Hi all,

Found this article with google. Gives quite a bit of info on this China scenario. (Under the chart)

Man, the economic/financial/fiat instability is getting so thick you need a machety to chop through it. I have to agree with Goldbarron, gold is going up significantly as it is anyway. We do not need any perverbial "Black Swans" to show up to send gold and silver seriously north.

For my scenario, the $64,000 question is??? Will the jolt that the main stream markets are going to taking pull the PM shares south with them? Or have we seen PM shares decouple from the broader stock market enough and start stracking gold price to avoid the hit? I have 20% of my powder yet dry and a couple of very stinky bids in just in case PM stocks do get hit hard. (SVM stink bid got hit a few days ago)

http://www.globalresearch.ca/index.php?context=va&aid=20087 The
Drums of War? Pentagon Provokes New Crisis With China By Rick Rozoff
Global Research<http://www.globalresearch.ca/>, July 10, 2010 Stop
NATO<http://rickrozoff.wordpress.com/2010/07/10/2061/>

Three news features appearing earlier this week highlight tensions
between the United States and the People's Republic of China that,
at least in relation to the language used to describe them, would
have seemed unimaginable even a few months ago and are evocative
more of the Korean War era than of any time since the entente
cordiale initiated by the Richard Nixon-Mao Zedong meeting in Beijing
in 1972.

To indicate the seriousness of the matter, the stories are from
Global Times, a daily newspaper published in conjunction with the
People's Daily, official press organ of the ruling Communist Party
of China, and Time, preeminent American weekly news magazine. Both
accounts use as their point of departure and source of key information
a July 4 report in Hong Kong's major English-language daily.

On July 6 writer Li Jing penned a news article for Global Times
called "US subs reach Asian ports: report," which detailed the
following recent developments:

"Three of the largest submarines of the US Seventh Fleet surfaced
in Asia-Pacific ports last week, the South China Morning Post
reported Monday [July 5]. The appearance of the USS Michigan in
Pusan, South Korea, the USS Ohio in Subic Bay, the Philippines, and
the USS Florida in the strategic Indian Ocean outpost of Diego
Garcia was a show of force not seen since the end of the Cold War,
the paper said, adding that the position of those three ports looks
like a siege of China." [1]

The piece from the Hong Kong newspaper cited was entitled "US
submarines emerge in show of military might: Message unlikely to
be lost on Beijing as 3 vessels turn up in Asian ports," and was
in fact dated July 4.

The author, South China Morning Post Asia correspondent Greg Torode,
described the simultaneous arrival of three "Ohio-class submarines"
equipped with "a vast quantity of Tomahawk cruise missiles" as a
reflection of "the trend of escalating submarine activity in East
Asia...." [2]

He further added this noteworthy data: "Between them, the three
submarines can carry 462 Tomahawks, boosting by an estimated 60 per
cent-plus the potential Tomahawk strike force of the entire
Japanese-based Seventh Fleet - the core projection of US military
power in East Asia."

The author quotes without identifying his name or nation a veteran
Asian military attache with reported close ties to both Chinese and
U.S. military officials: "460-odd Tomahawks is a huge amount of
potential firepower in anybody's language.

"It is another sign that the US is determined to not just maintain
its military dominance in Asia, but to be seen doing so...that is
a message for Beijing and for everybody else, whether you are a US
ally or a nation sitting on the fence." [3]

On July 8 Time magazine's Mark Thompson elaborated on the earlier
report with language, including that of his title, "U.S. Missiles
Deployed Near China Send a Message," derived from the South China
Morning Post piece, which Thompson claims contained information
planted by "U.S. officials...on July 4, no less"

[4] in a clear signal to the government in mainland China.

The Time journalist added details, though, not in the original
story, replete with a good deal of editorializing that perhaps
serves the same source he attributes the contents of the Hong Kong
article to and for the same reason:

As a shot across the bow to China.

His account of last week's deployments included: "A new class of
U.S.

superweapon had suddenly surfaced nearby. It was an Ohio-class
submarine, which for decades carried only nuclear missiles targeted
against the Soviet Union, and then Russia."

The U.S. has eighteen nuclear-powered Ohio class ballistic missile
submarines, fourteen still armed with nuclear warhead-tipped Trident
missiles and four which "hold up to 154 Tomahawk cruise missiles
each, capable of hitting anything within 1,000 miles with non-nuclear
warheads."

