(For China) The Game is to wait (redux)

Again I came to this since it's more pressing than ever.

The revolutionary fires that rage across the Arab world (across petro-dollar wall) are a tsunami of unknown geopolitical consequences.

Or maybe not so unforeseen consequences. Bear with me along the next line of thought.

(Yes, I'm know doing my first piece on geopolitical anticipation, neat!)

1st let me make the following set of assumptions:

• The petro-wall is a set of dictatorships and kingdoms setup and managed by the US-Israeli dream team to defend their own interests for the past 50y. They fucked up in Iran, with the Sha, true. But for the large majority they managed it pretty well.
• Saudi-Arabia is the pillar stone of this house of cards, it holds things in place.
• Saudi-Arabia is run by a small set o royalty  blood tied to the king (Abdhula).
• Saudi-Arabia royalty is well educated and has VAST investments of its oil biz profits across the world economy, BUT specially and strategically in th US economy. A piece from CBS a few years old shows how tied the 2 things are, Saudi-royalty and Corporate America. Where the Saudis to dump there US assets in a short time perido and WallStreet would be down on its knees in a flash.
• The US and the world are now tied up in a once in a century major eco-fin crisis.
• They face the bear truth that they have reached their borrowing limit (huge limit due to the dollar privileged situation since Brenton Woods!). Boosting again the money printing machine with QE3 would be also a disaster, no room for that either. So Obama called for austerity, control and targeted investment in early 2011.  No longer the pedal to the metal approach of GDP up by raising internal consumption. The federal gov is the verge of facing borrowing limits, the families alike, and the companies alike. It's true all over the world, also for the mighty mammoth.
• The truth about the real US Federal Gov financial liabilities is poorly hidden by engineered stats broadcasted by mainstream media in the pocket (I mean owned!) of the status-quo eco-fin giants. The beginning of the fiscal year next April will lift a bit of the shadows, California, Illinois, Florida, etc. Cities and towns, counties, etc. many are insolvent and since they are run literally as companies they can file for bankruptcy. A huge bet is on on how many will do it, what pile of money shortage will it uncover.
• The US are tied up with 2 major war scenarios, Iraque and Afganistan, which to a great extent blinded their omni eye from the social bomb being setup around the southern Mediterranean countries.
• The Chinese have a running trade surplus of avg 40 billion dollars/month with the US. They pile up 2 trillion USD (known) of T-bills (+1 trillion hidden). They trade long term T-bils (+10y) for short term T-Bills hugely since the crisis erupted. The US treasury is hostage to Chinese central bank, and the Chinese will not let the Yuan float freely, it's their short leash on the lion.

Now for some inline reading and forecast:

• The US cannot spend more without risking the dollar status of world reserve currency.
• The US depends on the petro-wall relative stability to maintain the dollar status and therefore all the American dream.
• The US depends on Saudi-Arabia royal family for good and bad. Imagine king Abdulha faces riots like Qaddafi and shuts down oil and money flows to the US if they do not support the regime and/or intervene militarily. So, to me US CANNOT let Adbulha fall, no matter what.
• The US have no money to sponsor (for a set of reasons above):
• CIA covert ops.
• New military ops in Arab countries under revolutionary processes.
• and/or openly support finnacilly political parties that defend pro-western ideas.
• The pedal to the metal approach will no longer do. No more Iraq 1, Iraq 2, Afghanistan, that road is a dead end. They have a little more long term brains in the white house know, true.

Conclusion:

• China just have to seat back and wait for the petro-wall to inexorably fall in front of the world eyes. It's unstoppable know I think. 1-2 years no more, a few months maybe. Can't tell when.
• With the petro-wall down, the era o US imperialistic power is over and guess who has the money and the industrial mighty to pick up the pieces :) Who was investing it's huge trade surplus in Africa, in raw materials, in high-tech industries, etc. and with a carefully planned strategy?

• To me, China is just waiting for its post WWII bonanza without shooting a single gun. Brilliant!

Ric

(Change with the World)