Beijing (China) is attempting to “trigger” President Trump’s internal neo-con and militaristic opposition. Stay frosty, avoid emotional reports demanding military engagement, and remain steady with a high altitude perspective.

Multiple reports now confirming that North Korea has conducted a missile test. The flight path escalates the issues by crossing over part of Northern Japan. In essence, Beijing China just threw an elbow at President Trump. [The likely “Why” follows breaking report]

TOKYO (Reuters) – North Korea fired a missile that passed over northern Japan early on Tuesday, the Japanese government said. The government’s J-Alert warning system advised people in the area to take precautions, but public broadcaster NHK said there was no sign of damage.

The Japanese military did not attempt to shoot down the missile, which passed over Japanese territory around 6:06 a.m. local time (2106 GMT). (Reuters)

Japanese Prime Minister Shinzo Abe, speaking to reporters in Tokyo after the launch, said the missile appeared to have passed over airspace and that the government was urgently collecting intelligence on the incident and doing everything to ensure the safety of its citizens, according to remarks broadcast on NHK, Bloomberg News reports.

Beijing China controls Kim Jong-un. Period.

Looking at the big picture, there’s no single event being responded to by this missile launch; rather, what we are seeing is a reaction to: A.) the cumulative effect of very strategic recent geopolitical maneuvering by President Trump (Venezuela, Pakistan, India etc); and, B.) the words spoken by the administration -including Trump, tillerson and Haley- that are removing China’s panda face.

Remember, China doesn’t draw a distinction between Peace and War.  It’s yin/yang. All actions toward China’s larger objectives are viewed as natural to achieve victory.  War or Peace it makes no difference to them; they don’t accept mutually beneficial outcomes. Either they win, or they lose.  All action to achieve victory is part of same world view.

When you accept this approach, you being to understand what happens when a nation built upon such outlooks feels squeezed. They fight back harder. To them it’s a zero-sum battle.

China’s objective is conquest.  China’s tool for conquest is economics.  President Trump entire geopolitical strategy of using economics in a similar way is an existential threat to China’s endeavor.  Communist Beijing calls the proverbial shots.

President Trump is putting on a MASSIVE economic squeeze.

♦Squeeze #1. Trump and Mnuchin just sanctioned Venezuela and cut off their access to expanded state owned oil revenue.  Venezuela now needs more money.  China and Russia are already leveraged to the gills in Venezuela and hold 49% of Citgo as collateral for loans outstanding.  Now China and Russia will need to loan more, directly.

♦Squeeze #2.  China’s geopolitical ally, Russia, is already squeezed with losses in energy revenue because of President Trump’s approach toward oil, LNG and coal.  Trump, through allies including Saudi Arabia, EU, France (North Africa energy), and domestic production has driven down energy prices. Meanwhile Russia is bleeding out financially in Syria.  Iran is the financial reserve, but they too are energy price dependent.

♦Squeeze #3. Trump and Tillerson just put Pakistan on notice they need to get involved in bringing their enabled tribal “extremists” (Taliban) to the table in Afghanistan.  Pakistan’s primary investor and economic partner is China.

♦Squeeze #4. China’s primary economic threat (competition) is next door in India.  President Trump has just embraced India as leverage over China in trade and pledged ongoing favorable trade deals.  The play is MFN (Most Favored Nation) trade status might flip from China to India.  That’s a big play.

♦Squeeze #4.  President Trump has launched a USTR Section 301 Trade Investigation into China’s theft of intellectual property.  This encompasses every U.S. entity that does manufacturing business with China, particularly aeronautics and technology, and also reaches into the financial services sector.

♦Squeeze #5.  President Trump, Secretary Ross, Secretary Mnuchin and USTR Robert Lighthizer are renegotiating NAFTA.  One of the primary objectives of team U.S.A. is to close the 3rd party loopholes, including dumping and origination, that China uses to gain backdoor access to the U.S. market and avoid trade/tariff restrictions. [China sends parts to Mexico and Canada for assembly and then back-door entry into the U.S. via NAFTA.]

♦Squeeze #5. President Trump has been open, visible and vocal about his intention to shift to bilateral trade renegotiation with China and Southeast Asia immediately after Team U.S.A. conclude with NAFTA renegotiation.

♦Squeeze #6.  President Trump has positioned ASEAN (Association of Southeast Asian Nations) as trade benefactors for assistance with North Korea. The relationship between ASEAN nations and the Trump administration is very strong, and getting stronger. Which leads to…

♦Squeeze #7.  President Trump has formed an economic and national security aliance with Shinzo Abe of Japan.   It is not accidental that North Korea’s Kim Jong-un fired today over the Northern part of Japan.  Quite simply, Beijing told him to.

Add all of this up, and you can see the cumulative impact of President Trump’s geopolitical strategy toward China.  The best part of all of it – is the likelihood China never saw it, meaning the sum totality of all of “it”, coming.

Just like Trump’s economic council (a bunch of globalists and Wall Streeters) thinking they were pulling POTUS Trump away from “America First”, only to realize he was simply giving them that impression so that he could advance his agenda….

