First, the essence of the US and European banking crisis - the failure of the dollar tide
The bankruptcies of Silvergate Bank (March 12, 2023), Silicon Valley Bank (SVB, March 10), Signature Bank (March 12), and Switzerland's Credit Suisse (March 20) caused strong global shocks in just two weeks.
There are a lot of relevant analysis articles, but none of them capture the real point.
There is always a vice in the media: if you succeed, you say that everything is justified; If it fails, it is a thousand fingers, ten thousand people scold, and nothing is right.
By analysing the problem in this way, it is impossible to grasp the real point. For example:
Some people think that it is a problem of their own operation, there is a mismatch of assets, etc.
Silicon Valley Bank has a large number of demand deposits used to buy 10-year U.S. Treasuries, and the Fed's continued violent interest rate hikes have led to book losses.
But if we look at it from another perspective, U.S. Treasuries are relatively low-risk investments.
At a time when the current world economic situation is extremely turbulent, Silicon Valley Bank has actually become the cause of bankruptcy to spend more funds on the most stable U.S. bond investment.
The amount of losses caused by forced sales of U.S. bonds is actually not much, less than $2 billion.
That's not much of a problem for a bank with $209 billion in assets and $175.4 billion in deposits.
Others believe that the Trump era lifted the stress test for banks under $250 billion, resulting in problems with the risk management of these banks.
Now that Biden's Democratic Party is in power, dumping Trump is a habitual move.
If you really think this is a problem, wouldn't the Biden administration change Trump's policy and increase the stress test of banks below $250 billion?
Why wait for more than 2 years after Trump stepped down, and the banking system had an accident before dumping the pot on Trump's head?
......
If we don't understand the nature of the banking crisis, we can't understand where it's headed.
In fact, the reason is simple, this is a manifestation of the complete failure of the dollar tide, it will be a big outbreak or even a total outbreak of the dollar crisis.
Silicon Valley Bank had just been named America's best bank the day before the thunderstorm.
Its own business is very healthy and its assets are very high-quality.
Those who believe that Silicon Valley Bank itself is in trouble, point to the bio of its CAO, Joseph Gentile, a former CFO of Lehman Brothers that went bankrupt during the 2008 financial crisis and an Arthur Andersen employee who played a key role in the Enron case. Some people call him "financial Thanos".
A personal introduction to Chief Administrative Officer Joseph Kintyre on SVB's website
It is useless to use this kind of insinuation alone. The 2008 financial crisis went bankrupt with too many financial institutions, and when the original financial institutions went bankrupt, they had to find new jobs.
Either change careers or enter other financial institutions. How many people working in the financial industry in the United States now have no experience working in bankrupt financial institutions?
It doesn't make sense to just say that Kintell worked at other bankrupt financial institutions, you have to say exactly what he did wrong.
Many of the people who think that Silicon Valley banks have problems in their operations, even some with the title of "chief economist". The problem is, if you think Silicon Valley Bank did something wrong, then you tell me what exactly he should have done right.
In the past few years, Silicon Valley Bank has obtained a lot of corporate cash, originally, bank deposits are more, which should be considered a good thing!
The problem is simply that these enterprises mainly use demand deposits. Silicon Valley Bank is in the business of deposits and loans, mainly through loans to make profits.
First of all, the first question is why he didn't do more of his main business - loans for innovative enterprises?
Either the innovative enterprise is well funded and does not need a loan; Either the Silicon Valley Bank doesn't do a good job of marketing and can't get money out.
But in any case, if he used the money that happened mainly to lend, his liquidity would be worse, and when the crisis occurred, he would have no money, and the problem would only be bigger, and bankruptcy would only be faster and earlier.
The second question is, if you think he is an asset mismatch, what can be done to match it well?
Most deposits in Silicon Valley banks are demand, and the duration of demand is zero.
No matter what banking business does, it must be temporal, and what all banking does is the time difference of funds, so that compared with demand, it must be mismatched in cycle.
Unless it's a Silicon Valley bank that does nothing and stays in demand.
But if you do, it will only be a bigger problem.
Money is inventory for banks, although demand interest is very small, but if you do not do any business and only pay interest to customers, it is doomed to lose money from the beginning, and go bankrupt earlier, rather than waiting for the sale of US debts to appear losses and bankruptcy.
He bought a lot of 10-year U.S. Treasuries, and the time difference between them and demand on the surface was too big.
However, from the point of view of his investment in the past, U.S. bonds are relatively safe, and at the same time very liquid investment, they can be sold at any time.
Therefore, his investment in U.S. bonds itself is the closest to demand deposits, and it is the best match in terms of time.
Ten-year and two-year U.S. Treasuries are actually the same liquidity, but ten-year interest rates are generally higher. Since it is an investment in U.S. bonds and the same liquidity, of course, it is necessary to invest in higher interest rates, right?
Therefore, his investment in 10-year US bonds is relatively the most correct investment decision.
If he doesn't, then you tell us what else he can do?
If you can't say a better way to do business, don't say there's anything wrong with the Silicon Valley bank itself.
This financial crisis is not the same as it was in 2008.
The main problem at that time was junk bonds, which were mainly zero-down payment and carefully packaged, which were themselves very problematic.
But the operation of the Silicon Valley Bank itself, although no one can say that he absolutely has no problems at all, but in the big picture, we have not seen anyone make a real mistake worth mentioning.
If you think it's a problem caused by the relaxation of the stress test of banks under $250 billion, then tell me, if the Silicon Valley bank did the stress test, what would it have done to avoid the risk of this bankruptcy?
The answer can only be: no matter what he does, he can't hide.
The key reason is that the fatal risk for banks is a run.
Even the Industrial and Commercial Bank, the largest bank in the universe, if depositors run to run overnight, they will not be able to stand it and go bankrupt.
So why don't people run on ICBC?
Because there is not only "confidence" in ICBC, but also "confidence" in China's macroeconomic situation and the Chinese government.
Confidence is the core and key thing in the financial industry.
The bankrupt banks above can indeed analyze various other reasons, but there is only one real key reason, and that is a run on the bank due to lack of confidence.
