Connecting the Trump Dots

The week ended on November 16, 2024, interesting news items to look at this week are:

1. Connecting the Trump Dots: Early this week, I sent out a news clipping to my circle of friends regarding Trump shutting doors for Pompeo and Haley to join his Administration. I was optimistic that the Trump announcement could mean distancing the White House in 2025 from the Neo Cons and Zionists. Looking at Trump’s staff appointments and nominations over the balance of the week, many critics jumped to the conclusion that there was no lack of Neo Cons and Zionists amongst those Trump picked. Yet on careful analysis, there were clever planning in Trump’s selection and I like to devote the next few paragraphs as to table my assessment.

(i) Who’s who in Trump’s Pick: (Fig. 1) is my best attempt to classify major Trump’s pick into three groupings of Neo Cons, Zionists and Non-Aligned.  

Of the 15 members that comprise a US President’s cabinet, the appointments so far are two Neo Cons, one Zionists and Four Non-Aligned (nominations incomplete and continuing). It is worthwhile to note that the UN Ambassador, Ambassador to Israel and Special Envoy to the Middle East are all Zionists and I suppose that should appease the Zionists. Nonetheless, all these appointments are under the direction of the Secretary of State and Marco Rubio is not a himself a Zionists but a die hard anti Cuban, anti Venezuelan War Hawk. Turning to the Foreign Policy aspects of Trump’s pick, the Secretary of State, the National Security Advisor and Director of CIA are all Neo Cons, yet Marco Rubio has been sanctioned by China which makes any visit by Rubio to China impossible. So it is likely that the relationship management with China will be Trump himself through his National Security Advisor. Now the National Security Advisor in waiting is Mike Waltz. Though Mike is a strong advocate of MAGA and and is a stern opponent to China, he does not belong to the Military Industrial Complex. Being a former Green Beret and Colonel in the US Army, his security briefing to the President should be more factual than ideological? Rubio is there to appease the Neo Cons and to keep up the verbal abuse of China yet not close enough to start a fire fight. The Director of CIA was a former Director of National Intelligence. I think Trump picked John Ratcliffe for the post more to drain the swamp of the Deep State.

(ii) Loyalty over Competence: It is obvious that Trump’s pick is loyalty over competence. The big question is even allowing for all nominations to be endorsed by the US Senate. Will Trump’s appointees be capable to fight in each of their respective domain the deeply entrenched Deep States and Shadow Government? Even armed with the most powerful position in the world, Trump 1.0 could not overcome the Deep State and the Shadow Government in his 4 year term in the oval office. In fact, one misstep with The MAGA team,  Trump could loose the mid-term election and the control of Congress be back in the hands of his adversaries putting Trump in a lame duck posture. Such is the sad saga of American democratic process. Our continued surveillance and recognizance is therefore unavoidable.

(iii) Trump’s Broad Policy Direction: According to James Rickards, multiple NYT best sellers author, advisor to the Pentagon and CIA and Hedge Fund Manager, Rickards correctly predicted a Trump victory with a deadly accurate of 312 Electoral College Votes, 54 Senate Seats and control of Congress, Trump will follow the tried and tested conservative American System found in early American development. The American System has 4 strong pillars: (a) High Tariff to protect local producers, (b) Strong Military (for defense and deterrence), (c) Strong Infrastructure and (d) Strong Central Bank to provide liquidity but not to set economic policies. Trump will ditch multilateral agreements in favor of bilateral agreements and use tariff as a weapon to bully weaker states. My opinion is the used by date of such notions of strength has past and the effectiveness of such off the cuff approach will fail as in Trump 1.0. One obvious soft spot of the whole American System is all the good intentions embodied in the 4 Pillars would backfire so long as Trump insists on holding onto the Dollar Hegemony. The theory behind my assertion is called “Triffin Paradox” (Fig. 2)

(iv) Triffin Paradox: The Triffin Paradox was identified by economist Robert Triffin in 1960s and states using a country’s national currency as an international reserve currency are in conflict. To feed the growth of international liquidity and reserve requirement, the issuing country must continue to increase its trade and payment deficits which eventually will lead to economic instability of the issuing host. Sure enough 10 years after Robert Triffin published his book “Gold and The Dollar Crisis” US defaulted in her Bretton Wood’s obligation in 1971. (Fig. 3 with narration by the IMF).

What we experienced today in terms of De-dollarization is nothing new nor all of a sudden Russia and China turned hostile to the West. The unnatural part is US doubling down to maintain the Dollar Hegemony through destabilization of other economies by color revolution, proxy wars and direct military regime change.

(v) Land Mines and Bobby Traps: Over two thirds of US GDP is in the services sector, the government sector alone is one third and private sector health care is another 7%. Cutting $2 trillion off Federal deficits as advocated by Elon Musk would immediately trigger a recession. In our analysis two weeks ago, an economic recession would immediately tilt government tax receipts below those required for mandatory payments of interests, social and healthcare entitlements. When that happens, a capital flight away from US is guaranteed irrespective of how enticing interest rate offerings the Federal Reserve may furnish.There is, however, a narrow window when some of Trump’s tactics may be executed but that requires the Federal Debt problem be dealt with first. Interests payments must be significantly reduced through sharply lowered interest rates and the USD exchange value weakened extensively to reduce import consumption. In other words, once in the Oval Office, Trump first diet is humble pie to recondition the American economic physique for a robust restructuring 6 to 12 months down the road. In all probability Trump first move would likely be strong arm tactics and have other countries pay for American excesses. Consequently, there is more than 50% chance of an economic collapse by second quarter of 2025.

Connecting the Trump dots is, I admit speculative and conjectural. Yet in the face of a contrived euphoric and extreme risky financial market environment I felt compelled to counter the prevailing narrative. May I invite readers to share your thoughts and how one should handle situations as such.

2. Financial Market Performance for the Week as follows (Fig. 4): Bitcoin (+19.42%), Uranium (+ 8.11%), USD Index (+1.60%), CNY (-0.72%), JPY (-1.10%), Dow (-1.40%), AUD (-1.82%), GBP (-2.29%), S&P 500 (-2.30%), Rubble (-2.41%), Silver (-3.35%), Nasdaq (-3.58%), Oil (-4,22%), Gold (-4.62%), Vix (-4.91%) and Copper (-5.77%).

I explained last week the Anglo American Cabal has pulled no punches to paint the tape that a Trump win would mean the mighty America is back because the Dollar is strong, stock market is up and Vix (Volatility Index), Precious Metals and Commodities are down implying there is certainty in the financial markets and Happy Days have returned.

Well, the figures have come in and what happened was the CTA (Commodity Trading Advisory Funds) have emptied their chest of Precious Metals and Commodities derivatives in favor of Bitcoin. (Fig. 5)

However big Macro Discretionary have held their long positions in Precious Metals and unmoved by their price decline. All the while the bullion banks took the opportunity to cover their short positions. Now CTA traditionally are where high net worth individuals park their money for commodity plays but because of their known algorithms and use of high leverage and HFT derivatives techniques, CTAs were frequently used by the Exchange Stabilization Fund to hide their market manipulations - deniability, small capital employed to produce a loud short term bang. One more Trump dot for you to consider.

Jeremiah13:23 Can the Ethiopian change his skin or the leopard its spots? Then may you also do good who are accustomed to do evil.