The Fifth India-Pakistan War: A Spark in the Global Powder Keg
“Nothing ever happens” is the mantra of idiots. It's something they have been saying for the past five years and for the past five years the world has witnessed crisis after crisis.
Let’s consider…
- A genetically-engineered virus plunged the global economy into the most severe recession in living memory.
- Then, the resulting hysteria threatened to turn into total medical tyranny.
- Russia invaded Ukraine – and NATO, led by the U.S. has been engaged in a proxy war with Russia ever since, virtually daring Putin to escalate into World War 3.
- Let’s not forget that Biden took the unprecedented and completely illegal step of freezing and seizing Russia’s foreign currency reserves. (This nuclear-level dollar weaponization may have shattered global trust in the dollar for good.)
- Terrorists based in Gaza launched a surprise attack across their border with Israel, killing over a thousand (mostly civilians) and taking another 251 hostage – again, mostly civilians.
- Israel’s ongoing war against the terrorists has spread – to Lebanon, Syria, Iran and Yemen.
- A group of Shia terrorists launching missiles and exploding drones at commercial shipping in the Red Sea (the primary shipping link between Europe and Asia). Attacks on container ships and oil tankers forced hundreds of vessels to take the long way around the Cape of Good Hope in Africa. Global trade declined noticeably, while the entire seaborne shipping industry lost 20% of its capacity.
- Here in the U.S. we’re still struggling through a stagflationary crisis.
- Right now, we’re seeing the first salvos of the greatest trade war in over a century.
Nothing ever happens?
Who still believes this?
Everything is happening! Just open your eyes.
The Asian front is heating up
Mainstream media – specifically Reuters, AP News and even Foreign Affairs (who should know better!) among MANY others – predicted nothing would happen between Pakistan and India.
They were wrong yet again. Just where are these “experts” on geopolitics coming from? How do they get platformed, and why does anyone bother to listen?
Cruise missiles have criss-crossed the border for days – constant artillery duels are ongoing, as are wave after wave of hundreds of explosives-armed drones. [Update: Thursday, May 8, over 125 aircraft clashed in “the biggest dogfight since World War II” and an unknown number of jets, at least five, have been shot down.]
Hundreds are dead, mostly in the disputed region of Kashmir – which both Pakistan and India have claimed since the countries were formed in 1947. In fact, the same year India and Pakistan became nations, they fought their first war. Over Kashmir.
Worst of all, though, these two belligerents have fought FOUR full-scale wars since 1947.
Will this be the fifth?
Is World War III starting before our eyes?
…well, not necessarily.
I think it’s a clear sign that we can expect further escalation of tensions and increasing global instability – the slowly heating water eventually boiling the frog.
Currently, the most common prediction among mainstream geopolitical analysts is that Pakistan and India will trade a few salvos, rattle their sabers and then walk away.
Each side will claim their side won and the other backed down. Maybe they are right, wars are expensive and brutal, and maybe there’s not enough political will for either nation to go all-in. Even so, this is what I would refer to as the “middle of the road” prediction – mainstream analysts are terrified of getting a reputation as a pessimist or a “doom monger.”
Remember, their jobs are mostly easing the fears of the masses and keeping a lid on any flashpoints of panic.
I don’t know – let’s hope that cooler heads can prevail in this, the fifth India-Pakistan war, before escalation develops more forward momentum.
Now, this discussion might not be worth our time if nothing else was happening.
But that’s not the case today.
We’re facing a series of geopolitcal powderkegs – with their fuses lit.
So, what are the REAL risks?
What would a war between Pakistan and India mean for the global economy? For international diplomatic relations?
What effects should we expect here in the U.S.?
Nuclear escalation – unlikely, but terrifying
First and foremost, we need to consider the fact that both countries have nuclear capabilities.
Both nations have significant nuclear weapons stockpiles (an estimated 170-200 warheads each), more than enough to utterly wreck the region.
India fields the world’s second-largest army. Pakistan’s army is only half as large.
India’s air force has about 600 aircraft. Pakistan has about 400.
Overall, India's military vastly outnumbers Pakistan's: twice the tanks, far larger navy…
This imbalance presents an existential danger, because Pakistan has a “first strike” policy for their nuclear arsenal. Pakistan cannot win a conventional war, they’d be overwhelmed. So their deterrent doctrine is preemptive destruction.
Another problem is India's recent threat to divert precious water supplies flowing through the Indus Valley. Without these rivers Pakistan's agricultural base will collapse and mass starvation would be inevitable. Again, they might decide to use nukes as a way to achieve India's mutual destruction. If the war expands to the point that Pakistan feels cornered, a nuclear response is entirsely possible.