Before the bankruptcy of Silicon Valley Bank, it was the 16th largest bank in the United States and made a very outstanding contribution to technological innovation in Silicon Valley.
No bank can manage risk in a complete run scenario, and if so, don't do banking.
He can only comply with the requirements of the reserve ratio and provide the client with cash that would normally be redeemed.
But no one has said that Silicon Valley Bank violated U.S. rules and requirements for bank reserves.
Under normal circumstances, even interest rate hikes are very limited, and 10-year U.S. Treasuries should not lose money even if they are sold.
But now that this rate hike in response to hyperinflation is a rare occurrence in U.S. history, where could Silicon Valley Bank have imagined such a "particularly unexpected" scenario.
The problem is not that Silicon Valley Bank alone, but that First Republic Bank and nearly 200 other banks could face a run on bankruptcy.
Silicon Valley Bank depositors are not individual users, they are corporate customers.
Corporate customers should be relatively rational, why should they seem irrational to run on a bank with very high-quality assets such as Silicon Valley Bank?
The simple reason is clearly indicative of the general lack of financial confidence in the United States.
Why do so many highly qualified economists put the blame on Silicon Valley banks?
Is it just that their academic level is too poor?
Of course not, because the entire macroeconomic level of the United States needs to be blurred, otherwise the confidence of the American people will only get worse, and the situation will only get worse.
We are already clear about the rules of the dollar game, that is, the United States uses the tide of the dollar to regularly harvest the world, so as to realize the fundamental interests of dollar hegemony.
However, since the development of the Chinese economy, the tide of the dollar has become less bright.
This is not only because China is too large for the United States to harvest, but also because China has extremely rich experience in the struggle against financial harvesting.
No matter how open it is, there have always been reservations about the exchange under the renminbi capital, and the US financial weapons have always lacked a convenient channel for unimpeded attack.
From the 1998 Hong Kong financial defense until now, the United States has taken advantage of small bargains, but it has never really succeeded in harvesting China completely.
When it is difficult for the United States to harvest through the tide of the dollar, it will be difficult to realize the benefits of dollar hegemony.
In this way, the investment to maintain the hegemony of the dollar becomes a loss-making transaction.
There are many anomalies in the timing of the banking crisis.
Generally, during the interest rate hike phase of the dollar cycle, global capital flows into the United States, which leads to economic crises in other regions. The U.S. financial markets will prosper because of the influx of money.
At this time, not only the capital of American companies flowed into the United States, but also the rich capital of other parts of the world also flowed into the United States in large numbers to enter the financial speculation market.
But most of these "retail investors" will be cut a leek in the US market.
When the economic crisis of other harvested countries develops to a certain extent, the dollar will turn into the interest rate reduction channel, cut the US capital flowing into the United States in the US financial market boom, and then flow out of the United States, buy high-quality assets of other countries at very low prices, and then the world economy will prosper again.
The assets acquired by the United States thus obtained super profiteering, and cut leeks again. These basic laws of the dollar tide are not only familiar to Chinese economists, financial and economic big V, ordinary big V, and even the old man who sells watermelons on the street.
It's just that in the above dollar tide cycle, the process of US capital cutting two leeks in the two stages of interest rate hike and interest rate cut is not clear enough.
This time, in the stage of the dollar interest rate hike cycle, there was an economic crisis in countries such as China, which should have been harvested.
This is why some people now try to exaggerate the problem of container accumulation in Chinese ports and exaggerate the problem of industrial migration.
Always want to sing the praises of China at this time, which is also a habit formed in the tide of the dollar. However, although China's economy is somewhat difficult, it is widely believed that 2023 will be a high-growth year.
The main reason for the accumulation of containers in Chinese ports is that due to the epidemic in the past two years, there was a shortage of workers in US ports, and they could not transport empty containers back, so they could only keep ordering new containers, resulting in an abnormal increase in empty containers.
Now a lot of piles are piled up in Chinese ports only because empty containers in the United States are now shipped back, and storage in the United States is more expensive than storage in China, and it would have been used in China.
Another reason is indeed that the United States and Europe are now in economic decline and demand is declining. It is difficult to exaggerate this issue to sing the praises of China's macroeconomy.
The United States, which should be prosperous as a reaper, financial market, and macroeconomy, has failed banks one after another, how can it harvest others?
The reason is that the US interest rate hike was not carried out according to the dollar's own cycle and harvesting rhythm, purely because of its own high inflation had to raise interest rates, and it was a very abnormal violent interest rate hike.
In the past, interest rates in the United States were close to zero, but now they have reached the level of 5%-5.25% developing countries through seven violent interest rate hikes.
Because inflation is at its highest level in developing countries close to 10% (9.1% in June 2022).
Changes in inflation in the United States over the past half-century. It reached 9.1% in June 2022, a new high in more than 40 years
In the past, people thought that the dollar was American, and inflation was someone else's, but now how come both the dollar and inflation have become America's own?
This is also an important manifestation of the failure of the dollar tide.
In the past, it was believed that no matter what problems arose in the United States itself, it could solve all problems by printing more dollars because of the convenience of occupying the international currency of dollars.
However, now that the US government debt has exceeded the $31.4 trillion ceiling, the space for increasing the printing of dollars has been compressed to close to zero.
In the past, he could indeed solve all problems by printing dollars, but the premise was that the law of the tide of the dollar could be established, and now it is not working.
It can be seen that the rate of increase in US debt before 2000 was relatively flat, but since then it has risen faster and faster. After 2020, it jumped straight up.
It is widely believed that the United States successfully harvested Europe and Russia through the Russian-Ukrainian war, which is indeed good, but this harvest seems to have eaten not enough meat, far from enough.
As soon as these banking crises appear, there will certainly be a lot of international liquidity fleeing Europe and the United States and entering emerging markets with a relatively stronger sense of security.
