Has China Declared a Cold War Against the US?

Unpopular Opinion: Western Media Is Ignoring China’s Declaration of Cold War

Have you seen the report released by China’s Ministry of Foreign Affairs titled “US Hegemony and its Perils”?

🧠 TL;DR

The United States has developed a hegemonic playbook to stage “color revolutions,” instigate regional disputes, and even directly launch wars under the guise of promoting democracy, freedom and human rights. Clinging to the Cold War mentality, the United States has ramped up bloc politics and stoked conflict and confrontation.
- China’s Ministry of Foreign Affairs

• The US has been accused of interfering in other countries’ internal affairs, pursuing and abusing hegemony, subverting and infiltrating, and waging wars.
• The BRICS countries are looking to challenge the dollar’s power by creating a reserve currency that’s made up of several different currencies.
• Investing in gold might be a good idea since it’s never disappeared or been devalued.
• Creating a BRICS currency that all parties agree on will be extremely challenging and could result in heightened dependence on China.
• Bitcoin’s market cap just isn’t big enough to handle a whole country’s demand.

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🎯 The US Has a Target On Its Back

The Backstory

The dollar has been pumping lately, and it’s made some emerging markets think about ways to not rely on it so much and not to be so sensitive to US interest rates.

The Federal Reserve’s plan to increase rates in 2022 showed how connected international monetary conditions are to those in the US. And with the US responding to Russia’s invasion of Ukraine, there’s a lot of talk about creating an independent financial system.

BRICS is an acronym for Brazil, Russia, India, China, and South Africa. Goldman Sachs economist Jim O’Neill coined the term BRIC (without South Africa) in 2001, claiming that by 2050 the four BRIC economies would come to dominate the global economy. South Africa was added to the list in 2010.
- investopedia

The BRICS countries are looking to challenge the dollar’s power by creating a reserve currency that’s made up of several different currencies. Russian leader Putin announced this plan last June, and it’s going to be discussed further at the BRICS summit in South Africa in August.

What We’re Watching

China prioritizes its own interests, which may diverge from those of other BRICS members.

They invest in alternatives to US Treasuries and search for safe havens for their excess cash. Other BRICS countries offer attractive opportunities for raw material investments, but China prefers to lead in this endeavor, similar to the Belt and Road Initiative.

One Belt One Road (OBOR), the brainchild of Chinese President Xi Jinping, is an ambitious economic development and commercial project that focuses on improving connectivity and cooperation among multiple countries spread across the continents of Asia, Africa, and Europe.
- investopedia

Creating a BRICS currency that all parties agree on will be extremely challenging and could result in heightened dependence on China. This is a crucial factor that cannot be overlooked.

Go deeper: BRIC: Acronym for Brazil, Russia, India, China, and South Africa; How China’s One Belt One Road (OBOR) Initiative Works & Its Goals; Why BRICS Nations Are Creating A New Currency (biased towards BRICS); Why a Brics currency is a flawed idea (biased against BRICS)

❄️ China’s Cold War Declaration (aka Report)

Zoom Out

China warns that the US is becoming more aggressive in global competition, which is causing other countries to pick sides. They also caution that the US will continue to try to hold China down and contain them. This could escalate tensions between the two countries.

The Big Picture

This report accuses the United States of abusing its hegemony in the political, military, economic, financial, technological, and cultural fields:

• The US has been accused of interfering in other countries’ internal affairs, pursuing and abusing hegemony, subverting and infiltrating, and waging wars. It has also used its military power to achieve expansionist goals, leading to humanitarian tragedies.
• The US has exploited global wealth and imposed additional conditions on aid to other countries. It has created 37 million refugees around the world and hindered biological arms control.
• In addition, the US has used appalling methods in war, including chemical and biological weapons.

Go deeper: US Hegemony and Its Perils (the report), China’s Xinhua Blasts US for Military, Political, Cultural ‘Hegemony’ (had trouble finding coverage of this in US Media)

🛡️ How to Protect Yourself if the Dollar Loses Its Reserve Currency Status

If people start questioning the dollar’s status as the reserve currency, that could mean a sudden adjustment for dollar devaluation during a time of price inflation like the one we’re in now.

That could also lead to a potential recession and a rise in gold’s dollar exchange rate. However, investing in gold might be a good idea since it’s never disappeared or been devalued. A recent study found that over the last 50 years, US stocks and gold have performed the best compared to other financial vehicles.

But since US stocks might be in a bubble, investing in gold could be a smart choice. Plus, gold is the opposite of most other currency-denominated investments, so it’s a good choice during a recessionary and/or dollar-deflationary environment.

💡 Don’t Forget About Crypto!

Stablecoins and Bitcoin might give fiat currencies a run for their money in a world where multiple currencies are in play. That could mean the US dollar keeps its crown a little longer. But, you know, when countries deal with a ton of debt and inflation, they might slap on some rules to control capital and lending.

Now, I’m pretty sure Bitcoin’s gonna be a hot ticket item, but let’s be real here: its market cap just isn’t big enough to handle a whole country’s demand. Not yet, anyway.

Go deeper: Podcast: Death of the Dollar?! with Lyn Alden, Dollar’s Reserve Currency Status May Be In Jeopardy

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