Brother In Arms

By Jeff Thomas, feature writer for Strategic Wealth Preservation, Doug Casey's International Man and 321gold.com

Mayer Amschel Rothschild died in 1812, so he could hardly be referred to as a pal of Xi Jinping, but the two have a great deal in common.

In the late eighteenth and early nineteenth centuries, Mr. Rothschild discovered that, as a major banker in Germany, he could control the country to a greater degree than its political leaders if he could find a way to control it economically. This he did through a series of loans, for which he wished never to be repaid. He instead presented his chits for collection at times when the German government was strapped for cash. By doing so, he was able to extend the loans, renegotiated to his advantage, and increase his control over both the political leaders and the government as a whole.

As he said at the time, “Let me issue and control a nation’s money and I care not who writes its laws.”

This was not a passing comment, but a basic principal through which he expanded his power. He sent each of his sons forth – to Naples, Paris, Vienna, Frankfurt and, most notably, London, where his son Nathan repeated his father’s postulate, saying, “I care not what puppet is placed upon the throne of England to rule the empire on which the sun never sets. The man who controls Britain’s money supply controls the British Empire and I control the British money supply.”

Each of his sons came to dominate a European country’s power, through banking, but Nathan was to create the world’s foremost bank – the Bank of England – in London. To this day, the Rothschild family control the majority of the world’s wealth.

They set their heel early in America, creating the First Bank of the United States in 1791. Its attempts to own the US prompted Thomas Jefferson to state, “I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs.”

Partially in reaction to the bank’s increasing power over the government, it lost its charter in 1811, but a new Rothschild-backed bank, The Second Bank of the United States, was created in 1816. It too, sought to expand its power over government and had its charter removed under Andrew Jackson in 1836.

But the indomitable Rothschilds found permanent success with the founding of the Federal Reserve (which is neither a federal body, nor a reserve) in 1913.

Since then, the US has increasingly been controlled by the creation of national debt.

Fast-forward, then, to China in the present day.

In 1978, China began its rise from the Maoist doldrums to become one of the world’s major powers. It has risen steadily and rapidly and, like a slow eclipse of the sun by the moon, has edged out the light of the foremost empire of the twentieth century – the US.

It has, in recent years, surpassed the US in GDP and PPP, and will soon surpass it in other ways. Its economy is presently growing almost three times as fast as the US. Its people possess a higher IQ than do Americans and China’s education level is ahead of the US (more university students than the EU and US combined) and improving constantly, whilst the US system is in decline.

But, above all, China is expanding worldwide, as an empire, through investment.

Whilst the US is relying on aggression (recently in Afghanistan, Iraq, Libya, Sudan, Syria, Ukraine, Chad, Mali, Egypt, Somalia, Niger and Nigeria – either directly or through proxies) to assert itself on the world, China has taken a different approach.

The US approach is nothing new. It has been using brutal force to insinuate itself on the world since the reign of Teddy Roosevelt.

But China has, in a short time, spread itself across the globe by offering development. China either pays or co-pays for the development (ports, highways, civic buildings and other infrastructure) in countries that have inadequate budgets. To sweeten the deal, China offers a kickback (described as averaging 7%) to political leaders, which encourages them to make the expenditure as large as possible.

In return, the country in question is indebted to China for a lengthy period.

This form of “bloodless invasion” has been far more successful than the US concept of “making friends through force.”

China then gains power over governments when they get into fiscal troubles, by renegotiating the loans in their favour. (Sound familiar?)

In essence, this is “debt-trap diplomacy” – a situation in which the presumed “win-win” agreement actually means that China wins on both scores.

The country in question bites at the development carrot, receiving infrastructure at what appears to be a bargain rate; then, when they find they cannot repay the debt, are forced to accept that China owns the infrastructure it has built.

And this, of course, means that China profits well enough from such agreements that it can continually create further international expansion.

By contrast, the US pours money into military adventures. Historically, warfare has been the greatest money pit that mankind has ever invented. Most previous empires went broke due to excessive warfare and the US is poised to do the same.

The US is presently alienating, not only the countries that it is attacking militarily, but their allies, as well. And, further, it is insisting that its own allies adopt US-created sanctions against the countries under attack, even if those sanctions are economically damaging to the allies. This is resulting in US allies quietly pulling away from the US.

To be sure, when one country is the biggest boy in the schoolyard, there are always those who will feign friendship, in order to capitalize on his power. However, when the biggest boy begins to cost them their lunch money, they tend to quietly step away.

Invariably, the last to notice this is the biggest boy, as he assumes his allies are still with him. When the day comes that he truly needs them, he finds himself alone and in peril.

The question here is not who is right and who is wrong in this picture. The question is which of the two great powers will prevail in the years to come.

Just as the Rothschild principle has been shown to succeed in every instance since Mayer first created it, the Chinese, who have adopted it, can be expected to emerge as the victor in the economic war that is now being fought between the two powers.

In this, Messrs. Rothschild and Xi are indeed brother in arms.

The world does not love the Chinese, but it has become thoroughly fed up with the US inclination to invade sovereign nations, impose economic sanctions and impoverish populations, all with extraordinary arrogance. By comparison, the Chinese are thriving by investing in countries worldwide.

Previously, many of these countries had no common ground, but, today, they are rapidly pulling together in opposition to the US.

China is an empire-in-the-making. It’s no more altruistic that the US, but it’s unquestionably playing the game more intelligently and therefore, will win.