Sunday, June 30, 2013

America's Secret Economic Warfare with China

Journalist James R. Norman argued that the U.S. and its allies use the price of oil as an economic weapon. The oil economic war against the Soviet Union worked so well in the 1980s, that this strategy is now being employed against "our other big geopolitical enemy," China, which currently imports more oil than the US, and is much less able to pay for it, he outlined. The thinking in Washington is, it's going to slow things down for China, and could put a crack in their political system, he continued. Other aspects of the economic war the US is waging with China are on the front page of the paper almost every day-- with fights over trade actions, interest rates, and currency levels, he noted.

The whole Chinese business model is based on predatory trade practices, and that's why the world is ganging up on them, Norman said, adding that China is facing large amounts of unemployment and social unrest, and their banks are sitting on huge assets of non-performing loans. Norman estimated that the actual cost of oil is between $10- $20 a barrel, but when US citizens shell out $4 a gallon at the pump, it's collateral damage or the price we pay to engage in an economic rather than physical war with China.

Companies like Goldman Sachs, Merrill Lynch, and Morgan Stanley are the economic warfare equivalent of a carrier battle group, because they are able to project power-- that's why financial restrictions were lessened for them, he explained. Morgan also touched on geopolitical/economic situations in such places as Russia, Europe, Iran, Venezuela, and Syria.


Jim Norman is a veteran business journalist and energy reporter. He is currently a contributing writer for McGraw-Hill's Platts Oilgram News, where he was a senior writer for 10 years before retiring in mid-2007. At Platts, Norman has been noted for his coverage of oil industry finance, economics, deal-making and chicanery. His "prophetic press reports," as early as 1998, were cited by Paul Volcker's UN Independent Inquiry Committee for laying bare the likelihood of kickbacks and money laundering involving the Iraq Oil-For-Food program. His critical analysis of Enron accounting and governance in mid-2001 helped trigger the SEC investigation which led to Enron's downfall.

Economic warfare is the term for economic policies followed as a part of military operations and covert operations during wartime.

The purpose of economic warfare is to capture critical economic resources so that the military and intelligence agencies can operate at full efficiency and/or deprive enemy forces of those resources so that they cannot fight the war properly.

The concept of economic warfare is most applicable to conflict between nation states, especially in times of total war - which involves not only the armed forces of a nation, but mobilization of the nation's entire economy towards the war effort. In such a situation, causing damage to the economy of the enemy directly damages the enemy's ability to fight the war.

Some of the types or policies followed in economic warfare include: Blockade Blacklisting Preclusive purchasing Rewards Capturing of enemy assets

Clear examples of economic warfare could be seen during World War II when the Allied powers followed these policies to deprive the Axis economies of critical resources. In turn, the Axis powers attempted to damage the Allied war effort via submarine warfare, and the sinking of supply ships carrying supplies, raw materials, and war related equipment.

Capitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.[1] Other elements central to capitalism include competitive markets, wage labor and capital accumulation.[2] There are multiple variants of capitalism, including laissez-faire, welfare capitalism and state capitalism. Capitalism is considered to have been applied in a variety of historical cases, varying in time, geography, politics, and culture.[3] There is general agreement that capitalism became dominant in the Western world following the demise of feudalism.[4] Competitive markets may also be found in market-based alternatives to capitalism such as market socialism and co-operative economics.

Economists, political economists and historians have taken different perspectives on the analysis of capitalism. Economists usually emphasize the degree to which government does not have control over markets (laissez faire), as well as the importance of property rights.[5][6] Most political economists emphasize private property as well, in addition to power relations, wage labor, class, and the uniqueness of capitalism as a historical formation