Is There Another World War on the Horizon? by Kevin Freeman

By Kevin Freeman
economic war north korea russia newsroom
August 11, 2017Aug 11, 2017

The following article appeared in the August 2017 issue of TACTICS AND PREPAREDNESS. [download article]

In July, 2017 Americans enjoyed another hot 4th of July.

Some visited a beach, some barbecued and others spent time with family. North Korea, however, chose our Independence Day to demonstrate their progress with Intercontinental Ballistic Missiles (ICBMs) capable of hitting our nation. While this was a dramatic contrast, it is just the most recent example of an oblivious American public in the crosshairs of multiple enemies.

North Korea (the Democratic People's Republic of Korea) already has a sophisticated nuclear weapons program.1 The DPRK has verifiably tested nuclear weapons, and they claim to have successfully miniaturized nuclear warheads.

North Korea has teamed with terror producing states such as Iran. Immediately after the DPRK's 4th of July launch, Iran's Head of National Security and Foreign Policy Commission stated online: "The parliamentary friendship group of Iran and North Korea is ready to facilitate and expedite cooperation between the two countries in various domains".2 Iran's constitution openly states that the purpose of the Iranian government is "…fulfilling the ideological mission of jihad in [Allah's] way; that is, extending the sovereignty of [Allah's] law throughout the world…" It also unambiguously states, "…the Constitution provides the necessary basis for ensuring the continuation of the Revolution at home and abroad. In particular, in the development of international relations, the Constitution will strive with other Islamic and popular movements [emphasis added] to prepare the way for the formation of a single world community…"

North Korea regularly threatens America. The DPRK has threatened to turn enemies into a "sea of fire", and has transitioned from accusing America of concocting a North Korean ballistic missile threat, to openly promising to use its' ballistic missile program to strike the continental United States.3

Now, North Korea has demonstrated a delivery mechanism that even skeptics must acknowledge is a threat to our way of life. At the same time, the North Korean economy has been ruined by dictatorship and Communism while the South Koreans have enjoyed freedom and success by contrast. We have already fought one major war (though undeclared) on the Korean Peninsula.

In 1950, the North Korean People's Army (NKPA) invaded South Korea shattering South Korean forces and U.S. Army elements deployed alongside them. U.S. Marines landed at Inchon spearheading a counter-attack that broke the NKPA's back and drove north until the People's Republic of China (PRC) deployed three armies (around a half-million men) to combat the Americans (and allies) and roll back their advance.4 This offensive culminated in a stalemate followed by an armistice dividing North and South Korea along the 38th parallel. The war was not concluded, merely halted.

While the focus today has been rightly placed on the nuclear danger, there are multiple other threats wrapped up in this one, not the least of which is sparking a cybereconomic war that could be an independent challenge or merely one line of effort in a wider campaign. And, of course, there is clearly the risk of a systemic Electro-Magnetic Pulse (EMP) attack to the continental United States. Finally, there is a growing call for direct military confrontation which would roil the global economy.

Secretary of Defense Mattis has stated that North Korea is the "most urgent" threat to our security and the Commandant of the Marine Corps has allegedly instructed the entire Marine Corps Reserves to consider itself MARFOR-K (Marine Forces Korea) until told otherwise.5 This is a consensus view of our Defense and Intelligence establishment. Russian President Vladimir Putin has declared the situation to be "dire." China's UN ambassador warned that "disastrous consequences" would happen unless tensions are eased and even the NY Times has warned that a small surgical strike could "spin up" into the worst kind of war. Basically, if we do nothing, North Korea continues to develop nuclear weapons capable of destroying Western Civilization. If we act now, we may trigger an economic war or worse. They may already have a satellite capable of firing an EMP that could wipe out our electric grid.6 This could result in a breakdown of banking, commercial activity, fuel and food production and distribution, medical services and other decisive complications at home for an extended period.

Yet, despite all of this, the stock market remains near all-time highs and there appears to be very limited concern among the public and investment community; but this is not a threat to be ignored. There are several triggers we need to watch. First, the Trump Administration had hoped to incentivize the Chinese to pressure North Korea. He indicated a willingness to put aside his concerns over currency manipulation to get China's help. While this might have proven effective, it appears the Chinese did nothing meaningful to that end.

