Monday, January 27, 2014

Orchestrated Collapse by Erick San Juan

Orchestrated Collapse by Erick San Juan

From which was sent to me through e-mail stated that - Financial institutions the world over are sounding the alarm of the possibility of a massive default in China, come January 31, 2014. If this should happen, it could lead to a cascading collapse of China’s entire banking system, which could potentially result in "sky-high interest rates" and "a precipitous plunge in credit".

In other words, it could be a "Lehman Brothers moment" for Asia. And since the global financial system is more interconnected today than ever before, that would be very bad news for the United States and to the world as well.

Some may wonder why on January 31, the Chinese New Year?

From Tyler Durden’s article published at – “CNY represents China’s official currency. It also stands for Chinese New Year, the biggest holiday for the country and the occasion for family reunions and celebration. But less familiar for many, however, the Year (?) itself actually stood for a beast which comes out every 365 days and eats everything along the way from bugs to humans. The holiday tradition started as a way for people to fend off the beast by getting together and lighting up the firecrackers.

At the same time, Chinese custom dictated that people should also pay their due to avoid becoming the beast’s target. In particular, it has been a tradition to settle all debt before the New Year. From the perspective of such folk culture, the trust product Credit Equals Gold #1, referred as CEQ1 hereafter, by China Credit Trust planned poorly for having the maturing date on the New Year, leaving a 3bn CNY beast running wild.”

With a picture like this that will happen on the 31st of this month, some analysts see things based on study of history that 2014 (after a hundred years since the First World War), it seems that the same present scenario is heading the world to another war. Actually some economists too expressed their analysis as follows (from Washington's blog):

    "A continuation of bailouts in Europe could ultimately spark another world war," says international investor Jim Rogers.

    “Add debt, the situation gets worse, and eventually it just collapses. Then everybody is looking for scapegoats. Politicians blame foreigners, and we’re in World War II or World War whatever.”

Marc Faber says that the American government will start new wars in response to the economic crisis:

    “The next thing the government will do to distract the attention of the people on bad economic conditions is they’ll start a war somewhere.”

    “If the global economy doesn’t recover, usually people go to war.”

We’re in the middle of a global currency war – i.e. a situation where nations all compete to devalue their currencies the most in order to boost exports. And Brazilian president-elect Rousseff said in 2010:

    'The last time there was a series of competitive devaluations … it ended in world war two.'

Jim Rickards agrees:

    Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon’s first-ever “financial” war games. While expressing confidence in America’s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into “asymmetric warfare,” if currency wars lead to rising inflation and global economic uncertainty.

As does Jim Rogers:

    'Trade wars always lead to wars.'

 Even in You Tube, most popular analysts like Gerald Celente. Glenn Beck, Jesse Ventura and others are all giving their self fulfilling prophesy. Even George Soros has predicted (orchestrated?) this possible impending collapse.
Forewarned is forearmed as the rest of the world may be preparing for the worst case scenario but sadly here in our country there is too much politicking already for the next election (if there is going to be one).

 “The writing is on the wall" or the future is predetermined by the actions taken by men as much as people repeating history, well in this case – another World War One or a Great War in the offing.

Let us pray that the Chinese New Year will bring better things but as always it is all up to us what life will bring us if we will all work harder and avoid the unnecessary war created by the greed and stupidity of the world’s elite.

Tuesday, January 21, 2014

Hegemony in the Offing by Erick San Juan

 Hegemony in the Offing by Erick San Juan

Despite many Chinese diplomatic assurances to the contrary, Chinese assertiveness in the South China Sea is an attempt to re-establish traditional Chinese hegemony in the region.

