A soft Retail Sales reading and a positive start to bank sector earnings provides the backdrop for today's session. On the data front, this morning' Retail Sales reading came short of estimates, but the modest...
The latest issue of the NFIB Small Business Economic Trends is out today. The April update for March came in at 95.2, a 2.8 drop from the previous month and the lowest reading in nine months. The index is now at...
Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman, provides his view on a large range of issues, including his expectation for the dollar to continue higher, the euro to fall below parity, timing of Fed rate hikes, direction of the U.S. economy...
First quarter earnings results aren't expected to be very good. According to data compiled by S&P Capital IQ, S&P 500 earnings per share are currently projected to be down 3.2% versus the same period a year ago.
Since I began writing analysis for the liberty movement more than eight years ago, I have always said that we will know when the endgame of the globalists is upon us when the criminals come out into the light of day and admit to their crimes. At that moment, it will be because they no longer fear either the repercussions or their plans being obstructed.
As I plan to show in this installment of my series on the hidden fiscal collapse of America, the endgame has indeed arrived. At the very least, the international elites seem to think success is within their grasp, for they now openly expose their own criminality. But they do so in a way that attempts to divert blame or to rationalize their actions as being for the “greater good.”
In Part 4 of this series, I discussed the reality of the false East/West paradigm and the fact that the “conflict” between Eastern and Western interests is nothing more than Kabuki theater constructed by globalists and designed to mesmerize the masses. You see, the problem with most people is that they tend to let their innate sense of tribalism drive them to take sides in war without understanding the fundamental root of that war. In most cases, they believe one side must be “good” and one side must be “bad.” Globalists understand this weakness of human collectivism, and they exploit it as often as possible. They create conflicts from out of the void, conflicts in which BOTH sides are controlled. Then, they let the masses fumble like idiots trying to set the noose around the other guy’s neck.
The East/West paradigm is just another in a long line of false confrontations engineered by the elites, but it is one that is most dangerous to the liberty movement itself. In our rage over the destruction of freedom and prosperity within our own country, some of us have come to assume that the source of all that is unholy bubbles at the heart of U.S. corporate and government activity and that the East is in the midst of some kind of rebellion. This is simply nonsense.
Recently, a reader sent me a link that reminded me of comments made by Rep. Louis T. McFadden, chairman of the House Banking Committee, on May 4, 1933. In the wake of his battle against the Federal Reserve, he said:
“… the treacherous signing away of American rights at the 7-power conference at London in July 1931 … put the Federal Reserve System under the control of the Bank of International Settlements.”
Even in 1933, there were some people who could see that the Federal Reserve was just an errand boy, an economic hit man for a more powerful entity. Sadly, McFadden died in 1936 from coronary thrombosis before he could make any headway in his crusade. The truth he stamped into the public record, though, lives on; and it is a truth that many people just don’t want to hear. It is easier to quantify the threat of the Federal Reserve. It is easier to believe that the Fed either controls the entire game or (for the more sheep-minded citizenry) that the Fed is a harmless “quasi-governmental body.” Many of us in the movement want to believe it is the gateway to the seventh circle of hell because if the Fed dies, then we win. And the Fed appears to be killable, most notably in light of certain actions on the part of the East. Unfortunately, the problem is far more complex.
As McFadden exposed, the Fed is merely a tentacle, one of many slithering at the behest of a larger vampire squid. The Bank for International Settlements appears to be the eye of the leviathan. I have been happy to see that the BIS is gaining more and more attention from the alternative media as a primary threat to the stability of the world. Zero Hedge published a very interesting article on the BIS banking cabal recently, excerpted from a book by Adam LeBor and titled “Meet The Secretive Group That Runs The World.”
Of course, this is not the first exposé on the BIS. Even Harper’s published a surprisingly honest (though only half the story) piece on the bank, titled “Ruling The World Of Money,” back in 1983. In it, the magazine claims that “…the unabashed purpose of its (BIS) elite monthly meetings is to coordinate and, if possible, to control all monetary activities in the industrialized world.”
