I have had a request from Mrs. Macleod to write down in simple terms what on earth is going on in the world, and why is it that I think gold is so important in this context. She-who-must-be-obeyed does not fully share my interest in the subject. An explanation of the big picture is also likely to be useful to many of my readers and their spouses, who do not share an enduring interest in geopolitics either.
That is the purpose of this article. It can be bewildering when a casual observer tries to follow global events, something made more difficult by editorial policies at news outlets, and the commentary from most analysts, who are, frankly, ill-informed. Accordingly, this article addresses the topic that dominates our future. The most important players in the great game of geopolitics are America and China. But before launching into an update, I shall lay down the disciplines required for an informed analysis.
Do try to look at issues from all sides in order to understand both strategic considerations and prospective outcomes. Understand that characteristics which may apply to one side do not necessarily apply to the other. For example, financial analysis that applies to the US economy does not necessarily apply to China’s. Do try to remain neutral and objective, analytical and unbiased. Remember the old stockbroker’s adage: where there’s a tip, there’s a tap, meaning that the dissemination of information is usually designed to promote vested interests.
The list of don’ts is somewhat longer. Don’t believe what governments say, because they will tell you what they want you to believe. Don’t believe anything coming out of intelligence services: if the information is good it is highly unlikely to come your way, and if good information does come your way, it will be indistinguishable from conspiracy theories. Don’t believe conspiracy theories because they are almost never true. Don’t believe government statistics; in fact, you shouldn’t rely on statistics at all, except in the broadest sense. Don’t believe western analysts, financial or otherwise, particularly when commenting on China or Russia. Don’t believe the mainstream media; it usually toes the establishment line, something we recognize of the Chinese and the Russians, but not in our own organizations. Don’t be swayed by nationalism or patriotism: remember Dr. Johnson’s aphorism, that patriotism is the last refuge of a scoundrel (he was referring to those who invoke it).
Bearing these rules in mind, let us begin with America, and her position in the world because everything else flows through her accelerating descent from post-war influence.
America – becoming introspective?
America’s global dominance, unquestioned after the dissolution of the old USSR, is now being challenged by China, which plans to absorb the whole Eurasian continent within its commercial sphere of influence. Before President Trump assumed office in January 2017, the threat to America’s hegemony was not widely seen as a public issue, and her policy was to protect US interests through diplomacy, trade, and military presence. Covert operations were used to destabilize regimes which were deemed to be a threat to American interests, particularly in the Middle East, but also in Ukraine, an important buffer-state between Russia and NATO member states in Europe. It was the continuation of persuasion by guns and butter, even though as a global policy it has been getting somewhat tired. The supply of metaphorical butter from America has diminished, and that is now increasingly supplied by China.
Then there came Trump. His surprise election as president brought a several-times bankrupted businessman with little more than an outsized ego into the White House. His understanding of economics and the political process was zilch, but to his electoral base, that was his attraction, particularly compared with the Clinton alternative. Trump stood on a platform of anti-immigration, anti-globalization, anti-foreign trade, and anti-foreign wars. He was pro-business and pro-America. In short, he was elected to overturn the tired policies of the Clintons, Bushes, and Obama. America was to become introspective in its foreign relationships, reversing the established globalization trends.
Trump is politically at odds with America’s allies, particularly in statist, predominantly-socialist Europe. His insistence that European members of NATO must pay more of NATO’s costs was seen as a signal that established relationships could no longer be taken for granted, and Germany, in particular, should assert greater independence. In fact, the post-war establishment and all its institutions were threatened by the Trump rhetoric. However, the prospect of a better relationship with Russia, one of Trump’s pre-election hopes, faded with allegations of Russian interference in the presidential election. But probably the most disruptive Trumpian policies are over trade.