As of January 1, 2014 China's Hainan province required all foreign fishing vessels to ask permission to enter more than half of the 3.5-million-square-kilometer South China Sea. The new regulations adopted by China's Hainan Province on implementing the country's fishing law replaced the previous regulations that went into effect in 1993.Chinese Foreign Ministry spokeswoman Hua Chunying said there was nothing unusual about the new restrictions."As a maritime nation it is normal and routine for China to make rules to regulate the conservation and management of maritime biological resources," said Hua. "According to international laws, universal practice and domestic laws, the Chinese government bears the right and obligation to manage the biological and non-biological resources on relevant islands, reefs and in relevant waters.... If someone asserts that the technical amendments on a provincial fishing regulation which has been implemented for years will pose a threat to regional peace and stability, it's either due to lack of common sense or out of hidden intent".

But the United States says Chinese moves to restrict fishing in contested waters of the South China Sea are a "potentially dangerous" escalation in the maritime dispute. Chinese authorities say the rules are well within their sovereign rights.

U.S. State Department spokeswoman Jen Psaki says the new restrictions run counter to efforts to resolve the disputes multilaterally.

"The passing of these restrictions on other countries' fishing activities in disputed portions of the South China Sea is a provocative and potentially dangerous act," said Psaki. ( Even geopolitical analysts in the region believe that the absence of crisis settlement methods between China and neighboring Asian nation-states and the probability of conflict situation emerging in the region will increase not excluding the possibility of armed confrontation.

So the question asked by Elfren Cruz in his column in the Philippine Star – “How is it that the province of Hainan can claim jurisdiction over most of China’s claims of islets and atolls in the West Philippine Sea? Is this not the responsibility alone of the central government? Is it mere coincidence that Hainan province is also where a major Chinese naval base is located? This is the location of a dock for China’s only aircraft carrier and also the base for attack submarines.”

Hainan province is the second largest province of China which explains why their major naval base is located (if one will look into the map closely, it is very near Luzon.) Quite obviously, aside from the South China Sea’s untapped oil and gas reserves, the area is very rich with marine life including wide varieties of edible fish.
That is why the predominantly privately owned fishing companies based in China are hard to control by Beijing’s central government even if these companies are already engaged in overfishing.

Actually as China look for more fishing grounds, near or distant, collisions with neighboring countries happen more often especially with Vietnam and the Philippines.  Sadly, our experience with such maritime accident made our overseas workers victims whether they like it or not.

Protests from country claimants in the South China Sea about this latest fishing regulations has been sent and it is for Beijing government to take action and instruct Hainan province to ease the tensions created by such act. But back to the nagging question - why this regulation by a China’s province being imposed ‘provocatively’ in the contested area?

To shed light to this question, from Foreign Affairs, Professor David Lampton wrote an article entitled “ How China is Ruled: Why It’s Getting Harder for Beijing to Govern.” According to him, this difficulty arises from the fact that China’s central government is operating in an environment radically different from the one that existed at the beginning of Deng’s tenure. He writes that these are the primary reasons governing has become more difficult than in the past:

“First, individual Chinese leaders have become progressively weaker in relation to both one another and the rest of society. Second, Chinese society, as well as the economy and the bureaucracy has fractured, multiplying the number of constituencies. Third, China’s leadership must now confront a population with more resources, in terms of money, talent, and information than ever before.”

However, today: “The combination of more densely packed urban population, rapidly rising aspirations and the spread of knowledge, and the greater ease of coordinating social action means that China’s leaders will find it progressively more challenging to govern.”

The leadership style of Xi Jingping is also being closely observed to see how he will deal with this changing environment. It is, of course, too early to determine what his path will be. He is presently still trying to consolidate his power over Communist Party political machinery, and even more critical, over the People’s Liberation Army. (Elfren Cruz)

With China’s rising hegemony in the region and the assertiveness of its citizenry in imposing regulations that involves foreign fishing vessels, there will always be incidents that might trigger a regional conflict in the process especially with the United States who always advocates freedom of navigation in the area.