Economic shockwaves ripple across the globe
There are a number of factors in play when it comes to the global economy and India in particular. India is quickly becoming a threat to China's dominance in global manufacturing, largely due to the trade war. Companies are rushing to find alternative export hubs because China is now untenable. India offers one of the best options to replace China over the next few years, and the CCP certainly isn't happy about that.
If India is embroiled in a war directly on its border with Pakistan, a war that could end in large scale missile exchanges or nuclear exchange, then many companies will avoid engaging with the country as a manufacturing base. China might benefit under certain conditions. Keep in mind that the terrorists involved in the Kashmir attack (which kicked off the current war) were carrying Huwei-encrypted satellite phones custom made for the Pakistani military by Chinese electronics companies.
This is not proof of Chinese complicity in the attack, but it highlights the close relationship between China and Pakistan. They don’t have a formal alliance – historically, though, China and Pakistan have shared an “all-weather strategic partnership” based on mutual security concerns. China and India have a disputed border that escalated into military conflict back in the 1960s.
On the other hand, India is also a top export market for Chinese manufacturers. A rupture in trade relations would greatly damage China as it is already reeling from the loss of U.S. markets. So, it's hard to say how much China would actually benefit from any involvement in the war. China is on the verge of deflationary collapse and has been for at least three years. Any slowdown in exports for more than a few months would be disastrous for the CCP. The destabilization of South Asia might not do much for them other than give them a little extra time for corporations shuffle their supply chains to avoid both China and India.
The loss of India as a market would be like kicking sand in China's face while they're down, but this could be a sacrifice China is willing to make.
Another immediate consequence would be a sizable drop in regional capital markets. Because of the interdependence of the global financial system, a panic South Asia spreads like a tsunami across the globe. Asian markets in particular would be hit hardest as they have the most exposure. This would trigger a massive surge in safe-haven gold – along with the U.S. dollar, a more stable currency than anything you’ll find printed in Asia (possibly even cryptocurrencies).
But the longer the war goes on, the more gold will benefit. Especially when you consider the key role gold plays as an inflation-resistant form of savings in India and in China – these nations are regularly the world’s #1 and #2 gold consumers during times of peace! Just think how much more intense regional gold demand will become during times or war…
Second-order geopolitical effects – allies and adversaries
As noted, China will seek to play the conflict to their advantage, at first by offering their factories as an alternative to India’s. With India nixed as a potential replacement exporter for goods going to the U.S., the other convenient option would be Vietnam.
China's naval expansion into the South China Sea is currently threatening Vietnam, the Philippines and even Australia. The danger is that China may use the distraction of an India/Pakistan war to take control of the waters in the area and harass trade ships going to the west. Also, of course, to blockade Taiwan as a first step toward invasion.
Between the-year real estate collapse and the recent trade war, China's economy is close to collapse. They have millions of young men who are losing or have already lost their jobs. This is a recipe for civil unrest. Not even the CCP’s notoriously efficient surveillance and oppression network may be able to contain it… The CCP definitely considers war with Taiwan an opportunity to turn an army of protestors into an army of conquest. Nothing welds a nation together like a war…
Just as China might view a limited war with Taiwan (or another neighbor) as a way to distract their population from economic crisis, the same goes for Pakistan. The Islamic nation is rife with financial troubles and has been for several years. There has also been civil unrest, politically motivated arrests and civil war is not far from the horizon. The Pakistani government might see war with India as a convenient unifying event that thwarts a revolution.
It's important to understand that there have been incidents in the past between India and Pakistan. The influence of today’s economic crisis changes everything. It makes escalation much more likely.
All sides might want to let the war play out.
All sides might see benefits – distraction from domestic troubles, for example.
This is only valid if nukes stay off the table. I fear they won’t.
Here in the U.S. the war seems comfortably far away, unless the trade situation is exacerbated and supply chains come under threat. Everything changes if China becomes directly involved or exploits the chaos to make a move on Taiwan and the South China Sea. Then, we're talking about U.S. naval movements into the Pacific and an undeniable World War.
The cancer of globalism and interdependency have long been vaunted as the keys to world peace. Instead, globalism has made world war much more likely. When nations are interdependent, they are more inclined to be drawn into limited regional conflicts.
They are more inclined to spread the war beyond the borders of belligerent nations – to escalate and make matters far worse.
Every war between larger powers now comes with the undeniable risk of rapidly spreading like a California wildfire.
None of these situations should be treated lightly or dismissed. To do so is foolish.
Watch the fighting between Pakistan and India with careful concern.
BGG - About the Author
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Birch Gold Group.
BGG - CTA Option 2