"The 14 Trident-carrying subs are useful in the unlikely event of
a nuclear Armageddon, and Russia remains their prime target. But
the Tomahawk-outfitted quartet carries a weapon that the U.S.
military has used repeatedly against targets in Afghanistan, Bosnia,
Iraq and Sudan." [5]

With the arrival of the USS Ohio in the Philippines, the USS Michigan
in South Korea and the USS Florida "in the strategic Indian Ocean
outpost of Diego Garcia" [6] on the same day, "the Chinese military
awoke to find as many as 462 new Tomahawks deployed by the U.S. in
its neighborhood." [7]

The Time report also revealed that all four Ohio class Tomahawk-armed
submarines were operationally deployed away from their home ports
for the first time.

Thompson wrote that the coordinated actions were "part of a policy
by the U.S.

government to shift firepower from the Atlantic to the Pacific
theater, which Washington sees as the military focus of the 21st
century."

Regarding the submarines still carrying Trident missiles, he
rhetorically added, "Why 14 subs, as well as bombers and land-based
missiles carrying nuclear weapons, are still required to deal with
the Russian threat is a topic for another day." [8]

All three journalists cited - Jing, Torode and Thompson - place the
U.S.

submarine deployments within a broader and also a more pressing
context.

The South China Morning Post writer stated: "In policies drafted
under then-president George W. Bush, a Republican, and continued
by the administration of his successor, Democrat Barack Obama, the
Pentagon is shifting 60 per cent of its 53 fast-attack [as distinct
from ballistic and guided missile] submarines to the Pacific - a
process that is now virtually complete.

"But the presence of the larger cruise-missile submarines shows
that, at times, the US forward posture will be significantly larger."

The USS Ohio, for example, "has been operating out of Guam for most
of the last year, taking advantage of the island's expanding
facilities to extend its operations in the western Pacific.

"It is due to return soon, but the Florida and the Michigan are
likely to remain in the region for many months yet, using Guam and
possibly Diego Garcia for essential maintenance and crew changes."

Additionally, "The presence of the Florida, based on the US east
coast, appears to confirm the US is still routinely bringing
submarines under the arctic ice cap to East Asia." [9]

Just as the Pentagon is moving nuclear submarines under the northern
polar ice cap to the Indian Ocean, so it has recently reached an
"agreement [that] will allow troops to fly directly from the United
States over the North Pole" to Afghanistan and "the region" by way
of Kazakhstan, which borders China as well as Russia. [10]

The U.S. military "siege of China" is proceeding on several fronts,
on land as well as under water and in Central as well as South and
East Asia. But what primarily had been a policy of surveillance and
probing China's perimeter is now entering a new phase.

That the U.S. currently has over 60 per cent of the Tomahawk cruise
missiles assigned to its Japan-based Seventh Fleet near China
emphasizes the qualitative escalation of Washington's show of
strength vis-a-vis Beijing. One related to, as was seen above, a
strategic shift of attack submarines nearer China and also to the
crisis on the Korean Peninsula that was exacerbated by the sinking
of a South Korean warship, the Cheonan, in March.

There has even been speculation that U.S. submarine deployments and
other "messages" delivered to China of late were designed to pressure
Beijing into taking a tougher stance toward North Korea over the
Cheonan incident. What journalists have been referring to as messages
would in an earlier age have been called saber-rattling and gunboat
diplomacy.

U.S.-China relations sharply deteriorated this January when the
Obama administration finalized an almost $6.5 billion arms sales
package for Taiwan which includes 200 Patriot missiles. [11] An
article on the subject in the New York Times on January 31 was
titled, revealing enough, "U.S. Arms for Taiwan Send Beijing a
Message."

China suspended military ties with the U.S., and bad blood has
persisted throughout the year, resulting in Secretary of Defense
Robert Gates scrapping plans to visit Beijing early last month when
he was effectively disinvited by Chinese officialdom on the prompting
of the military.

The White House and the Pentagon have been sending a number of
unequivocal - and increasingly provocative - messages to China this
year.

The new U.S. administration signalled a confrontational approach
early on. In May of 2009 Secretary of State Hillary Clinton, barely
three months in her post, stated, The Obama administration is working
to improve deteriorating U.S. relations with a number of Latin
American nations to counter growing Iranian, Chinese and Russian
influence in the Western Hemisphere.... [12]

Later in the year then Director of National Intelligence (and retired
admiral and former commander-in-chief of the Pacific Command) Dennis
Blair released the latest quadrennial National Intelligence Strategy
report which said Russia, China, Iran, and North Korea pose the
greatest challenges to the United States national interests. [13]

While Blair headed up the Pacific Command (PACOM) from 1999-2002,
his role included overseeing a vast area of the planet that includes
China (since the Ronald Reagan administration assigned it to that
military command in 1983).