Remember that “throughout history, relations between dominant and rising states have been uneasy—and often violent. Established powers tend to regard themselves as the defenders of an international order that they helped to create and from which they continue to benefit; rising powers feel constrained, even cheated, by the status quo and struggle against it to take what they think is rightfully theirs.” (Aaron L. Friedberg, the national interest online)

 So who will blink first? The US is known for it's 'first strike policy' or doing preemptive strikes to neutralize the enemy. But China seems to do the same. China's action is now being perceived as a violator of international laws and an open threat to regional security and stability. Multilateral discussion on this issue must be addressed by the ASEAN and by the UN as soon as possible to avoid the 'inevitable' which the 'hidden hands' behind the scene are fanning to create a situation to justify such wars in the offing.

Monday, January 13, 2014

The True Picture by Erick San Juan

The True Picture by Erick San Juan

'Loose lips sink ships' is an American English idiom meaning "beware of unguarded talk". The phrase originated on propaganda posters during World War II. The phrase was created by the War Advertising Council and used on posters by the United States Office of War Information.

The gist of this particular slogan was that one should avoid speaking of ship movements, as this talk (if directed at or overheard by covert enemy agents) might allow the enemy to intercept and destroy the ships.

There were many similar slogans, but "Loose lips sink ships" remained in the American idiom for the remainder of the century and into the next, usually as an admonition to avoid careless talk in general. (

But in this age of high-tech information gathering and sharing especially through the internet and the widely use of several social networking sites, keeping mum on certain information that pertains to a country’s national security is no longer applicable, and some are using this avenue to mind conditioning or as deliberate leak of information.

Take for example, the endless word wars via rhetoric and double talk of countries especially claimants in the disputed area in the South China Sea (SCS) plus the saber rattling between the United States versus China. Such exchanges of provocative words are the reactions to certain actions taken usually by both China and US that involve contested areas in the region.

Such actions usually pertain to the military buildup of both Beijing and Washington that were conveniently posted on the internet through online newspapers and definitely in their government-controlled media. The mere fact that these are deliberate leaks, there are still a lot that these two giants are not telling the media because it might just ‘sink ships’ in the process.

One such ‘secret’ is about the true picture of their economies, both countries are trying to hide the sad realities of the situation that their economies are in the brink of collapse or shall I say in the process of collapsing and such situation might lead to internal conflict among their citizenry.

Let us heed the words of U.S. President Abraham Lincoln in his letter to Col. William F. Elkins dated November 21, 1864 -  “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”  (thanks to my friend and loyal listener, Rels Octaviano for this quote)

May it be the global elites or the local elites, through corporations, these elites are enriching themselves unabated. Sounds familiar? Our country is actually not spared from this phenomenon.

Like I used to say, the G2 (China and US) needed war to avoid an internal confrontation (translation-civil war). But recently it was China that has been creating situation that spells provocation. Scenarios that have made its neighboring countries nervous from ADIZ to the much recent one - the new Chinese fishing restrictions in disputed waters in the South China Sea.

The legislature of China's Hainan province approved rules in November 2013 that took effect on January 1,2014 requiring foreign fishing vessels to obtain approval to enter waters under its jurisdiction.

Such a move, if broadly enforced, could worsen tensions in the region. Beijing claims almost the entire oil- and gas-rich South China Sea, rejecting rival claims to parts of it from the Philippines, Taiwan, Malaysia, Brunei and Vietnam. (Reuters)

My observation was seconded by this article "Did Soros Just Predict a China Crash?" by William Pesek that in a Jan. 2 op-ed for Project Syndicate, George Soros didn't say whether he's hitting China. But he did connect the dots in a way that can't make President Xi Jinping happy. To Soros, the main risk facing the world isn't the euro, the U.S. Congress or a Japanese asset bubble, but a Chinese debt disaster that's unfolding in plain sight.

“There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years," Soros wrote.

Xi would be negligent to ignore Soros's warnings. He's hardly alone: Peking University professor Michael Pettis and Jim Chanos of Kynikos Associates have been beating this drum for years. Silvercrest Asset Management's Patrick Chovanec worries about a “shadow” Chinese balance sheet that would be keeping policy makers awake around the globe, if Beijing's obsessive opacity weren't concealing the problem. (You can read his latest concerns in this Jan. 3, 2014 Bloomberg View op-ed.)

