Begin The Blockade? China Steps Up Action Near Taiwan

China has repeatedly warned the US to abide by our agreements, and to stop pretending that Taiwan is a sovereign country. Are matters about to come to a head in the near future. The US has been yanking chains around the world, but especially by launching provocations against Russia and China. The latest with regard to China is Speaker Kev meeting with Tsai in California. That was supposed to mollify China, by not doing the meeting in Taiwan. Wrong.

The Chinese May Have Already Imposed A Blockade Of Taiwan - Neither That Nation Nor The United States Is Prepared For What Comes Next

As Taiwan’s President Tsai Ing-wen sat down for meetings with US House Speaker Kevin McCarthy, Beijing announced it was beginning a special operation near Taiwan.

"Special joint patrol and inspection operation began today in the central and northern parts of the Taiwan Strait," the Chinese Maritime Safety Administration said yesterday.  This came in the wake of a statement by the Chinese Foreign Ministry that McCarthy’s meeting with Tsai Ing-Wen violated the CCP’s One China principle. The CCP has previously made clear that such violations constitute the crossing of a “red line” for China.

The “operation” launched by China involves the deployment of forces to two zones to the east of Taiwan.  Per Beijing, Chinese forces will operate in these areas and inspect vessels operating in these areas. That “inspection” expressly includes boarding vessels coming in and out of Taiwan.

Taiwan has announced it will not cooperate with Chinese efforts to stop and inspect ships. The stage is now set for a confrontation at sea. We could literally at any time have an exchange of fire. We could just as easily have foreign vessels refuse to test the Chinese “inspection” operation and stop moving in and out of Taiwan.

I won’t predict how this will work out. The Chinese are typically cautious, no matter their rhetoric. This current move leaves plenty of room for escalation as well as de-escalation in the short term. However, from the longer term perspective, this is a major escalation.

In related news, Tucker Carlson’s monologue last night got a lot of attention. I picked it up at CTH—it’s something like 17 minutes long and is totally worth your time to listen—or relisten—and ponder. The subject is one that we’ve been harping on fairly continuously: The Money War. Unfortunately, since the video is on Rumble I can’t embed it. You can pick it up at CTH. Zerohedge also has it, with commentary, at

"The Last War We Can Afford To Fight": Tucker Carlson Sounds Alarm Over De-Dollarization

Or, try Fox News. They call it a Tucker Op-Ed, but it’s actually a transcript of Tucker’s remarks, plus two videos. The second video (which is included at CTH in one full length video) includes a few minutes of remarks by economist Luke Gromen. I’ve inserted a shortened version of Tucker’s remarks along with what Gromen adds. The point is as usual. Most Americans have no clue about where the money comes from to fund our military. They seem to think that our defense industry remains a home grown thing, supported by our tax dollars.

For nearly 80 years since the end of the Second World War, the U.S. dollar has effectively been the currency of the world for our entire lifetimes.

Because there were so many U.S. dollars in circulation outside of the country, the cost of borrowing money inside the country remained artificially low and that's one of the reasons that in this country, America, middle-class people could buy their own homes. The U.S. government, meanwhile, was able to run up astronomical debts without many obvious consequences.

Now, from time to time, the Congress would debate something called the debt ceiling, but it was abstract. For most people, the entire topic didn't seem very relevant to their lives because, for most of the time, it really wasn't. ..., but we started to worry about it about a year ago, really the day the Russian military rolled over the Ukrainian border.

Here Tucker makes an important point that he will repeat a number of times: Zhou and his Republican allies.

Policy makers in the U.S. went insane. Joe Biden, helped by his Republican allies in the Senate, appear to be determined not simply to topple the Russian government in some kind of regime change war, but to blow up the postwar economic order that had served the U.S. so generously for so long. ... the unprecedented economic sanctions that Joe Biden was allowed to, in fact, encouraged to impose ... were supposed to hurt Russia, but even in March of last year, it seemed obvious they were going to hurt the United States much more than they hurt Russia. Here's what we said 13 months ago.

"We should prepare to lose our position as holder of the world's reserve currency. ... These policies have driven Russia, China, India, Turkey and other countries to accelerate their flight from the U.S. dollar. Let's be clear. That's the majority of the global economy. This may be the most reckless and destructive thing any American president has ever done to the United States."

So, that was last year and at the time it was really just yelling into the wind. Those views were considered absurd, even treasonous. Biden and his Republican allies described sanctions against Russia as morally essential. We seized oligarchs’ yachts at anchor. We closed the Apple Store in Moscow. We were all assured these were important victories and anyone who has questions what their long-term economic consequences was a Putin stooge. ...

These people are such buffoons and all the Republican senators nodding in agreement. ... These sanctions were never going to work in the way they promised because unlike the United States, Russia does not have a late stage financed economy. Russian oligarchs do not get rich from credit default swaps. They get rich from selling actual things that people need in order to live: Oil, natural gas, iron, fertilizer, coal, wheat. ...