Any central bank that ends up on the membership roster of the BIS should be for all intents and purposes considered a pawn of the BIS. This includes the central banks of Eastern nations supposedly in opposition to Western power. The very beginning history of the BIS is stained with blood, since it financially played both sides of World War II and aided the funding of the Nazi apparatus. Keep in mind that Germany, Japan and the Allies were all members of the BIS from 1931 on and remained members through the war. Bankers have been pitting countries against each other for a very long time, and they have no loyalties to any particular nation.
The BIS had to fade into the background for a time after its partnership with fascists was made public after the war. So the elites formed yet another monstrosity, the International Monetary Fund, to take its place in the public eye. However, the BIS continues to this day to pull the strings of the world’s central banks and, by extension, the world’s governments.
The strategy of engineered conflict has not changed. I have written numerous articles on the undeniable collusion between Russia and the IMF, including the avid Russian support for the IMF’s new global reserve currency, the Special Drawing Rights. You can read those articles here, here and here.
Vladimir Putin and the Kremlin have continued their love affair with the IMF since 2009, when they called for the SDR to become the world reserve currency.
Last year, Putin reasserted the goal of the BRICS to become more involved (enveloped) in the IMF system:
"In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this."
I also have been covering the Chinese shift away from the dollar and into the arms of the IMF’s currency basket for years.
The great lie today is that China and Russia are anti-New World Order. Yet as I discussed in my last article, China (and Russia) have consistently called for a global conversion into the SDR basket system, and they want this system to be run by the IMF. The IMF, in turn, has consistently called for the end of the dollar as the world reserve currency and has openly embraced institutions like the new Asian regional bank, the AIIB, which is dominated by China, despite the fact that many people wrongly believe that the AIIB is somehow “competition” to the IMF or World Bank.
This excerpt comes from the International Business Times:
World Bank managing director Mulyani Indrawati told Xinhua in an interview.
“We will definitely open for cooperation with AIIB [sic]. Even now, we are working very closely in the beginning and looking at the setting, principle and framework of this institution.”
She also dismissed worries that the AIIB will compete against the World Bank or existing regional development banks and noted the global need for infrastructure is huge to accommodate multiple organisations.
Speaking at the opening of the China Development Forum in Beijing, IMF chief Christine Lagarde said the IMF would be “delighted” to co-operate with AIIB, and the institutions have “massive” room for cooperation.
More on the history of China and its partnership with the New World Order can be found in James Corbett’s excellent video analysis here.
At the level of international banking and monetary policy, there is absolutely NO indication of any legitimate conflict between the East and the West. Again, such battles are only theater for the masses. But what purpose does this theater serve?
The fake economic war between East and West provides cover and rationale for the true goal of the internationalists: the destruction of the dollar as the world reserve currency and the ascendency of the SDR global monetary system. The endgame of the bankers is, of course, global government. It has been the longtime dream of the Fabian socialists permeating the central banking universe. A global currency system and centralized economic management are first-step psychological weapons against the public. If the world operates on a singular currency mechanism and a singular economic authority, why not have a singular governmental system as well?
The mistake many liberty movement analysts make is the assumption that the internationalists are somehow dedicated to U.S. interests. The idea that globalists have any loyalties to any sovereign government is a ridiculous notion. Fabians hate sovereign separations between nations (as much as they hate individual liberties), and they seek to ultimately destroy all boundaries for the sake of a singular global fiscal-political edifice.
But the elites cannot simply kill the dollar and replace it outright. They need a magic trick, a smoke-and-mirrors hologram, a sexy assistant in a sequined bathing suit and fireworks galore while they pull their global basket reserve out of a top hat. The false East/West paradigm is the perfect distraction. What better way to destroy the dollar and conjure a new world reserve than to pit one block of nations you dominate against the other block of nations you dominate and blame the resulting economic catastrophe on the "barbarism of sovereign nationalism,” which you also plan to erase in due course?
The elites are preparing for this event, and they are not content only to trigger it then sit back and watch it happen. They also hope to construct a new image for themselves as the prophets who tried to warn the world — the financial “sages” who would be our rescuers.
The criminals are coming into the light, and they are wearing the masks of saviors.
Alan Greenspan is now suddenly a staunch promoter of economic caution, warning that “something big … a significant market event …” is about to happen, and that gold is now a good investment as opposed to the dollar.
Janet Yellen has openly conceded that cash is not a convenient store of value.
Jamie Dimon is getting in on the prognosticator action, asserting that another financial crisis is coming.