We remember George Soros, the billionaire who first shook a major government in September 1992, when he led an attack on the British pound. For his role in humiliating London and forcing former Prime Minister John Major's government to exit the European exchange-rate mechanism -- essentially the euro -- Soros reportedly netted $2 billion. Soros made a bundle off America's sub-prime debt crisis as well. Here in Asia, his legend has loomed large since 1997, when then-Malaysian Prime Minister Mahathir Mohamad accused him, bizarrely, of heading a Jewish conspiracy to spark an Asian crisis.

People haven't made lots of money betting against China. But Soros is absolutely right that there's a worrisome disconnect between China's pledges to move away from excessive investment and overborrowing and toward a services-based economy without sacrificing rapid growth. If Xi doesn't act now, Soros could possibly make more than $2 billion when things go awry and savage the global economy. Add a zero. (Ibid)

Like any country’s economy, if it is built in bubbles, the day will come that it will just burst and people will ask what hit them because they never heed the echoes of the past and so they will always repeat history. And the sad part is, history might not be kind to them in the end.

Monday, January 6, 2014

Inevitable War by Erick San Juan

There is no avoiding war; it can only be postponed to the advantage of others. – Niccolo Machiavelli

Like I used to say, if the program is on and the only thing the global elites can do is to postpone the inevitable global war and precisely to their advantage. And so what can countries (like the Philippines) do to seize the opportunity of getting what they deserve in engaging with alliances?

As a sovereign nation, we have to gather our act together so that we will get what is due us and not to repeat the bad part of our history.

Just like a broken record player, i've been repeating that we must learn from our past experiences and we should not forget how we were screwed by the global elites in dragging us into a war not of our liking. In the process we were left behind after the war and it was Japan, the perceived enemy of America who received the all out support from the United States government.

Now that the Philippines is being programmed to be the epicenter of war in the South China Sea (SCS) and in the Pacific, US  State Secretary Kerry made a lip service recently that the US will give an all out  support to our country just in case of war. But remember the several times that we had a near confrontation with China, all we heard from Uncle Sam was that the US will remain neutral and will not interfere with the dispute between China and the Philippines and their only concern is the freedom of navigation in the SCS. But when Japan had the same predicament with China in the disputed area in the East China Sea, plus the recent establishment of Air Defense Identification Zone (ADIZ) by China, we witnessed how the US military showed support to Japan.

The mere fact that the US government even reminded Beijing that there is a US-Japan security pact in place and that the contested islands are part of that treaty that the US will give support to Japan in case of an attack from China. It is very clear that after all that support we gave as a loyal ally to US, we never had the same treatment as what US has been giving to Japan.

This only shows that our government should make it clear and be firm as to the extent of our relationship with Washington, especially now that there is an ongoing talks about a new “access agreement” on the presence of US military in the country.

If the US is really serious not to make  us just cannon fodders, the US congress should pass a law (like what support they gave to Japan) that there will be an automatic retaliation and support from US in case of Chinese (or other countries) attack and aggression to our country.

In these exciting times, let us be very wary and always on the lookout when it comes to the country’s security and foreign policy, like what we have cited in our past two articles, the drums of war are getting louder and louder and the possibility of a regional conflict right here in our backyard is real. Any miscalculation and possible false flag operation can lead us to another destruction whether we like it or not. This is the reality! Our so called leaders allowed us to be the US military doormat in the region and like a huge magnet, we attract Uncle Sam’s enemies in the process.
The only hope that this country have with the present administration is to cast a fair deal with the US. If they want our country’s support in their pivot to Asia, they must put it in writing approved by their US Congress. That will be the moment that we can have a semblance of peace of mind especially if we will be armed like real warriors and not like toy soldiers. If not God forbid!

 May our leaders conscience bother them. I believe in Karma!