Bold Moves

Where in the world is Zhou Xiaochuan? The first three reports are always wrong. What we do know, however, is that an explanation will follow (after the dust has settled; after Monday's market close).

The continued perceived weakness of the Obama administration on virtually every front, is inviting bold moves. When the North Koreans attacked the South Korean war ship, Cheonan, and the Obama administration did essentially nothing, China knew it can do whatever it wants. America is no longer an impediment to whatever goals it might set for itself.

That much is true: America no longer has a foreign policy. As long as Obama remains in office, America will maintain the classic stance of the ‘see no evil, hear no evil, speak no evil’ monkeys. The sole challenge Obama acknowledges is the one here at home where he has deemed the American people the enemy.

Abroad, countries are scrambling to get what they can before America regains its senses. China has been building infrastructure throughout Asia to accommodate its ever growing military might . Just this month, Chinese naval vessels made port call in Myanmar for the very first time. Major Chinese construction projects are ongoing in Pakistan and Sri Lanka. China has been busy making deals all over the world to secure exclusive rights to important natural resources. China is putting all its ducks in a row.

Clearly, China is readying for war. Why, you might ask, is China so intent on positioning its military favorably at a time when the U.S. is in clear decline? China does not view the U.S. as the enemy. It is not the U.S. it must be ready to fight. It’s the chaos that will ensue once it has become clear to everyone that the U.S. has exited the world stage.

China is already in a position to push the U.S. over that edge. Its holdings of U.S. debt give it that power. However, China feels, it is not yet ready. When she moves, she will move fast. Much of her U.S. holdings will go up in smoke. But it won’t matter. America will lie in ruins. Taiwan will assume the position of low hanging fruit.

The current act is simply a way for the gamers to squeeze some temporary cash out of the markets. Strictly small stuff compared to having to face the Russian bear …later.