The Winds of Change

I have written many times that the top priority for the US is the strategic and military control of sea lanes that provide freedom of trade vital to US economic interests. For example, in the last half century energy has been of vital importance to the US and world economy and therefore the US has military bases and ports along these routes. They use their massive sea and air power to patrol different trade routes. To emphasize the point, the military of the United States is deployed in more than 150 countries around the world. Now that energy is in abundant over supply, we continue to follow the money. 

In a previous blog (http://www.inctruth.blogspot.ca/2015/03/the-balance-of-power-part-one.html) I wrote: The wars in Iraq and Afghanistan proved beyond a shadow of doubt that The US did not have the military strength to impose their will on anyone in this region. Tough to read, but never the less true. When one adds the undeniable fact that the US is energy  independent, it makes sense to beat a retreat from the failed policies in the troublesome Middle East and to confront the economic and military power of the expanding China/Russia alliance. The Iranian deal was meant to facilitate this change in policy. Typically the deal has been presented as a victory of sorts, when in fact it was a monumental retreat of US leadership in the region.

More than half of the world’s annual merchant fleet tonnage passes through choke points in the South China Sea and a third of all maritime traffic worldwide. The oil transported through the Malacca Strait from the Indian Ocean, en route to East Asia through the South China Sea, is triple the amount that passes through the Suez Canal and fifteen times the amount that transits the Panama Canal. Roughly two thirds of South Korea’s energy supplies, nearly 60 percent of Japan’s and Taiwan’s energy supplies, and 80 percent of China’s crude oil imports come through the South China Sea. Whereas in the Persian Gulf only energy is transported, in the South China Sea you have energy, finished goods, and unfinished goods. Furthermore Ninety percent of Chinese exports pass through these choke points, mostly controlled by US allies 

In addition to centrality of location, the South China Sea has proven oil reserves of seven billion barrels, and an estimated 900 trillion cubic feet of natural gas. 

So while attention is on the Iran deal, the following is taking place:

1.Leaders from the Russian and Chinese navies signed a protocol July 17 on joint naval drills to be held at the end of August in the Sea of Japan, Tass reported. The maneuvers will for the first time involve a joint amphibious assault drill in Russia’s Primorsky territory and include the participation of carrier-based aircraft, a Russian Pacific Fleet spokesman said. In May, the two countries held joint naval exercises in the Mediterranean.

2.The Philippine military announced that it would hold joint naval drills with Japan from June 22-26. Just four days before the announcement, Philippine President Benigno Aquino III concluded a state visit to Japan. Aquino announced that the Philippines and Japan were ready to begin talks on a visiting forces agreement. The Philippines is eager to bring in as many outside parties as possible to bolster its position in its territorial dispute with China in the South China Sea.

3.Japan’s ruling coalition pushed major security legislation through a lower house panel July 15, setting the bills up for passage by the lower house as early as July 16, Kyodo reported. The legislation would broaden the scope of overseas operations by Japan’s Self-Defense Forces, marking the most dramatic shift in Japanese security policy since World War II. 

4.Japan may conduct patrols and surveillance activities in the South China Sea to counter a China that is likely to become increasingly assertive in the region, Japan’s top military commander, Adm. Katsutoshi Kawano, said in a speech July 16 during a visit to Washington, Reuters reported. 

5.China has almost finished building a 3,000-metre-long airstrip on one of its artificial islands in the disputed Spratly archipelago of the South China Sea, according to a report from Reuters. The airstrip, will be long enough to accommodate most Chinese military aircraft and may be operational within months.

Its interesting how this flashpoint is developing under our noses while the western media is obsessing over Donald Trump and co.

“There are those whose primary ability is to spin wheels of manipulation. It is their second skin and without these spinning wheels, they simply do not know how to function. They are like toys on wheels of manipulation and control. If you remove one of the wheels, they'll never be able to feel secure, be whole.” ― C. JoyBell C. 

Watching foreign affairs is sometimes like watching a magician; the eye is drawn to the hand performing the dramatic flourishes, leaving the other hand - the one doing the important job - unnoticed. - David K. Shipler

When the oak is felled the whole forest echoes with it fall, but a hundred acorns are sown in silence by an unnoticed breeze - Thomas Carlyle

The Peanut Gallery

Statements, comments and forecasts that have no substance, but just might turn out to be relevant.