There are now rumors of hundreds of billions of dollars flowing out of the United States and Switzerland into Hong Kong, Singapore, Canada and Australia, with Hong Kong preferred. Although it is only rumored now, the macro confidence side is clear that the credit of the dollar is going bankrupt:
As a result of the Russian-Ukrainian war, the assets of the Russian state and the rich have been frozen and directly confiscated, which breaks the basic rules of the game for the protection of private property;
Credit Suisse's 17.24 billion AT1 bonds were directly cleared to zero, leaving the corresponding investment in ruins.
In the past, the bonds of high-quality Western banks were considered relatively safe and stable investments;
Huge losses for equity investors in the above bankrupt banks;
......
It is clear that in this case, where should people put their funds safely, and no more advice is needed.
We all know the wealth effect of banking, which is also often referred to as leverage.
This would make the bank actually increase its assets by far more than 100 million when it gets 100 million deposits, 500 million if the leverage is 5 times, and 1 billion if it is 10 times.
But this wealth effect can not only be understood from the positive side, but also know the opposite side: when depositors withdraw 100 million funds, the bank's shrinking assets will also show a negative wealth effect.
When a large amount of money enters the United States, the increase in funds in the US financial industry is the amount of money that enters multiplied by leverage.
And when funds flee the United States, the shrinkage of US funds will also be the amount of escape funds multiplied by leverage.
100 billion funds fled the United States, if the leverage is 5 times, it is equivalent to the US financial market will shrink by 500 billion US dollars.
After the 2008 financial crisis, the United States only alleviated the financial difficulties of the financial industry by releasing water, but it did not solve the fundamental problem.
At the time, many people said that it only delayed the crisis and made it bigger and more violent when it could no longer be stopped.
It has long been said that the United States can only develop its own industry and truly create wealth through its own wealth is the road to long-term prosperity.
Whether it is Obama, Trump or Biden, they all understand in their hearts that the United States should develop industry, and they really do their best to promote it.
Biden even used very rogue means to force semiconductor companies in Taiwan, South Korea and Japan to invest in the United States, and scare many European companies to transfer production to the United States through the Russian-Ukrainian war.
However, they cannot cure the root cause of the disease in the United States, and the manufacturing industry is not developed in a day or two, requiring long-term efforts and a long process.
I really don't know how Americans' brains grow, and he is still fantasizing about forcing China to buy more US debt to save him.
It is completely different from China's rapid launch of the 4 trillion yuan plan in 2008, when many people shouted that "saving America is saving yourself."
At that time, the relationship between China and the United States was quite okay, but this time the United States and China trade war, science and technology war, sanctions war ... Fought for a whole 5 years.
On the most sensitive issues between China and the United States, such as the Taiwan Strait, the United States has constantly touched China's red line.
At this time, it would be good if China did not take the opportunity to fall into the well, and it would be good to do its best to increase the crisis in the United States, and it would be good if China wanted to come to the rescue, but there was no door.
There are also calls for China to empty U.S. debt.
In fact, many countries around the world are currently reducing their holdings of U.S. debt, with China reducing its holdings of U.S. debt by $173.2 billion in the past year.
But this reduction is not necessarily a "sell-off", but simply a normal cash payment when the U.S. debt matures, and then the cash is used for other things.
For example, buying gold, physical commodities or other investments. As long as it does not increase the purchase of US bonds, or even if it buys more, as long as the newly purchased US bonds are less than the amount of natural maturity, its holdings will naturally decrease.
At present, China will not easily sell unmatured U.S. Treasuries in the market, because doing so will result in losses like Silicon Valley banks.
Compared with the interest rate after the violent interest rate hike now, the interest rate of US bonds purchased by China in the past is low.
If you sell directly before expiration, you are likely to lose money at a price lower than when you bought it.
And the natural payment after maturity, but the profit is relatively small, but at least there will be no loss. U.S. Treasury rates are now much higher than in the past, and if you add more U.S. Treasuries now, the yield on the books may be better.
However, in the current situation, it is not a question of how much investment income is at all, but whether the capital can be recovered.
Therefore, China will certainly not increase its purchases of US debt.
It's not for nothing that other investors around the world have stepped up for the dollar at this time, but certainly not many. Of course, if Sino-US relations deteriorate further, it cannot be ruled out that China's debt in the United States will naturally be reduced to a certain extent, and it is really not afraid of a small loss and liquidates the remaining small amount of US debt at one time, at least recover most of the capital first, so as not to be completely confiscated by the Americans.
Not long ago, US Treasury Secretary Yellen had a creepy speech.
At the time, there was a suggestion to prioritize U.S. debt, and Yellen's words were made against such a tiering proposal.
She said that in that case, the US debt of China and other countries will be paid first, and the United States' own pension fund and veterans' fund will be paid later.
This kind of remark itself is extremely lethal, which clearly assumes that the US debt may default in the near future, and the question is only how to minimize losses in the event of default.
Yellen's words are that any default would be catastrophic for the dollar itself. Even if the US debt held by other countries is guaranteed priority in payment, global confidence in the dollar will also collapse. The discussion of this topic itself has already made the overall thunderstorm prospects of the dollar clear and unmistakable in official form.
Therefore, the prospect of the dollar gradually entering the outbreak of a crisis has become clearer, and once it breaks out, it will last a long time.
Second, China will be completely super beautiful in ten years
In the next decade, China's economy, science and technology, and military will comprehensively surpass the United States.
Why this strategic judgment?
China's manufacturing industry surpassed the United States in 2010, and is now the sum of the United States, Germany and Japan. But some people have given different analyses and judgments from the process of the United States surpassing the United Kingdom.
The United States surpassed Britain in manufacturing in 1894, but it was not until more than half a century, after World War II, that the United States truly surpassed Britain to become the world leader.
Some argue that even if China's total GDP soon surpasses that of the United States, it will be decades before China's international status truly becomes the world's dominant power.
We will argue here that this analysis is completely wrong.
The reason why the United States really surpassed Britain after World War II is because it was not until after World War II that Britain really became the Britain it is today.
Britain before World War II had a large number of colonies, including today's Canada, Australia, New Zealand, Singapore and even India, Pakistan, Bangladesh, etc., which can be said to be "part of Britain".