The IMF now consistently warns of “shadow banking risks” bringing disaster to the economic environment.
The World Bank has been polite enough to warn the public that “now is the time to prepare for the next crisis.”
The BIS now produces statements on a regular basis predicting a possible “violent reversal of global markets,” just as it conveniently alerted the public to the possibility of credit collapse in 2007 right before the derivatives crisis.
Literally every elitist and his drunken uncle now publicly discuss the danger of another market crash. That’s a rather stark reversal from a few years ago when recovery was a mainstream absolute, Bernanke was being called a hero, and fiat stimulus was the fountain of youth. How would they know that such an event is coming? They built the conditions by which a collapse is inevitable, and now they want to purify themselves in the waters of Lake Minnetonka and absolve their institutions of all future ugliness.
I would like to point out, though, that banker warnings of volatility and crisis are generally given far too late for average people to act accordingly. I would also like to point out that the rising chorus of mainstream voices giving predictions of destabilization are also marginalizing and isolating the U.S. and the Federal Reserve as the root cause. The U.S. is nothing more than a storefront for elitist activities. And the Federal Reserve is a tentacle that can be sacrificed if it means achieving total centralization. All signs and evidence point to what the IMF calls the “great global economic reset.” The plans for this reset do not include U.S. prosperity or a thriving dollar.
In yet another ripped from the movies-screen-esque event, Beijing was brought to a standstill today as a massive Interstellar-like sandstorm covered the Chinese capital in thick blanket of red dust, sparking social media discussions of the end of the world. As RT reports, The China Meteorological Administration issued a yellow sandstorm alert – the third-most serious danger level, which given the images below, makes us wonder just WTF it takes to get to a level 1 sandstorm...
Stunning!! In a city of 21 million people...
As RT reports, Some areas in the city of 21 million recorded air pollution of nearly 1,000 micrograms per cubic meter, which is considered hazardous for people’s health.
Beijing residents had to wear face masks and goggles to protect themselves from the red sand and avoid injury and respiratory problems.
The bad visibility seriously disrupted traffic, causing large traffic jams all over the capital.
Massive sandstorm rolling into central Beijing, view from our office window: pic.twitter.com/VUaz6jJV7P
— Steve George (@steve0george) April 15, 2015
Chinese internet users were quick to label the weather phenomenon ‘Sand-ageddon,’ comparing it to the end of the world.
“It’s very dirty, I feel like it is the end of the world,” one of the users was cited by South China Morning Post.
Sandstorm in Beijing, it appears. pic.twitter.com/GfjThxtEgE
— Ben Ross (@BenRoss) April 15, 2015
While another person on social networks wrote that “it feels like we are living in a desert. I wonder how we can survive such bad weather.”
Despite being far from the red danger level, Wednesday’s sand storm was the strongest in the Chinese capital in 13 years.
Sandstorm, smog, willow catkins and traffic. Just another day in Beijing... pic.twitter.com/YSTELa71QA
— Li Yuan (@LiYuan6) April 15, 2015
Besides Beijing, 11 other provinces in the north of the country were impacted by the storm, which led to electricity blackouts and chaos on the roads.
Sandstorms are a common event in China in the spring, with the dust originating from the outer edge of deserts in Mongolia, northern China and the Hexi Corridor.
— Janis Mackey Frayer (@janisctv) April 15, 2015
Beijing is considered among the most polluted cities in the planet, with environmental watchdog Chinese Hazardous saying on Thursday that air particles, which cause asthma and breathing problems, were more than double the national target in the capital.
* * *
What in the world are the elite up to? In recent days, we have learned that the New York Fed is moving a lot of operations to Chicago because of concerns about what a “natural disaster” could do, the federal government is buying 62 million rounds of ammunition commonly used in AR-15 semi-automatic rifles for “training” purposes, and NORAD is moving back into Cheyenne Mountain because it is “EMP-hardened”. In addition, government authorities have scheduled a whole host of unusual “training exercises” all over the nation. So are the elite doing all of this in order to prepare for something really BIG, or should we just chalk up all of this strange activity to rampant government paranoia?
