What Surprise is in Store for the 2025 Year of the Wooden Snake?

 

Mundus vult decipi, ergo decipiatur (The world wants to be deceived, so let it be deceived) —Sebastian Brant (also Brandt) 

In this issue

What Surprise is in Store for the 2025 Year of the Wooden Snake?

I. 2025: The Year of the Wooden Snake, Zodiac Cycles and Sociology

II. Trump 2.0 and Current Geopolitical Developments

III. Geopolitical Milestones in the Year of the Snake

IV. The Influence of the Year of the Snake on the Global Economy and Financial Markets

V. The Impact of the Year of the Snake on Philippine Politics and Economy

VI. A Comparative Analysis of the Year of the Snake's Impact on the Philippines

VII. Conclusion

What Surprise is in Store for the 2025 Year of the Wooden Snake?

How will the 2025 Year of the Snake impact geopolitics, the global economy, and financial markets? Will it be a year of upheaval or opportunity for the Philippines?

I. 2025: The Year of the Wooden Snake, Zodiac Cycles and Sociology

2025 is the Year of the Wooden Snake. To gain insight into what this might signify, a quote from the article offers a succinct summary. 

Chinese new year 2025 is an especially fortuitous one as it is ruled over by the wood snake, a sign associated with wisdom, intuition, and renewal. It’s a combination of an animal (the snake) and an element (wood) that occurs once every 60 years. It promises to be a period full of unique energy with some distinct characteristics…The combination of snake and wood creates a special synergy in which the introspective and transformative energy of the snake is paired with wood’s expansive and balanced nature. (Mendoza, 2025)

Optimism consistently pervades the annual forecasts for the Chinese zodiac calendar. The zodiac embodies a 12-year cycle, each year symbolized by an animal and its associated attributes.

While we remain agnostic about this tradition (and its geomantic counterpart, feng shui), significant events occurring within the year might appear as circumstantial coincidences or could indeed signal potential cyclical patterns within the political economy. 

In other words, certain aspects of astrology might intersect with sociological phenomena. 

For instance, our analysis of geopolitical developments through the lens of the Chinese zodiac cycles fortuitously resulted in our accurate prediction of the outbreak of the Russia-Ukraine War in February 2022. 

Aside from the eroding concerns over the pandemic, potential geopolitical flashpoints for a hot war may occur.  

For instance, the US-Russian impasse over Ukraine (Russia’s vehement objection over the slippery slope of NATO’s expansion into her borders) (Prudent Investor, January 2022) 

Thus, an examination of global and local developments over 12-year cycles may provide valuable clues for 2025. 

II. Trump 2.0 and Current Geopolitical Developments

Donald Trump’s inauguration as the 47th President of the United States will be held on January 20th, just 9 days ahead of the Chinese New Year on January 29th. This timing suggests that at the start of his term, he will busily sign numerous Executive Orders (EOs) that could significantly influence the geopolitical landscape this year. 

Even before taking office, geopolitical developments have already moved in anticipation of his potential actions.

Israel and Hamas have agreed to a ceasefire, which takes effect on Sunday, January 19th—469 days after the conflict began on October 7, 2023. President-elect Trump reportedly had significant influence over this deal. 

Still, Israeli Prime Minister Netanyahu has publicly stated that the ceasefire with Hamas, as discussed with Trump, is intended to be "temporary." 

The incoming president is also reportedly considering easing sanctions on Russian oil exports in exchange for a peace deal with Ukraine, while simultaneously exerting pressure on Iran and Venezuela. 

While the incoming cabinet has reportedly been filled with pro-Israel lackeys and are hostile towards relations with China and Russia, Trump recently posted a video on his X account suggesting that the Syria and Iraq wars were orchestrated by Israel’s Netanyahu. 

Trump also had a phone call with China’s President Xi on January 17th, where both leaders declared on X.com they would “do everything possible to make the world more peaceful and safe.”

Following the sudden collapse of Assad-led Syria, Russian President Putin and Iranian President Raisi signed a “comprehensive partnership agreement” on January 17th, likely aimed at deterring any potential aggression from the U.S.-Israel alliance

Donald Trump has added complexity to geopolitics by exerting pressure on his allies. 

1. He has cited the need to pursue the acquisition of the Panama Canal.

2. Beyond securing access to critical mineral resources, Trump has proposed the acquisition of Greenland and the annexation of Canada, potentially to extend the U.S. sphere of influence in the Arctic Circle, competing with Russia. This strategy might also serve to divert attention from escalating war tensions with Russia and China.

