Not 4D chess but just a repeat act

The week ended on May 16, 2025, interesting news items to look at this week are:

1. Not 4D chess but just a repeat act: Winston Churchill once said, “Those who fail to learn from history are doomed to repeat it.” (Fig. 1).

Some followers of Trump think the 47^th US President is a brilliant 4D chess master but when I looked into the sequence of orchestration by the White House over the past week, the “reality trade war show” is but an old act in a highly compressed time frame. To fully understand what happened we need first a rewind back to 1944.

(i)  Bretton Woods Agreement and Creation of the World Bank and IMF: The three institutions that established the post WWII international monetary order was set up in 1944. All these institutions are highly skewed in favor of US interests (US has veto powers over both the World Bank and IMF) and simultaneously weakened the remnants of the British and French Empires.  Gold as the ultimate international settlement currency and reserve was replaced by USD. To accomplish what US wanted, US first forced the UK Government to bend the knee and then use the UK agreement as a model to convince Continental Europe to abide.  A simple Google search revealed the foregoing information in (Fig. 2).

Fast forward to May 8 2025, UK was the first country that concluded a Trade Deal with US and in it the hidden power of US to sanction trade between UK and China. (Fig. 3).

(ii) May 12 2025 US China Trade Truce: The US stock market reacted to the truce as if Happy Days are here again and the world at large a sign of relief. But the important thing to watch is what will the respective parties do in the intervening 90 days period. I am certain US will (i) expedite the conclusion of deals with other countries both to extract maximum advantage to US with hidden agenda to embed clauses in all trade agreements that will provide US a right to later on encircle China, like banning Huawei AI chips. (Fig. 4).

(ii) Get he Fed to lower interest rates quickly for refinance the $6.5 trillion Treasuries due in June. (iii) Set the stage for a currency war on China and to that extent we have already witnessed a massive flow of hot money into Hong Kong as reflected in the Hong Kong Inter-bank market. The one month HKD inter-bank interest rate showed a jaw dropping waterfall decline of 274 basis points over the past 14 days. (Fig. 5).

Hong Kong is the largest offshore CNY trading center and I am sure the ultimate target is the financial architecture that enable and assist international trading and settlement using CNY, and (iv) Discredit gold as the backbone for the Global Majority Balance of Payment currency and reserve asset. (v) Continue to destabilize Asia by instigating Regional Wars as is happening between India and Pakistan and may be elsewhere along OBOR. China will continued with her careful defense posture and pull out new tools against US at a time of her choosing. Is China aware of US antics and further future escalations? What do you think?

(iii) May 16 2025 Trump Middle East Visit: While in the wealthy Gulf region, Trump announced deals that would see Saudi Arabia, Qatar and the UAE buy US arms and invest in American firms. According to the White House, Trump secured a total of $2 trillion in investments, $0.6 and $1.4 trillion  respectively from Saudi Arabia and UAE during the trip. (Fig. 6).

But as is typical for Trump and reported by the Washington Post, the deals included deals concluded before Trump’s presidency and the figures added up to only half of what was claimed. (Fig. 7).

The most interesting part of the show is the timing and is meant to showcase nations are willing to satisfy Stephen Miran’s bucket list (see my April 18 Blog An American Saw Cut Double Barrel Shotgun and a Chinese Sniper Rifle with Silencer and Fig. 8)

2. Financial Market Performance for April and first two weeks of May: (Fig. 9)

TSLA(+34.33%%), Bitcoin (+26.1%), Nvidia (+25.57%), Nasdaq (+12.15%), S&P 500 (+5.94%), Swiss Fr (+5.44%), Eur(+3.11%), Russian Ruble (+2.84%),  JPY (+2.80%), GBP(+2.66%),  Gold (+2.13%), Rmb (+0.67%),  USD Index (-2.97%), Silver (-5.47%), VIX “Volatility Index” (+45.16%), USD Index (-3.82%),  Copper (-9.74%), Oil (-10.56%) and VIX “Volatility Index” (-12.42%). Well the manipulated market is saying “Risk On”. Volatility index is way down and when Microsoft lays off 6,000 staff or 3% of its workforce, it is good news and proves the power of AI and Nvidia was again bid to stratosphere. (Fig 10).

In the meantime, US credit card and student loan defaults have sky rocketed (Fig. 11)

and Treasury interest rates resumed its climb both for YR2 (Fig. 12 )

and Duration Treasuries (Fig. 13).

The official narrative is market is turning from FEAR to FOMO and champagne is popping once more. Nonetheless the Bond Vigilantes are not buying. For my books I bought more gold on the dip and if I have tech stocks and bitcoin I will sell them into the contrived  rally. Nothing was done to fix US debt death loop except more chaos.  

II Corinthians 9:6  But this I say: He who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully. 7  So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver. 8  And God is able to make all grace abound toward you, that you, always having all sufficiency in all things, may have an abundance for every good work. 9  As it is written: "HE HAS DISPERSED ABROAD, HE HAS GIVEN TO THE POOR; HIS RIGHTEOUSNESS ENDURES FOREVER." 10  Now may He who supplies seed to the sower, and bread for food, supply and multiply the seed you have sown and increase the fruits of your righteousness, 11  while you are enriched in everything for all liberality, which causes thanksgiving through us to God.