Britain at that time could not be seen as merely its native Britain.
So, although the United States surpassed the British mainland in manufacturing output in 1894, the overall strength of the United States was far inferior to the entire British mainland plus its colonies.
It was only after World War II, when a large number of British colonies became independent, that Britain became the Britain it is today.
The difference between the United States and Britain was that it did not continue to adopt a colonial policy (there were a few colonies, such as the Philippines, etc.).
Thus, the United States is and has always been, its native America.
What the United States is like at home, the United States is basically what it is. The economic strength of the United States at home is lower than that of China, that is, the overall economic strength of the United States is lower than that of China.
Some people believe that if the United States cannot maintain the hegemony of the dollar, it may be divided itself.
If so, can Washington, D.C., which is likely to inherit a seat at the United Nations, plus the state of Washington formed by Maryland or more, still be considered hegemonic compared to China?
Of course not. But not only can we not take this prospect seriously, but we also do not grasp it as a goal to actually operate.
If you can't actually do something, then at most you can only tell it as a story.
If the United States really wants to divide, we can only respect it, and if he does not divide, we have little way to promote his division.
The reason why we want to talk about this issue is because the promotion of the independence of a large number of British colonies was actually operated by the United States as a national policy.
Of course, one might make another reason: the United States, although it did not continue its colonial policy, had a large number of allies.
If the United States adds allies, its power is not limited to its homeland.
In addition to NATO allies, the United States has 17 non-NATO allies. In Asia, the United States is trying to create a potential "Asian NATO" to contain China.
This does make sense, and the United States operates as a fundamental international strategy to strengthen and even expand its allies.
But the problem is not entirely that it is not only that allies are just allies, but more importantly, that China is simply too big. We need to recognize the basic principles of the diplomatic relations between the two Chinas:
(1) The block is absolutely overwhelming.
(2) All nations, large and small, are equal.
At the same time, the above analysis reminds us of an important and central strategy for competing with the United States: anti-alignment.
Third, why should the United States fight with China?
China's population in 2022: 1.412 billion, the United States 331 million.
To accurately understand Sino-US relations, we must be clear about the facts in Sino-US relations that can be said to be at the level of axioms:
(1) China > 4 times that of the United States
(2) China > twice (US + potentially Asian NATO)
(3) China > the entire NATO that includes the United States, plus one more United States
(4) China's > includes the entire NATO of the United States + potentially NATO in Asia
(5) China> the United States + the European Union + all other developed countries combined
(6) The number of college graduates in China in 2022 will be 10.76 million, exceeding the total population of two-thirds of NATO countries.
Of the world's 193 UN member states, only 72 have populations that exceed this figure.
Potential Asian NATO population (tens of thousands):
Japan 12600 South Korea 5174.5 Australia 2568.8 New Zealand 512.3 Philippines 11400 Taiwan 2330 Total 34585.6
As of March 2020, NATO has 30 member states: Belgium, Iceland, Denmark, Germany, France, Netherlands, Canada, Luxembourg, United States, Norway, Portugal, Turkey, Spain, Greece, Italy, United Kingdom, Poland, Hungary, Czech Republic, Estonia, Latvia, Lithuania, Slovakia, Slovenia, Romania, Bulgaria, Albania, Croatia, Montenegro, North Macedonia. Headquartered in Brussels, Belgium.
This year, Sweden and Finland are likely to join NATO, bringing the total to 32 members. Let's count 32 Member States.
NATO Demographics (10,000 people)
United States 33200 Belgium 1159.3 Iceland 37.3 Denmark 585.7 Germany 8319.6 France 6775
Netherlands 1753.3 Canada 3824.6 Luxembourg 64 Norway 540.8 Portugal 1032.5 Turkey 8477.5 Spain 4741.6 Greece 1064.1 Italy 5911 United Kingdom 6732.7 Poland 3774.7 Hungary 971
Czech Republic 1050.6 Estonia 133.1 Latvia 188.3 Lithuania 280.1 Slovakia 544.7 Slovenia 211 Romania 1912
Bulgaria 687.8 Albania 281.2 Croatia 406 Montenegro 61.9 North Macedonia 206.51 Sweden 1041.6 Finland 554.1 Total 96523.61
Of course, people may also say that quality trumps quantity.
However, China's population of 1.412 billion is basically industrialized.
Once industrialized, there will be no generational gap between China and the United States, and if the 330 million people of the best quality are separated from China, the gap between the quality and the United States is not as large as it seems.
More population means more potential for division of labor, consumption potential, military potential, etc.
The question is simply how to unleash these potentials. And the 331 million people in the United States are not all elite, and a large number of people are a headache for the United States.
There is also the question that China can also choose to form alliances to gain a comparative competitive advantage with the United States, why not?
Why did China choose the non-alignment strategy?
First of all, from the above analysis of the basic scale, it can be seen that China does not need an alliance at all.
Does China's alliance with a country of 10 or 20 million people help to strengthen itself?
Didn't help at all. If the world is a non-aligned world in the future, China will naturally have the greatest advantage.
More importantly, the act of forming alliances is very similar to the folk worship in Chinese history.
It is very much of a triad nature.
If any of the brothers who worship the son do something wrong, all the brothers will have to follow along indiscriminately.
If it is the big brother who is doing something wrong, all the other brothers have to follow along without asking any right and wrong.
Therefore, for China, a world-leading populous country, if it chooses a large number of countries to form an alliance, any of these countries will have to suffer with it, otherwise it will face the risk of default and breach of trust.
In fact, the reason why the two world wars became "world wars" also has a certain relationship with the system of military alliance.
If any two of the two allied systems fight, all the other allied countries must follow suit.
In this way, a dozen will be fought into a full-scale war between two allied systems.
After World War II, NATO and the Warsaw Pact allied military blocs faced each other, because both sides had nuclear weapons and military power, so there was no direct war between the two military blocs, but a Cold War style confrontation for decades.
But the two sides have been provoking war between other non-aligned proxies behind their backs.
