Here is the TLDR:
IV. THE NEXT DOMINO – TAIWAN
- Below, we build on our previous discussions of Covid-19 and Ukraine, to explain how a potential move by the PRC in Taiwan would create disruptive effects on a far greater scale.
- (1) Highly unlikely that PRC leadership will endorse any operational plans that give Taiwan a lengthy period of advanced notice………. should instead anticipate that a crisis in the Taiwan Strait could develop very quickly
- (2) Regardless of how the U.S. responds, a PRC move against Taiwan is likely to result in satellite and GPS disruption. Without satellite access, it will be extremely difficult for Taiwan’s leadership to communicate with the outside world. The PRC is also likely to note that in Ukraine, access to commercial satellites was key to the generation of global support. In 2020, the U.S. Department of Defense published its annual report on military developments in the PRC. The report suggests that in the event of an invasion, the PRC is likely to disable not just commercial and military satellites in Low-Earth Orbit, but also to strike navigation, reconnaissance, and communications satellites in geosynchronous orbit. In terms of practical effects, this means that Taiwan and the mainland PRC may be beyond the reach of most communication methods from the Continental U.S.
- (3) While intelligence on Chinese cyber-warfare capabilities is highly restricted, open-source intelligence suggests that were the PRC to move on Taiwan, it would coordinate lethal force deployments with a carefully scripted cyber offensive designed to cripple air defense, electrical power, mobile communications, and food distribution. Taiwan is likely to retaliate with a similar offensive.
- (4) If the PRC moves on Taiwan, we expect both states to deploy submarines, surface vessels, anti-ship ballistic missiles and other “over the horizon” strike capabilities. The implications for ocean-going trade is at once simple, and terrifying. Because both states possess significant quantities of long-range anti-ship missiles, a PRC invasion of Taiwan could result in a termination of all commercial shipping within 1,500 nautical miles of Taiwan. Issuers would not only lose access to the PRC, but also to ports and markets in Japan, the ROK, Vietnam, Thailand, and Indonesia. It is also highly unlikely that insurers would underwrite any coverage for vessels transiting the Pacific, given the distinct possibility that either Taiwan or the PRC would misidentify a merchant vessel as a combatant. The same is likely true for air freight passing within missile range of the PRC or Taiwan borders.
- (5) A final feature of a PRC-Taiwan conflict is the likely nationalization of PRC natural resources and manufacturing facilities owned by western companies, or controlled by U.S.-PRC joint ventures. The same is true for manufacturing facilities used by U.S. issuers to source production from private PRC entities. In the event of an invasion of Taiwan, the PRC is likely to seize these facilities, and issuers are unlikely to have any viable means to recover resulting losses.
It is hard to see global stock markets, bond markets, commodity markets, housing markets and crypto markets not crashing severely in the event this all happens. Which would plunge the global economy into Great Depression 2.0 or worse – collapse the global financial system, leading to global systemic collapse and TheEnd.
- Biden Tells NATO That the US Supreme Court is Destabilizing the World
- Rationing Has Already Started In Europe As The Entire Globe Plunges Into A Horrific Economic Nightmare
- Liz Cheney is gonna get smoked by this woman…
- Democrats don’t want to hear it, but this needed to happen…
- Are You Willing To Suffer Through A Recession For The Good Of “The Liberal World Order”?
- Black Privilege is Real in America
- A Quick Word on EVs and Oil Prices
- Zelensky Orders NATO to Pay $5 Billion a Month to Cover Costs of Pretending There’s a Chance to Win
- ‘Highly comical but sinister’ London LGBTQ+ flag display
- American Hypersonic Missile Test Fails Miserably