By JC Collins
The lead up the election of Donald Trump was filled with campaign promises that aligned with bringing jobs back to America while also stepping back from being the unipolar power in the world. Trump wanted to reduce funding to the United Nations and other countries while re-building relationships with Russia and taking out ISIS. It appeared as if the multilateral transformation was taking place as strategized with the major nations now moving in the same direction towards further consolidation and changes to the international reserve status of the dollar.
This still may be the case but some worrisome events have been taking place over the last few days which are suggestive that something else may be in the wind. The relentless slander and political attacks on Trump and his incoming administration have increased as we move closer to inauguration day on January 20th. With these attacks the American establishment which appeared to have been removed from power by Trump’s election have hanged on to the edge long enough to force a turnaround.
The first hint that something wasn’t right was Trump stating in his press conference yesterday that he believed Russia was behind the DNC hacks. This is a direct about-face by Trump and stands in contrast to his previous statements.
Further evidence of a change came during the testimonies of the incoming administration. Secretary of State pick Rex Tillerson said that sanctions should remain on “resurgent Russia” and that “the taking of Crimea” was against the law. Most readers will understand that the framing of these positions is more aligned with that promoted by the Anglo-American establishment as opposed to that which has been hammered home by Trump over the last year and a half.
When Trump’s pick for Secretary of Defense Retired General James Mattis was questioned during nominee hearings today he said that the existing world order, which is dominated by the Anglo-American establishment, is “under biggest attack since World War Two from Russia, terrorist groups, and China’s actions in the South China Sea”.
Mattis also stated that “Russia is the principle threat to US security”.
It was also suggested by Rex Tillerson that America could block Chinese access to the man-made islands in the South China Sea, something which Beijing said they were “not amused” by.
These statements are all happening at the same time that NATO continues to encroach on Russian territory and American troops and tanks pour into Poland.
What are we to make of all this?
Could the incoming Trump administration be making such statements to minimize the amount of resistance to each of the nominees? With a Republican majority this would be unlikely, though there are those in the Republican establishment who are still against Trump.
Whether the Trump script and strategy is changing does not change the fact that America cannot continue using the dollar as the primary reserve currency for much longer. The trade imbalances will continue to grow and both Russia and China, along with other nations, are moving towards using the Special Drawing Right (SDR) of the International Monetary Fund as the supra-sovereign reserve asset.
It would be madness on the part of the Trump administration to think that forcing tariffs and increasing American production and exports through tax cuts alone could reverse these growing trade imbalances.
But weirder things have happened in the history of the world.
It is also equally as likely that these statements are pre-placed for the eventual negotiations which will take place regarding the restructuring of the international monetary system and outdated trade agreements. Creating a strong starting position makes for a great strategy and even greater results. It would not benefit America to appear weak on either Russia or China in the lead up to negotiations.
In the meantime I’ll be sticking to the thesis we have been discussing for three years as it makes the most sense as a path forward for the world. There is obviously a major division within America between the existing establishment powerbase and the incoming Trump powerbase. Will the Trump powerbase win? Will they trade off somethings for others?
Let’s watch close for further signs and directions. The upcoming Paris summit on Israel and Palestine, and subsequent UN Resolution which is sure to come just a few days before Trump’s inauguration will add a further dynamic to all of this unfolding drama. – JC