Let's continue to head through Asia now for what I call "The Beast in the East". It is perhaps gonna be one of the most important international organizations not just of Asia, but the entire planet in this century/the coming centuries. It's so wildly important, but still so brand new that most of you have never even heard of it. Let's change that. Of course I'm stalking about the SCO. The Shanghai Cooperation Organization. Now, the Shanghai Five, as the original 5 members were called, got together in 1996, that's not that long ago, and they signed a Treaty on Deepening Military Trust in Border Regions. Well that's a mouthful too. And why did they do this? Why would these states get together at this particular time? Well first off, who were the states? The Shanghai Five original were Russia, China, Kazakhstan, Tajikistan, and Kyrgyzstan. Why would they sign a treaty on military trust in 1996? Keep it in historical context here. Just five years earlier in 1991, the Soviet Union had imploded, collapsed, and dissolved. So you went from a single USSR sovereign entity to 15 new sovereign states including all of those Central Asian countries. That used to be part of the Soviet Union. Now they're independent sovereign states. But of course they still have a lot of collaborative military stuff going on with the Russians. They used to all work together under the USSR umbrella, so it was in the Russians' strategic interest to maintain those ties in countries that were heavily armed but independent and the Russians and the Chinese throughout most of the Cold War had an on-again, off-again relationship where they were mostly allies, never fast friends. But here in 1996, with a new age dawning, the Russians and Chinese got together with the Central Asian states and said, "You know what? We have a lot of military power between us." Hell, the Russians and the Chinese are nuclear armed countries. And China has the largest standing army on the planet. And all these states have hell-tons of Soviet weaponry in them. So they said, "Let's get together for this deepening military trust to reduce frictions between each other to make sure nothing goes wrong. Because guess what? We have more in common than we have against each other. In fact, we have a hell of a lot in common." And indeed, along the same theme they reinforced that concept in 1997 by signing another treaty, the Treaty of Reduction of Military Forces in Border Regions. Again, between themselves. They're saying, "Hey, let's start strategically thinking about working together militarily as a singular unit which means we don't have to have all of our troops stationed across the borders from each other. Let's start thinking as a singular hole, not as 6 independent states." And indeed, they did become the Shanghai Six in 2001 when they allowed Uzbekistan to join. It's at this time in 2001 that they also renamed the entity from the Shanghai Five to the SCO, Shanghai Cooperation Organization. Now, These six full members of the SCO have been joined by four more observer states. Not full members, but observer states. Many people believe they actually will become full [member] states. The 4 observer states are India, Iran, Mongolia, and Pakistan. Wow! Now you're starting to talk about a serious Asian bloc going down here. Indeed. These six full members account for about 60% of the Eurasian land mass. That's most of Eurasia. And when you count the 4 observers and the 6 for the 10 states in the SCO, that accounts for over half of the Earth's current population. Wow. Half under this singular military/defense/security umbrella. This is very significant and again, it's still brand new. It still has the training wheels on. They're still evolving. They're not even sure what they are yet. So it's got a long way to go, but it was based on this joint military/defensive cooperation idea. Now, let's flesh that out a little bit more. They themselves, the SCO says "Hey, we're not trying to be a NATO yet. We're not forming some sort of war club. We're not getting together so we can all be on the same team." They say, " We are primarily centered on our member states working together to address security related concerns. We're gonna work together for three particularly security related concerns." 1) Terrorism. 2) Extremism. 3) Separatism. Okay now this is interesting. The terrorism and extremism, that's no surprise. Every country fights against terrorism and extremism. They don't want radicals popping up and everybody in the world is after terrorists now. There's no world war against terrorism led by the US. NATO fights against terrorism. That's what they're doing in Afghanistan. The EU fights against terrorism and extremism. So that's not that new that you would have groups of countries working together at a common goal to stop terrorism or extremism or violent anything. The separatism I think is very unique. I don't know of any other entity that, in its constitution, in its charters, says, "Yes, we the sovereign states working together in this club vow to protect each other's sovereignty, protect each other's territorial integrity by working together to fight against separatism." Maybe I haven't made it clear why this is so importnat. Because these six states have said, Russia's basically said to China, "China, look. We know you're the number one fan of sovereignty. So we're telling you in the SCO that we as a member state will help you fight against separatism in your country. So not only do we recognize that Taiwan and Tibet are part of sovereign China, but if Tibet tries to break away, we as an SCO member have vowed to help you stop that." That is radical and new. And in return, China says, "Ah, thank you Russia." And if Chechnya tries to break away from Russia, the Chinese have said, "Yes, we will come help prevent that." So the whole idea of separatism being on of the foundation blocks of this security arrangement is quite unique and new. Please jot that down. I think it's