JIT is Just in Time
Here is my best case prediction:
THE GREAT FRACTURE: A Projection (October 2025 - March 2026)
Current State (October 20, 2025): The global system is critically brittle. The US is paralyzed by a 20-day government shutdown and faces an imminent debt ceiling breach (X-Date). China is actively executing "Reverse Constrainment," restricting critical minerals (REEs, Ga, Ge) in retaliation for Western chip sanctions, catalyzed by the Dutch seizure of Nexperia. Crucially, ASML—the monopolist for essential lithography equipment—is heavily dependent on these materials, with reports suggesting stockpiles are down to 1-2 months.
This convergence creates a fleeting window for a decisive geopolitical realignment.
PHASE 1: THE SLIDE (Late October - November 2025)
The US political system fails its initial tests, signaling profound weakness globally.
The Political Impasse Hardens: The US government shutdown persists through the November 1 ACA deadline. The resulting healthcare crisis further entrenches the deadlock. Federal employees and the military miss multiple paychecks, degrading readiness and economic activity.
The Economic Squeeze Tightens: The Nexperia crisis translates into visible damage. By mid-November, major automotive production lines in the US (GM, Ford, Toyota, Tesla) halt due to the lack of essential power management chips.
The ASML Crisis Ignites: China utilizes its new licensing regime to deny the export of critical REEs (Lanthanum, Cerium) required for ASML's advanced optics. By late November, ASML publicly confirms its stockpiles are nearly depleted and announces a halt to the production of new EUV and DUV lithography machines. They also warn that the supply of spare parts for the existing global installed base is compromised. Panic buying of semiconductors accelerates.
Defense Paralysis: The US defense industrial base reports critical shortages of Gallium Nitride (for radar) and specialized magnets, slowing production of key systems like the F-35.
The X-Date Approaches: The Treasury Department confirms the X-Date for early-to-mid December. Financial markets become extremely volatile, with the S&P 500 entering correction territory (-15%).
PHASE 2: THE CATALYST – DEFAULT (Early-Mid December 2025)
The unthinkable occurs. The foundation of the global financial system cracks.
The Default: The shutdown reaches Day 70. Political gridlock holds. The US Treasury breaches the X-Date and defaults on its obligations.
Financial Chaos: The "risk-free" status of US Treasuries evaporates. Global markets crash violently (S&P 500 drops another 30%). Credit markets freeze worldwide. Interest rates spike, triggering a massive housing and consumer debt crisis.
The Strategic Window Opens: The US government is paralyzed, the military is unpaid and degraded, the economy is in freefall, and the industrial base is crippled. China identifies this as the moment of maximum US vulnerability.
PHASE 3: THE FRACTURE – CHINA'S GAMBIT (Mid-Late December 2025)
Exploiting the window of vulnerability, China executes a coordinated economic and military offensive to secure its long-term objectives.
1. The Economic Coup (De-Dollarization and Total Embargo)
China announces that the US default invalidates the Dollar's reserve status. It mandates that all trade partners (OPEC+, BRICS, Global South) immediately shift transactions to the RMB/CIPS system, exiting SWIFT. The global flight from the dollar accelerates uncontrollably. The "Petrodollar" ends. Simultaneously, China imposes a total trade embargo on the United States and its closest allies.
2. The Lithography Kill Shot
The blockade of REEs to ASML is confirmed as indefinite. The foundation of the global semiconductor industry is fractured at its source.
3. The Geopolitical Rupture (The Taiwan Fait Accompli)
The People's Liberation Army (PLA) launches a rapid, overwhelming operation to force reunification with Taiwan.
The Execution: The operation leverages China's matured A2/AD capabilities (hypersonic saturation strikes, massive electronic warfare, and cyber assaults) to paralyze Taiwanese defenses and deny US access to the theater.
The Deterrence: The US, crippled by the shutdown/default and facing unacceptable losses against the PLA's advanced weaponry, is unable to mount an effective intervention.
The Outcome: The operation concludes swiftly. Taiwan is annexed by the end of December 2025.
PHASE 4: THE COLLAPSE – THE SILICON WINTER (Q1 2026 Onwards)
The downstream consequences manifest, reshaping the global order.
1. The Silicon Guillotine
The "Silicon Guillotine" falls. The West is severed from the critical path of technological advancement through two simultaneous mechanisms:
The Immediate Loss (TSMC): The annexation of Taiwan removes 90% of advanced logic chip production from Western access.
The Long-Term Freeze (ASML): The paralysis of ASML prevents the rest of the world (Intel, Samsung) from manufacturing any advanced chips or even maintaining production of mature-node chips, as existing machines fail without parts.
2. The Industrial Collapse
The resulting Semiconductor Famine paralyzes all sectors reliant on electronics.
The AI Stop: The production of advanced AI GPUs halts entirely in the West.
Automotive and Defense: Production ceases globally outside of the China-aligned bloc.
Infrastructure: The maintenance of power grids, communication networks, and data centers degrades significantly as components fail and cannot be replaced.
3. The Global Depression and The New Order
The US economy enters a deep depression characterized by hyper-stagflation (soaring prices due to the embargo and dollar collapse; contracting economic activity).
The geopolitical landscape is violently reshaped. The US loss of financial credibility (default), technological leadership (TSMC/ASML/REEs), and military deterrence (Taiwan) marks the definitive end of Pax Americana. The world enters a new, Sino-centric economic and technological era.