As historian Eric Margolis suggested, "Trump has started a scramble of imperial rebranding"

3. Additionally, Trump has urged NATO members to increase their defense spending to 5% of GDP.

4. Could the alleged snubbing of the Philippine leadership at Trump’s inauguration signal a potential shift in US-Philippines foreign relations?

Trump's presidency promises to be a period of intense geopolitical activities, where traditional alliances might be tested, and new power dynamics could emerge, all under the ambitious and often unpredictable deal-making leadership of the 47th President of the United States.

III. Geopolitical Milestones in the Year of the Snake

Based on historical analysis and considering the cyclical nature of the Chinese zodiac, here are significant geopolitical milestones that occurred in various Years of the Snake: 

1917: The United States joined the Allies and entered World War I in April 1917. This was a pivotal moment that contributed to the eventual end of the war.

1941: The Bombing of Pearl Harbor on December 7, 1941, prompted the U.S. entry into World War II, significantly altering the course of the conflict.

Operation Barbarossa: Launched on June 22, 1941, this was Nazi Germany's invasion of the Soviet Union, marking the beginning of a massive Eastern Front campaign in World War II. This operation was one of the largest military operations in history and had profound effects on the war's outcome.

The Battle of Moscow, marking a turning point on the Eastern Front for the Russians against the invading Germans in World War II, also took place in (October 2) 1941-42. This battle was crucial for halting the German advance into the Soviet Union.

1953: The Korean War concluded with an armistice agreement on July 27, 1953, ending three years of conflict and setting the stage for the division of Korea that persists today.

1965: The U.S. significantly escalated its involvement in the Vietnam War in 1965, marking a major expansion of American military presence in Southeast Asia.

1989: The Tiananmen Square Massacre in China, from April 15 to June 4, 1989, involved the violent suppression of pro-democracy protests, impacting China's international image and domestic politics.

The Fall of the Berlin Wall on November 9, 1989, marked the end of the Cold War and was a precursor to the reunification of Germany, signaling the decline of the Soviet sphere of influence in Eastern Europe. 

2001: The 9/11 Terrorist Attacks on September 11, 2001, devastated the U.S., leading to the initiation of the War on Terror. This event reshaped global security dynamics.

The War in Afghanistan began 1-month later that year as the U.S. response to the 9/11 attacks, marking the start of a long-term military engagement in the region.

2013: The Syrian Civil War saw increased international involvement in 2013, with discussions around chemical weapon use and subsequent military actions, further complicating the conflict.

The Snake is often linked with transformation, introspection, and unpredictability, suggesting that geopolitical tensions might rise or escalate. The Wood element, associated with growth and expansion, could also signify potential for new power struggles. On the other hand, the introspective nature of the Snake might promote diplomatic efforts and peace negotiations, leading to the conclusion of ongoing conflicts.

In sum, the impact of the Year of the Wood Snake will depend on a complex array of interdependent factors, including global political dynamics, the influence of vested interest groups such as the military-industrial complex, hegemonists, and political elites, as well as leadership decisions and international diplomacy. This year tends to bring significant changes, with the potential for new conflicts to emerge, existing wars to escalate, and the possibility of resolving ongoing disputes, reflecting the intricate interplay of forces during this zodiac cycle.

IV. The Influence of the Year of the Snake on the Global Economy and Financial Markets

The influence of the Year of the Snake on the global economy and financial markets have been significant

1929: The U.S. stock market crash of 1929 precipitated the Great Depression, causing global economic devastation, massive unemployment, and profound financial instability. 

1941: U.S. economic mobilization for World War II marked a shift toward a war economy. This also resulted in increased U.S. wartime financing through the issuance of war bonds, a growing national debt and the Fed’s financial repression policies.

World War II also led to the U.S. Lend-Lease Act, which strengthened economic ties between the U.S. and Allied nations. 

1965: Often cited as part of the Golden Age of capitalism, 1965 marked a peak in the post-WWII economic boom in Western nations, particularly the U.S. and Europe.

Figure 1

The Bretton Woods System started showing signs of strain mounting due to inflationary pressures and vastly increased spending related to the Vietnam War. (Figure 1, upper graph)

1977: Following the Nixon Shock in 1971, the post-Bretton Woods era led to U.S. dollar weakness and inflationary pressures.

1989: The fall of the Berlin Wall paved the way for Germany's economic reunification. 

Global market liberalization advanced, emphasizing free trade and deregulation.

