Globalists Have Walked Blindfolded Into a Buzzsaw

The High Price of Coddling China Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] Globalists Have Walked Blindfolded Into a Buzzsaw - “For the past 30 years, American policymakers and academics have walked blindfolded into the buzzsaw of Communist China”… - Even some elites are beginning to wake up… - Then Jim Rickards shows you how globalism is anti-democratic, and is really about control… Recommended Link [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on claiming this new upgrade to your Strategic Intelligence subscription, you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. [Claim Your Subscription Upgrade Here]( Portsmouth, New Hampshire October 25, 2021 [Jim Rickards]Dear Reader, Old delusions die hard. For the past 30 years, American policymakers and academics have walked blindfolded into the buzzsaw of Communist China. The prevailing view from the mid-1990s–2017 was that the Chinese would end up being “just like us.” We would admit China to important multilateral institutions, such as the World Trade Organization in 2001, and include China in the IMF’s world money basket called the special drawing right (SDR) in 2016. China would make promises about open trade and open capital accounts to gain admission and then proceed to break every rule in the book. Meanwhile they stole intellectual property, coerced developing economies into using Chinese suppliers such as Huawei and limited access of U.S. companies to their markets. In the political realm, their behavior has been even worse. It includes human slavery, concentration camps, organ harvesting from live victims, suppression of religious freedom for Uyghurs, Falun Gong and Catholics among other beliefs and nearly complete censorship of internet message traffic. China is run by the Communist Party, which is atheistic, totalitarian and utterly ruthless in enforcing one-party rule. It’s no surprise then that China also embraces central economic planning. Coal prices are rising because of expanding demand, cold weather and supply-chain disruptions. Real estate prices are falling because of the Evergrande collapse and the drying up of new money to finance purchases. So what did China do? First, they imposed price controls on real estate by setting a floor under property prices. Then they imposed price controls on coal by setting a ceiling on coal price increases. In the first place, you know you’re in trouble when your price controls involve ceilings and floors. That means you’re fighting inflation and deflation at the same time in two different sectors for different reasons. The bigger problem is that price controls never work. They may offer some short-term alleviation, but sooner than later consumers figure out substitutes or structured solutions or move to an outright black market. Regardless, the original problem is not solved and the inefficiencies from the workarounds pile up. China will find this out the hard way. The happy-talk notions of Western academics and politicians now lie in ruins, although a few serial killers of democracy such as Jeffrey Sachs of Columbia University still persist in this delusional line of thought. Of course, no resistance to Chinese human rights violations and economic aggression can be expected from the Biden administration. This is because the Biden crime family are in hock to China due to their corrupt influence-peddling schemes led by Joe’s brother, James, and Joe’s son, Hunter. That said, reality is beginning to set in even among the elites who have led America so far astray. Nicholas Burns, a seasoned diplomat and the nominee to become U.S. ambassador to China, has announced that China is our “most dangerous competitor” and he has been outspoken in referring to China’s treatment of its Uyghur population as “genocide.” That’s a refreshing splash of realism considering it comes from inside elite policy circles. Let’s hope that Burns’ perspective gains traction and naive voices such as Jeffery Sachs’ are marginalized once and for all. Investors should decouple from China and not consider reinvesting until China gets the message and reins in its aggression at home and aboard — if it ever does. Globalism is the religion of globalists. They may talk about democracy, but they really don’t believe in it. Below, I show you why globalism is really about control. Read on. Regards, Jim Rickards for The Daily Reckoning P.S. Did you MISS what might be [the most important Special Profit Briefing I’ve ever given?]( I’m not trying to brag, but I’m one of the media’s biggest “go to” guys for context on global macroeconomic happenings… And how to make money from them. In my new briefing, [I blow the lid off a growing international conflict that’s already costing $6.6 trillion a day.]( That’s right, $6.6 trillion. Every. Single. Day. [Click here for more...]