A year later, ..., the Russian ruble is just as strong against the U.S. dollar as it was before the war in Ukraine. So, we didn't really hurt Russia with those sanctions, ..., but we hurt ourselves. E.J. Antoni and Peter St Onge wrote an incisive piece in The Daily Caller last week that explains part of why this happened:

"A critical feature of a reserve currency is its apolitical nature, which Biden is now gutting after both parties in Washington destroyed the dollar's stability with inflation. Now, the Biden administration has chosen to wield the dollar as a weapon. ..."

What do you think happened next as we were jumping up and down and talking about Winston Churchill? Well, smart, foreigners ... started to dump the U.S. dollar. Why? Because the U.S. dollar was no longer a reliable store of value. ...

We've been asking for months for any Republican senator who supports this, whether it's Thom Tillis or John Cornyn of Texas, to come on the show and calmly explain why you support this. None of them have accepted an invitation, but at this point, you begin to wonder, what does the United States have that will retain its value over time? We should do an inventory of our assets. Biden, ... is continuing to ... sell[] off America's most valuable hard asset. That's our Strategic Petroleum Reserve, because unlike the U.S. dollar, oil, which is in the reserve, has inherent value. Oil is the densest store of transportable energy known to man.

In the last fiscal year, the Biden administration sold off 218 million barrels of oil, including ... to the government of China.

Right. Think about that. China is one of the main holders of US debt, and like every other country run by leaders focused on something other than where their next serving of chocolate chip ice cream is coming from, they’ve been dumping their holdings. If you were Xi Jinping, which would you rather have: All the oil you can buy from the US in exchange for dollars and/or T-Bills, or US dollars? With so much of the rest of the world rushing for the exits to the Dollar Store and lining up outside the Yuan Store, getting oil for dollars seems almost too good to be true for China. After all, how else could they get real value while getting rid of dollar reserves they no longer want?

Otavio (Tavi) Costa

@TaviCosta

So, the US government not only sold its oil reserves, but it also decided to sell its sour crude rather than sweet.

To be clear:

The current US refinery infrastructure *requires* sour crude to operate.

This is the whole reason why despite the US being the largest oil producer in the world today, it still needs to import sour crude.

Even if there were a logical explanation to draw its strategic oil reserves, why on earth would the government sell the most critical portion of it?

If you know of a legitimate reason, I’m all ears.

Otherwise, this might have been one of the dumbest energy policy decisions ever.

So, on comes Luke Gromen:

Tucker: This seems to be happening right in front of us for those who are paying attention. ...

Luke: Yeah, there's not a whole lotta talk about it, outside the niche Wall St. community--there's some chatter about it there--but there hasn't been a lotta talk about what I think was, ultimately, one of the biggest moments in finance and in the global economy since Nixon closed the gold window in 1971. [That next biggest event was] the US freezing Russian FX reserves last spring.

Tucker: ...

Luke: It's important to separate [i.e., distinguish] the dollar--which is the medium of exchange and the global reserve currency, and I think it will remain the global reserve currency--from what has been since 1971 the primary reserve asset of the world, which are Treasury Bonds. The way the system has basically worked since 1971, and in particular since post '82, is we have subjugated the US defense - industrial base, the US middle and working classes, to support the value of the US bond market on a real basis because our biggest export was Treasury Bonds. It was great for Wall St., it was great for government bureaucrats--that's what we exported.

That system made sense, quite frankly, from '71 to '89 it was critical in helping us win the Cold War. It was a big deal. After '89, when the USSR collapsed, we shoulda restructured the deal, basically, at that point. We did not, and instead we went to NAFTA and got China into the WTO. The net of it is, having the Treasury Bond as our primary reserve asset is no longer an asset, in fact it's a threat to national security.

Tucker: Exactly. It's wiser to export steel and automobiles and refrigerators and not debt. In retrospect.

Right. In the Reagan years we thought we’d invented a never ending gravy train, and every administration—not to mention every Congress—has wanted to keep that train rolling.

I’ll finish by linking to a video of Douglas Macregor that covers a lot of ground that he doesn’t often address—cultural, historical, intel, technical military, and more. For our purposes, I’ll start with the end, the bottom line:

Judge Napolitano: What do you think is the most likely endgame in Ukraine?

Douglas Macgregor: "A financial crisis in the US, followed by an economic downturn that will drive us out of Ukraine."

More & more Germans are finding NATO useless.

Bear in mind—this is all connected. Who thinks Putin and Xi don’t coordinate? Who thinks the pressure being exerted in various ways—in Syria, for example—isn’t also coordinated? Who thinks Saudi Arabia and Iran aren’t coordinating closely with both Russia and China—and India? It all comes back to money. And oil.