After the collapse of the Warsaw Pact, NATO still survived with the United States as the core, and even continued to expand eastward, which led to many wars in which NATO fought without opponents.
The first of these wars was authorized by the United Nations, but most other wars were fought without a United Nations mandate and were fought only with NATO support.
Most of them belong to the boss, and the other little brothers can only follow along.
But this is not entirely the case, because most of them are of the nature of US aggression against other countries, and not all NATO countries have sent troops with them, and even have no basic practical support.
This is even more true for other non-NATO allies.
We also need to understand that each country has its own security demands, which is reasonable.
If they feel they are a security threat, they do have a need to join a military alliance in search of security.
After joining NATO, the possibility of being threatened by invasion by other countries will be greatly reduced. But this is not absolute.
The first is that NATO, a military alliance, must have overwhelming military superiority to be effective.
This used to be true, but it's not exactly the same now.
China's military strength is rapidly increasing, and the relative advantage of US military power is basically erased.
At present, in addition to the gap in nuclear-powered aircraft carriers and stealth strategic bombers, China does not have the problem of "have/no", nor does it have a generation difference, and in many ways China even surpasses the US military.
These two gaps are completely closed, and it is close at hand.
Both H-20 and 005 have already been "spoilers", just waiting for the question of test flights/launches and installations.
Boom 20 "spoiler" photos
005 nuclear-powered aircraft carrier model "spoiler" photo
China's new military equipment has long entered the era of a big outbreak, and yesterday's bunch of "Britneys" have become "Madame Cow" in a blink of an eye.
While people were still reveling in the DF-21D ballistic missile anti-carrier equipment, the DF-26, which doubled its range, quickly turned the DF-21D into a cow lady.
And the DF-26 has not been lively for a few days, and the hypersonic DF-17 with Qian Xuesen's trajectory has turned the DF-26 into Mrs. Ox.
Soon the carrier-based hypersonic anti-ship ballistic missile Eagle Strike 21 successfully took the position.
At present, the US military does not have interception capabilities, ballistic missiles and hypersonic missiles capable of sinking aircraft carriers, so many that the US military is overwhelmed.
Some people may also say that even if China has J-20, 055, H-20, and nuclear-powered aircraft carriers, there is still a big gap between it and the US military in terms of numbers.
It has long been said: "For China, the world's largest manufacturing country, as long as there is, it is equivalent to many, many, and so many that it absolutely overwhelms the United States."
No one doubts that China can build 1,000, 3,000 or more J-20 and more advanced fighters.
The advanced warships that China is launching in a year are the size of the entire national naval fleets of countries such as Britain and France.
As long as the technology is mature, it will not be difficult to launch a nuclear-powered aircraft carrier every year in the future - "dumplings" has long been nothing to boast about for China.
Therefore, under the premise that the core of its military allies, the United States, completely loses its relative military superiority, many objective conditions will undergo essential changes.
Fifth, is the United States now in a scientific and technological explosion or a cowhide explosion?
Now, the United States is not only focusing on China's chip-based technology, but also the United States' own technology has suddenly exploded and thrown off China a few streets:
fusion breakthroughs; room temperature superconductivity; Musk's Mars Project series of breakthroughs: starships, starlink, reusable rockets, pure electric vehicles...; ChatGPT、GPT4.0、Microsoft 365 Copilot； NVIDIA's AI chips;
…..
Is that really the case?
Let's sort it out one by one.
First of all, whether it is nuclear fusion in China or the United States, the practical application can still be described as "far away". As soon as many people see a breakthrough in nuclear fusion technology, they immediately analyze its significance and impact on society.
Pull it down!
Whether it will eventually succeed is still unknown.
And it is, and far from being as layman media people analyze.
For any technology to be applied practically, it is not only whether it can be technically successful, but also has to make a comprehensive comparison with a large number of other competing technologies, especially the comparative analysis of cost.
Technically, it is technical feasibility and economic feasibility.
One of the benefits of fusion energy is advertised as "inexhaustible."
Because according to scientists' calculations, nuclear fusion material extracted from seawater can be used by humans for 1 million years. Pretty awesome, isn't it?
But don't forget that photovoltaics, wind energy, hydropower, etc. are essentially fusion energy.
Which of them has not been able to be used continuously by humans for at least thousands of 1 million years?
As long as the sun doesn't go out, they can all be used continuously, do you understand this simple truth?
How can human nuclear fusion be embarrassed to say "inexhaustible, inexhaustible" in the face of natural solar nuclear fusion?
When you say how much fusion material is in seawater, have you considered how much fusion material is on the sun?
After thinking about it, you know that your little amount of material is still worth mentioning?
Even if nuclear fusion is successfully commercialized in the future, solar energy will already be fully popularized or even replaced by coal.
Moreover, in 2020, the cost of solar power per kWh of electricity has been lower than that of thermal power.
And it is still falling rapidly at a rate of about 10% per year. In 2023, China's new photovoltaic installed capacity will reach hundreds of millions of kilowatts.
In addition to pumped storage, water-solar complementary and other technologies, sodium-ion batteries, all-vanadium liquid flow, iron-chromium flow and other chemical energy storage technologies supporting photovoltaic and wind energy will also be commercialized on a large scale in 2022.
Even if fusion is successfully commercialized ten years after the most optimistic period, it is safe to say that its cost is lower than that of photovoltaics of the same period.
Moreover, there are fourth-generation nuclear power and so on in front of it. Others say that once fusion is achieved, the cost of energy will be close to zero. How is this possible?
Look at what the cost of fission technology nuclear power is now, it is almost the highest of all power generation technologies at present.
The control technology of nuclear fusion is far more complex than nuclear fission technology, how can it be close to zero cost?
So no matter what the progress of nuclear fusion looks like, whether it technically ends up or not, don't think too much about it.
Even if it is eventually successfully commercialized, it is safe to say that it will never exceed 5% of total human electricity consumption, just a special case to fill the gap. There is not much of it, no less without it.
This is followed by room temperature superconductivity.
The Indian-American buddy who led the technology already had a retraction record, and he was also a high-temperature superconductivity.