really, really, important. Again, that's just within the six member state that they're going to try to prevent separatism, but also fight against terrorism and extremism. However, evidence is growing that the activities of this SCO group are expanding rapidly in various other social development directions simultaneously and this is happening fast. They have started to broaden cooperation on issues like overall security, crime, They're talking about building a legal framework to extradite criminals and help each other's police forces between the member states. That's crazy new. And they're even gonna have a joint task force to fight drug trafficking acroos the entire SCO area. And this is quite important. I can tell you, my friends. Because just off the cuff, Afghanistan is the number one producer of heroin on planet Earth. Most of that heroin goes to Russia and China. So obviously, obviously this SCO grouping is going to say, "Hey we're going to work together to stop that from happening and lots of other criminal activities. And separatist activities. Or rebel activities." So you see that this is a bizarre amalgam of lots of different stuff going on here. Now to stop all of those things from happening, they're also increasing their activities to include increased intelligence sharing and counter-terrorism programs across all six countries and perhaps the observers states eventually. So this is growing and growing and now let me get to the cherry on the cake. Increased SCO joint military exercise and military cooperation. Booyah! Now we're getting to something that looks a hell of a lot like a NATO. You mean the militaries are working together? Yes, they have just started--they're not all the way there yet-- but they've had several joint military operations, war games if you will, where the militaries of these six entities have gotten together and had their tanks come out there, and fighter jets do patrols, maneuvers with each other. That is serious, serious Asian shit, my friends. And it's going down now. And I gotta tell you, the very first war games they had about five years ago they cut right to the chase, they're very blunt. And the first war game scenario they said, "Okay. Scenario 1 for our SCO military exercises. Let's pretend that a small group of terrorists in one of our states has blown up something over in another state. Let's say Europe or America. And then let's pretend that one of those European states or America decided to invade one of our states to get that small terrorist group. Now, let's have a joint military exercise to repel the western country that tried to come into our state." Woohoooo! Now, if you don't know why I'm laughing, what I've just described is the US and Afghanistan. They have been very open in saying, "Hey, this kind of is a defensive pact much like NATO." Much like NATO Article 5 -- they haven't outlined it in an exact way yet, but they have suggested, "We will not allow any military incursions from outside the SCO bloc into any of the member states." Obviously nobody's gonna invade Russia or China. But somebody might try to invade Tajikistan. And the Russians and Chinese and whole SCO group have said, "We're not gonna let that happen. This is a new world. This is a new bloc of Asian power that's not going to allow the rest of the world, mostly the western institutions, come into their backyard anymore." Again, it's new. I'm excited about it because I want you to understand and know and remember this stuff. But don't let my excitement, don't let my rising blood pressure overstate the realistic rendition of what's happening here. They are nowhere near as organized as NATO yet. They have nowhere near the level of intelligence sharing as the EU, or NATO, or western institutions do. Yet. But they're working on it. The mere fact that they're starting it is what's exciting and new about it and very important for the evolution of not just Asia, not just this bloc, but world power structures and current events worldwide. Now, it's even more than that. As if I haven't just given myself a stroke talking about the military stuff. They wanna do more on economic fronts too. At a meeting about 5 or 6 years ago, the Chinese Premier, and I know you know who he is, Wen Jiabao, proposed as a long term objective of the SCO to establish a free trade area. Whammo! Boom! So now you have the SCO that's kind of like a NATO structure and now they're kind of like an EU structure, or a NAFTA structure. Pulling in new duties. Russia, at the same meeting, also suggested that the SCO form an "energy club" where they will, the member states, prioritize joint energy projects including building infrastructure and helping each other develop oil and natural gas field. And this is quite important because Russia and those Central Asian states actually control over half of the world's natural gas. What's interesting about a country controlling over half of an resource? Or a group of countries doing that? Because you can form a cartel, much like OPEC is to oil in the Middle East. So now we have the SCO that's maybe an OPEC type of deal in Asia for natural gas. We have multiple things going on. I have to tell a side story here. Because it's just too hilarious not to. And that is, at this meeting, where Vladimir Putin was, because the heads of state and the main premiers actually come to these SCO meetings. So premiers, prime ministers, and presidents actually attend these things. Of course Vladimir Putin being the president of Russia from 2000-2008 and still the prime minister now, he still attends these meetings and he said after this energy club statement, a reporter said, "Hey! President Putin! I have a question. So if you guys are talking about joint projects and stuff, are you guys gonna form some kind of cartel based on natural gas? Is the SCO gonna evolve like an OPEC of Asia for natural gas?" And here was Vladimir Putin's response: [laughs] "Oh, no! Oh for goodness sakes. What are you