A New Cold War Turning Hot

US dependency on China and Russia have long been building. Those dependencies deepened with the CoVid lab leak in late-2019 resulting in a doubling of our trade deficit under the Biden Regime.

Amidst rising fragility, the Biden Regime amped-up the confrontation. In 2021, the Regime redeployed from Afghanistan to confront Russia — China’s ally — through its Ukrainian proxy which the DC Establishment has been arming, supplying, and financing since the CIA-backed coup in 2014.

Ukraine launched the first strike on break-away Russian nationals in Donbass on February 17, 2022. Russia responded with military intervention a week ago.

The Biden Regime further upped the ante in March with sanctions aimed at breaking Russia.

That didn’t go as planned as Russia responded to the shock.

Instead of “regime change” in Moscow by the mid-terms, we now have US and Europe facing ever higher energy prices as Saudi Arabia, Iran, India and others increasingly align with China and Russia against the Biden Regime.

It wasn’t supposed to be that way since the USD has long been the reserve currency and our banking system (SWIFT) can admit and block anyone at will.

But the game has changed.

A key element to the dollar remaining the global reserve currency is its demand, much of which globally is driven by transactions in oil. This started back in 1974, when the U.S. promised the Saudi kingdom protection in exchange for the Saudis pricing oil in U.S. dollars.

“…Saudi Arabia, which had the world’s largest proven reserves of oil, was to price and sell its oil only in dollars and was also obliged to invest its surplus oil proceeds in US debt securities…”

But that four decade-old deal is starting to slip away, it appears.

First, the Biden Regime kneecapped US oil production upon seizing power in hopes of accelerating a shift to renewables. That shifted power back to OPEC and Saudia Arabia.

But instead of obeying the Biden Regime, the Saudis had their own ideas.

In March 2022, the Wall Street Journal first reported that the Saudis were considering stepping away from the dollar in exchange for – you guessed it – the Chinese yuan.

The talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom, the people said.

Other countries are already beating Saudi Arabia to the punch. Russia is selling gas to China in roubles and yuan as of earlier this year. Debt laden Ghana, though not a powerhouse on the global GDP stage, has just agreed to buy oil with gold instead of U.S. dollar reserves to held secure its currency.

Elsewhere among BRIC nations and BRIC nation-candidates, Turkey and Qatar are tying themselves up financially. Qatar is sealing long-term LNG deals with China.

Over here in the United States, distillate stocks are running at their lowest in decades and the Biden Regime depleted our strategic petroleum reserve to buy votes in the mid-terms.

While at the same time, our national debt continues to run higher, faster. Our national debt currently stands at $31.3 trillion, but more alarmingly our national debt to GDP has scorched to 50 year highs and is now near 140%.

The second alarm bell that should be going off is that Central Banks elsewhere in the world are in a rush to stockpile gold and one “mystery buyer” has been confirmed to be China.

Bloomberg called the buyers “mystery whales” at the time and postulated that it was likely either China, Russia, Saudi Arabia or India. That buyer was revealed last week by Nikkei to likely be China, who was said to be buying gold to cut their dependence on the U.S. dollar. Nikkei wrote:

Central banks bought a net 399.3 tonnes of gold in the July-September period, more than quadrupling on the year, according to the November report by industry group the World Gold Council. The latest amount marks a steep jump from 186 tonnes in the preceding quarter and 87.7 tonnes in the first quarter, while the year-to-date total alone surpasses any full year since 1967.

The article continued:

“Seeing how Russia’s overseas assets were frozen after its invasion of Ukraine, anti-Western countries are eager to accumulate gold holdings on hand,” said Emin Yurumazu, a Japan-based economist from Turkey.

“China likely bought a substantial amount of gold from Russia,” said market analyst Itsuo Toshima.

China has made similar moves in the past. After staying mum since 2009, Beijing stunned the market in 2015, disclosing it had boosted gold holdings by about 600 tonnes. It has not reported any activity since September 2019.

(Chart: Zero Hedge, who had a great writeup on China’s reveal as the mystery buyer)

And also noted that these purchases are coming while China dumps U.S. treasuries and strengthens its trade relationship with Russia:

China has been unloading U.S. bonds. It sold $121.2 billion in U.S. debt , the equivalent of roughly 2,200 tonnes of gold, between the end of February — immediately after Russia’s first attack on Ukraine — and the end of September, according to the U.S. Treasury Department.