In fact, they actually ramped up trade (almost a 40% increase in the first quarter of 2017) with North Korea even while making a show of reducing some fuel sales.7 And, there are legitimate questions raised by noted author Gordon Chang regarding how North Korea's missile program advanced so quickly, and why the ICBM was launched from a Chinese-made vehicle. The general consensus is that China could have stopped the North Korean test had they wanted to do so.

Now, President Trump is prepared to pressure China in addition to North Korea. The carrot was ineffective, so the stick will be tried. It may not be pretty. We may see a fullblown cyber war or worse. Remember that North Korea was likely behind the May, 2017 WannaCry ransomware attack that sabotaged individuals, commerce, services and governments around the world.8 They actually have a robust cyber team, but nothing like China.

And just as the People's Republic of China went to war against United States forces in the Korean War and sent advisors, arms and supplies to facilitate the North Vietnamese defeat of the U.S. government in the Vietnam War, it is possible that the Chinese may view themselves as drawn into a conflict between North Korea and the United States today. Even if limited to waging a cyber and economic war this time, Chinese commitment to a new Korean War would prove highly significant whether orchestrated in advance or not.

Another step that President Trump is willing to take is to sanction Chinese individuals, particularly those involved in business with North Korea. He is now being urged to play hardball. Some, like Ambassador John Bolton, argue that sanctions will prove ineffective and are a waste of time. If Bolton is right, this will "strengthen the hand of Beijing's pro-Pyongyang faction, obviously the opposite of the result we seek."9 Whether right or wrong, however, I have little doubt that sanctions will be tried.

One day after the July 4th DPRK ICBM demonstration, Gordon Chang posted: "On Monday, the American president welcomed the leader of China's adversary, India, to the White House in an unmistakable signal to the Chinese. On Tuesday, the State Department dropped China to the worst ranking—Tier 3—in its annual Trafficking in Persons report. On Thursday, the Treasury Department sawed off the Bank of Dandong, a shady Chinese bank, from the global financial system and sanctioned a Chinese shipping company and two Chinese individuals. That same day, the administration notified Congress of a proposed sale of arms to Taiwan, which Beijing considers a breakaway province.

And on Sunday [President] Trump iced the cake when a U.S. Navy destroyer, the Stethem, passed close by a Chinese-held island in the South China Sea in a "freedom of navigation" exercise that enraged Beijing."10 

These are strong actions that may be propelling us toward conflict. Noted authors Jim Rickards and George Friedman have both separately said we are headed to war with North Korea. I believe it could start as a cyber-economic war with China. Given the idea that China could have stopped North Korea, does this suggest that the Chinese are prepared for a proxy war with us? This would be consistent with the asymmetric strategies promoted in the PLA (People's Liberation Army) document Unrestricted Warfare (Liang and Xiangsui, 1999) and similar to the way the PRC viewed North Vietnam in the Vietnam War.

The truth is that China has been preparing for an economic war with America since at least 2013. They publicly stated they wish to "de-Americanize the world."11 They have pursued a disciplined approach to dethroning the American dollar as the primary reserve currency of the world and the methodical progress continues. The most recent step has been for China to open up their domestic bond market for foreign investment. This follows a series of steps taken to prepare the Chinese yuan for global conversion and to create a functioning alternative to the Western financial system:

  • China declared that the dollar must be replaced (2013).
  • BRICS nations, led by China, built a $100 billion fund to bypass the dollar (2014).
  • A SWIFT (Society for Worldwide Interbank Financial Telecommunication) alternative was created for international exchange (2015).
  • The Asia Infrastructure Investment Bank (AIIB) was created and promoted as the alternative to the US-led World Bank (2015).
  • A sell-off of American Treasury Bonds occurred (2016).
  • The Chinese renminbi gained inclusion in the International Monetary Fund "special drawing rights" (SDR) basket (2016).

While these were all important steps, skeptics rightly pointed out that China did not have a deep enough debt market to serve as a truly global currency. This is being addressed head on at the same time China has been manipulating their currency higher. This is in sharp contrast to their earlier efforts to depress their currency to boost their trade surplus.