First, let’s talk about what the New York Fed has been doing. What kind of natural disaster would be bad enough to completely shut down the operations of the New York Federal Reserve Bank? It would have to be something very unusual, and apparently the New York Fed is very concerned that such an event could happen. According to Reuters, the New York Fed has been transferring personnel to Chicago and building up its satellite office there just in case a “natural disaster” makes it impossible for normal operations to continue in New York…
The New York branch of the U.S. Federal Reserve, wary that a natural disaster or other eventuality could shut down its market operations as it approaches an interest rate hike, has added staff and bulked up its satellite office in Chicago.
Some market technicians have transferred from New York and others were hired at the office housed in the Chicago Fed, according to several people familiar with the build-out that began about two years ago, after Hurricane Sandy struck Manhattan.
Officials believe the Chicago staffers can now handle all of the market operations that are done daily out of the New York Fed, which is the U.S. central bank’s main conduit to Wall Street.
This seems very odd.
In all of U.S. history, there has never been a natural disaster in New York City that would have been bad enough to totally shut down the operations of the New York Fed for an extended period of time.
So why are they so concerned?
Well, I can think of one event that could cause such a disruption…
An east coast tsunami.
This is something that I wrote about in this article. But other than that, it is hard to imagine a natural disaster which could shut down the New York Fed for an extended period of time.
Another very odd thing that we learned about this week is an absolutely massive purchase by the government of ammunition that is commonly used in AR-15 semi-automatic rifles. The following comes from an article by Paul Joseph Watson…
The Department of Homeland Security is set to purchase over 62 million rounds of ammo typically used in AR-15 semi-automatic rifles, just weeks after the ATF was forced to back down on a ban on M855 bullets.
A posting on FedBizOpps.gov this week reveals that the DHS is looking to contract with a company to provide 12.6 million rounds of .223 Remington ammunition per year for a period of five years – totaling 62.5 million bullets.
The solicitation explains that the purchase is intended, “to achieve price savings over the current .223 Rem duty ammunition.” The bullets will be used by U.S. Customs and Border Protection agents nationwide for “training” purposes.
Why in the world would U.S. Customs and Border Protection agents nationwide need such a massive amount of ammunition for “training” purposes?
That seems very odd.
Something else that seems very strange is the fact that NORAD is moving back into Cheyenne mountain after all these years…
It shut down nearly ten years ago as the threat from Russia seemed to subside, but this week the Pentagon announced that Cheyenne Mountain will once again be home to the most advanced tracking and communications equipment in the United States military.
The shift to the Cheyenne Mountain base in Colorado is designed to safeguard the command’s sensitive sensors and servers from a potential electromagnetic pulse (EMP) attack, military officers said.
The Pentagon last week announced a $700 million contract with Raytheon Corporation to oversee the work for North American Aerospace Command (NORAD) and US Northern Command.
Admiral William Gortney, head of NORAD and Northern Command, said that ‘because of the very nature of the way that Cheyenne Mountain’s built, it’s EMP-hardened.’
So the U.S. military is concerned about an EMP attack all of a sudden?
Have they been reading The Economic Collapse Blog?
Spending 700 million dollars to move back inside a mountain just because it is “EMP-hardened” is a pretty big deal.
Do they know something that we don’t?
On top of everything else, we have been seeing lots of strange “training exercises” being scheduled all over the nation recently.
For example, the following is from a news story about one being held in Iowa…
This week you may notice extra emergency vehicles and public safety officers running around in tactical gear, Hazmat suits, and bomb suits. It’s a part of a statewide drill Des Moines is hosting Tuesday and Wednesday to prepare emergency personnel for dealing with weapons of mass destruction.
Brian O’Keefe with the Des Moines Fire Department said emergency officials in Iowa need to be prepared for anything.
“You know we’re number one seed producer with corn and soy, chicken embryo development, middle of the country heartland. So I’m sure all states access it. But we’re a target like any other large community,” said O’Keefe.
And here is an excerpt form a news story about an exercise known as “Northern Exposure” that is being held in Michigan…
The National Guard event is called Northern Exposure, which is taking place across Michigan during the month of June, he said. According to the Michigan National Guard website, Northern Exposure is “a major exercise in Michigan where the military provides defense support to civilian authorities.”
In addition, the U.S. military will be conducting some “unusual” training activity out in Arizona and California…
If you see some unusual helicopters overhead in the next couple of days, there’s nothing to worry about.
