It’s ridiculous to have red lines if you are not going to do anything when they are crossed. So what should Biden do?
China Has Crossed Biden’s Red Line on Ukraine
A Wall Street Journal Op-Ed moans China Has Crossed Biden’s Red Line on Ukraine.
President Biden warned China two years ago not to provide “material support” for Russia’s war in Ukraine. On Friday, Secretary of State Antony Blinken conceded that Xi Jinping ignored that warning. China, Mr. Blinken said, was “overwhelmingly the No. 1 supplier” of Russia’s military industrial base, with the “material effect” of having fundamentally changed the course of the war. Whatever Mr. Biden chooses to do next will be momentous for global security and stability.
Mr. Biden can either enforce his red line through sanctions or other means, or he can signal a collapse of American resolve by applying merely symbolic penalties. Beijing and its strategic partners in Moscow, Tehran, Pyongyang and Caracas would surely interpret half-hearted enforcement as a green light to deepen their campaign of global chaos. Mr. Xi sees a historic opportunity here to undermine the West.
What sanctions? On Who? On What? For How Long?
Op-ed writer Matt Pottinger provided no details, he just wants action. He needs to explain what sanctions make any sense at all, and how they would work.
Numerous US sanctions on Russia, China, Iran, all failed. Hell some of them on Russia and China not only failed they backfired.
How China Gets Around US Sanctions on Semiconductors
On February 18, 2024, I explained How China Gets Around US Sanctions on Semiconductors
How Russia Makes a Mockery of US Sanctions in One Picture
Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?
On December 29, 2023 I noted How Russia Makes a Mockery of US Sanctions in One Picture
On September 19, 2023, I commented Lesson of the Day: Sanctions Don’t Work Because They Create New Markets
Why Sanctions Fail
- Someone always has an incentive to break sanctions.
- Sanctions create new markets.
This is how Russia sells oil and how China gets access to equipment and parts.
In the case of chips, the US has forced China into a path to self-sufficiency. Hooray?!
Matt Pottinger wants sanctions. He should name some. Nah, what he really wants is to promote his book “The Boiling Moat: Urgent Steps to Defend Taiwan.”
What Color Are Biden’s Red Lines?
On March 10, I asked Are Biden’s Red Lines to Netanyahu Really Yellow or Green?
Presumably you know the answer now, but if not, please consider this idle threat: Biden Threatens Sanctions on Israeli Soldiers Yet Wants More Money for Israel
If you are going to have red lines, I suggest they should be red.
Israel vs China Red Lines
In the case of Israel, there was an easy remedy. Biden could have withheld aid. Instead, when Israel repeatedly crossed lines, Biden stepped up the aid further emboldening Netanyahu.
In the case of China, there are no sanctions or policy actions that make any sense, so there should not be any red lines.
Attempting to set foreign policy for the world is a huge mistake. And setting red lines you cannot or will not do anything about makes one look silly.
“China, Mr. Blinken said, was “overwhelmingly the No. 1 supplier” of Russia’s military industrial base, with the “material effect” of having fundamentally changed the course of the war.”
A pot calling a kettle black. Both the U.S. and China have fundamentally changed the course of the war.
I know that holding two contradictory thoughts simultaneously and believing both of them is a Democratic specialty, but this one seems a bit much. We warn China not to provide material support for Russia in its war with Ukraine, while we continuously send military advisors and billions of dollars in weapons to Ukraine.
“Mr. Xi sees a historic opportunity here to undermine the West.”
The West is undermining itself, without Xi’s help.
We in the USA need to mind our own business. Ukraine is not our war. Palestine is not our war. Bring our troops home from around the world and put them on the Southern border. Let’s save our own country. America first!
No biggie. China has been taking over the U.S. for the past 30 years. They have an even better hold on Canada, especially the O & G in Alberta.
HSBC, one of the world’s largest banks, issued an alarming warning that Earth is running out of the resources to sustain life
link to forbes.com
Good thing neither Forbes nor HSBC, nor anyone else in the Fed’s special-ed club “finance”, employs as much as a single even semi-literate anyone anymore. Such that whatever nonsense they spew, it will never correlate any better than random with any observable nor future reality. Meaning: Don’t worry. At least not on account of anything any of those childbrains are spouting.
Excellent – perhaps you can use your fine intellect to explain to me why we are steaming oil out of sand.
And drilling miles beneath the sea for oil…
And dropping bombs down holes to blow up the rock and suck out the dregs….
