The unstoppable marching of time

I’ll be taking a break from the LIVES and maybe even the newsletter, news depending, for the last two weeks of the year.

I’ll come back rocking in January, still here but planning the move away from LinkedIn.

If you haven’t done so already, please share your email address here so you can always receive this weekly newsletter and not miss any.

GEOPOLITICS

USA

There is a game of drones happening in the US right now. The most likely hypothesis is this is run by the US military and for some reason they don’t want to explain.

The most convincing explanation I’ve seen is that they are “sniffing” drones (nothing to do with Joe) looking for something specific, especially in the wake of heightened radiation levels in the New York area.

War in Ukraine also demonstrated the strategic usage of drones, and this might well be military exercises. We’ll know soon enough …

Besides, Trump went from impeachment and conviction to eventually Time person of the year !

Eastern Europe

In November 2024, Russia liberated nearly five times more territory than in all of 2023. The primary reasons cited are Ukraine's lack of resources, as mentioned here or in the LIVE many times.

This has become a source of tension between the US and Ukraine that now refuses to conscript younger men who will be desperately needed to rebuild the country.

Middle East 

The major news of the week  was the collapse of the Assad regime in less than 10 days.

HTS, Hay’at Tahrir al-Sham, formerly Al Nusrah, Al Qaeda and Isis, supported by Turkey, the US and Israel conquered the country with little resistance. Assad was abandoned by his troops and government, as much as his primary supporters, Russia and Iran.

Since 2011, the Assad regime has been the target of many toppling attempts, from the US, Israel and Turkey.

For the US, this was one of the last dominoes that had to fall before turning to Iran. Started under Obama, the outgoing administration rushed to finish the job before the next one could halt it, which Trump did in 2017. At the time, Trump’s priority was to eradicate ISIS, with Russia and Assad.

HTS and Jolani, described by the Special Representative for Syria James Jeffrey as assets in Syria three years ago, received support from the US when HTS (Hayat Tahrir al-Sham) finds its origins as the Al-Nusra Front, an Al-Qaeda affiliate, after a few rebranding campaigns from terrorists to “moderate rebels”.

Israel wants to expand to create a bigger buffer to protect the country (sounding a lot like Russia’s motivations in Ukraine), if not taking steps to the Greater Israel.

Turkey’s interest is to control if not eradicate ethnic minorities across the Turkey Syrian border, specifically Kurds.

Natural resources control is also always at the center of what’s happening in the Middle East, with the US already controlling most of the oil fields in Syria.

The main objective in this context, is to develop a pipeline from Qatar to Europe, through Saudi Arabia, Syria and Turkey, when Assad was supporting an Iranian pipeline project through Syria with an access to the Mediterranean.

Russia is busy with Ukraine, and had negotiated with HTS and Jolani to keep their military base in Tartus and Hmeimim.

However, Israel destroyed the whole Syrian military apparatus across Syria, including the Tartus and Latakia ports, cutting Russia’s supply lines to Africa in particular.

The US also launched 75 airstrikes on Syria, supposedly on ISIS targets to prevent them from regrouping in the current chaos in Syria. The issue is they are mostly the same guys, just a different hair and beard cut.

Syria is now a land free to grab with no defense, and Hezbollah in Lebanon is now totally cut from its support coming from Iran.

With Sharia law immediately implemented by the new Syrian Minister of Justice (with the the dismissal of all female judges from their positions), it is likely that a new flow of non muslim refugees will seek to join Europe.

ECONOMY

Syria’s fall may actually be positive news for the US dollar. The Syrian rapid collapse showed that the Russian protection may not be as strong as expected, and this may pour cold water on the countries eager to join the BRICS and increase dedollarization, even if we’re still far from it.

Central banks in general, and China in particular after a six month pause are buying Gold again.

Turkey and India have been significant buyers as well, at a time gold prices have rallied 28% year-to-date, and trade just 5% below all-time highs.

Overall, central banks have now purchased 694 tonnes of gold year-to-date, comparable to levels seen in 2022.

At the same time, global central banks have conducted 62 rate cuts over the last 3 months, the most since the 2020 pandemic, and comparable to the peak of the Financial Crisis in 2009 when global central banks implemented 76 rate reductions!

The same central banks are calling for a "soft landing" while behaving with gold and rate cuts like in a major crisis. What is actually happening?

2025 may bring some answers...

Concerning is also the US budget deficit spiking by a massive $367 billion in November 2024.

For the first 2 months of the 2025 fiscal year, the US ran a $624 billion deficit, as much as the $642 billion for the whole year 2008 !

This raises the total US public debt to a record $36.17 trillion, up $1 trillion over the last 105 days, or an average of $9.5 billion per day.

But the real issue is the US national debt rising significantly faster than the size of the economy, with a debt-to-GDP ratio now standing at 121%, the highest in 3 years.

In comparison, Milei reduced Argentina’s deficit for the first time in 123 years, managing to generate a sustained fiscal surplus.

This achievement came from reducing monetary emission to zero.

A lesson for the next US administration at a time inflation is back with no surprise: the Fed has pumped $650 billion newly created dollars into the market over the last year. 

Interesting parallel between the US and Argentina, when both incumbent candidates to the presidency tried to print money to buy the election, fueling inflation, and lost !

Meanwhile, US large bankruptcies are now up at the highest in 14 years, more year to date than during the 2020 pandemic lockdowns.

Bankruptcies have reached recession levels, when central banks still develop the “soft landing” narrative (see above).

The landing looks so soft that corporate executives are selling their stock at record levels, at a ratio of sellers to buyers of 6x!

Nothing to see here …

MARKETS

(more market comments in the live, as usual)

S&P on pace for best full-year return this century, mostly as a result of pumping money into the market (see my post about this)

Bitcoins are leaving exchanges and US Bitcoin ETFs see ~350m inflows daily vs $45m mined daily. Beware the potential supply shock

US Treasury Bonds had a difficult week with the return of inflation

Oil is still not reacting much from geopolitical events

And that's a wrap.

As usual, you know the drill, everything mentioned here is simply my opinion, and in NO WAY AN INVESTMENT ADVICE.

If I don't see you again before next year, Happy holidays & Merry Christmas !