1.The nuclear deal with Iran is not built on trust, U.S. President Barack Obama said at a July 14 news conference, but on verification, and it meets all the bottom lines from the framework deal reached previously. The United States negotiated from a position of strength and principle, Obama said, and every pathway to a nuclear weapon has been cut off. COMMENT: Obama says....LOL

2.JUBA, South Sudan — Warring forces in South Sudan have carried out horrific crimes against children, including castration, rape and tying them together before slitting their throats, the UN has said. “Survivors report that boys have been castrated and left to bleed to death… girls as young as eight have been gang raped and murdered,” UN children’s agency UNICEF chief Anthony Lake said in a statement released earlier this week.
“Children have been tied together before their attackers slit their throats… others have been thrown into burning buildings.” COMMENT: This is not news on CNN...and anyway, Israel will ultimately be held responsible.

3. In 2002, Montreal’s Concordia University was home to infamous riots preventing Israeli Prime Minister Benjamin Netanyahu from speaking. In 2015, the same university hosted the largest annual international academic gathering for the field of Israel Studies. What a difference 13 years makes. Many of Israel’s considerable advances for the benefit of humankind were showcased earlier this month during the 31st Annual Meeting of the Association for Israel Studies (AIS) at Concordia. Outgoing AIS President Menachem Hofnung called this year’s event “the largest assembly I have presided over.” COMMENT: Go Concordia! Read more http://www.jns.org/latest-articles/2015/6/22/israel-studies-confab-gives-canadian-university-new-narrative-on-jewish-state#.VYrWQGBYX5S=

4.The No. 1 U.S. bank by assets JP Morgan revealed 2015 second-quarter earnings per share of $1.54 a share on revenue of $24.53 billion. For the full year of 2008 net income was $5.6 billion and 4th quarter net income only $700 million. COMMENT: Anybody remember the Obama speeches on the big banks getting smaller or perhaps the speeches on Wall Street and main Street? So Wall Street rose 300% and the rich got richer while Main Street....he must have been referring to Baltimore, Ferguson and other ghettoes in the US.

5.New York City reached a $5.9 million settlement Monday with the family of Eric Garner, whose death after he was placed in a chokehold by a police officer sparked a public outcry, officials said. COMMENT: The death of Eric garner was widely reported and this deal.....obviously not newsworthy. 

6.Tony Sagami: You can gnash your teeth over the Greek debt crisis or the Chinese stock meltdown, but one economic sure-thing you should be watching is the collapsing fundamentals of the transportation industry. More problematic for the stock market is that the profit outlook for transportation stocks, particularly ocean shipping companies, is horrible. Drewry Maritime Research estimates that the break-even rate for most container ships is $800 per TEU on the Asia-Europe route. The price today is $243. COMMENT: These numbers are a red light for investors. Read more: http://www.mauldineconomics.com/connecting-the-dots/sinking-ships-train-wrecks-and-empty-trucks-my-case-against-transportation

7.The Greeks voted "no" against austerity. Their government, after supporting the "no" vote then proceeded to ignore the will of the people and approved the same austerity package. Germany, using all its power then humiliated the Greeks and presented what is basically a "takeover" package which will now go to a vote in the Greek parliament. The cat is amongst the pigeons. George Friedman: The specifics are less important than the fact that Greece invoked its sovereign right, and Germany responded by enforcing an agreement that compelled the Greeks to cede those rights. 

8. George Friedman (continued): In World War II, the Germans occupied Greece. As in much of the rest of Europe, the memory of that occupation is now in the country's DNA. This will be seen as the return of German occupation, and opponents of the deal will certainly use that argument. The manner in which the deal was made and extended by the Germans to provide outside control will resurrect historical memories of German occupation. It has already started. The aggressive inflexibility of the Germans can be understood as an attitude motivated by German fears, but then Germany has always been a frightened country responding with bravado and self-confidence. Read more: https://www.stratfor.com/weekly/empire-strikes-back-germany-and-greek-crisis?login=1

The first principle is that you must not fool yourself and you are the easiest person to fool - Richard P. Feynman

The serpent, the king, the tiger, the stinging wasp, the small child, the dog owned by other people, and the fool: these seven ought not to be awakened from sleep - Chanakya