Despite the Bank of Japan's monetary tightening, the Nikkei 225 reached an all-time high of 38,957.44 on December 29, 1989, amidst a Tokyo land price crash. 

2001: The bursting of the Dot-Com Bubble led to a recession, with considerable stock market losses, particularly in tech stocks, and an eight-month U.S. economic contraction.

The 9/11 attacks further destabilized global markets.

China's accession to the WTO significantly expanded its global trade presence.

2013: The "Taper Tantrum" occurred when Federal Reserve Chairman Bernanke announced a potential reduction in bond purchases, causing U.S. bond yields to rise and leading to instability in emerging markets.

The U.S. Dollar Index (DXY), which tracks the value of the U.S. dollar against a basket of six major trading partners' currencies, began its nearly 12-year uptrend in 2013. (Figure 1, lower image) 

Meanwhile, the Eurozone crisis persisted, with Greece and other nations continuing to face financial instability.

The Year of the Snake has historically been associated with heightened volatility in both geopolitics and domestic politics, and its interconnectedness with economics reveals similar underlying dynamics.

Historically, periods marked by surging asset bubbles, financial system pressures, recessions, and rapid economic expansion have all been part of this recurring cycle.

Looking ahead to 2025, uncertainties abound. However, the growing deep-seated economic imbalances—characterized by unprecedented debt levels, record deficits, and central bank policies favoring easy money—along with rising protectionism, the weaponization of finance, and speculative asset bubbles, all point to an increased risk of significant downside volatility.

V. The Impact of the Year of the Snake on Philippine Politics and Economy

How has the year of the Snake affected the Philippines.

1929: The Great Depression severely impacted the Philippine economy, which was still a U.S. colony, due to its dependence on U.S. markets.

1941: Imperial Japan launched a surprise attack on Clark Field and Iba Field on the opening day of hostilities in the Philippines, a day after the attack on Pearl Harbor. This paved the way for the Japanese occupation, causing massive socio-economic devastation.

1953: Former Defense Secretary Ramon Magsaysay was elected as the seventh President of the Philippines. The post-World War II economic recovery was still underway, with the country grappling with the repercussions of the war, including ongoing rebuilding efforts.

1965: Ferdinand Marcos Sr. was elected the tenth President of the Philippines. His victory marked the beginning of a long tenure in power, eventually leading to the declaration of martial law in 1972.

1977: Since the establishment of Martial Law in 1972, the administration of Ferdinand Marcos Sr. had suppressed political dissent and controlled growing unrest, which resulted in widespread human rights violations.

During this period, the Philippine economy was characterized by massive government spending on infrastructure projects, largely funded through loans. This led to rising external debt, which became a significant issue in the later years of Marcos' rule. In 1977, Marcos issued Presidential Decree 1177, which mandated automatic appropriations for debt servicing. 

The imposition of Martial Law coincided with economic instability, partly exacerbated by the global oil crisis, high inflation, and escalating debt levels.

1989: The late 1980s were marked by political turmoil and growing opposition to the regime of Corazon Aquino, who had assumed power after the 1986 People Power Revolution (People Power I).

In 1989, the Reform Armed Forces of the Philippines (RAFP) launched the most serious coup attempt against the Aquino government, among many previous attempts, highlighting dissatisfaction with her leadership and resistance to her reforms.

Despite Aquino's efforts to stabilize the economy, the country continued to face persistent challenges, including high levels of foreign debt and inflation. However, Aquino’s administration made significant strides in implementing market-oriented reforms and privatizing state-run enterprises, though the country still struggled due to global economic conditions and internal political instability.

2001: In January 2001, President Joseph Estrada was ousted in a second People Power Revolution, also known as People Power II, after being accused of corruption. Estrada’s impeachment and subsequent removal from office, amid widespread public protests, marked a significant political transition. Vice President Gloria Macapagal Arroyo was sworn in as the new president, though the transition was accompanied by significant political unrest and instability.

At the time, the Philippines was grappling with substantial economic challenges, including the aftermath of the 1997 Asian Financial Crisis and declining investor confidence during Estrada's administration.

Figure 2

2013: The Philippine economy showed robust growth, reaching a significant milestone with an upgrade to an investment-grade credit rating by major rating agencies.  (Figure 2, topmost chart)

The economy grew at an impressive rate of 6.8% for the year.

Simultaneously, Philippine assets reached key milestones, reflecting strong investor confidence in the market during this period.