By the time they realized, it was too late.  Well, so too did China not quite realize the scope and totality of how well thought out and strategic President Trump’s geopolitical economic doctrine really is.

You know why?  Because President Trump doesn’t tell anyone what the final product is, they only know the piece of the puzzle they carry. The picture, the big objective, is inside his head and he doesn’t share it with anyone.  That’s what living amid the Apex Predators in brutal rabid-dog-eat-rabid-dog Manhattan teaches you.  Oh, and he ain’t flinching or moderating his will one bit in carrying it out and putting it all together.

What happens when you surprise Beijing China with a massive awakening that suddenly has them peering toward a horizon showing potential economic defeat?

Well, for that answer we go full circle and remember how China perceives any action as a natural evolution of struggle, so long as it takes them toward victory…

Stay steady.  Avoid the chaff and countermeasures.  It’s all about the economics and the tectonic financial plates he’s shifting.

It must be pointed out; it is up to us to do so.  The corporate media are hopelessly deficient in their coverage and explanations of how strategic objectives for national security are being delivered through a Trump Doctrine via economic leverage.  The results are stunningly effective, yet few have noticed, and even fewer seem willing to articulate.

The latest example of the geopolitical Trump Doctrine in action comes via Venezuela, and in the wake of a fraudulent Maduro election – the Trump administration’s economic and financial policy delivering sanctions against the rogue Maduro regime:

(Via LA Times) The Trump administration on Friday slapped sweeping financial sanctions on Venezuela, barring banks from any new financial deals with the government or state-run oil giant PDVSA.

The sanctions Trump signed by executive order are bound to dramatically escalate tensions between Venezuela and the U.S. and exacerbate the country’s economic crisis.

The White House said in a statement that the measures “are carefully calibrated to deny the [President Nicolas] Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the United States financial system from complicity in Venezuela’s corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance.”

The new actions prohibit dealings in new debt and equity issued by the government of Venezuela and its state oil company. It also prohibits dealings in certain existing bonds owned by the Venezuelan public sector, as well as dividend payments to the government of Venezuela.  (read more)

Now, to fully conceptualize the strategic policy of the Trump Doctrine in action it becomes necessary to remind ourselves the latest action does not happen in a vacuum. In the multidimensional economic security approach of President Trump, Treasury Secretary Steve Mnuchin plays a critical role.

The sanctions against Venezuela, while targeted, are only one small outcropping of a much larger geopolitical strategy that U.S. President Trump has initiated for the past eight months with jaw-dropping success:

From OPEC (Saudi Summit) to the EU and Baltic States (Poland Pre-G20); to North African energy development via President Macron (Libya and Mali); to walking away from the Paris Climate agreement; to discussions with Theresa May on a bilateral trade deal; to massive shipments of coal to U.K. and France; to closing a deal to deliver Ireland massive amounts of Texas LNG; to our own internal U.S. energy production policy with pipelines, Oil, Coal and Liquified Natural Gas (LNG) etc.

President Trump has used all of those “allied” relationships to lower global energy prices.

The bigger part of the ‘big-missed-picture‘ was how that energy strategy impacted adversaries like Russia, Iran, China and recently Venezuela, while simultaneously supporting the larger America-First economic and geopolitical goals.

President Trump thinks seriously long-term, and really BIG picture.

Global energy, mostly oil, fuels the expansionist and interventionist structure that builds the very foundation of our geopolitical adversaries’ ability to continue their global influence. Diminish the value of oil and Donald Trump puts the squeeze on the financial resources of those nations dependent on energy as income.

Most of our current geopolitical adversaries Russia, Iran and Venezuela are dependent on high energy prices. Secondly, the downstream economic adversaries are dependent on high energy prices to maintain their economic position and alliances. As examples: China (as an geopolitical influence agent), and Mexico (as a NAFTA trade parasite), hold adverse interests to the U.S. on trade.

President Trump, by lowering global energy prices, has fractured the foundation of energy producing nations to influence geopolitical strategy; Trump has diminished their most powerful tool.

As a consequence, economic adversaries like China are put into a position of having to spend more money, directly, to aid their allies and to maintain their influence.

Think about how much financial strain is on China currently.  North Korea is entirely financially dependent on China; Pakistan is financially dependent on China’s continued investment; Mexico is financially dependent on Chinese investment; Venezuela is dependent on Chinese loans and oil purchases; etc., etc. the list goes on.   The Trump Doctrine is confronting these relationships through economics.  Each of these relationships is bleeding out money from China.

Conversely, on the income side of China’s ledgers, they are dependent on manufacturing and trade to keep their revenue stream viable.  The Trump Doctrine of renegotiated trade relationships is also confronting China on the revenue side.  China needs our market to sell their goods; China is dependent on access to the U.S. $20 trillion trade market.

See the squeeze?

The Trump Doctrine of using economic strategy is forcing China to spend more and yet simultaneously they are facing less income.   And remember, as a combined result of their dependency on international trade and a trade surplus with the U.S., China’s central bank vault holds “dollars”.

China’s #1 threat, if you want to call it that, would be to dump dollars to retaliate against what President Trump is doing.  However, if the value of the dollar drops, China has less value in their vault, and a lower dollar actually helps our exports.

