Why Huawei was banned

The American version of the story is that Huawei can’t be allowed to install 5G infrastructure because it’s connected to the Chinese government and will build in back doors and spyware.

However, the American version is also that Iran is aggressive against America by bringing their country too close to the American aircraft carriers which threatens freedom and democracy.

I have a version that is much more likely. So far, America had complete technological supremacy, both on the layer of infrastructure and the layer of consumer electronics. Non-American products used key parts that were either produced or designed by America, and America had the ability to completely control the entire technological layer, either for spying or for denying access.

For the first time, America lost the technological supremacy on the infrastructural layer, which would mean, if free market rules applied, that the Chinese who were the first to market with 5G, would install their own technology across the world. This would mean two things. First, the Chinese could now put their own back doors and spyware in the infrastructure, and this is at least formally the reason for all the noise. Second, and most important, the Americans couldn’t put their own back doors and spyware in the infrastructure. This, I think, is far more important. In all the places where Huawei installed their own 5G routers, America would not be able to collect, store and analyse user data without control or supervision, the way it is used to. They would be forced to actually respect other people’s privacy, if not by choice, then by limitations of technology.

Let’s put 5G concerns aside for the moment and forget that the 5G band contains frequencies that were patented by America as weapons; this is important, but it is not the reason America has their panties in a bunch. They would be perfectly fine with installing weaponized microwave technology on each building in each city, as long as they control the technology. The problem is, they don’t. Which brings us to the next point.

When someone is a technological leader or has the strongest economy, he advocates open borders and free market. When he loses that position, he introduces tariffs and sanctions in order to protect himself. Notice how the roles have reversed between USA and China?

So, it’s not about Huawei, and it’s not even about China, or about spying. It’s about America losing technological and economic supremacy. If America was a normal country with a normal economy, that wouldn’t be so bad. It could fall behind, then get stronger and leapfrog the competition, the way it happens in sport all the time. The problem is, America isn’t a normal country. It’s a country that managed to abuse its dominant position after WW2 in so many ways, from currency to economy, technology and culture, and by abusing I mean thoroughly depending on the fact that it can force other countries to finance their debt, and infiltrate their intelligence assets into vassal countries’ press, politics and education, to the point of total control. America got so dependent on printing trillions of dollars out of thin air and passing the bill to the rest of the world, and using aircraft carriers if anyone had a problem with that, it became a cornerstone of their economy. Their entire economy is based on printing money, using VC funds to pump it into startups, overhyping and overinflating their value at the IPO, and using the GDP data obtained from the stock market to print more money, because American economy is so huge. Most of that economy is nothing but air. That’s why all those comforting stories Americans keep repeating, about Russia having economy the size of Italy, are profoundly misleading, because something must be very wrong about those numbers, because they don’t explain the reality on the ground. The reality on the ground is that America is hugely in debt, and the expectation is that countries that are truly technologically and economically powerful have a huge economic sufficit. That’s how America used to be, how Japan used to be until recently, and how China is now. Economically powerful countries create new and abundant financial assets and use them to go around the world and buy. They don’t create debt, they lend money to others and put them in debt. The fact that America is tens of trillions of dollars in debt, and that’s only the actually declared part, makes it obvious that its economy is not real, because real economies create wealth. This means America can’t afford to let go of the dominant position it’s been abusing since the end of the WW2. Their entire country would collapse. It’s not just that they wouldn’t be able to finance their military. The entire structure is built upon foundations of debt and illusion. If their economy collapsed to realistic proportions, based only on what they could actually make and consume without magic tricks of printing tons of aircraft-carrier based money, it’s their economy that might prove to be quite modestly sized. And that’s the reason why they are fighting this process, tooth and nail. They literally can’t afford to lose the dominant global position, because they won’t just be leapfrogged by China or Russia, then do better and leapfrog them back, as a healthy country would be able to do. No; if they lose the no1 position, they will crumble into post-apocalyptic rubble, and take the whole civilization with them. That’s why it’s so difficult for me to explain what I see to other people: because they don’t understand those facts. That’s why my analysis can sound crazy and yet be supported by the events. The way the world actually works and the way people think it works are two vastly different things.

So, when you understand that America can’t afford to lose the dominant position, and yet it is in a position where they can’t maintain it because they already bought themselves some time by removing all rational restraints on money printing in 2008, they got their economy addicted to injections of free money just to keep it going, they impoverished the rest of the world by exporting their inflation overseas (because other countries have to buy dollars with real assets in order to buy oil), and they understood in 2008 that this game is over, and all they could do is buy themselves some time in order to have the collapse on their own terms. All those sanctions and restrictions are merely stop-gap measures. What they are actually doing is destroying the potential competition that could arise in the years of their absence from the dominant position on the world scene. They are preparing the ground in such a way that everybody else is in a worse mess than they will be, so that when they recover, they can just assume the mantle of a world leading power. They destabilized the Arab countries in order to force them to spend all the oil money they accumulated, so that they can’t use it for increasing their control of the world in America’s absence. They destabilized Europe by importing all kinds of worthless human garbage there, so that it turns into an African hellhole mired in endless civil wars and poverty, and forced it to degrade relations with Russia because Russia was a huge market for Europe, and that threatened America, because an alliance between Europe and Russia would have naturally formed in America’s absence and would have taken over the mantle of leadership of the Western civilization. And, unfortunately, the plan for dealing with China and Russia is a nuclear war. They will turn China and Russia into a nuclear wasteland, and put an end to competition that way. That, at least, is what they seem to be planning. However, it is my opinion that they miscalculated. There will be no recovery.