US China Japan Quandary

As I write this, President Obama has ended his Asian tour (sounds rockstaresque). Although he was met by major protest nearly everywhere he went, from the Philippines where protestors were sprayed with water hoses to Malaysia, his main worry continues to be how to deal with Japan, an ally but at the same time not offend one of America’s largest holder of U.S. debt – China.

In word, President Obama stated that the US Japan alliance was "stronger than ever" adding in so many words that America opposes any efforts (by China) to undermine Japan’s administration of the disputed and uninhabited Diaoyu Islands in the East China Sea (note East China not East Japan).  By taking this position, The President basically questioned China's sovereignty and “legitimate interest," to use the words of foreign ministry spokesman Qin Gang, in the Diaoyu Islands, which they feel have nothing to do the Japan-US security treaty. Also, there remains the effort of the U.S. to implement Obamas GATT and NAFTA, the 12-nation Trans-Pacific Partnership (TPP), which excludes China.

Some may argue otherwise, but it should be remembered that since the fall of japan after WW 2, it was clear that a primary objective of the occupation of Japan would be U.S. military control in the region for decades to come albeit not originally outlined in the Potsdam Declaration as such. This was achieved when General Douglas MacArthur, along with a few staff WROTE the entire new constitution of Japan that has lasted ever since. Specifically via But the most unique and one of the most important provisions came in Article 9, which outlawed the creation of armed forces and the right to make war.

This is a difficult prospectus for the U.S. while mainstream media incessantly pounds that China is faltering economically, the question is compared to whom?  Not the U.S. for certain.   First, U.S. bureaucrats insist that the Chinese economy is in deep trouble, although the Chinese economy grewat 7.4% year-on-year for the first quarter of 2014. In particular when compared with the miniscule expanded 0.10 percent growth in the U.S. Gross DomesticProduct (GDP) observed in the first quarter of 2014 over the previous quarter.  And loot will continue to flow in to China given the global demand for copper, soybeans and multiple investments and trade arrangements between China and South America. China has a large hand and equal investment in Copper in both Chile and Peru and Iron in Brazil as well as sustainable energy development in Venezuela. Plus one must recognize the long standing relationship China and Trinidad have in the Caribbean. The reality is that South America now imports more from China than it does from the European Union, according to the U.N. economic agency for the region.

Then there is the issue with China and Russia , which appear to be making moves toward quitting using (diversifying) the US dollar or at least significantly cutting the dollar share in their forex reserves (a move that will most likely broaden the Yuan’s daily trading range). Add to this that from of January 2013 to the end of July, the Bank of Russia reduced its stockpile of US Treasury securities from USD 164.4 billion to USD 131.6 billion (a reduction of US Treasury obligations by USD 32.8 billion, or by 20 percent), there are some serious issues on the table for the administration to address and not just give window dressing.

Even more important is that the military containment of China for the U.S. is the main reason this administration has proffered unequivocal support for Japan, although they are well aware that such may have a dire impact and strain on the U.S. economy.  Specifically, speaking, if China desires to retaliate, in concert with Russia and other BRIC nations, the result could led to starting the demise of the dollar – meaning the American way of living will be severely impacted as a consequence with growing levels of inflation in the form of increases in the cost of food, clothing and gasoline and utilities.

It should be reminded, give the manner in which the U.S. has targeted Russia for what has occurred in the Ukraine, and leaving China out of the TPP talks, what we observe as closer interaction between Beijing and Moscow are really about protecting their domestic economies. But it is not farfetched to see that is they continue this close corporate, an outcome of bad and poorly thought-out U.S. foreign policy could be a direct challenge and attack on the dollar.

The U.S. concerns in China will prove to be challenging for the present administration. For one they are all over the place in policy and tend to reflect a moderately satirical ineptness to the goals and aims of their foreign policy efforts.  On the other, I am still waiting (as I suspect others) for  Mr. Obama to define what he means by “rebalancing” U.S. policy towards Asia, when his actions show opposite and even worse, the same old U.S. approach. By this I mean the neocolonial zeal reflected in President Obama’s desire to re-occupy the Philippines consequently continuing the United States historical imperialist agenda in Asia.