( More importantly — I reveal [my proprietary secret]( for profiting from this massive daily flow of capital. If you want in, or at least want to discuss this $6.6 trillion secret, [click here now.]( Recommended Link [Newest book from the author of Rich Dad Poor Dad]( [Read more here...]( You don’t have to be a landlord (or even invest in REITs) to earn monthly income from real estate. Now you can start building your own real estate empire today — the “lazy” way — thanks to over a dozen real estate secrets found in his most recently released book. [Click Here To Claim Your Copy]( The Daily Reckoning Presents: Globalist elites don’t trust you to make the right choice… ****************************** Globalist elites don’t trust you to make the right choice By Jim Rickards [Jim Rickards]When the U.K. voted for Brexit in June 2016, the globalists were stunned. They couldn’t believe it. They then did everything they could to delay and fight Brexit. Then when Donald Trump won the election as president in November 2016, the globalists were even more stunned. They went into complete denial and put their heads in the sand. They comforted themselves with the convenient myth that Russian interference lost them the election, not a popular rejection of their ideology. Yet it kept getting worse for globalists. Both China and Russia have become more nationalistic and completely turned their backs on globalism. The pandemic only strengthened the trend away from globalism, and the fractured supply chains we’re now seeing expose globalism’s fragile underbelly. These chains may be efficient and economical, but when they break down, it has a rippling effect on the global economy. It’s like pulling on one strand on a carpet. The entire thing is affected. Globalists worship at the altar of free trade. But free trade is a myth. It doesn’t exist outside classrooms. France subsidizes agriculture. The U.S. subsidizes electric vehicles. China subsidizes a long list of national champions with government contracts, cheap loans and currency manipulation. Every major economy subsidizes one or more sectors using fiscal and monetary tools and tariffs and nontariff barriers to trade. America grew rich and powerful from 1787–1962, a period of 175 years, using tariffs, subsidies and other barriers to trade to nurture domestic industry and protect high-paying manufacturing jobs. In fact, tariffs are as American as apple pie. Beginning in 1962, the U.S. turned its back on a successful legacy of protecting its jobs and industry and embraced the free trade theory. This was done first through the General Agreement on Tariffs and Trade, or GATT, one of the original Bretton Woods institutions in addition to the World Bank and IMF. Against the mercantilist system was a theory of free trade based on comparative advantage as advocated by British economist David Ricardo in the early 19th century. Ricardo’s theory said that trading nations are endowed with attributes that gave them a relative advantage in producing certain goods versus others. These attributes could consist of natural resources, climate, population, river systems, education, ports, financial capacity or any other factor of production. Nations should produce those goods as to which they have a natural advantage and trade with other nations for goods where the advantage was not so great. Countries should specialize in what they do best, and let others also specialize in what they do best. Then countries could simply trade the goods they make for the goods made by others. All sides would be better off because prices would be lower as a result of specialization in those goods where you have a natural advantage. It’s a nice theory often summed up in the idea that Tom Brady should not mow his own lawn because it makes more sense to pay a landscaper while he practices football. For example, if the U.K. had an advantage in textile production and Portugal had an advantage in wine production, then the U.K. and Portugal should trade wool for wine. But if the theory of comparative advantage were true, Japan would still be exporting tuna fish instead of cars, computers, TVs, steel and much more. The problem with the theory of comparative advantage is that the factors of production are not permanent and they are not immobile. Recommended Link [George Gilder: “Do NOT buy bitcoin until you’ve seen this.”]( [Read more here...]