The I Marine Expeditionary Force G-7 will be conducting a Realistic Military Training this week, using the Prescott Municipal Airfield as a helicopter refueling point in order to facilitate a Long Range Raid at Camp Navajo, Arizona.
This Certification Exercise (CERTEX) is directed to be conducted from April 8-21, 2015 at various training locations throughout California and Arizona. The training at Prescott will take place on April 15, 16.
All of this is in addition to the exercise that people have really been buzzing about. It is called “Jade Helm”, and in this particular “unconventional warfare exercise”, the states of Texas and Utah will be designated as “hostile territory”…
“Jade Helm is a challenging eight-week joint military and Interagency (IA) Unconventional Warfare (UW) exercise conducted throughout Texas, New Mexico, Arizona, California, Nevada, Utah and Colorado,” according to an unclassified military document announcing the training drill, which runs from July 15 through September 15.
Multiple branches of the US military, including Green Berets, Navy Seals, and the 82nd Airborne Division, will participate in the 8-week long exercise, which may result in “increased aircraft in the area at night.”
Troops will be tasked with honing advanced skills in “large areas of undeveloped land with low population densities,” and will work alongside “civilians to gain their trust and an understanding of the issues.”
The exercise, in which some participants will be “wearing civilian clothes and driving civilian vehicles,” lists Texas and Utah as “hostile” territory.
Should we be alarmed by these exercises?
Some people sure think so.
Another thing that has people scratching their heads are the weird closures of Wal-Mart stores all over the nation for supposed “plumbing problems”…
Not just one, but five Walmart stores across the U.S. are closing their doors due to plumbing problems that, in some cases, will take four to six months to repair.
Those closing include locations in Livingston and Midland, Texas; Tulsa, Oklahoma; and near Los Angeles.
For the Brandon Walmart, I talked to Hillsborough County and Walmart to get answers about why these plumbing repairs will take so long and whether the issues are connected, but local customers are already skeptical.
“Why is it just plumbing problems? It’s gonna take them six months to fix up the store?” asked customer John Mambrl.
Yes, is it really going to take them six months to fix the toilets?
Either someone at Wal-Mart is extremely incompetent, or there is something fishy going on here.
In the end, perhaps there is nothing to any of this.
Perhaps all of these examples are just unrelated coincidences.
But then again, perhaps not.
House price trends reverse in first three months as regions rise and Dublin falls - Irish Independent
House price trends reverse in first three months as regions rise and Dublin falls
PRICE trends in the Irish property market have completely reversed in the first quarter of this year with values now static or falling in Dublin while they continue to rise elsewhere. Prices in Dublin locations have fallen by up to 6.5pc since the start of 2015.
and more »
Not necessarily a bubble: HSBC's Paul Bloxham on Sydney house prices
Sydney purchasers need to be very careful, because at some point there has to be some correction, HSBC Australia chief economist Paul Bloxham has again warned. "Sydney house prices are running at an unsustainable pace," he told AAP. Following recent ...
and more »
What is the real story of energy and the economy? We hear two predominant energy stories. One is the story economists tell: The economy can grow forever; energy shortages will have no impact on the economy. We can simply substitute other forms of energy, or do without.
Another version of the energy and the economy story is the view of many who believe in the “Peak Oil” theory. According to this view, oil supply can decrease with only a minor impact on the economy. The economy will continue along as before, except with higher prices. These higher prices encourage the production of alternatives, such wind and solar. At this point, it is not just peak oilers who endorse this view, but many others as well.
In my view, the real story of energy and the economy is much less favorable than either of these views. It is a story of oil limits that will make themselves known as financial limits, quite possibly in the near term—perhaps in as little time as a few months or years. Our underlying problem is diminishing returns—it takes more and more effort (hours of workers’ time and quantities of resources), to produce essentially the same goods and services.
We don’t measure our investment results with respect to the quantity of end product produced (barrels of oil produced, liters of fresh water produced, kilos of copper produced, or number of workers provided with sufficient education to work in high tech industries), so we don’t realize that we are becoming increasingly inefficient at producing desired end products. See my post “How increased inefficiency explains falling oil prices.”
Wages, viewed in terms of the product produced–oil in this case–can be expected to decrease as well. This change isn’t evident in usual efficiency statistics, because some of the workers are providing new kinds of services, such as fracking services, that weren’t required before.
