Amateurs talk strategy. Professionals talk logistics

The week ended on April 25, 2025, interesting news items to look at this week are:

Amateurs talk strategy. Professionals talk logistics: The famous words of Napoleon "Amateurs talk strategy. Professionals talk logistics"  emphasizes that while strategy provides the overall direction, logistics are what actually execute and make the plan a reality. (Fig. 1)

 

 Horror stories are beginning to surface as to how Trump chose his “Liberation Day” strategy and looking at the confusion amongst the Administration Officials and the back-flips involved, there is a high probability the following narratives were true.  

(i) Impatience: Most people have accepted Trump picked his cabinet members and advisors primarily based on loyalty and not competance, experience or professionalism. Although Trump’s motley crew all endorsed his Tariff strategy, there were heated debate among the ranks as to how it would be implemented. At the end Trump got impatient and decreed a single simple formula should apply to all countries and across all products and picked Navarro’s simplistic formula. Trump liked Navarro’s high tariff rates applicable to every country that had a trade surplus with the United States. As we all know now the formula had nothing to do with reciprocation but is a levy against US trade deficits. This shoot first and aim later approach had an immediate impact on the credibility of US and badly hit the US financial markets (Stocks, Bonds and Exchange Value of the USD), US consumers, importers, transporters and manufacturers. Elon Musk thrown in the towel in disgust and all of Trump’s lieutenants left defenseless against hard questions from the media. Worst of all the Tariff Policy and its associated demands from Miran and Bessent once and for all exposed US naked aggression and economics of plunder to the world at large.

(ii) Counting the Dissidents: Against the unprovoked attack by US, China immediately counter US aggression not only with a full tariff reciprocation but rolled out one by one other measures to undermine the Dollar Hegemony, closed ranks with former US allies and export restrictions and sanctions against US MIC. By Bessent's own admission, Vietnam, Japan, South Korea and India are his first targets to coerce into an alliance to encircle China. What we know so far is Vietnam offered what it could to Washington, found wanting and then pivot towards China. (Fig. 2).

Japan went to Washington and afterwards PM Ishiba declared he would bend the knee no more  (Fig. 3).

In tactical terms, Japan is trading time for space. South Korea will have a Presidential election in June and therefore a legitimate reason not to negotiate according to US timetable. (Fig. 4).

India publicly stated they will only conclude a trade deal with US only in autumn. (Fig. 5).

 Finally the EU Canada and Mexico all have prepared counter measures against US should the temporary 90 days pause lapsed. So taking out the above countries, the BRICS countries, ASEAN, most of Africa and the Axis of Resistance in the ME, US would be left only with a handful of small but wealthy nations to plunder. Certainly far short of the $4 trillion bounty US had designs to raid to refinance her empty Treasury.  

(iii) Recession Timeline: Apollo Global Management, a giant US Fund Manager with $650 billion in assets told clients that there will be a 90% probability of a US recession within 2025 with an estimated timeline on how it will happen. (Fig. 6).

Apollo’s full presentaion slide deck can be found in link below:

 https://www.apolloacademy.com/wp-content/uploads/2025/04/042625-ConsumerandFirms_v2.pdf  Typically what happens in a US Recession is Tax Receits typically drops between 6% to 16%  with a 20% to 50% increase in welfare payment over the last 3 recessions. This will total up a negative impact of US Federal Government cashflow of $1.5 trillion. Should this eventuates, the cashflow squeeze will happen at a time during the peak of the US refinancing cycle in June 2025 when $6.5 trillion treasuries will need to be repaid or rollover. This is the reason for the game of chicken

(iv) Disruption Timing by Design: In the U.S., the final rules of Basel III, also known as "Basel III Endgame," are scheduled to go into effect on July 1, 2025, with a three-year phase-in period. This means that the new capital requirements will be fully implemented by July 1, 2028. This will the end of the smoke screens and mirrors of the most important derivative props in support of the strong dollar maneuvers, namely the gold carry trade. The 17th BRICS Summit is scheduled to take place in Rio de Janeiro, Brazil, on July 6-7, 2025. It is expected at the Summit, the methods and tactics of a Dollar Alternative will be announced. Ever wonder why Powell persistently defies Trump to lower interest rates. Does the current economic deterioration in US warrens an accommodative policy, yes it does. But everything Powell can do would add to the detriment of the US economy should Trump foolishly continued with an already failed Tariff policy. So Powell is playing a game of chicken with Trump that Trump should eat humble pie and back down first. (Fig. 7).

All fingers all pointing at Trump and Trump has blinked 4 times already.

(v) My Base Case: The egotistic and narcissistic Trump will play ostrich until the end of May when everything will collapse around him. Trump will capitulate and the Federal Reserve will launch a $10 trillion print. USD will officially be in default territory with a currency debauchery unseen since the days of the Wiemar Republic.  (Fig. 8)

Isaiah 26:20  Come, my people, enter your chambers, And shut your doors behind you; Hide yourself, as it were, for a little moment, Until the indignation is past. 21  For behold, the LORD comes out of His place To punish the inhabitants of the earth for their iniquity; The earth will also disclose her blood, And will no more cover her slain.