talking about? That would never happen." Now here's how I interpret that event. Vladimir Putin never laughs. Never. In fact, when he does laugh, it's probably the last thing you're gonna hear before the icy hand of death snuffs you out. So his overplaying this to me gives it credence that it probably is going to happen and at least they're talking about it. And even if they're not talking about forming up a cartel in which they could set the prices for natural gas worldwide, just the SCO states, they certainly are working together in infrastructure and helping each other's oil fields and gas fields because China wants a lot of this stuff. So economic levels keep piling up here in this grouping as well. Now to stay with Vladimir Putin and sum up why the SCO is so important, Vladimir Putin and the leaders of China the major international power players in their own right, have really made it clear that they see the SCO as much, much more than any of the individual things I've outlined. Yes, it's kind of like an Asian NATO. Yes, it may become an Asian OPEC. Yes, it may become a free trade bloc like an Asian EU. But they are saying, "Hey here's the deal. All together, the SCO will probably become a major power player on planet Earth as a singular bloc that is an alternative to the western dominated ones that currently run the whole damn show in the world." That's what's so damn important about it. They're not saying we're anti-EU, anti-NATO, anti-OPEC. They're saying, "No. We're just the Asian version of these things." And as Asia's power grows, as China grows, and India, and ASEAN, and Japan, this is where the true center of economic growth and vibrancy and military and political power is rising. And the SCO is positioned to be the major entity in control. Whew! And this, of course, will create all sorts of stability between the states. Kind of imagine it as an ASEAN plus a NATO, almost plus a UN just for Asia. And again, they're suggesting "We did not create the SCO to counter NATO per se. We didn't create so we can attack you." It's not about that. Yes, it might be about competition, but it's more about an alternative. The Asian alternative. That make a little bit of sense? Not just counterbalancing all the western institutions, but providing a a completely different alternative that will be the center of power, the power bloc that these players with increasing voice in the world will be running. They don't want western influence there. They don't want the western institutions to have a say there or to come in and overpower their rising economic and political clout in the world. In fact, one of the main reasons they created the SCO was that they saw the US as the sole superpower back in the early '90s with perhaps too much power and all of those western-dominated institutions like the UN Security Council, IMF, and World Bank. These Asian entities, including Russia, said, "Why they hell do the Americans and the Europeans have all the power? This is bullshit. We need to start thinking Asian-way. We need to create our own so we don't have to rely on those guys." And it is unfolding fast, my friends. Very fast. Not just, militarily, not just economically, even financially. The Russians and the Chinese have been hinting that they would like to shift away from world reliance on the US dollar as the main currency of the planet. I mean, that's the kind of shift I'm talking about, much less all the other stuff. You see how important this is? This is a strategic entity which is going to grow in power for the rest of your lives. It's still a baby. It still has training wheels on. And again to re-stress how they want to do it their way. They don't want influence from the US. They don't want those western institutions dominating them. The US has actually applied for observer state status to the SCO every year for a decade. And they've been denied every year for a decade. Repeat. The US has tried to get into the SCO meetings and been denied entry into the clubhouse. That is telling you something that's going on here. Back to my point. One of the reasons they created the SCO was the rising power of the US and then the forthcoming wars in Afghanistan and then Iraq, that a lot of these SCO states said, "Hey we wanna make sure that doesn't happen in our backyard. Because, guess what? Asia's our backyard. What the hell is the US doing here? What's NATO doing here? This part of the world should be influenced and controlled by us, the Asian states." And not to be a deserter of NATO or the US, both entities I love. They got a point. It is their backyard. They should be the ones in Afghanistan. And if NATO and the US leave Afghanistan, watch for Russian, Chinese, and possibly and SCO contingent to fill that void and go in and do something. That's the shift I'm talking about. So as Asian power players continue to rise in the 21st century in economic, political and military power, this is going to continue to grow in our lifetimes, look to the SCO to become the major if not the only major power block in Asia that is pulling and binding all of these states together. And I'll end on this. Think about SCO, even though it's dynamic, it's new, it's young, it's feeling its way out still, and I've told you all these different things they do, kind of consider SCO like this. We talk about ASEAN as an economic bloc that's growing. It might have half the world's population in a free trade bloc. ASEAN is to Asia kind of like what the EU is to Europe. Economically. Binding states together to trade with each other, bringing stability. So ASEAN is to Asia what the EU is Europe and the SCO may become to Asia what NATO is to Europe and the US and the Western World. Does that make a little sense? I sure hope so. I know I get all excited about it. I want you to be smart about what's happening on the planet and this one is the one to know for the rest of your life. It's still a baby. It's got a long way to grow into its Asian giant final form.