China has the second largest economy in the world and recently it has been project to pass the U.S, before the next year, with some economist suggesting that the size of the Chinese economy will become three times larger than the U.S. economy by the year 2040. The concern is that much of the U.S. dollar’s valuation stems from its lock on the oil industry and if China and Russia and the BRIC nations can accomplish this, next thing is the dollar is gone and  gold will rise. As I write and you read, Iran is already in the field trying out a non-dollar based international trade system.

It will be hard for Obama to both keep from upsetting China and at the same time appease Japan, as current news reports in the region have noted.  It is the administration desire to maintain U.S. military hegemony in both Malaysiaand Philippines, by making sure neither nation ever reach the strength militarily equal to Vietnam, as well as do all possible to prevent China from reaching parity with the U.S as a naval power that could eventually challenge American in the Indian Ocean and the Western Pacific. The obstacle is, has the Obama administration really thought about what their actions may result in, or are they just making it up as they go like they were in a game of pick-up and run?

A Ten Hour Glorified Lunch

Today, the three leaders of North America: President Barack Obama, President Enrique Peña Nieto of Mexico and Prime Minister Stephen Harper of Canada, meet in Mexico to supposedly discuss issues of trade between the three nations.  This on the 20-year anniversary of the North American Free Trade Agreement, commonly known as (NAFTA), which was signed into law by Bill Clinton in January  of 1994.

Before the meeting, it could have easily been guessed that the agendas of each leader were similar yet different.  I am certain Obama wanted to discuss security and immigration, and that Mr. Harper wanted to discuss the Keystone pipeline to take Canadian oil to the Gulf of Mexico, and that President Enrique Peña Nieto wanted to discuss immigration. But I also suspect that all wanted to get down to the nitty gritty with respect to the on the proposed trade agreement known as the Trans-Pacific Partnership.

The concern the average thinking American should ask is why is the US involved in another far reaching, sovereignty reducing trade pact that will supersede constitutional parameters that benefit the people over large, and in many cases foreign corporations? Although some purport the divinity of NAFTA, what we do know is that it was responsible for more than a million jobs leaving America for Mexico by incentivizing U.S. manufacturers to move production to lower-cost Mexico and that through Chapter 11 of the agreement, allows corporations or individuals of foreign governments to be placed on the same footing as Americans. As a consequence, many of the manufacturing jobs that once used to be in states like Michigan left and consequently, allowed companies that did stay in America to suppress wages of workers. So regardless of all the good it was supposed to do, what America really got was massive unemployment  and a massive U.S. trade deficit especially in the manufacturing sector with respect to Mexico of about  $100 billion which is still growing.

What President Obama should have mentioned was the concern with the criminal justice system in Mexico and the problems of violence perpetrated by the numerous drug cartels in the region, but he didn’t?  He should have discussed openly, that he wants the Keystone pipeline, but it would be hypocritical for him to do such given the oil from the Canadian Tar Sands would produce more of what he calls “carbon pollutants” and because much of the oil will not be used in the U.S. but rather sold and shipped abroad.  And lord knows Obama didn’t want to go on the record saying he supported foreign corporations like Trans-Canada having the right to claim imminent domain in America.

After I read the releasedjoint statement, it was obvious that this was just a waste of time. It had nothing to do with real issues, but more about show and photo ops.  I should have known Obama would not go on the record about the TPP, an agreement he is keeping so hush-hush, that he won’t even share it with the American citizenry openly and no one yet knows the broad scope of its reach. An agreement so hidden that we wouldn’t even know about its breath if it wasn’t for Wikileaks. All we do know is that Wall Street and the big banks and all associated with it are racking up big bonuses and it aint even law yet.

But as, unusual, I actually expected a meeting to be productive, and that American leaders should (the conditional) work on the best interest of U.S. citizens. But I was wrong, all this was it seems was a ten hour glorified lunch meeting, I just wonder how much tax payers spent for this, seeing that it could have been conducted via Skype.