Hey There Income Hunter,

Yesterday’s United Nations General Assembly vote revealed key insights on where China stands on the battle re: Russia.

The emergency session was triggered when the  Security Council couldn’t reach unanimity …

And the resolution condemning Russia’s attack was overwhelming, with 141 in favor and only 5 opposed.

The no votes included a cast of ne’er-do-wells featuring Russia, North Korea and Syria … but the most watched-for vote was China, which abstained. 

However, the statement below made by the People’s Republic’s foreign minister spoke volumes about how China really feels.

“Those who created the problem should be the ones to undo it. We hope the culprits can reflect upon their roles in the Ukraine crisis. They should earnestly shoulder due responsibilities and take real actions to ease the situation and resolve the problem instead of shifting blame to others.”

The foreign ministry’s text even referenced prior US diplomat George Kennan …

“International media lately mentioned many times that George Kennan, former US ambassador to the Soviet Union, suggested to the US government in the 1990s that expanding NATO up to Russia’s borders would be the most fateful error of American policy. Regrettably, the US government turned a deaf ear to this.”

Look, Ukraine may just be the beginning of the ultimate clash between the US and China.

Today, I’ll give you a tale of the tape to show how far China has come to position themselves as the leading candidate to take over America’s role as reserve currency to the world.

The stakes are sky-high.

Does China Really Care About Russia?

Russia only has two things going for it …

 

One is its military might and the other is its collection of natural resources (that is in demand globally). 

 

It did not make sense for Putin to have taken the path he took alone, especially knowing the sanctions would be slapped on immediately.

 

However, we all know how aligned Russia and China are …

 

And China can be very helpful in minimizing the effects of the sanctions. 

 

Most important is Russia’s use of the Chinese yuan, its clearing system and the development and increased use of the digital yuan.

 

The intel you can get by watching China’s every move throughout the invasion is critical because that will have a big effect on what the rapidly changing global power structure will soon look like. 

 

And …

 

This invasion is speeding up the end game for the US.

 

Just look at how much China is already helping Russia.

 

Some Questions to Consider:

 

– Would Putin turn this into a war against NATO to better position Russia in negotiations for a ceasefire?  

 

– Will China provoke the US by invading Taiwan while the war in the Ukraine is in motion? 

 

– Will China now sit back and wait patiently to see the impact of the invasion on the US economy? 

 

The bottom line is that the Ukraine invasion may be just a precursor to the main fight that will occur when, not  if, China invades Taiwan. 

 

Tale of The Tape

The table below is important to understand from the standpoint of how far China has already come in its pursuit to pass the US as the global leader. 

The Z-score (2nd column) shows the number of standard deviations away from the 20-year trend for each category. The second column shows the direction of that 20-year trend.

The highlighted cells show who has large advantages in each category. 

The markets and reserve currency categories are most important and the US has substantial leads in both. 

However, the Ukraine invasion has given China an opportunity to gain market share in both as foreign countries fearful of US sanctions seek alternatives outside the US.  

Bring It Home

A hot war never benefits anyone except the winner of the war.  

It will be very difficult for the US to win a war fought in the South China sea. It will be very costly and the US will have to print trillions more dollars that will increase its debt burden further.

The alternative is for Biden and the administration to accept the fact that China is the new sheriff in town and then go about resetting the US economy and building a new manufacturing power house. 

Unfortunately I don’t think that will be the end game, but we can all pray it is because the alternative will be a lose-lose for all involved.

Well, except members of my Power Income Trader Program, of course.

Live and Trade With Passion My Friend,

Griff