It’s a three way geopolitical and financial squeeze.

Now, back to Venezuela – The United States was the only remaining cash purchaser of Venezuela oil.  Both China and Russia purchase Maduro’s oil, however their current purchases are/were all made as offsets, repayments, for prior loans.  It doesn’t generate additional revenue for Maduro if China and Russia to purchase more oil, it only pays down the Venezuelan debt.

This report was earlier in this month (we predicted today’s outcome from it):

MEXICO CITY (Reuters) – A tanker carrying a cargo of about 1 million barrels of Venezuelan heavy crude has been stranded for more than a month off the coast of Louisiana for lack of a bank letter of credit to discharge, three sources have told Reuters.

The cargo’s fate adds to state-run oil company PDVSA’s precarious financial position. Revenue from the company’s oil sales, which have suffered because of low prices and declining production, account for more than 90 percent of the nation’s exports.

Major banks are cutting exposure to Venezuela as a result of political upheaval in the South American country. Some have closed accounts linked to officials of the OPEC member who have had sanctions leveled against them by the U.S. government and have refused to provide correspondent bank services or trade in government bonds.

Credit Suisse this month barred operations involving certain Venezuelan bonds and is now requiring that business with President Nicolas Maduro’s government and related entities undergo a reputation risk review.

[…] The tanker Karvounis carrying Venezuelan oil is anchored at South West Pass off the coast of Louisiana, according to Reuters vessel tracking data. PBF Energy Inc, the intended buyer of the cargo, has been trying unsuccessfully to find a bank willing to provide a letter of credit to discharge the oil, according to two trading and shipping sources.

Crude sellers typically request letters of credit from customers that guarantee payment within 30 days after a cargo is delivered. The documents must be issued by a bank and received before the parties agree to discharge.

It was not immediately clear which banks have denied letters of credit or if other U.S. refiners are affected.  (read more)

Today’s additional sanctions by Treasury Secretary Mnuchin formally removes the ability of Venezuela to get underwriting for their most important export, oil.   Essentially, Maduro is cut off from additional cash.

The only option for Maduro’s economic allies: China, Russia, Cuba etc., is to directly give more money to Venezuela.  However, if they do so they run the risk of running afoul of Secretary Mnuchin’s sanctions and freezing their own international financial systems from engagement with U.S. banks.  Chinese businesses cannot effectively trade with the U.S. market if they are cut off from access to the U.S. banking system.

See the leverage?

Now when you step back, and look at the bigger BIG PICTURE, and think about North Korea, Pakistan-Afghanistan, and the other geopolitical hot-button issues where China is involved…. And then overlay Russia’s lack of energy revenue and simultaneous drain on resources via Syria,… well, you begin to see how effective the Trump Doctrine is.

None of this happened this week, this month, or last month.  This is a cumulative strategy mapped out long before the January inauguration and carried out ever since.

Communist Beijing China controls North Korea.  The DPRK is used by China, specifically the Old Communist Guard in Beijing, as a sword and shield against U.S. economic allies, interests and relationships in SE Asia.

The U.S. launches Section 301 trade investigations into China. The U.S. gives ownership of Afghanistan extremism to Pakistan, a Chinese strategic partner. The U.S. sanctions Venezuela, another strategic partner for China. Outcome = China is under pressure.

North Korea’s Kim Jong-Un does what Beijing tells him to do; that truth is how we can predict events like this missile launch.

SEOUL, Aug. 26 (Yonhap) — North Korea launched what seems to be short-range missiles into the East Sea on Saturday morning, according to South Korea’s military.

The North fired several “unidentified projectiles” from the vicinity Gitdaeryong in Gangwon Province at around 6:49 a.m., said the Joint Chiefs of Staff (JCS). (link)

These responses from Beijing are predictable.  The day after US Trade Representative Robert Lighthizer began the official section 301 trade investigation of China for intellectual property theft we predicted China would respond in either of two ways:

A.) by authorizing Kim Jong-un to carry out more missile tests; or

B.) by publicly calling for renewed six party talks.

In the days between the 301 trade launch and the DPRK missile launch, President Trump put additional pressure on China via expectations of Pakistan and today sanctions against Venezuela. Both Pakistan and Venezuela rely on Chinese money; the pressure is mounting on Beijing; the communist old guard don’t handle pressure well. Ergo, they fall back on what is familiar to them; they chose the missile launch.

The first missile was launched at 6:19 a.m. local time on Saturday from the Kittaeryong Missile Test Site near Wonsan in the southeastern province of Gangwon, according to U.S. Pacific Command. A second missile was launched at 6:37 a.m. and a third at 7:49 a.m.

An initial assessment from the U.S. said the first and third missiles failed in flight, while the second missile appears to have blown up almost immediately. “We are working with our Interagency partners on a more detailed assessment and we will provide a public update if warranted,” the U.S. said.

At least one of the missiles traveled a distance of about 250 kilometers (155 miles) before falling into waters of the Sea of Japan, according to South Korea’s Yonhap news agency. None of the missiles targeted the U.S. territory of Guam, which North Korea had threatened in recent weeks. (more)