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You Could See it Coming

By Larry Leonard
 
 Canada approves pipeline that will ship oil to Asia...
 Consumer prices rise sharply in May...

June 18, 2014 —  It isn’t a done deal.  There are lawsuits, and resistance in government circles.  Canada’s present prime minister is, after all, a conservative.  It is a shame that Obama isn’t, because if the resistance eventually folds, the result will be that smog-bound China will continue on its path to economic dominance.  Energy determines industrial capacity and China, unlike Obama, knows what that means.  So does the American South, which lost the Civil War because of manufacturing capacity.Dollar sign

There is irony in all this.  A communist country that works for profit,  dominates with profit.  Russia is plugging into China, and may begin to use some of her methods.  North Korea remains a stupid, collective agricultural economy, but Mother Russia?  For now, a giant in the way of resources, I suspect the freewheeling dive of China into market-based economic structures may lag behind in the land of Marx and Stalin.  Those things are long term effects.  The day of the bureaucrat, of five year plans, may live on for a while in the nation of the czars.

But, China is bursting at the seams.  It was predictable.  China had trade fleets before engines were invented.  Deep down inside the Chinese there is a businessman.  Only the strongest of repressions hold it slightly in check and still in control, these days.

The Future

The Russians sense the danger for China.  Success is thrilling.  Not doing everything possible to encourage it is antithetical in a sense, but the controlling class must limit some activities if it is to maintain its centralized power.  In a way, it’s like putting a tiger in too small a cage.  There’s trouble ahead for China.  Even their artificial kind of capitalism comes with its own dangers.  China could suddenly explode into a constitutional republic (which, if memory serves, it was at one point, for a very short time).  Money does it.  It makes for hunger for future accomplishment.  It is hard to keep caged as it paces back and forth.

And, there is the required interaction with other kinds of thought.  Creativity, even in engineering, longs for avenues of expression.

Russia fears it because the true Russia of the Communists is just the old czarist state run by bureaucrats who like all bureaucrats recognize that bureaucracy is fueled by poverty, not plenty.

Canada tried to help us, and may yet fail to make this new pipeline serve as the energy source for an explosively expanding Sino-Soviet production empire.  We are curious if China will try to make use of the new opportunities evolving out of the Middle East mess, and what that might mean to the Saudis and the other oil princes.  China is cautious about the use of military power.  Not showing it, but using it.  And, where will the Japanese fit in all this?  We wonder if the new Canadian oil will also flow to them.  It is surprising it all isn’t going there, now.  Canada’s hesitation to build this pipeline should have brought the Japanese in.  They have too much experience trying to avoid oil with nuclear alternatives not to have thought about that.

It’s a complex subject, rich with centuries of history between the nations in the portrait.

Maybe some of you can see what’s coming, but I cannot.

(LL)

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