I have been thinking we do this because we are desperate because there is no easy oil remaining
I must be wrong. Right?
You’re not “wrong” about oil getting harder to get at. That’s been the case since at least the 90s. But “..sustaining life…..”???
Americans, and Westerners, are facing a double whammy: The low hanging natural resource fruit have increasingly been picked. And: We are no longer even the remotely most efficient at neither picking, nor making valuable use of, what fruit is still left. Hence are increasingly being outbid and left out of mining and otherwise obtaining them.
And that’s happening even despite the dollar still clinging on to valuations more than twice anything that trade and competitiveness weighting warrants. Based on nothing other than sheer inertia. When that inertia stops carrying it; which, like all else, will happen first slowly then all at once; Americans ability to procure oil will be cut in half almost overnight.
There are still plenty of resources on/in Earth. Some may be getting hard enough to get at that the average 3rd worlder “making money from his home” gets outbid. But that really has more to do with being a third worlder: They, now “we”, never really had access to much in the way of resources. Yet there is still life on earth.
Let’s do this again so that it might sink in:
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. link to iea.org
HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. link to bloomberg.com
Conventional Oil Sources peaked in 2008 and the Shale binge has now spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
Some key points from this Financial Times article: link to energyskeptic.com
Shale boss says US has passed peak oil | Financial Times link to archive.ph
Just as is the case with conventional fields; how much oil is recovered from shale, is largely a function of resources thrown at it. Price oil on par with gold, and all fields now mothballed; conventional as well as tighter fields, will be brought on line again. You mothball a well, as well as a field, because it’s longer economically viable. Not because the last pint of hydrocarbon has been recovered. And economically viable looks very different at $200 as far as eye can see, than it does at the $28-$45 estimates much of today’s industry is based on.
Just the big ME fields themselves, have plenty more oil to give up, once/if it becomes generally accepted that prices will stay north of 1/10 oz Gold (or perhaps north of a median Chinese’s daily wage) from then on forward. As opposed to today, when the “finance” special-ed’ders instead keep babbling about “the end of fossil”; AND central bank wealth transfers have resulted in those special-ed, all-out idiots, now largely being in charge of decision making everywhere.
I have to give you an F (Fail).
The price of energy DOES matter.
The Beginning of the End
JUNE 13, 2003 – There is increasing evidence that massive economic stimulus — monetary, courtesy of the Federal Reserve, and fiscal, thanks to the president and supply-side minded lawmakers — is taking hold. The magnitude of the policy turnaround, which caps a constructive, multi-year reflation process, should overwhelm the economic negatives — including the drag from expensive oil and poor finances at the state- and local-government levels.
Expensive oil and its impact on other energy costs remains a concern.
The current level of U.S. monetary stimulus is massive. Real interest rates have fallen 5.2 percent from December 2000 to March 2003, reaching -1.2 percent. A swing of this magnitude may be historical.
Read more at: link to nationalreview.com
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. link to iea.org
HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. link to bloomberg.com
Given most of our manufactured goods come from China, its ridiculous for us to be threatening them. Things are better arranged for them to be able to threatening us. But the Biden team is too incompetent and stupid to figure out who has the upper hand.
Matt Pottinger is responsible for the criminally incompetent Deborah Birx serving as the White House Coronavirus Response Coordinator under Trump.
Biden is so compromised by China that there is no way for him to do anything meaningful. Can you even imagine the videos and dirt from Hunter’s trips there? Plus they know exactly where all the cash went and to whom. Hunter’s deals and the Biden Penn Center was funded with $ from China.
Nothing 5% can’t fix. Just jump from 10% to 15% and the Big Guy is all set. Easy, peasy as they say, and besides what’s another 5% amongst Friends?
Nobody wants EVs… the delusion is imploding
link to brusselstimes.com
They are so good for the environment though, and we gotta go green as fast as possible, to save the planet, or something to that effect… What’s that you say? They are not nearly as good to or for the environment as they would lead you to believe. Well then, let’s get rid of them, as it’s a fools errand to go any further right?
Isn’t it supposed to be “Nothing Lost, nothing gained” NOT “Everything Lost, Nothing Gained” Just saying…
it’s hard to discern your point here, Stu… sarcasm, maybe? not sure.
an effort to clarify…
$600billion (minimum; all taxpayer $$/debt) in “green” giveaways & subsidies… all gone (to the Donor Class; all via Obama & Biden admins.)…
absolutely nothing gained.
