Trump’s Ultimatum with China
Trump’s Ultimatum with China by Jim Rickards – Daily Reckoning
[Ed. Note: Jim Rickards’ latest New York Times bestseller, The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis, is out now. Learn how to get your free copy – HERE. This vital book transcends rhetoric from the G20 Summit to prepare you for what you should be watching now.]
The Mar-a-Lago meetings between President Trump and Chinese President Xi have now brought geopolitical, economic, financial and other issues all to a convergence.
The worlds of defense and diplomacy are now converging on global capital markets — stocks, bonds, derivatives, commodities, currencies, gold, etc.
The significance of the Mar-a-Lago meeting extends beyond the historic property and the fact that it is Donald Trump’s main winter residence. Presidents have a protocol of meeting locations with heads of state. They tend to reserve the most important meetings for exclusive venues.
In April, President Xi and President Trump met at Mar-a-Lago. It was a significant one-on-one bilateral conference where trade was always front and center.
Looking back to the campaign, Trump signaled his problems with China on three fronts — trade, tariffs, intellectual property — while also having a financial and currency component.
Since the inauguration, Trump has not been forceful on any of those issues. He has not started a trade war with China. He has not labeled them a currency manipulator. He has not done anything. Why? The answer is that Trump wants and needs China’s help on an even bigger issue — North Korea.
North Korea is pursuing nuclear capabilities that would have an intercontinental ballistic missile (ICBM) program. If you were to combine those two facets by putting a miniaturized nuclear warhead on a missile, it would be possible to kill millions Americans in Los Angeles.
As of today North Korea has achieved the capability of hitting Alaska. This is a threat that presents clear and present danger to the United States.
The conventional wisdom is that China has more economic leverage over North Koreathan any other country. While there’s also good reasoning that Russia also has a lot of influence over the North, Trump is first looking to China for help to a solution.