This so-called room temperature superconductivity has not yet been able to repeat the corresponding experiment by a large number of other physicists around the world.
What's worse is that this buddy himself can't repeat it, saying that the experimental materials are lost again. At present, it seems very likely that it will be the result of another bullhide blowing.
Let's look at the chip.
There are very few people who really know how to do it with chips. In essence, in chip technology, the United States' sanctions, blockades or leadership over China are somewhat similar to an interception net built halfway up the cliff.
Today's chip technology is close to the Moore limit, and in the past, what was the chip linewidth, such as 130 nanometers, is that the linewidth is really 130 nanometers. But now the so-called 7 nanometers, 5 nanometers, 3 nanometers, 2 nanometers, etc. that are widely circulated on the Internet are not really so many linewidths, but are all "equivalent linewidths".
The real linewidth may actually be 22 nanometers, more than ten nanometers, etc. They are achieved by stacking more transistors in 3D to achieve a higher level of integration, which is equivalent to those wirewidth chips.
Therefore, it is an inevitable trend that chip technology is gradually stagnant. On the other hand, chips are not like engines, and how much the efficiency of the engine is ahead, it is an absolute lead.
Because the number of engines that can be used is strictly limited, even only one engine can be used.
If the thrust-to-weight ratio of the engine does not meet the requirements, it is impossible to achieve supersonic cruise without thrust.
But the chip is completely different, and its performance is stackable.
Nvidia's A100 AI chip is advanced, but that doesn't mean it can't work without it. An A100 chip costs more than $10,000, and if you stack 10 low-performance chips for $1,000, it's possible to achieve computing performance close to the A100.
Then in terms of actual cost performance, they are close to the same, but the latter's low-performance chips may occupy much more space. But is a little more space a big problem?
It can still solve the problem after all. Even today's more advanced performance chips are themselves performance gains achieved by stacking more CPU or GPU cores within the chip.
Chiplets, 3D chips, secondary integration, massively parallel processing, etc. are all performance gains achieved by stacking more processing power in various ways.
Of course, stacking more cores in the chip will indeed have smaller latency, power consumption, etc., and the performance improvement effect will be better, but it does not mean that other stacked technical approaches have no room for function.
You can do an artificial intelligence project with 10,000 A100, I can only use 1 million chips with lower performance and much lower price, which is indeed troublesome, power consumption and cost may be high, but it does not mean that it must not be done, and the final cost may not be much higher.
The further improvement of chip technology, its cost performance is far less effective than in the past.
Therefore, the significance of further improvement of chip technology will not be as obvious as in the past.
This provides sufficient time and space for China's chip technology to gradually progress and catch up.
GPT's AI advancements are indeed of great value, but I analyzed them in the article "The Most Authoritative Artificial Intelligence Analysis on the Web".
In the history of artificial intelligence development, there are often far more components of "show" than actual progress.
Remember Sophia, the robot who became a Saudi citizen?
She answered with the host on TV, more real than a real person.
It also caused a great sensation at the time. Is there a follow-up later? No more!
Why did GPT cause such a huge stir?
Its functions have actually existed in the past, but the problem is that in the past, many corresponding artificial intelligence were implemented by application software in professional fields, so many of them were only circulated in professional circles and ordinary people did not know. The AGI (General Artificial Intelligence) technology of GPT has promoted the technical capabilities that were circulated in many professional circles in the past to ordinary users.
The average user will feel particularly fresh and shocked, but there is hardly anything new for people who really follow AI for a long time.
I saw many general artificial intelligence projects in Silicon Valley 7 or 8 years ago, and there were very few people in China who knew about it, and there were no Internet companies to track and develop this technology in time.
But this is nothing, as long as Chinese companies keep up in time and use similar algorithms to train, they can also get results. Many people are now mocking Baidu's similar technology "Wen Xin Yiyan".
When it first launched, its capabilities will definitely be very limited! GPT was not really accepted until version 3.5. As long as Chinese companies are given a certain amount of time, there is no problem at all in obtaining products with similar performance.
Unlike chip technology, there are no substantive technical problems that cannot be broken through, but have you thought of doing it.
People are tolerant of ChatGPT's many messy results, even as cute.
And the same problems with the same technology of the Chinese companies that follow will be blamed, ridiculed and even abused.
On the one hand, this is indeed a world of difference between original and follow, from zero to 1 and from 1 to 100, but on the other hand, the actual technical difference is far less so.
As for Musk's massive technological innovation with Mars immigration as the ultimate goal, it is indeed respectable.
This shows a very important principle of technological innovation: demand is the core force that drives innovation.
Without the corresponding goals and motivation, even if you have the corresponding capabilities, you will not do the corresponding work at all, let alone innovate accordingly.
Musk has a big goal that no one else has, so he can make a lot of innovations that others don't say they do, and they wouldn't even think about.
For example, why did he do so much technological innovation and build a "boring company" to make tunnels with extremely small space and small appearance. Is it really boring?
Of course not, this is to prepare the technology for the construction of roads on Mars.
Building roads on the ground on Mars, where the air is thin, is not only difficult, but also faces the danger of high-speed impact of interstellar material at any time, and building tunnels underground is the most effective way to build a Martian transportation network.
Musk's brilliance is that all the technology he plans to apply on Mars is first commercially available on Earth, so that the corresponding business model can be obtained, rather than becoming a purely engaged research process.
In that case, before going to Mars, you will go bankrupt first. His so-called "first principles" are actually very simple, everything is a premise principle for going to Mars and first applying it on Earth.
For example, when he developed rockets, he did not simply consider what fuel was better from the technology itself, but only asked the simplest question: it is impossible to carry fuel to and from Mars, and it must be taken locally on Mars. What fuel can be obtained on the planet Mars?
Only methane. Only methane is used as fuel for starships. While methane is indeed cheaper, the only fuel that can be used locally on Mars is methane.
But, also according to first principles, the day when the Martian colonization plan finally succeeds is the day when he will be defeated and completely bankrupt.
The reason is simple, what did you rely on to establish a sustainable business model after you migrated to Mars?