Chinese imports of gold from Russia surged in July, soaring more than eightfold on the month and roughly 50 times the year-earlier level, according to China’s customs authorities.

Bloomberg noted in its original article about a week ago that the Central Bank purchases were nearly double the previous record.

This isn’t just a move by China you would make if trying to shore up your relationship with Russia. It’s also a move you would make if you were preparing for war, economic or otherwise.

It’s also not definitive proof that China is going to back its currency with gold, but it would certainly be a large step in the right direction, should China want to head in that direction.

A third red flag worth keeping an eye on is China’s constant espionage efforts in the United States.

It was reported last Wednesday that U.S. Senators were warned that “hundreds of Chinese-manufactured drones have been detected in restricted airspace over Washington, D.C., in recent months, a trend that national security agencies fear could become a new means for foreign espionage.”

Politico reported last week:

The recreational drones made by Chinese company DJI, which are designed with “geofencing” restrictions to keep them out of sensitive locations, are being manipulated by users with simple workarounds to fly over no-go zones around the nation’s capital.

Federal officials and drone industry experts have delivered classified briefings to the Senate Homeland Security, Commerce and Intelligence committees on the development, three people privy to the meetings said.

This comes at a time when the U.S. is mostly standing idly by while popular phone software TikTok, described as a “national security threat” by many analysts, continues to send information from the U.S. back to China.

FBI director Christopher Wray testified last week before the House that the FBI had a “number of concerns” about the software: “They include the possibility that the Chinese government could use it to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations if they so chose, or to control software on millions of devices, which gives it an opportunity to potentially technically compromise personal devices.”

It’s a new Cold War that has already begun:

  1. The U.S. is economically in its most precarious state in decades and has depleted a fair amount of its oil reserves
  2. Saudi Arabia is openly floating the idea of stepping away from the U.S. dollar and switching the Chinese yuan for oil payments, pressuring a key item of support for the dollar as global reserve currency
  3. China and Russia have openly floated the idea of challenging the dollar as global reserve currency
  4. Other countries are buying oil in roubles, yuan and gold
  5. Central Banks are hoarding gold to the tune of quadrupling purchases from the year prior, including China acting as a “mystery whale” with large purchases
  6. China is also dumping U.S. dollar denominated treasury bonds
  7. New espionage efforts may have emerged with Chinese-made drones flying in restricted airspace over the Capitol, following confirmed reports of China attempting to spy on the Fed and shake down U.S. economists
  8. Popular Chinese software like TikTok has been called a “national security threat” by the FBI.

We may have a ruling class led by Bozo, but Russia has a serious leader who finally realizes what the game is for and their role in it.

His recent address is well worth reviewing. Putin knows that this global war is one for all the marbles, and so does Xi in Beijing—”either Russia wins or China loses”. Negotiations will take place only from a position of Russian strength, as Putin made clear at the end of 2021 in his draft treaties:

Yet, despite Russia going all-in and holding the initiative in Ukraine, the Biden Regime is intent on pursuing its mad war on Russia, doubling-down at each juncture.

The latest madness, already noted a few days ago, featured Senator Graham calling for some anonymous actor on the world stage to “take out” President Putin of Russia  link. That followed a Newsweek article that cited anonymous “military sources” in the US who stated that the US is contemplating a “decapitation strike” against Russia—presumably a strike at the Kremlin that would kill Russia’s top leadership.

Russia was not amused.

Russian Foreign Minister Sergey Lavrov on Tuesday lashed out at what he described as threats coming out of the US to assassinate President Vladimir Putin, apparently in response to a slew of anonymously sourced reports. 

“There are some ‘anonymous officials’ from the Pentagon who have actually enunciated threats to deliver a ‘decapitating strike’ on the Kremlin, which is in fact an assassination threat against the Russian president,” Lavrov said, according to TASS. 

Via The Associated Press

“If someone really has such ideas, then this someone should think long and hard about the possible consequences of such plans,” the top Russian diplomat warned. 

It appears Lavrov specifically had in mind a September report published in Newsweek which relied on anonymous US defense officials describing that the Biden administration was mulling plans for a “decapitation strike to kill Putin in the heart of the Kremlin.”

