Ukranized the Entire Western Alliance

 

The week ended on January 11, 2025, interesting news items to look at this week are:

1. Ukranized the Entire Western Alliance: There is a Chinese Proverb “前門拒虎後門進狼”, literally it can be translated as “Whilst the tiger is resisted at the front door, the wolf has stealthily entered through the back”. The proverb is a metaphor for disasters coming one after another, and the situation is extremely dangerous. (Fig. 1)

Such is the predicament of Europe, Canada and the rest of the Western alliances. There are 29 countries standing as defensive shields or cannon fodder in front of the United States as the Anglo American Empire fights an unsuccessful war with the Global South and the axis of defiance against “The Rule Based International Order.” (Fig. 2)

These 29 countries have exhausted their resources (militarily, personnel, moral cover, economic and monetarily)  in defending American hegemony and now found themselves totally vulnerable to predatory American demands. For the Western Alliance countries, it is the Russian Bear at the front and the American Crocodile at the back.

(i) New York Post Meme - The Donroe Doctrine: (Fig. 3)

Today's cover of the New York Post features the title “The Donroe Doctrine”, a direct reference to the Monroe Doctrine, a policy established by the United States in the early 19th century. The Monroe Doctrine, proclaimed by President James Monroe in 1823, stated that any intervention by European powers in the Americas would be seen as a hostile act against the United States, establishing the idea that the Western Hemisphere would be an American sphere of influence. Especially in the 20th century, the Doctrine was used as a pretext for military interventions in the region. While recent Democratic governments have distanced themselves from the Monroe Doctrine, Trump explicitly defends it, reinforcing the idea of American hegemony in the Americas. Additionally, the Republican majority on the House of Representatives Foreign Affairs Committee shared the newspaper's cover with a tweet that read: “Our country was built by warriors and explorers. We conquered the West, won two world wars and were the first to plant our flag on the moon. President Trump has the biggest dreams for America, and it is un-American to be afraid of big dreams.” The tweet was later deleted but continues to circulate online.

(ii) The Fall of Justin Trudeau: (Fig. 4)

The first fallout of the Donroe Doctrine is Canadian Prime Minister Justin Trudeau who under pressure for not standing up to US President-elect Trump encroachment into Canada, resigned this week.

(iii) Denmark Capitualted: (Fig. 5)

In reaction to Trump’s threat of taking Greenland by force, Greenland’s prime minister Múte Egede called for Greenland independence from Denmark and for the “shackles of the colonial era” to be broken. Last year, on December 23, he explicitly rejected Trump’s interest: “Greenland is ours. We are not for sale and will never be for sale.” The Danish prime minister similarly dismissed the notion of Trump buying Greenland as absurd when he first raised it in 2019. Yet, Trump’s fascination with the Arctic island persists, reflecting broader geopolitical interests in the region.

But the big question is what prompts Trump’s America to show its fangs at this time. Commentators and analysts have put forward numerous reasons but the two most pertinent points are:

(a) Economics of Plunder and Low Hanging Fruits: US financial conditions is bordering on catastrophic and Trump is considering a declaration of National Economic Emergency. (Fig. 6).

The original US Grand Plan of fragmenting Russia and China for exploitation simply hasn’t work as the long drawn out war of attrition is hurting US a lot more than Russia or China. Of the $30 trillion of foreign portfolio investments in US, the Global South have resisted to further sink good money after bad whilst US allies continued to follow the Piper’s tune unabated. (Fig. 7).

As at end October 2024, the share of Foreigner’s Investment Portfolio Owed by US to US Allies are 4 times larger than the Global South (Fig. 8).

Since further borrowing by US is not an option for the US economy, even after paying the highest interest rates in the developed world, the allies’ sunk investments in US is a juicy low hanging fruit that the Trump administration simply cannot resists to devour.

(b) Imminent Military Defeat: In the world of Martial Arts, there is a Chinese saying, “天下武功,無堅不破,唯快不破” In English Translation it reads “In the world of martial arts, even the hardest defence can be pierced, only speed can't be pierced”. With the Russian’s Oreshnik Missile challenge and China’s recent show case of sixth-gen fighters and legacy hyper-sonic missiles, conventional warfare against these two adversaries is no longer a military option for the US. For the first time US is being forced onto a defensive posture. When mobilization and logistics is taken into consideration, Russia’s military industrial surge capacity vs NATO’s in the Ukraine conflict and China’s speed in arms built up, this Eurasian Bloc are not just equal but in honest reality have far surpassed the combined conventional military capability of G7. In a turbulent sea, survival means quickly ditching dead weight overboard after scavenging what one needs to live on and that is exactly what Trump is contemplating. Greenland and Canada are the perfect outpost for early missile tracking radar systems US would require before a hot kinetic war eventuate.

2. Major Shifts in Financial Markets for the three weeks December 31, 2024 to January 11, 2025.

(i) Key Financial Asset Category Performance: (Fig. 9)

Ruble (+11.50%), Copper (+6.66%), Oil (+5.84%), Silver (+5.33%), Gold (+2.51%), USD Index (+1.06%), Uranium (+0.77%), Bitcoin (+0.64%), Jpy (-0.26%), Rmb (-0.45%), AUD (-0.72%), S&P500 (-0.79%), Nasdaq (-1.06%), Euro (-1.11%), Dow (-1.25%) and GBP (-2.51%). Energy, Commodities and Precious Metals are sought as insiders are selling toppy US stocks en mass.

(ii) Fed Funds Rate and Duration Treasuries: Interest rate on Duration Treasuries continued to climb as Treasury Bonds are looking increasingly unattractive on a risk reward basis. This is despite the current FOMC minutes indicate a further 75 basis points cuts in Fed Funds rate is in the pipeline in 2025. (Fig. 10)

(iii) Short Term Interest Rate: Short Duration rates remained steady and the market is pricing the next Fed rate cut to be around June 2025. (Fig. 11)

Revelation 17:15  Then he said to me, "The waters which you saw, where the harlot sits, are peoples, multitudes, nations, and tongues. 16  And the ten horns which you saw on the beast, these will hate the harlot, make her desolate and naked, eat her flesh and burn her with fire. 17  For God has put it into their hearts to fulfill His purpose, to be of one mind, and to give their kingdom to the beast, until the words of God are fulfilled. 18  And the woman whom you saw is that great city which reigns over the kings of the earth."