It is impossible to successfully establish.
Whatever technology you use, wouldn't it be cheaper to engineer a planet that's all deserts than to engineer deserts in parts of the planet?
No way. In that case, why not transform the deserts and oceans on Earth first?
Musk fears that World War III will destroy the planet. But if you can't manage the Earth well and prevent a nuclear war on Earth, do you think you can avoid it by escaping to Mars?
There are already many countries that can launch rockets on Mars, even India can do it, and only more countries can do it in the future.
If humans have the ability to destroy Earth, is it difficult to destroy Mars?
Musk is a trailblazer, and the great dream of mankind going out of the earth that he advocated will eventually come true. But before going out of the earth, there is a more absolute first principle: we must first get things done in the base camp of the earth.
Mankind's exit from the earth cannot be a long march without a rear.
And to run the earth's own affairs well, we cannot rely on the hegemonic thinking of the United States, nor can we rely on the laws of the dark forest, but can only rely on the "harmonious culture" of Chinese civilization.
Musk's technological innovations are very good, but if you can't effectively prevent the earth from being destroyed by humans themselves, and it is impossible to prevent humans from destroying the entire solar system, you Musk can't escape.
The community of human destiny is not only a community with a shared future for the earth, but also a community with a shared future in the solar system, and even a community with a shared future in the galaxy.
Why is there now the illusion that American technology is suddenly throwing out a few streets of China?
This is because the US imperialist hegemon is still fantasizing about gaining overwhelming scientific and technological and military superiority, and thus fantasizes about continuing to maintain its hegemony for a long time. But technology can't explode overnight, and it's even less likely to rely on bragging.
Moreover, now the United States constantly wants to sever the connection with China, which has entered the first echelon of science and technology in the world, and constantly decouples, and constantly persecutes the group of Chinese scientists who are one of the most important scientific and technological research and development forces in the United States, resulting in a large number of them flowing back to China.
Under these circumstances, how could the United States suddenly have a technological explosion?
From "non-alignment" to "anti-alignment"
Once we understand the above truth, we know what the basic competitive strategy that China should adopt is.
First of all, of course, you must continue to develop and strengthen yourself.
But it cannot be limited to this, and it is necessary to take the initiative to break the US military alliance system in order to compete fairly with the United States.
How to do this?
It is meaningful to refer to how the United States used anti-colonialism to dismantle the historical process of Britain's hegemonic system.
How to anti-colonial? First of all, colonization must be demonized and occupied the moral high ground.
At the same time, it is to use and even promote and intensify the contradictions within the colonial system.
The two world wars were, in fact, the general outbreak of contradictions within the traditional colonial system.
Let's start with the first point, which must morally demonize military alliances.
Therefore, China should shift from a non-alignment policy to a clear-cut "anti-alignment" policy.
Vigorously publicizing alliances around the world is neocolonization, and the NATO system is a new colonial system, which is the cruel exploitation and oppression of other NATO members by the United States.
The United States is an international authoritarian regime that pits its allies. The relationship of alliance is essentially a colonial relationship. China wants to push for an international system without any military alliances around the world.
We should set up a moral beacon of international democracy and freedom, and carry the moral banner of "anti-hegemony and anti-autocracy" in the international arena.
If the name is not regular, it is not good. There must be moral justice and demonization of opponents in order to compete smoothly. It is necessary to make "anti-hegemony, anti-colonialism, and anti-dictatorship" the most important international political correctness at present.
Naming Britain and the United States as the axis of evil in the current world and the source of a large number of international disasters. Mobilize the people of all U.S. allies to rise up against the United States. Pour back all the sewage that the United States poured into China, and then add ten times more stench.
In response to the problem of seeking security through alliances, China can create a security atmosphere for a new international order: the more America's military allies, the more insecure it will be.
In the future, with the development of the Russian-Ukrainian war, the United States will continue to drag into a deeper quagmire, and when China needs to help Russia, China must have a good reason for the moral high ground. The reason for this is that precisely because Ukraine wants to join NATO, it is inevitable, correct and just that he will be beaten.
All U.S. allies may face a righteous and counter-hegemonic joint attack by China and Russia. However, for non-aligned countries, China will provide maximum security support under the framework of the United Nations.
Or to surround the city with the countryside, first strip the allies of the United States from the periphery and let them break away from the alliance with the United States.
As long as Ukraine publicly announces that it will never join NATO and adopts an anti-alliance policy, China will push Russia to cease fire. That is, whoever is allied with the United States, I may specifically hit whom, making you more insecure.
First choose some non-NATO allies of the United States to look for opportunities to carry out military strikes, that is, to disgrace the boss of the United States, I see if you help the United States or not.
If you help, then strike directly at the US military. If it does not help, the United States will lose its prestige to its global allies.
Under this continuous blow, its alliance system will gradually collapse.
At the same time, it supports various forms of global or regional economic cooperation. Advocating world peace and development is combined with anti-alliance "anti-hegemony, anti-colonialism, anti-dictatorship and anti-autocracy", so as to enrich and enrich the connotation of a community with a shared future for mankind.
Let's not just look at how many allies the United States has on the surface and think that America's power is magnified.
At the same time, we must also see that there are a lot of contradictions within these alliance systems.
Not to mention that there are many contradictions between these allies, even the contradictions brought about by the "pure opposition of the opposition party" within the United States are difficult to reconcile.
The United States has just pushed the International Criminal Court to order the arrest of President Putin in order to block the Sino-Russian summit. But before Russia could react, Trump, a former US president, immediately jumped out and said that he was going to be arrested by the Biden administration, which made people really dizzy.
AI-generated images of Trump's arrest
AI-generated images of Trump's arrest
AI-generated images of the original first lady's angry expression when Trump was arrested
Before Chinese netizens could figure out how to add fuel to the U.S. banking crisis, Trump's supporters immediately began to call on everyone to run on U.S. banks to create a bigger financial crisis.
7. Review the instructor's theory of the three worlds
Today, we should properly study and study what Chairman Mao and his old man did back then, and why he put forward the theory of dividing the three worlds.