Even investment is becoming increasingly inefficient. It takes more and more investment to extract a given quantity of oil or other energy product. This investment needs to stay in place longer as well. The ultra-low interest rates we have been experiencing reflect the poor returns investments are now making.
The myth exists that prices of all of the scarce goods and services will rise high and higher, as the economy encounters scarcity. The real story, though, is that the inflation-adjusted purchasing power of common workers is falling lower and lower, especially in the United States, Europe, and Japan. Not only can these workers afford to buy less, but they can also afford to borrow less. This means that their ability to purchase expensive goods created from commodities is falling.
At some point, this lack of purchasing power can be expected to affect the financial markets, and the prices of many commodities can be expected to fall. In fact, this already seems to be happening.
The likely impact of such a fall in commodity prices is not good. If low oil prices cannot be “turned around,” they will lead to debt defaults, and these debt defaults are likely to lead to failing financial institutions. Failing financial institutions have the potential to bring down the system, because it becomes very difficult for businesses to continue if they are not supported by a banking system that allows a company to pay its employees. Workers also need the banking system to pay for goods and to save for a “rainy day.”
A big part of what has allowed the economy to grow to the size it is today is increasing debt levels. These rising debt levels play many roles:
- They make high-priced goods more affordable to consumers.
- They create greater demand for goods, allowing more end-product goods to be produced.
- They create more demand for commodities required to make end-product goods, allowing the price of these commodities to rise, so that more businesses have more incentive to create/extract these commodities.
At some point, debt levels stop rising as fast as they have in the past (because of a lack of growth in purchasing power because of diminishing returns in investment), and the whole system tends to fall toward collapse. We seem to have reached this point in the middle of 2014. China was raising its total debt level rapidly up until the early part of 2014, then suddenly moderated its growth in debt level in mid 2014. At about the same time, the US scaled back and eliminated it program of quantitative easing (QE). Oil prices dropped starting in mid-2014, at the time debt levels started moderating. Other commodity prices started falling as early as 2011, indicating likely affordability problems.
We are now in the period when many people still believe everything is going well. Oil prices and other commodity prices are low—what is “not to like”? The answer is that the system in not at all sustainable—profits of oil companies and other commodity businesses are down, just as wages of common workers in developed countries are down in inflation-adjusted terms. Companies are cutting back in investment in oil production. Soon oil production will drop. With lower oil supply, the economy will face huge challenges.
Many people believe that oil prices can bounce back up again, but this really isn’t the case, because of growing inefficiency related to limits we are reaching–the need to use more advanced techniques to produce oil; the need for desalination for water in some places; the need for more pollution control equipment that doesn’t really increase the finished goods and services we are producing but instead makes goods more expensive to produce.
Each worker is, on average, producing less and less of the finished goods we really need. Whether we like it or not, standards of living will have to fall. The amount of debt workers can afford decreases rather than increases. This new reality can be expected to manifest itself in debt defaults and increasing financial system problems.
Even if oil prices bounce back up again, it is doubtful that shale oil drillers will be able to again borrow at a sufficiently high rate to increase their production again—what lender will believe that oil prices will remain high indefinitely?
Spot the difference:
- A topless protester gets "two thumbs up" and a smile from Vladimir Putin.
- A terrified Mario Draghi reels from a fully-clothed female protester.
Last week, we noted the hilarious irony in President Obama’s contention that China was “using its sheer size and muscle to force other countries into subordinate positions.” That of course, is a picture perfect description of US foreign policy and so the statement by the President is effectively an indictment of Washington’s own actions.
Obama’s remarks were made in the context of China’s construction “activities” in the South China Sea where Beijing shares contested waters with the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Essentially, China is building islands atop the Fiery Cross Reef in the Spratly archipelago, which some believe will be used for military purposes. Here’s NY Times, summarizing:
The construction on Fiery Cross Reef is part of a larger Chinese reclamation project involving scores of dredgers on at least five islands in the South China Sea. China is converting tiny reefs, once barely visible above water, into islands big enough to handle military hardware, personnel and recreation facilities for workers.
Satellite images of the reclamation efforts have been released in steady doses over the last few months, as smaller countries with claims to islands in the area have voiced concern about China’s accelerated construction, and as the United States has stepped up its criticism...