Never forget that the Chinese approach is methodical and uses Five Year Plans to achieve long-term goals. Michael Pillsbury referred to this approach as a "Hundred Year Marathon" (that began decades ago) in his insightful book with the same name. Next year we will be at five years since the overt call for a "de-Americanized" world. We can rightly question whether the current situation with North Korea is being orchestrated as part of this planned challenge to American hegemony. And, even though China has serious domestic economic problems, never forget that a wounded dragon may be more ferocious. In other words, domestic economic problems might encourage global belligerence.

Since 2014, China has been aggressively building islands in the South China Sea. These Islands facilitate little more than runways, hangars, storage, radars and advanced electronic equipment. They are clearly designed for military purposes and appear intended to intimidate neighbors, and control regional commerce, shipping and lines of communication in international waters. This construction may also be calibrated to provoke predictable responses from the United States and others. Some of these island facilities appear to be reaching completion presently.12

Unfortunately, there are no obvious solutions to the conflict developing. There may be a challenge to the global economy, our stock market and the U.S. dollar. American forces may be baited into battles with larger, zealous, combined modern forces.

Some observers like analyst Jim Rickards suggest that this may be the time to consider holding gold. Others may suggest holding higher levels of cash in case of a knee-jerk decline in the markets. If a disruption to our electric grid is even a remote possibility, it would be worthwhile to have extra food, water, and medical supplies available for emergencies. It may be equally beneficial to personally have the means of producing more of these things. And, this is a good time to pray. Pray for our President and his administration to have wisdom. Pray for peace. For now, the next best thing to do may be to stay informed and remain cautious. This is no time for complacency. We can be certain that overcommitment to any one possible adversary (North Korea, Iran, China, Russia, the networks of jihad-inspired insurgents, etc.) will create opportunities for the others to exploit, while under-commitment would leave their efforts as unimpeded as they were by the words and "soft power" of previous administrations. Even without direct combat, any U.S. exertion accelerates the U.S. government deficit spending crisis toward conclusion while inaction permits adversaries to create a new world reality. Remember, the Soviet Union was not defeated on the battlefield. It was maneuvered into governmental spending to the point of economic collapse.

Nearly a decade before Germany's National Socialist (Nazi) government invaded Poland, Winston Churchill warned Britain and the world what was coming with numerous accurate predictions. Years before WWII, US Army Air Service Colonel Billy Mitchell predicted Japan would go to war with the United States and initiate the conflict with a surprise attack against the U.S. Navy at Pearl Harbor. Marine Lieutenant Colonel Pete Ellis undertook an intelligence gathering mission in the Pacific and also predicted a Pearl Harbor attack and numerous later-proven-true details of the war.

Most people living in Berlin, London, Washington D.C., and Tokyo during those times went about their business as usual though. If you were a citizen of the United States at that time, what policies would you have encouraged your representatives to pursue? If you lived in any of those cities, what precautions would you have found prudent to minimize risk for your family? How does history judge your choices?

ENDNOTES

1. http://www.bbc.com/news/world-asia-pacific-11813699

2. https://www.alaraby.co.uk/english/news/2017/7/4/iran-seeks-cooperation-with-north-korea-aftermissile-test

3. http://www.bbc.com/news/world-asia-21710644

4. T.R. Fehrenback, This Kind of War: Korea- A Study in Unpreparedness, Pocket Books, 1964.

5. http://www.reuters.com/article/us-usa-northkorea-idUSKBN19407I

6. http://www.express.co.uk/news/world/809986/North-Korean-satellites-EMP-attack-Kim-Jong-Un

7. http://www.newsmax.com/Finance/Economy/Trump-China-Trade-North-Korea/2017/07/05/id/799860/ns_mail_uid=64640730

8. https://www.washingtonpost.com/world/national-security/the-nsa-has-linked-the-wannacry-computerworm-to-north-korea/2017/06/14/101395a2-508e-11e7-be25-3a519335381c_story.html?utm_term=.e814f4bb05f6

9. http://nypost.com/2017/07/05/asking-china-to-fix-north-korea-is-a-waste-of-time/

10. http://www.thedailybeast.com/trump-needs-to-confront-china-on-koreas-nukes

11. http://www.marketwatch.com/story/china-wants-to-de-americanize-the-world-2013-10-14

12. http://www.newsweek.com/china-south-china-sea-islands-build-military-territory-expand-575161