Powerdale, once a stalwart in Belgium’s electric vehicle charging infrastructure, has left hundreds, if not thousands, of its customers in the lurch following its bankruptcy last year. link to brusselstimes.com
EVs are heading for ZERO. Absolute ZERO
Biden is really an expert in bullying friends and appeasing foes.
Biden is so weak. January 20th cannot get here soon enough!!!
I’m sure Biden is weak as well. But that hardly matters at all.
The issue is that the US, and The West, is so weak.
China has been the undisputed leader of the free world for a decade now. With its position only cementing, year in year out. Something which is is pretty much guaranteed to not change at all, on any January 20th this half of the century.
The EV cult link to youtu.be
Tesla Inc. eliminated almost its entire Supercharger organization, which has built a vast network of public charging stations that virtually every major automaker is in the process of tapping into in the US. link to msn.com
Vast? Overstatement…
In any event – Jeff — the ball of yarn is unravelling right before your eyes… have you sold your EV collection yet?
You need to do a Hertz and dump before EVs go to Absolute ZERO.
I love watching this slow motion train wreck… what doesn’t make sense… will stop..
It is … stopping hahaha
Hey where are all the Tesla fan boys? Where is Jeff these days??? Sucking their thumbs in the corner
Trump would not have hesitated using the big red button. Biden is timid probably from aging and low testosterone.
Biden is not timid, it’s simply that the USA no longer has the means to intimidate Russia and China. Just look at the disastrous performance of American weapons in Ukraine, and the ease and speed with which Russia adapts to it.
No. Biden has entered the super angry old man phase of dementia
And in any event he is irrelevant. Does anyone seriously believe he has ANYTHING to do with any of the decisions being made?
Nope.
I know what he should do Retire and shut his senile old mouth that’s what
Along with several others
,,,,defending depraved Hunter’s interests, like all good fathers would do ….
I wonder if Biden violently stabs his ice cream with a spoon when he’s mad?
This is the best post ever because I had oral surgery today and i’m on a soft diet today and i’m on pain pills and got the munchies and just realized I have a container of peanut butter fudge ice cream in the fridge!
For the first time ever I say: Thank you Biden!
Its not just China. Saudi Arabia, Egypt, Turkey, Israel, Russia, Brazil, and India have all ignored Biden’s red lines already. Friend or foe, everyone thinks Biden and the Obama foreign policy team are a bunch of idiots. Many, including China, have bluntly said so several years ago.
What is surprising is how long it took the revolving door between the NY Times, Bloomberg and WSJ to realize what the rest of humanity thinks of Biden.
When Chinese diplomats looked Blinken in the eye (his first week as SecState) and told him China thinks he is an idiot… was that not a big clue?
“..everyone thinks Biden and the Obama foreign policy team are a bunch of idiots.”
That’s exactly what everyone who thinks, thinks.
Not sure what you are talking about here Mish. It seems every single week, both Biden and Trump are in a pissing match to see who will impose the most sanctions and tariffs on China. In fact, you have written about this numerous times, while decrying the stupidity.
Now you seem upset that Biden will not impose more sanctions. Shouldn’t you be cheering?
Regarding China; I am impressed that they have been making the necessary investments over the last several decades to make themselves the most efficient, lowest cost producer in so many areas. They are so far ahead in the “energy transition” area that they now dominate the world in so many areas:
They install more solar and wind each year than the rest of the world combined, and still export more than anyone else.
They dominate in producing and refining rare earth minerals.
They have built 43,000 km of “electrified” “high speed” rail.
They are building more nuclear and hydro power than anyone else.
They are the largest producer and consumer of EV and PHEVs in the world and are beginning to export these vehicles to the rest of the world.
They are focused on producing more high tech “stuff”, like semiconductors, chips, smartphones etc than any other country.
I expect that all the cult morons here who think EVs and renewables are all part of a hoax, will later complain about how we were asleep at the switch while China outmaneuvered us. Of course, it will all be the government’s fault.
Exactly The hypocrisy runs deep
“Now you seem upset that Biden will not impose more sanctions. Shouldn’t you be cheering?”
Boy did you misread this post.
I do not want Biden to do sanctions – I would not do any ever
I merely stated if you are going to have red lines then you should have them. With Israel it makes sense. We could have done something about them. I explicitly said with China it makes no sense.