China claims more than 80 percent of the South China Sea, arguing that a “nine-dash line” that it drew around the waterway in the late 1940s conforms to its rights there. No other country recognizes the validity of the nine-dash line, and many fear that China’s reclamation activities are part of a drive to create an inevitability about Chinese ownership.
Now, a series of satellite images have confirmed the construction of a 10,000 foot runway on the reef, which would appear to suggest that China may be planning on landing military aircraft such as fighter jets on the reclaimed islands. Here, in glorious HD, are the visuals accompanied by descriptions via the Asia Maritime Transparency Initiative:
Satellite photography has identified three cement plants operating on the island.
China has already constructed in excess of 60 semi-permanent or permanent buildings.
At least 20 structures are visible on the southern side of the island (ZH: including a helipad).
China is building an airstrip on the island. The airstrip is likely large enough to land nearly any Chinese aircraft.
Images taken on April 11 show the runway more than one-third complete.
Beijing is also installing port facilities which may be capable of docking military tankers.
Here’s more color from NY Times on what this may mean from a military and geopolitical perspective:
The runway, which is expected to be about 10,000 feet long — enough to accommodate fighter jets and surveillance aircraft — is a game changer in the competition between the United States and China in the South China Sea, said Peter Dutton, professor of strategic studies at the Naval War College in Rhode Island.
“This is a major strategic event,” Mr. Dutton said. “In order to have sea control, you need to have air control…”
In time, Mr. Dutton said, China is likely to install radar and missiles that could intimidate countries like the Philippines, an American ally, and Vietnam, which also have claims to the Spratlys, as they resupply modest military garrisons in the area.
More broadly, he said, China’s ability to use Fiery Cross Reef as a landing strip for fighter and surveillance aircraft will vastly expand its zone of competition with the United States in the South China Sea…
“We absolutely think it is for military aircraft, but of course an airstrip is an airstrip — anything can land on it if it’s long enough,” said James Hardy, Asia-Pacific editor for Jane’s Defense Weekly...
“The main question is, what else would land there?” he said. “Unless they are planning to turn these into resorts — which seems unlikely, not least given the statement from the Foreign Ministry last week — then military aircraft are the only things that would need to land there.”
And a bit more from Reuters:
Senator John McCain, chairman of the U.S. Senate Armed Services Committee, called the Chinese moves "aggressive" and said they showed the need for the Obama administration to act on plans to move more military resources into the economically important Asian region and boost cooperation with Asian countries worried by China.
McCain referred to a U.S. intelligence assessment from February that China's military modernization was designed to counteract U.S. strength and said Washington had a lot of work ahead to maintain its military advantage in the Asia-Pacific.
"When any nation fills in 600 acres of land and builds runways and most likely is putting in other kinds of military capabilities in what is international waters, it is clearly a threat to where the world's economy is going, has gone, and will remain for the foreseeable future," he told a public briefing in Congress.
A spokesperson for the U.S. State Department said the scale of China’s land reclamation and construction was fueling concerns within the region that China intends to militarize its outposts and stressed the importance of freedom of navigation.
"The United States has a strong interest in preservation of peace and security in the SouthChina Sea. We do not believe that large-scale land reclamation with the intent to militarize outposts on disputed land features is consistent with the region’s desire for peace and stability."
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This comes at an interesting time for relations between Beijing and Washington. China’s recent move to evacuate foreign nationals from the embattled Yemeni port city of Aden marked the first time the rising superpower has participated in an international rescue effort. During the same week, state television indicated the country would begin its first patrol by nuclear submarine later this year.
Meanwhile, the China-led Asian Infrastructure Investment Bank marks a coup in the post-war economic era, as the multilateral institution will seek to plug holes left by the US-dominated IMF and the Japan-influenced ADB, while simultaneously positioning the yuan to play a more prominent role in what is quickly becoming a new economic world order characterized by the ascendancy of the renminbi and the decline of traditional systems that have supported dollar hegemony such as petrocurrency mercantilism. While it’s unclear exactly how ambitious Beijing hopes to be in terms of turning the Spratlys into a military outpost, China’s bold development efforts underscore the degree to which the country isn’t timid when it comes to advancing its interests in the face of Western admonition.