September 24, 2017

As with Dracaena cinnabari’s labyrinthine, spiny canopy, the ramifications of North Korea’s nuclear program reach everyone on this planet. In fact, it threatens to bring to a boil the simmering rivalry between China and Russia on the one hand, and the United States, NATO (notably, Germany does not support war)  and Japan on the other, a system of alliances and ententes reminiscent of pre-World War I Europe. Both sides have staked their positions. The Global Times, a Chinese newspaper, stated in an editorial what China’s policy would be should war break out between the United States and North Korea, and President Trump’s U.N. speech was equally blunt. As neither party can afford to be perceived as weak or less than courageous at home or abroad, it is wise to take them at their word.

Meanwhile President Putin weighed in saying that North Korea views its nuclear and missile program as its only means of self defense. His logic makes sense, but there’s much more to it than that.

Proliferation of Weapons

A simple fact: thorough research reveals that historically the proliferation of weapons has been the rule, not the exception. For that reason it borders on the naïve to believe that the proliferation of nuclear weapons can be permanently prevented. It might be possible for a finite period of time –years or decades- but not permanently.

The first countries to arm themselves with nuclear weapons were the victorious powers of World War II and veto wielders in the Security Council of the United Nations: the U.S., the Soviet Union (and its successor, Russia), China, France and Great Britain. Since then countries that either did not exist or were not then independent –India, Israel, North Korea and Pakistan, in alphabetical order, have acquired them. No wartime leader is known to have foreseen that these specific countries would one day be armed with these weapons. By the same token, it is impossible to predict who else is going to have them or something worse in the future, including non-state militias.

A Changing World Order

The ongoing festering of the Korean crisis has coincided with three events that herald a new world order. The first is the recent introduction of the gold-backed petroyuan. Russia, Iran, and now Venezuela have begun selling crude to China, the biggest importer of oil in the world, in yuan rather than dollars.

One immediate consequence is the decline in the value of the dollar; another, not yet fully manifested, is the effect all those unused dollars will have on the U.S. money supply when they are repatriated. They will fan the flames of inflation and spike interest rates, the worst possible outcome for the housing market. The federal government, saddled with a mountain of debt and perennial current account and trade deficits, will likely find it impossible to do much about it. That will trigger a cascade of events, none pleasant.

The second is that China, France, Britain and India have decided to stop sales of gasoline and diesel automobiles. China did not announce a target date, but it is pressuring automakers to speed things up. France and Britain will do so by 2040, India by 2030.

The third event, boycotted by all nuclear powered states and their vassals, is the adoption by 122 nations of a treaty to ban nuclear weapons. According to Costa Rica’s U.N. ambassador in Geneva, fully 129 nations signed up to help draft the treaty, two-thirds of the 193 member states. While nuclear armed states do not recognize it, the message from the majority of the world is unmistakable. It is a rebellion against the established world order whereby a handful of nations hold the entire world hostage at their pleasure. North Korea, recognizing that nuclear states are not about to renounce them, reserves the right to arm itself with them to deter, in their eyes, an attack by the United States. The obvious danger here is that the nations that adopted the new treaty will at some point in the future get discouraged by the refusal of nuclear states to adopt it and walk away from the Non-Proliferation Treaty a la North Korea. That alone explains why the U.S. and China agree that they will not accept North Korea’s premise. They must make an example of it so that no other country will dare do the same thing.

Convergence of U.S. and Chinese Interests

China’s currency is on the verge of displacing the petrodollar. Given the inevitable decline in the demand for oil that will occur as the world switches to electric cars it is in China’s interest to wait patiently for that event on the assumption that it will collapse the American Financial System. If and when that happens the U.S. will find itself unable to spend on the military as much as it has been since the end of World War II. In other words, China can accomplish this long term goal without firing a shot. Conversely, the U.S. operates on short term objectives, the most pressing being to convince its Persian Gulf allies that it alone can protect the dynasties from extinction by selling them expensive weapons and deploying the navy in exchange for pricing oil in dollars. Neither China nor the U.S. want war, however their strategic objectives are not congruent.

A Face-Saving Possibility

Here is a series of steps that could be taken to defuse the crisis.

• China would guarantee North Korea’s existence, not with words but with deeds. It would deploy fighter jets, AWACS, tankers, anti-submarine and anti-aircraft ships, and submarines to guard the approaches to North Korea.
• North Korea would immediately cease firing missiles of any type and detonating nuclear bombs.
• Subject to verification, North Korea would move all its nuclear missiles and bombs to China. The U.S. would reciprocate by not deploying nuclear bombs and missiles in South Korea, also subject to verification.
• The U.S. and South Korea, and China and North Korea, would sit down –without preconditions- to negotiate a permanent peace treaty.