I have never seen you mangle a post of mine like this.
My apologies. I looked over your post again, and I clearly misread it. I am on the same page as you regarding more free trade in general and was thinking more along those lines.
We can agree on this.
I have developed IT consumer technology with companies from all over the world. primarily China, Israel, Belarus, India, Lithuania and Latvia. Eastern Europeans are super smart and incredibly kind. Education matters.
China is fast!
Small projects that take 4 months here can take as little as 7 days in China. Except for multifaceted novel code iteration, almost any basic device can be completed and prototyped in China in a week.
Look on “Made in China” and search for a specific tech hardware piece, like an industrial IOT mini computer. Then look up the companies website? You’ll see that the company will customize any base offering, de populate the board, swap components, modify the bios and drivers, prototype a custom case and ship it to you in about 7 days.
Try that in the US… laughable.
US companies are overtly obsessed with qualifying you, terrified that they might waste time and resources on you and needing to understand your company and business model. Then charge you a fortune for a prototype that will takes 3 or more months.
vs
China “we make you a prototype – no charge – ships next Friday.”.
That’s right, a prototype for FREE.
You then ask, “How long to scale into production?”
“No problem we can supply hundreds in two weeks and thousands in one mfg cycle, about 6 weeks.”
China is one giant multi level integrated technology platform that begins with college graduates who will work in one of China’s, 6 vertically integrated tech hubs, that include worker housing, parks, transportation, restaurants, entertainment, funding, IP services, Labs, Bio Tech etc. China is building 6 Silicon Vally’s. Look it up. All the multi nationals have a massive presence’s in these these distributed technology hubs.
The US is done, put a fork in it. Chinese cities are like visiting another planet. The US is a giant dystopian slum filled with illiterate brainwashed morons, terrified of vapors and ghosts.
Wow. Kinda scary
Nice to be able to agree. China’s internal supply chain has been deliberately designed and developed to a level of efficiency that gives them a tremendous advantage.
The shocking thing is that this was not because of the “invisible hand” of the free market, but from a deliberate central plan where government encouraged, and subsidized companies to set up and grow rapidly in designated regions in order to achieve these supply chain goals for the entire country. The result is spectacular, as you indicated.
Kind of like Amazon on steroids; but for the benefit of the entire country rather than a single company.
This would be a great topic for Mish to look at. Central planning working better than Free Market Capitalism (in this instance). Something not possible in the US these days because of our anti-government mantra. Yet something that used to happen more in our past in the infrastructure area. China took our infrastructure playbook and put it on steroids.
So, while our old infrastructure rots and cries out for modernization, China’s has already prepared theirs to dominate in the next several decades.
What do you think Mish? This is a good topic for future discussion. How best to prepare for the future. The US did it in the 20th century; China in the 21st.
It’s all very ironic. The US and the West have been encouraging the private sector to embrace the energy transition to EVs, wind, solar etc for two decades now with limited success.
China, on the other hand, has been incredibly successful in this transition and now can produce EVs, wind and solar for lower cost than anyone else. And the response from the US is to put more tariffs and sanctions on the these things because they are from China.
Love it. Can’t change it. But I can try to profit from it.
Pardon your great leaders, they ve been too busy with warmongering in recent decades !
“The shocking thing is that this was not because of the “invisible hand” of the free market,”
Yes it was. It always is. The utter complexity of a supply chain, made it completely impossible to 5 year plan back when it consisted of a few farm collectives in Ukraine. China’s current one, would take, literally, divine powers to plan.
It’s also only impressive in the context of our current totalitarian world. China, despite being nominally communist, has been the freest larger (…than Singapore…) country on the planet, for several decades.
That is why China is leading, and gaining: It’s the leader of the free world. Conversely: That is also why The West is falling ever farther behind. At an ever accelerating pace even: “We” are the new command economies. “We” are the ones who are forced to spend more resources obtaining permits and permissions from vapid apparatchiks; both nominally public and private; than “we” are then left with to spend on anything useful.
That’s not to China is in any way free, as in Civilized Era America. Only that “do what you want as long as you don’t trash-talk Xi” leaves a lot more freedom than “you can only do anything at all, after first spending millions on ambulance chasers, lobbyists; and “home owners” via debasement transfers.
In practice, it’s not even remotely close. As anyone who has tried to get anything done both places can attest.
That’s exactly what I believe China had planned with the West: suck it dry, then discard the carcass when no longer useful.
