We Could Be Looking at War in the South China Sea

Many people would do anything to have a crystal ball into the future.

You could see if you're going to get that dream job...

You could find out what your children will become when they grow up...

You could know where you'll be when you retire.

The possibilities are endless if you could see the future.

Many of my colleagues, if asked the question of what they would do if they could see the future, would say that they would like to look at the financial markets and pick the best trades to make them rich.

I'd say that's a popular choice.

But for me, if I had such a power, I would be looking at more than just the financial markets.

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There are many factors involved in what makes a particular company a good trade, and much of it depends on geopolitics.

So, if I had a crystal ball, I would be looking at the geopolitical situation only a few months into the future.

On the other hand, with today's geopolitical tensions, I don't think I really need a crystal ball to tell me what's going to happen.

In fact, all I really need is a history textbook...

You Don't Need to See the Future to Suspect What's Happening

The United States has been in a constant state of national emergency since Sept. 11, 2001 and the War on Terror.

The president renewed it once again back on Sept. 10, 2018, declaring, "... I am continuing for one year the national emergency previously declared on Sept. 14, 2001, and the continuing and immediate threat of further attacks on the United States."

And now, with the situations in the Persian Gulf, in Venezuela, in Iran, in Russia, in China... it's not hard to see where we're heading.

The United States has managed to antagonize most of our foreign counterparts, and the consequences are not far away.

We've already experienced two world conflicts; people are not eager for another one.

And yet that seems to be where we're heading.

The countries that have a beef with the U.S. are starting to team up. We saw some friendly relations between China and Russia back in September... China and Iran have gotten together in the energy trade... and Venezuela and Russia have been supporting each other for some time now.

All this is combining to provide the highest level of geopolitical volatility I have experienced in some time - however, that's not to say I haven't seen this level of hostility before.

And that's why I can tell you where we're heading is not favorable for global peace.

The international fabric of finance, trade, and economics is being strained, even if somebody does not slip up and end up starting a war (or two or three).

Given my personal experience in such matters, I am always concerned when there is no fallback position.

However, what is concerning me the most right now is what's going on between the United States and China...

How We're Keeping Up With - And Surpassing - The Chinese

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Early last month, the Chinese began testing anti-ship missiles in the South China Sea. These tests were fortunately carried out far from U.S. Navy vessels, but the implication is clear.

The Chinese will not hesitate to use these missiles offensively should they feel that the U.S. Navy is overstepping its bounds in the region.

It wouldn't take much for them to feel that way, either.

Other places like Taiwan and Vietnam are being roped into the conflict, and China has warned them to stay out of the region.

And the Chinese missiles are nothing to take lightly either. They are some of the most powerful I've ever seen and could decimate a Navy ship if fired upon.

Insiders are predicting that the unstable tension and military competition are likely to increase in the coming years.

And despite conferences and summits to keep the peace in this highly volatile stretch of water, I agree with that assessment.

That's why I believe that funding for defensive and offensive technology to be developed is absolutely essential.

Luckily, the Pentagon agrees with me.

Defense contractors have been getting some of the heaviest funding in years to develop weapons that can defend and counterattack anything the Chinese throws our way.

In other words, we're not giving up without a fight.

If you'd like to learn more about the ongoing situation and what started it in the first place, just click here.

The post We Could Be Looking at War in the South China Sea appeared first on Oil & Energy Investor.

About the Author

Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.

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