Arrogating the right to divide the entire world into military zones,
areas of operation, has never been attempted by any other nation,
any group of nations, not even all the nations of the world
collectively (in the United Nations or otherwise). But the U.S. has
and does do just that. It has even added two new Unified Combatant
Commands - Northern Command and Africa Command - in recent years,
in 2002 and 2007 respectively.

The Pacific Command is the oldest and largest of the six current
regional commands (the others being the Africa, Northern, European,
Central and Southern Commands), and was formed during the dawning
of the Cold War in 1947.

Its area of responsibility takes in over 50 per cent of the world
- 105 million square miles - 36 nations and almost 60 per cent of
the world's population.

300,000 troops from all major branches of the U.S. armed forces -
the Air Force, Army, Marine Corps and Navy - are assigned to it,
20 per cent of all active duty American service members.

Pacific Command is in charge of military defense treaties with
Australia, Japan, New Zealand, the Philippines and South Korea.

The U.S. is also alone in assigning the world's oceans and seas to
naval commands. Washington has six naval fleets - the Fourth Fleet
(the Caribbean, Central and South America) was reactivated in 2008
after being disbanded in 1950) - and just as Pacific Command is the
largest unified, multi-service command, so the Seventh is the largest
forward-deployed fleet, with 50-60 warships, 350 aircraft and as
many as 60,000 Sailors and Marines at any given time. It is based
in Japan and its area of responsibility includes over 50 million
square miles of the (largely western) Pacific and Indian Oceans.

The U.S. also has eleven aircraft carriers, ten of them nuclear-powered
and all eleven part of strike groups. [14] (China has no and Russia
one carrier.)

The Time magazine article quoted from earlier mentioned that the
deployment of four U.S. guided missile submarines to East Asia and
the Indian Ocean is not the only development that China needs to
be concerned about. The U.S. is simultaneously presiding over
six-week biennial Rim of the Pacific (RIMPAC) military exercises
in Hawaii with over 20,000 troops, 36 warships and submarines (25
American) and 180 planes and helicopters.

This year's RIMPAC, which began on June 23 and is to be completed
by the end of July, includes for the first time the participation
of France, Colombia - with which the U.S. has recently concluded
an agreement for the use of seven of its military bases [15] - and
the Southeast Asia nations of Malaysia and Singapore. The other
countries involved are Australia, Canada, Chile, Indonesia, Japan,
the Netherlands, Peru, South Korea and Thailand. The five-week war
games involve "missile exercises and the sinking of three abandoned
vessels playing the role of enemy ships." [16]

The combined task force commander for RIMPAC 2010 is commander of
the U.S.

Third Fleet, whose area of responsibility is approximately 50 million
square miles of the eastern Pacific, Vice Admiral Richard Hunt, who
stated, "This is the largest RIMPAC that we've had," and one which
"clearly focuses on maritime domain awareness dealing with expanded
military operations across the complete spectrum of warfare." [17]

Time's Mark Thompson also wrote: "Closer to China, CARAT 2010 - for
Cooperation Afloat Readiness and Training - just got underway [July
5] off Singapore. The operation involves 17,000 personnel and 73
ships from the U.S., Singapore, Bangladesh, Brunei, Cambodia,
Indonesia, Malaysia, the Philippines and Thailand.

"China is absent from both exercises, and that's no oversight."
[18]

This February Cobra Gold 2010, "the largest multinational military
exercise in the world," [19}, was launched in Thailand (separated
from China by only one nation, either Laos or Myanmar) and as with
all previous Cobra Gold war games was run by U.S. Pacific Command
and the Royal Thai Supreme Command. Joining the U.S. and Thailand
in this year's exercises, designed "to build interoperability between
the United States and its Asia-Pacific regional partners," [20]
were the armed forces of Japan, Indonesia, Singapore and, for the
first time, South Korea.

From June 8-25 the latest U.S. Air Force-led Red Flag Alaska air
maneuvers were held near the eastern Pacific. "The Red Flag exercises,
conducted in four-to-six cycles a year by the 414th Combat Training
Squadron of the 57th Wing, are very realistic aerial war games. The
purpose is to train pilots from the U.S., NATO and other allied
countries for real combat situations." [21]

Over a thousand airmen from five nations - the U.S., Japan, South
Korea, Romania and Belgium - assembled at Alaska's Elmendorf and
Eielson Air Force Bases for air combat training which "unites forces
from all over the world."

