Arrested Development: The Don, Hunter, The Justice and the Irony of Sticky Situations
For a moment, let’s step back from American politics and ask what the world looks like from a geopolitical perspective now that a former President has been arrested. Congress has ordered his former Vice President to testify against his former President. The sitting President may be reeled into the legal investigation into his own son’s involvement with agents of foreign governments, especially China. Of course, the Democrats are leading the charge against Trump(s), and the Republicans are leading the charge against the Biden(s). Most Americans have taken sides and cannot see that it is quite possible that both Republicans and Democrats might have broken the law. Meanwhile, the world is digesting the news that corruption may have also tainted a Justice on The Supreme Court. Obviously, any change of personnel at The Supreme Court now, given the delicate political balance there, will probably have implications for the two Presidential legal cases. But, what is entirely overlooked by all the pundits, and what really matters now, is how Xi, Putin, MBS, and European leaders see all this. While America’s leaders duke it out in their ongoing domestic barroom brawl, international observers are taking note as they scheme, plan and prepare for a world that Americans of any political persuasion will not be able to influence as they did in the past.
Regardless of political persuasion, it seems incredible to all Americans that anyone would choose Russia as a partner over the US. And yet, China, Saudi and some European leaders have increasingly aligned with Russia. This seems particularly worrying since Gleb Karakulov, a member of Putin’s personal security team, the FSO, just defected with his family declaring that Putin is living in such a bubble that he has no idea what is really going on in the world. He has “an impenetrable barrier of quarantine and a lack of any information from the internet.” Yet, there is clear evidence that many nations are aligning with China and Russia in their efforts to create a new world order. Xi’s words to Putin two weeks ago now haunt all observers of geopolitics, “Right now there are changes – the likes of which we haven’t seen for 100 years – and we are the ones driving these changes together,” followed by “Take care please, dear friend.”
Whatever changes they have in mind, there is no doubt that they expect America’s Presidents and their children to remain preoccupied with domestic politico-legal affairs. They expect America’s Presidents to remain focused on tomorrow’s press conference and unable to think ahead, let alone engage in any prospection regarding what the future should look like. China and Russia see the US like a fly ironically trapped in the gossamer web of legal constraints that spring from the Constitution. They watch as Donald Trump and Joe Biden both seethe with anger, because the legal processes both face mean losing control of the narrative. These are things neither Putin nor Xi has to worry about.
The more the lawyers and investigators dig into these Executive Office cases, the more freedom China and Russia have to redraw the world map. They know that it’s not just the two Presidents’ time is now hostage to the legal process. The entire political system will slow to a grind if the President isn’t there to sign off on proposals. While many may detest Trump, he still holds sway over a large portion of the voting public and would otherwise have been devoting time to defining the platform issues for the 2024 election. His supporters are raising money with his AI-fabricated arrest and mug shots. That capacity to define the platform issues now has to be done in his spare time when he is not in a courtroom or preparing to be in one. The Supreme Court will now also be distracted by internal and Presidential legal issues. Both President’s legal cases seem likely to go all the way to the finely balanced Supreme Court. The entire political machinery is affected by all this. There’s molasses in the gas tank of the American political machine.
All this legal drama also emboldens and empowers independent voices. Elon Musk is now seeking to meet directly with China’s Premier in China. Tim Cook of Apple is reaching out to the Chinese political leadership directly, and to Chinese app developers like miHoYo. European political and business leaders are now reaching out to China as well. Meanwhile, the US is introducing a “Reverse CFIUS,”(coined by Malmgren and Glinsman) meaning it is forcing US investors to divest from China. The US is also now pursuing the Restrict Act which nominally aims at Tik Tok but actually seeks to impose a $1 million fine and 20 years in prison for anyone who is deemed to be a “threat to national security.” The legislation, which the White House already agreed to approve in principle, would allow the US Government to monitor individuals and firms via their communications, whether WIFI, webcams, or networking devices, and all without a warrant. It seems ironic, given that the objection to Tik Tok is that it gathers too much private data. It looks like simply using a VPN could become actionable under the new law. America’s friends are looking at all this and thinking it might be smarter to cut deals with the Chinese than to get ensnared in this new, highly invasive legal web. Of course, China has their own communications web and its own even harsher regime for VPN use, but that’s for Chinese nationals. Outsiders can still cut deals with the Chinese that they can’t cut with Americans once legislation is in place.
The high-profile media coverage around The Don, Hunter, and the Justice reinforces a view that all American politics is both corrupt and preoccupied. This plays into the hands of those offering an alternative world order. This is not just about de-dollarizing the world. Frankly, until China is willing to embrace convertibility, the attractiveness of a Yuan-led world has its limits. The perception has shifted away from a Petro-Dollar world, where oil/hydrocarbon surpluses ended up in the US either as deposits, property purchases, or in the form of weapons or technology sales. The perception is growing that there is a new Petro-Yuan where oil/hydrocarbon surpluses will end up in technology alliances with China. This is part of a bigger shift away from financial assets like Treasuries, where the US offered the most attractive options to a world where these nations are investing in real assets like physical infrastructure. The world is increasingly buying into China’s effort to replace Treasuries with spending on The Belt and Road Initiative. Railway links beat Treasuries. Whether this will generate financial performance is not the primary concern. These nations want the resources, technology, and physical connectivity needed to support an ambitious population, not 6% returns in a portfolio. Notice that China has just announced a global ticketing platform across 140 countries for the Belt and Road railway network. You can buy a ticket from March 15th. You’ll pay Swiss Francs until China’s new CBDC Digital Yuan rolls out globally.
Do we think the US can pursue an upgrade of its domestic railway system while the Oval Office is embroiled in legal disputes? No. Look at the record number of extraordinary train derailments in the US since COVID. Look at the impact. It’s not just that trains went off the tracks. Whole communities have been poisoned and …
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