The Philippine Stock Exchange’s PSEi 30 had a record-breaking year, hitting new highs in May 2013. (Figure 2, middle diagram)

The Philippine peso rallied to a five-year high, or the US dollar-to-Philippine peso exchange rate fell to a five-year low. (Figure 2, middle chart)

In April 2013, Philippine 10-year bond yields hit all-time lows or Philippine bonds rallied to historic highs. (Figure 2, lowest graph)

In my humble opinion, 2013 signified the genuine bull market peak of the PSEi 30, which has been affirmed by both the USD-PHP exchange rate and the bond markets.

Once again, like its global counterparts, the Year of the Snake in the Philippines has historically coincided with moments of political upheaval, such as the rise and fall of leaders, coup attempts, and the People Power Revolution, as well as economic challenges and heightened volatility like inflation, debt, instability, and periods of market euphoria.

VI. A Comparative Analysis of the Year of the Snake's Impact on the Philippines

Finally, let us provide a concise analysis of the comparative performances during the Year of the Snake.

Nota Bene: The underlying dynamics behind each economic statistic differ from period to period.

Figure 3

The headline GDP experienced its best performance post-independence from the U.S. and post-bellum or post-war recovery in the Water Snake year of 1953, which saw an 8.9% GDP growth. (Figure 3, upper window)

With the exception of 2001, the headline GDP has been rising since then, with 2013 representing its highest level.

However, the Water Snake year of 1953 was followed by a sharp decline in the Wooden Snake year of 1965. If history follows its pattern, could we witness a sharp drop in GDP? Or will the uptrend since 1965 continue?

The average headline GDP during the Year of the Snake since 1953 stands at 5.4%.

Could the Year of the Snake also reflect trends in the Consumer Price Index (CPI) cycle?

The CPI surged from its trough in the Wooden Snake year of 1965 to its peak of 10.7% in 1989, before descending to 2.6% in the Water Snake year of 2013.

Does this suggest a cyclical pattern of three Snake years (or every 24 years)? Or could the CPI rise sharply in the upcoming Wooden Snake year? (Figure 3, lower chart)

The average CPI during the Year of the Snake since 1965 is 6%.

Figure 4

The USD-PHP exchange rate seems inclined to appreciate during the Year of the Snake. It gained in three of the last four Snake years, averaging 4.6%, particularly due to the 2001 return, which coincided with the weakest GDP performance among Snake years. (Figure 4, upper pane)

Moving to the PSE. Since its largest return of 31.24% in 1989, the Philippine’s major equity benchmark, the PSEi 30 has struggled. However, despite its mixed performance, the five Year of the Snake episodes since 1965 have yielded an average return of 4.1%, thanks in large part to the notable gains in 1989. (Figure 4, lower graph)

The Snake years reveal that the USD-PHP's largest returns, the weakest GDP, and the most significant decline in the PSEi 30 share a common denominator: the Metal Snake year of 2001.

Key global events—such as the bursting of the dot-com bubble, the dot-com recession in the U.S., the 9/11 attacks, and local political upheaval in the Philippines marked by People Power 2, alongside the country's post-Asian Crisis economic challenges in 2001—contributed to this outcome. 

VII. Conclusion

In examining the economic patterns associated with the Year of the Snake in the Philippines, we observe a tapestry of significant historical events and economic indicators. From the peak GDP growth in 1953 to the financial turbulence of 2001 and to the financial euphoria of 2013, these years have often been marked by notable shifts in political power, economic policy, market cycles and external shocks with each year adding a unique chapter to the country's economic and political story.

As we look towards 2025, while historical trends provide valuable insights, the future remains uncertain. Given the current global and domestic economic imbalances, the Year of the Snake may again usher in another period of heightened risk and potential volatility. As always, the interplay of external events, governmental actions, and market responses will determine whether the Snake’s legacy of upheaval or opportunity will prevail. 

____

References

Corina Mendoza Architectural Chinese new year 2025: Here's what to expect in the year of the Wood Snake January 1 2025 

Prudent Investor, What Surprise is in Store for the 2022 Year of the Water Tiger? January 23, 2022 

Other Zodiac series

What Surprise is in Store for the 2023 Year of the Water Rabbit? January 22, 2023

What Surprise is in Store for the 2024 Year of the Wooden Dragon? February 11, 2024

 

Fear the ‟Trump Trade‟ or a Pushback on Fed Policies? Trump or Harris: The Era of the Bond Vigilantes is Upon us

An election is a moral horror, as bad as a battle except for blood; a mud bath for every soul concerned in it—George Bernard Shaw

In this issue

Fear the ‟Trump Trade‟ or a Pushback on Fed Policies? Trump or Harris: The Era of the Bond Vigilantes is Upon us

I. US Election Narrative: Fear the Trump Trade!

II. Market Chaos Erupts after Fed’s September Rate Cut

III. Global Economic War and the Inflation Scorecard: Trump versus Biden-Harris; Trump’s Tariffs as Negotiation Card

IV. Emerging Market and ASEAN Stocks, the PSEi 30 Hit a Record High in Trump’s Term, Philippine Peso Flourished Under Trump!