"South Korea, a country already accustomed to working with U.S.
troops, is also in Alaska to strengthen the two nations' ties after
the sinking of a South Korean warship by a North Korean submarine.

"'We have the American Air Force in Korea, and the coalition and
the combined working environment is very important,' said Lt. Hoon
Min Kim, a member of South Korea's air force. 'And being able to
perform under a combined environment is therefore essential as
well.'" [22]

The incorporation of progressively more Asia-Pacific nations into
what has been referred to as an Asian NATO is by no means directed
solely at North Korea nor is it understood as such by officials in
Beijing.

Participants in that arrangement, among them Australia, New Zealand,
Singapore, South Korea and Mongolia, have troops serving under NATO
in Afghanistan. Recently 140 new South Korean forces arrived at the
Bagram Air Base in Afghanistan to reinforce a base in Parwan province
recently subjected to repeated rocket attacks. Seoul's troop strength
in the war zone is now at 230.

This month the government of Singapore announced it will increase
its soldiers in the NATO-led International Security Assistance Force
to "a record 162, from 97 last year."

"Next month, the Singapore Armed Forces (SAF) will send a 52-man
unmanned aerial vehicle (UAV) team - its biggest deployment to
Afghanistan - to Oruzgan [Uruzgan], one of two provinces where
Singapore has troops." [23]

Earlier this year NATO announced that Mongolia and South Korea have
become the 45th and 46th nations to provide it with troops for the
war in Afghanistan.

Mongolia borders both China and Russia and is the object of intense
efforts by the U.S. to increase military cooperation and integration.
[24] On July 6 NATO's Assistant Secretary General for Political
Affairs and Security Policy Dirk Brengelmann paid a two-day visit
to South Korea, where he stated, "Our security interests and security
interests of countries like Korea coincide today more than ever."

A news report of his visit paraphrased his comments as asserting
that "The world's biggest military alliance, NATO, is looking to
increase cooperation with South Korea and other partners beyond
Europe and North America," and added that "Speaking of cooperation,
Brengelmann noted NATO's show of support for South Korea in light
of the sinking of its warship Cheonan....The diplomat said some
NATO members also serve on the U.N. Security Council and that the
NATO members will try to ensure any Security Council action on the
Cheonan sinking will represent their views expressed in the NATO
statement." [25]

Another country that shares borders with China and Russia, Kazakhstan,
has allowed the U.S. and NATO transit and overflight rights for the
Afghan war and last week the nation's president, Nursultan Nazarbayev,
signed a law permitting the Pentagon to ship "special cargo" -
armored vehicles - through his country.

The U.S. and NATO have transited hundreds of thousands of troops
through the Manas Air Base (now Transit Center at Manas) in Kyrgyzstan,
which also borders China, since 2001 and in recent months troops
have passed in and out from Afghanistan at the rate of 55,000 a
month, 660,000 a year. [26] Washington has announced plans to open
new training bases in Kyrgyzstan and Tajikistan, the second nation
also adjoining China.

With Afghanistan and Pakistan, which also have borders with China,
the U.S.

and NATO have a military presence in five nations on China's western
flank and a foothold in Mongolia. The U.S. and NATO war in South
Asia will enter its tenth year this autumn with no sign of Western
military presence departing from China's backyard.

The U.S. military remains ensconced in Japan and South Korea, has
returned to the Philippines (including camps in Mindanao), is
solidifying bilateral and multilateral military relations with
practically all nations in Southeast Asia, and for the past five
years has cultivated India as a military partner.

[India is currently an observer at the RIMPAC exercises.) Japan,
Taiwan and Australia are being integrated into a U.S.-designed
regional and broader global interceptor missile system.

The U.S. is conducting regular military exercises, building military
partnerships, stationing troops and opening bases around China's
periphery, in addition to the positioning of warships, submarines
and aircraft carriers in the waters off its coasts.

What alarms China most at the moment, though, is a proposed joint
U.S.-South Korean military exercise in the Yellow Sea, enclosed by
both Koreas to the east and China to the north and west.