The West is led by idiot grifters, and the future doesn’t look bright.
I am impressed with how the Chinese were able to get Western companies to transfer their trade secrets and expertise to themselves while keeping those companies from obtaining a significant market share within China. They played the economic thought at the time in the West that free trade was sacrosanct and that even if you allow a country to discriminate against your companies, you can give that county’s companies a free hand in yours because it all works out you in the end somehow. How that somehow works out in the end is never explained. Now at least we know from results that it works out in the end for the Chinese but not for us yet many still insist that the theory is true.
Agree.
give away?
the Chinese PAID for those “trade secrets”.
Exhibit A: the bank accounts of almost every US politician at the federal level.
DUH.
Boy did you misread this one! Read it again, then comment. “Red lines and tariffs suck; period” is Mish’s message.
You are correct. I did misread it. I tend to agree with Mish’s stand on tariffs and sanctions in general.
= china russia
there is a interesting historical and geo dynamic between those 2 countries.
some say Russia depends on china too much, in some way it is true.
but there is a diff angle, CALLED WOLRD TRADE ROUTES.
basically china is world industrial hub- center, and w/in 10-20 years will be biggest market on pretty much everything, bigger than Europe +USA combined . you cant beat simple fact AKA the 1.5 bil people.
but China still depends on external trade w/ world!
======
but what trade routes can China use?
#1 current, over world seas. but it can be blocked very easily by usa/nato/etc
#2 old SILK route over mostly Kazachstan-Uzbekistan, Iran and Caspian sea!
#3 North route, using Russian transib rail system, all way from east to west.
#4 new one, Artic route if you believe north ice will melt more or less
but as there is a choking point in Bering strait, so you need to built rail system from Russian far east/china border into Russian artic to skip ‘Bering strait’
as you can see MOST OF LAND BASED ROUTES ARE controlled by Russia due of size and geo position, uncluding old SILK route !!
alx
Only problem with US/NATO blocking Chinese using oceanic trade routes is that it is an act of war. China could then respond both militarily by blocking US trade with countries like Japan and South Korea in its near orbit and globally via allies and proxies to disrupt global choke points like the Persian Gulf or by funding terrorists and 5th columnists to destroy US infrastructure. Only about a million Chinese in the US and if 0.1% are agents of the Chinese that would be 1000 plus to commit sabotage such as destroying transformers and substations to knock out power for at least 2 years until replacements could be made. And the biggest maker of such electrical equipment is China.
The US would collapse if the voters couldn’t charge their phones or download Netflix so the US would negotiate to become Chinas bitch with some face saving “win” for Washington.
#sanctions
there is stat item i found very interesting.
last year in 2023 in Russia there were 30+ mil new smartphones sold, it is mostly xioimi, realmi, oppo, etc but Apple is very popular too (aaple sold as gray phones from europe mostly)
30+ mil is about 20% of Russian ppl, including toddlers!
alx
This “CIA” controlled government under which we now labor makes me recall an old saying. It is better to keep ones mouth shut and be thought a fool than to open ones mouth and remove all doubt
It is also the height of imprudence to allow potential adversaries to see the limits of your power. It is MUCH wiser to keep them guessing
The children now running US foreign policy are not taken seriously anywhere. They suffer slights everywhere. No administration (even if it is the Security State running the show) has ever done more damage to the US position in the world.
I would recommend the Rand report that came out this week about crumbling empires and the potential for them to repair the damage. The report is in reference to the decline of US power and authority in the world I would provide a link but the last time I did my comment was not published. It is titled blandly “The Sources of Renewed National Dynamism” and you can find it on Rand’s site.
I would add neither Russia nor China is a real military adversary, and Russia is not an adversary at all, or shouldnt be if there were ANYONE with a brain among those calling the shots in DC
“Russia nor China is a real military adversary”..? How good is the US military, when your Aegis destroyers, with supposedly the most sophisticated radar in the world, capable of detecting a basketball 10 miles out, get rear ended by a container ship?
Perhaps he should switch to a Purple Line. That would certainly be respected.
Lots of sabre rattling going on by both sides. I’m waiting for the ‘double-dog dare you’ threat to pop up at any moment. That’s when you know that things are getting very serious.
Watching ‘A Christmas Story’ has informed me that Triple Dog Dare is the one you don’t back down from.
Given it takes place roughly around the time Biden was a kid he should be intimately familiar with its meaning.