V. The Biden-Harris Legacy of "Proxy Wars"

VI. Trends in Motion Tend to Stay in Motion: World War III’s Multifaceted Aspects

VII. Global Kinetic Warfare and the Cold War as Products of the Fed’s and Global Central Bank’s Easy Money Regime

VIII. Conclusion: Trump or Harris: The Era of the Bond Vigilantes is Upon Us 

Fear the Trump Trade or a Pushback on Fed Policies? Trump or Harris: The Era of the Bond Vigilantes is Upon us 

Is the "Trump Trade" responsible for recent market convulsions, or does this represent a pushback against the Fed’s actions? Why political-economic trends in motion tend to stay in motion. 

I. US Election Narrative: Fear the Trump Trade!

Trump's Rising Election Odds Sends Emerging Markets Into Tailspin, Causes Biggest Stock Drop In 10 Months (Yahoo, October 27) 

The Bangko Sentral ng Pilipinas (BSP) might have to do more to support the Philippine economy if former US President Donald Trump returns to power and starts a global trade war, which can hurt the entire world and, in turn, dim local growth prospects. (Inquirer.net, October 28, 2024) 

THE RETURN of Donald J. Trump to the US presidency could cause Asian currencies such as the Philippine peso to weaken, analysts said. (Businessworld, October 29, 2024) 

At first glance, it may seem that the following headlines or excerpts were conveyed for Halloween. 

Then, I realized that the U.S. elections are coming up this week. 

Mainstream media has painted an impression that the recent setbacks in the marketplace mean that a Trump win/presidency, or the "Trump Trade," could be detrimental to the markets. 

Let us examine what led to this perspective. 

In October, the Bloomberg spot U.S. dollar index surged by nearly 3% compared to the previous month. The S&P 500 slipped by 0.99%, the iShares MSCI Emerging Market ETF (EEM) dived by 3.07%, and the Global X FTSE ASEAN ETF (ASEA) tanked by 3.9%. The U.S. 10-year Treasury yield surged by 48 basis points (12.7%). 

Meanwhile, at home, the Philippine peso plunged by 3.6%, and the PSEi 30 plummeted by 1.78%. 

The prevailing sentiment in the speculative marketplace has shifted from excessive optimism to risk aversion.

Who else to blame but the leading contender in the prediction markets, Trump!

II. Market Chaos Erupts after Fed’s September Rate Cut 

But does this widely accepted perception accurately reflect causation, or is it intended to shift the Overton Window in favor of the opposing contender, Kamala Harris?

Figure 1 

The rising 10-year yield actually started just after the US Federal Reserve initiated its 50-basis-point rate cut on September 18th. (Figure 1, topmost chart)

It is rare to witness such a combination of powerful forces ripple through other market indicators.

Figure 2

Rising Treasury yields have been accompanied by an appreciating U.S. dollar index, which has also contributed to increased volatility in the bond market (MOVE Index) and volatility premiums across asset markets—including equities, oil, and foreign exchange—as well as a spike in U.S. Credit Default Swaps (CDS). (Figure 1, middle and lower graphs, Figure 2 topmost and lower images)

Figure 3

This dynamic coincided with a spike in the Economic Surprise Index and gold's widening outperformance against the TLT iShares 20-Year U.S. Treasury bond prices. (Figure 3, middle topmost and middle visuals) 

Incredible. 

The most striking indicator of the impact of the Fed's rate-cutting cycle that began in September is that it occurred under the loosest financial conditions since at least December 2022. (Figure 3, lowest diagram) 

In other words, global financial markets have significantly pushed back against the Fed’s easing policy by effectively re-tightening conditions! 

Of course, one could interpret this as "buy the rumor, sell the news." 

Still, other factors are at play—such as unrestrained public spending, surging debt levels, escalating debt servicing costs, geopolitics and more!

Nevertheless, resonating with the "Overton Window" during the pandemic in support of lockdowns and vaccines, the Gramsci-cult elite-controlled media shifted the rhetoric to blame Trump’s predilection for tariffs.