This theory is clearly targeted and purposeful.
At that time, there were two military alliance blocs with the Warsaw Pact with the Soviet Union as the core and NATO with the United States as the core, and China could face a hostile situation between the two military blocs at any time.
The division of the three worlds is the application of the magic weapon of the united front in a specific international situation.
To classify China in the third world, that is, our third world is all "gangs", and we will first get more of our friends.
You Warsaw Pact and NATO are not two military allies system? Then dig out your core, divide it out and put it in the first world, and the little brothers in the allies are put in the second world, that is, create the distinction and contradiction between the core of the military alliance and other members.
In this way, the real enemy is made fewer.
Originally, we were very isolated, so we were not so isolated, but divided and isolated the opponents of the two very powerful military blocs.
Therefore, we must first separate and isolate the United States from its alliance system, and use "anti-hegemony, anti-colonialism, anti-autocracy, and anti-dictatorship" to mobilize the internal rebellion of America's allies.
In fact, the current calls within NATO to withdraw from NATO are rising wave after wave, but we just stand by and watch, and do nothing at all, which is not okay. Select specific U.S. allies to strike militarily, or at least threaten militarily, in order to kill the monkeys.
Why switch from "non-alignment" to "anti-alignment"?
Because the "non-alignment" policy is too inactive, there is almost no substantive content and promotion. At that time, India was one of the main leaders of the Non-Aligned Movement, and India itself was founded by a completely inactive non-cooperation movement, which had a certain impact on the original culture of the Non-Aligned Movement.
This completely inactive non-aligned cultural adaptability is very limited.
Of course, the participants in the Non-Aligned Movement were basically the countries at the bottom of the world's scientific, technological, economic, military and other strengths, and it was difficult to do anything.
But now with countries with completely different strengths, such as China and Russia, as the core, it is not allowed by strength to be too low-key, and it is completely possible to make a difference.
The nature of "anti-alignment" and "non-alignment" is very different, and all countries that are not allies of the United States are first made into "gangs", and then the military alliance is greatly "demonized" morally, and the allies of the United States are graded, divided, and isolated. By cracking down on carefully selected specific U.S. allies who stir up trouble behind U.S. backs, "the more U.S. allies, the less secure the international mentality."
Allies in the United States vigorously promote an alliance with the United States as a new colony of the United States.
To propagate alliances within the United States is to use the money of American taxpayers to make a big deal of wrong, and use the lives of Americans to stand guard and guard other countries.
This would eventually lead to a complete disintegration of the U.S. alliance system.
In conducting the "summit of democratic countries," the United States is doing its utmost to carry out a united front. This is our party's traditional magic weapon, how can it all be learned by the United States while we ourselves are about to lose it?
Our so-called strategists and cultural elites feel that American democracy is a universal value, and we can't help it. The only thing you can't explain is that you don't have the ability, and you can't explain anything else.
This is just a banner, we can also create a different universal banner!
You can't create it just because you don't have the ability, definitely not because of anything else.
We can redivide the world into three worlds: US imperialism is the only first world - the "hegemonic world"; America's ally, the "new colony," is the Second World; Sovereign independent States are the Third World.
If you ask, "Democracy or dictatorship?" Voters around the world will surely not want to raise their arms and shout "want democracy".
But if the question is "colonization or independence?" Voters around the world will not want to say "independence".
If you continue to ask, "Hegemony or democracy?" Voters around the world will also not want to say "democracy".
If you ask, "Freedom or despotism?" Voters around the world will not want to say "be free."
But if the question is "Hegemony or freedom?" Voters around the world will not want to say "want freedom."
If you continue to ask, "Do you want international tyranny or freedom?" Voters around the world will also not want to say "want freedom."
"Wanting democracy", "wanting freedom", "anti-dictatorship" and "anti-autocracy" can be turned into anti-China by US imperialism; The same "want democracy", "want freedom", "anti-dictatorship", "anti-autocracy", plus "anti-hegemony" and "anti-colonial" are completely turned into anti-US imperialism by us.
The only difference is how you ask questions and how you create concepts.
......
Why do scholars and elites, including China, think that the United States and its allies have the same values but not ours?
It's not because the United States and its allies really have the same values, they really don't have the same values as ours. The only reason is simply because China's elites and strategists don't ask questions or create concepts.
Today, we must calm down and learn how the teacher and his old man created concepts. All are people, all are human society, all walk on two legs, all have to live by eating, all rely on men and women to reproduce... What's so different?
Everything in human society is the same and different, and there are historical and cultural background factors that play a role, but they are all artificially created. If it can't be manufactured, the only reason is just because our strategists and intellectual elites have no ability and no performance, and they have not seriously and accurately and scientifically analyzed and studied the real situation.
American-style democracy is the secret forces in the United States, not really letting the American voters decide. Other countries that accept American-style democracy are not their voters themselves, but the same dark forces in the United States.
We want to let the people of all countries be truly their own masters, and it is "true democracy" against "fake democracy".
We are the only truly universal value. You in the United States can hold a summit of democratic countries, I can have a summit of sovereign and independent countries, a summit of anti-aligned countries, a summit of anti-colonial countries, a summit of anti-hegemonic countries, a summit of true democracies... The democracy of your US imperialism is a fake democracy, and our original intention of serving the people wholeheartedly is true democracy.
If the concept is right, American values can be made different from all other countries in the world, only we and the rest of the world.
You France, Germany, Sweden ... What qualifies to be the same as American values? The United States is a global hegemon, can you be a global hegemon? The United States stationed troops in your home, and in several countries did you station troops? You are a colony of the United States, can you go and colonize the United States? At most, you are your own rich people, skilled personnel, capital and business immigration, transfer to the United States, and be exploited by the United States...
The collapse of the alliance system of US imperialism will completely dismantle the old international order of "hegemony, colonization, autocracy and dictatorship" of US imperialism, thus laying the foundation for the establishment of a new international order based on a community with a shared future for mankind and a community with a shared future in the solar system. The big change that has not been seen in a hundred years, what really needs to change is this.