China's Global Times recently quoted Xu Guangqian, military strategist
at the People's Liberation Army's Academy of Military Sciences,
issuing this warning:

"China's position on the Yellow Sea issue demonstrates its resolution
to safeguard national rights and interests. It also reflects that
China is increasingly aware of the fact that its strategic space
has confronted threats from other countries." [27]

China, which just concluded six days of naval drills of its own in
the East China Sea, had more reason to be concerned when it was
disclosed earlier this month that a U.S. aircraft carrier would
join the maneuvers off its Yellow Sea coast.

On July 8 China renewed its opposition to the planned U.S.-South
Korean war games, with Foreign Ministry spokesman Qin Gang telling
reporters, "China has expressed its serious concerns with relevant
parties. We are firmly opposed to foreign military vessels engaging
in activities that undermine China's security interests in the
Yellow Sea or waters close to China." [28]

An unsigned editorial in the Chinese Global Times of July 8 stated,
"Beijing sees the joint exercise not only as being aimed at Pyongyang,
but also as a direct threat to its territorial waters and coastline,"
and blamed South Korean President Lee Myung-bak for worsening
relations between the two nations:

"It is not known whether Lee had thought of China's reaction when
he announced in May the drill with the US.

"Did he foresee Chinese people's anger? Or, did he intend to provoke
the country on the other side of the Yellow Sea?

"It is a shame and a provocation on China's doorstep.

"If a US aircraft carrier enters the Yellow Sea, it will mean a
major setback to Seoul's diplomacy, as hostility between the peoples
of China and South Korea will probably escalate, which Beijing and
Seoul have been working for years to avoid." [29]

President Lee met with his American counterpart, Barack Obama, on
the sidelines of the Group of Eight summit in Toronto late last
month, during which a previous arrangement to transfer wartime
command of South Korean forces to the nation in 2012 were postponed
if not abandoned. In Obama's words, "One of the topics that we
discussed is that we have arrived at an agreement that the transition
of operational control for alliance activities in the Korean peninsula
will take place in 2015." In the five-year interim "if war were to
break out on the Korean peninsula the United States would assume
operational command of South Korean forces." [30]

If Washington is planning direct intervention on the Korean Peninsula
as its military buildup in the region, including off China's shores,
might indicate, the words of former South Korean president Kim
Young-Sam a decade ago are worth recalling. Two years after stepping
down as head of state, Kim revealed to one of his nation's main
newspapers that he had intervened to prevent a second Korean war,
that his government "stopped US President Bill Clinton from launching
an air strike against North Korea's nuclear facilities in June
1994."

He initiated a last-minute phone conversation with the U.S. president
which "saved the Korean peninsula from an imminent war," as "The
Clinton government was preparing a war" by deploying an aircraft
carrier off the eastern coast of North Korea "close enough for its
war planes to hit the North's nuclear facilities in Yongbyon."

Furthermore, Kim warned the U.S. ambassador in Seoul that "another
war on the Korean peninsula would turn all of Korea into a bloodbath,
killing between 10 and 20 million people and destroying South Korea's
prosperous economy." [31]

Any catastrophic event on the Korean Peninsula, and war is the
ultimate cataclysm, could lead to hundreds of thousands of North
Korean refugees fleeing to Russia and millions to China.

The nearly nine-year war in Afghanistan being waged by the U.S. and
NATO has led to an explosion of violence and destabilization in
three nations flanking China: Afghanistan itself, Pakistan and
Kyrgyzstan.

Also, since 2001 Afghanistan has become the world's largest producer
of opium and hashish, flooding the European and other drug markets.
A forum entitled "Afghan Drug Production - A Challenge to the
International Community" was held in Moscow a month ago.

A Russian report on the meeting stated "The situation around drug
production in Afghanistan has gained a catastrophic character. Some
100,000 people died globally from Afghan drugs in 2009 alone. In
all, Afghan-made opiates have claimed one million human lives in
the past decade, and 16 million more ruined their health." [32]
30,000 of the drug-related deaths occurred in Russia. The United
Nations estimates that Afghanistan currently accounts for 92 per
cent of world opium cultivation.

China and Russia are viewed as, if not challengers to U.S. global
dominance, impediments to its further consolidation. And not in the
military sphere but in the fields of economics, trade, energy and
transportation. Destabilization of their neighborhoods and frontiers
is one manner of limiting competition.

All means fair and foul are employed to eliminate obstacles to
uncontested supremacy, and what the world's sole military superpower
(the term is President Obama's from his Nobel Peace Prize acceptance
speech) truly excels at is expanding its international military
machine with an unflinching willingness to use it.