( George believes something bigger – and potentially more lucrative – than bitcoin is emerging as we speak. It could ultimately transform the Internet and the world monetary system. And George recently went on camera to discuss his top stocks to buy to tap into that trillion-dollar potential. [See The Footage Here]( If labor moves from the countryside to the city in China, then suddenly China has a comparative advantage in cheap labor. If finance capital moves from New York banks to direct foreign investment in Chinese factories, then China has the comparative advantage in capital also. Before long, China has the advantage in labor and capital and is running huge trade surpluses with the U.S., putting Americans out of work and shutting down U.S. factories in the process. Worse yet, countries such as China can pull comparative advantage out of thin air with government subsidies. We’ve been living in a world where the U.S. has been a free trade sucker and everyone else breaks the rules. In a world where a few parties are free traders but most are mercantilists, the mercantilists win every time. They are like parasites sucking the free traders dry. But to globalists, the moral arc of the universe bends in one direction, and that’s toward increasing globalization. Populism and protectionism are therefore moral evils that must be condemned. But globalists have slowly realized that the nationalist trend is not an anomaly but a powerful force that is reversing globalist policies that have been ascendant since 1989, or even since the end of World War II, when institutions like the IMF and World Bank were established to promote globalist goals. But right now, free trade is on the ropes, currency wars are rampant and geopolitical hotspots like Taiwan are becoming more dangerous. What happened to globalism? The globalist-in-chief is Columbia University academic Jeffrey D. Sachs. He led the charge for “market” solutions in Russia in the 1990s, which backfired into a takeover by oligarchs and the rise of Putin. He also led the charge for “opening” China in the early 2000s, which led to the rise of Xi Jinping and the strongest form of Communism since the death of Mao Zedong. Is Sachs willing to admit any mistakes? No. Like most globalists who are too arrogant to question their own worldviews and assumptions, Sachs instead says the problem is democracy itself. Essentially, Sachs wants to abandon traditional voting in the U.S. and U.K. to create a system more favorable to globalists. Sure, you can let voters choose center-right candidate x or center-left candidate y, who might be 10% apart on many issues. Neither of them will really rock the boat and have no fundamental disagreement with globalism in general. As far as globalists are concerned, voters cannot be trusted to vote on fundamental issues like Brexit. They also can’t be trusted to vote against presidential candidates like Trump. Such decisions should be beyond democratic control, globalists believe. In fact, Time magazine ran an article gloating about how corporate and media elites essentially conspired to prevent Trump from winning the election. Media refusal to cover the Hunter Biden laptop scandal was just one example. Former intelligence officials joined in by claiming it bore all the trademarks of “Russian disinformation.” Of course, we all know the laptop was real. But they wouldn’t allow it to influence the election. When elites don’t like the potential outcome, just change the rules. Another issue that unites globalists is climate change. Globalists argue that climate change is too important to trust to voters in individual countries. Climate change is the perfect cover for globalism because combating it requires an internationally coordinated policy run by elites. Their real agenda is to define a “global problem” so they can advance “global solutions” such as world governance, world taxation and world rule by elites. It doesn’t matter that the actual science behind hysterical climate alarmism is extremely weak. Unfortunately, the media, corporations, governments and international organizations are run mostly by globalists. And many of them are working hard to silence dissent. We’re in a Brave New World. Regards, Jim Rickards for The Daily Reckoning P.S. Did you MISS what might be [the most important Special Profit Briefing I’ve ever given?]( I’m not trying to brag, but I’m one of the media’s biggest “go to” guys for context on global macroeconomic happenings… And how to make money from them. In my new briefing, [I blow the lid off a growing international conflict that’s already costing $6.6 trillion a day.]( That’s right, $6.6 trillion. Every. Single. Day. [Click here for more...]( More importantly — I reveal [my proprietary secret]( for profiting from this massive daily flow of capital. If you want in, or at least want to discuss this $6.6 trillion secret, [click here now.]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [James Rickards][James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [unsubscribe here.]( Please read our [Privacy Statement](. For any further comments or concerns please email us at feedback@dailyreckoning.com. If you are having trouble receiving your Daily Reckoning subscription, you can ensure its arrival in your mailbox [by whitelisting The Daily Reckoning.]( [Paradigm Press]© 2021 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Email Reference ID: 470DRED01