interest rates that would accompany a
Chinese multi-trillion Treasury bond dump,” Keiser said.
“Additionally, China’s internal debts are harder to cut without
causing a more generalized, across-the-board economic wipeout –
giving rise to severe, unpredictable social unrest.”
The
commentator said that cutting the Pentagon budget in half will cut
the stock market in half and cause a short and sharp recession in the
US. However, the economy can rapidly recover if Trump “allocates
part of the defense-spending-cut dividend to stimulus programs,
pushing credit opportunities for small and medium-sized enterprises
and infrastructure spending.”
Chinese investments totaled $1.8 billion from January through May, that’s the lowest level in 7 years on.rt.com/980h
China
cuts US investments by 92 percent this year amid escalating trade war
According
to Keiser, China’s stock market will also be cut in half. However,
the country’s government, in the absence of a fully-developed
consumer economy, will have to “fall back on its tried and true
Mercantilist policies of exporting its way to growth by pegging its
currency at below market rates – which means holding, not selling
US dollars.”
“In
the end, Trump wins. China’s growth rate is cut sharply, (but it
keeps going without a revolution). Germany is free to partner with
Russia in a post-NATO world (long overdue, IMO) and over in the
mid-East, the oil is running out – so they’re transitioning to
solar,” said Keiser.
Chinese investment in the US drops 90% amid political pressure
- Chinese acquisitions and investments in the U.S. fell 92 percent to just $1.8 billion in the first five months of this year, consulting and research firm Rhodium Group says.
- Counting divestitures, net Chinese deal flow to the U.S. during that time was a negative $7.8 billion, the report says.
- Beijing is trying to limit capital outflows and excessive leverage, while the Trump administration is increasing scrutiny of Chinese investments in the U.S. amid concerns about intellectual property protection.
Chinese
acquisitions and investments in the U.S. fell 92 percent to just $1.8
billion in the first five months of this year, consulting and
research firm Rhodium Group said Tuesday.
Counting
divestitures, net Chinese deal flow to the U.S. during that time was
a negative $7.8 billion, the report said.
The
decline follows a sharp drop in the second half of last year as
pressure from both Beijing and the Trump administration curbed a
recent surge in cross-border investment. Completed Chinese deals in
the U.S. hit a record $46 billion in 2016, and dropped to $29 billion
in 2017, according to Rhodium.
China Steps Up US Cyberattacks As Trade Tensions Worsen
Despite
signing a "digital truce" with the US in 2015 that banned
the hacking of private companies, China
has been green-lighting plenty of cyberattacks on US defense
contractors, along with other targets, lately. And given the rising
trade tensions with the US, these types of attacks are only expected
to increase,
according to Wired. To
wit, one state-funded group recently infiltrated a Navy contractor
and stole hundreds of gigabytes of information about submarines and
undersea weapons, that
have by now likely been handed over to the Chinese military.
As
one source told Wired, China
has backed off on intellectual property theft, as it promised to do
when it signed the treaty. But it has more than compensated for this
by redoubling its efforts to acquire US military intelligence.
"China’s actually backed off quite a bit on intellectual property theft, but when it comes to military trade secrets, military preparedness, military readiness, satellite communications, anything that involves the US’s ability to keep a cyber or military edge, China has been very heavily focused on those targets," says David Kennedy, CEO of the threat tracking firm Binary Defense Systems, who formerly worked at the NSA and with the Marine Corps' signal intelligence unit. "And the US does the same thing, by the way."
Earlier
this week, analysts from Symantec published their research tracking a
series of attacks carried out by suspected Chinese hackers between
November 2017 and April. The researchers dubbed the group "Thrip"
- and what they have discovered is deeply troubling. The group, which
the Symantec analysts have monitored since 2013, has learned to "hide
in plain site" by using prefab malware to infiltrate networks,
and then manipulate administrative controls to press further without
tripping any alarms. Using off-the-shelf tools makes the group harder
to identify. Still, the Symantec team found evidence of intrusions at
some telecoms firms in southeast Asia, a
US geospatial imagery company, a couple of private satellite
companies including one US firm, and a US defense contractor.
And
in what was probably Symantec's most alarming discovery, the
researchers learned that the hackers had managed to obtain
operational control of orbiting satellite, giving them the ability to
"disrupt data flows" or the satellite's trajectory.
The researchers found evidence of intrusions at some southeast Asian telecom firms, a US geospatial imagery company, a couple of private satellite companies including one from the US, and a US defense contractor. The breaches were all deliberate and targeted, and in the case of the satellite firms the hackers moved all the way through to reach the control systems of actual orbiting satellites, where they could have impacted a satellite's trajectory or disrupted data flow.
"It is scary," says Jon DiMaggio, a senior threat intelligence analyst at Symantec who leads the research into Thrip.
"We looked at which systems they were interested in, where they spent the most time, and on the satellites it was command and control. And then they were also on the operational side for both the geospatial imagery and the telecom attacks."
We
should all be concerned about the increase in hacking of defense
contractors because, as one of Wired's
sources explains, sometimes an escalation of digital attacks can
precede an armed conflict.
"Hacking can be used as a sign of force in a lot of cases to say 'hey, we’re not happy and we’re going to make you feel some pain,'" Kennedy notes. "They'll use that as a first step instead of having to send fighter jets or something."
[...]
"All of these pieces fit together," Symantec's DiMaggio says of Thrip. "It’s not targets of opportunity; it’s definitely a planned operation."
Of
course, China has many options for retaliating against the US as the
trade war with President Donald Trump worsens, including the
so-called nuclear option: Dumping
its US Treasury holdings. China's military still lags the US in terms
of firepower, but the government is quickly closing that gap, and
its provocations in the South China Sea could
cause the already tenuous relationship between the two countries to
further deteriorate.
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