Below is the relevant section from that September 29 Newsweek article

Details about what “decisively” means have not been publicly revealed. The military sources tell Newsweek that there are subtle moves being made with regard to nuclear threats, including moving submarines and aircraft and drilling B-52 bombers. But they stress that non-nuclear military options—the use of conventional weapons and special operations, as well as cyber and space attack—are front and centerto include a decapitation strike to kill Putin in the heart of the Kremlin.

Continuing his Tuesday response to this and more recent threats emanating from the West, Lavrov said that “It seems that they have shed all vestiges of respectability.”

He added: “The notorious [ex-British PM] Liz Truss is a vivid example given that she directly and publicly said during her pre-election campaign that she was ready to order a nuclear strike,” he recalled.

Lavrov also addressed a growing atmosphere of dangerous nuclear rhetoric and confrontation. “It is no secret to anyone that the strategic goal of the United States and its NATO allies is to defeat Russia on the battlefield as a mechanism for significantly weakening or even destroying our country,” he said.

Worse – the Regime is in double-down mode.

As reported Antiwar this week, the CIA has been using a European NATO country’s intelligence services to conduct sabotage attacks inside Russia since the February invasion of Ukraine, investigative journalist Jack Murphy reported on Saturday, citing unnamed former US intelligence and military officials.

The report said that no US personnel are on the ground in Russia but that the operations are being directed by the CIA. The US is using an ally’s intelligence services to add an extra layer of plausible deniability, and a former US special operations official told Murphy that layer was a major factor in President Biden signing off on the attacks.

A fire at the Russian Aerospace Forces’ Central Scientific Research Institute in Tver in April, via TASS.

Murphy said he didn’t name the NATO country whose intelligence services were being used in the report because “doing so might endanger the operational security of cells that are still operational inside of Russia.”

The report appeared on Murphy’s personal website, and in a note at the end of the piece, he explained why it wasn’t published by a media outlet. “While working with editors at mainstream publications I was asked to do things that were illegal and unethical in one instance, and in another instance I felt that a senior CIA official was able to edit my article by making off the record statements, before he leaked a story to The New York Times to undermine this piece,” he wrote.

According to the report, the covert campaign inside Russia has been years in the making. Two former military officials said that the NATO country’s spy services had hidden a cache of explosives and equipment in Russia more than a decade ago, and some of the gear has been used recently.

A former US special operations official and US person briefed on the campaign said that the CIA didn’t get involved with the NATO country’s operations inside Russia until 2014. The first time sleeper cells entered Russia that were directed by both the CIA and the NATO ally’s spy service was in 2016, and more entered the country in the following years.

The NATO ally provided the undercover operatives with stories to explain their presence in Russia and documents to back them up. The report said that around the time Russia invaded Ukraine on February 24, the NATO ally’s spy service activated its sleeper cells inside Russia using covert communication, and they were ready for orders on what targets to strike.

It’s not clear how many attacks the sleeper cells have been responsible for, but there has been a series of mysterious explosions at Russian military facilities, powerplants, and railways since the invasion. The report suggested that the saboteurs could have been behind an April fire at the research institute of Russia’s Aerospace Defense Forces, which killed over 20 people.

The sabotage operations that the CIA is overseeing require a presidential finding. President Obama signed a finding before he left office that allowed covert action against Russia over allegations that Moscow interfered in the 2016 election, a claim that has never been proven.

According to The Washington Post, Obama’s finding allows “planting cyberweapons in Russia’s infrastructure, the digital equivalent of bombs that could be detonated if the United States found itself in an escalating exchange with Moscow.” Murphy cited a former CIA official who said the finding also allowed sabotage operations against Russia, although other former officials he spoke with said the current operations would have required an amendment or an entirely new finding.

A CIA spokesperson denied the allegations made in the report, but Murphy pointed out that the spy agency can legally deny the existence of its covert operations.

The CIA directing sabotage inside Russia risks a major escalation between NATO and Russia and could lead to a nuclear escalation. Ukraine has recently stepped up its own attacks inside Russian territory, and according to The Times, the Pentagon tacitly endorsed recent drone strikes that hit air bases deep inside Russian territory, adding to the risk of escalation.

In his note at the end of the report, Murphy said that he published the story to inform the public:

“Indeed, the Russian government knows perfectly well who is sponsoring these sabotage strikes. Moreover, the intelligence community wants them to know. The only party left in the dark is the public at large, left unaware of the shadow war taking place behind the scenes,” he wrote.

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