III. Global Economic War and the Inflation Scorecard: Trump versus Biden-Harris; Trump’s Tariffs as Negotiation Card 

First and foremost, yes, while it is true that global trade restrictions did rise in during Trump 1.0 (2017-2021) regime, his successors, the Biden-Harris tandem, pushed for MORE trade barriers, which hit a record high in at least 2022! 

Figure 4

As the IMF chart reveals, the global economic conflict spans both parties, with both candidates appearing inclined toward de-globalization. 

(Note this shouldn’t be seen in a simplistic lens but related to geopolitical developments) 

Second, financial easing amidst the loosest monetary conditions translates to a potential comeback of inflation, which aligns with the perspective that Trump’s trade war results in higher inflation. 

However, that shouldn’t hold water; inflation under Trump’s administration was milder than the inflation epidemic during the Biden-Harris administration. 

Consequently, with higher inflation came higher interest rates as well. 

Third, Trump’s push for tariffs represents a carryover from his 2016 campaign trail. 

He used tariffs as leverage for negotiation but eased up on strict currency regulations, as noted in this Yahoo article. 

Trump has likened his tariff plan to a new "ring around the collar" of the US, with tariffs often described not as part of negotiations but with those high duties as an end goal in themselves to protect US industry… 

He promised during that campaign to impose tariffs, renegotiate NAFTA, and withdraw from the Trans-Pacific Partnership. "Promise kept," PolitiFact said of all three. 

Trump also took action on a fourth promise to declare China a currency manipulator but ended up compromising, according to the group. 

IV. Emerging Market and ASEAN Stocks, the PSEi 30 Hit a Record High in Trump’s Term, Philippine Peso Flourished Under Trump!

Figure 5

Fourth, stock markets haven’t been exactly hostile to Trump.

The ASEAN ETF (ASEA) reached an all-time high in 2018 or during the early phase of his administration, and the Emerging Markets ETF (EEM) also hit a milestone that year and also surged to a fresh record toward the close of Trump’s term. Both markets, however, eventually succumbed to the pandemic recession.

Similarly, the Philippine PSEi 30 hit a significant peak in January 2018, also coinciding with Trump’s administration.

On the currency front, the Philippine peso rallied from October 2018 to the end of 2021.

In fact, contrary to contemporary analysis, the USDPHP fell by 3.7% from January 20, 2017, to January 20, 2021 (Trump’s tenure).

In contrast, under the Biden-Harris administration, the USDPHP has increased by an astounding 21% from January 20, 2021, to the present (October 31, 2024)!

While past performance does not guarantee future outcomes, the scorecard between the contending parties shows a stark difference in the accuracy of the current predominating narratives. 

In a word, propaganda. 

Nota Bene: Past performance is not a guarantee of future results. Our purpose is to highlight inaccuracies in media claims. We don’t endorse any candidates. 

V. The Biden-Harris Legacy of "Proxy Wars"

Fifth, the world is on the brink of, or already embroiled in, a form of World War III, fought across multiple spheres. 

The U.S. suffered a humiliating defeat in the 20-year Afghanistan War, ultimately withdrawing in the face of a relentless war of attrition led by the Taliban’s guerilla tactics. Both the Trump and Biden administrations negotiated withdrawal terms, but the Biden-Harris administration oversaw a controversial chaotic exit in August 2021. 

That aside, a series of conflicts has marked the Biden-Harris administration’s legacy. 

The kinetic conflict began with the Russia-Ukraine war in 2022, spread to the Israel-Palestine/Hamas war in 2023, and has since escalated to include confrontations involving Israel-Hezbollah or the "Third Lebanon War," and even the precursory phase of Israel-Iran Conflict in 2024. 

Simultaneously, following Obama’s failed "Pivot to Asia," geopolitical tensions have been mounting in the Taiwan Straits, the South China Sea, Central Asia, and other parts of the world. 

Notably, these ongoing and emerging conflicts are interconnected.

For example, the U.S. has been supplying not only aid but also arms to its allies to counter hegemonic rivals.

Figure 6

Aside from supplying 70% of conventional weapons, U.S. military aid/grants to Israel soared to all-time highs in 2024! (Figure 6, topmost chart)

That is to say, the current conflicts represent "proxy wars" where the U.S. led NATO forces engage indirectly to pursue hegemonic objectives.

VI. Trends in Motion Tend to Stay in Motion: World War III’s Multifaceted Aspects

The Global Warfare has also entered the economic and financial spheres—seen in the weaponization of the U.S. dollar through asset confiscations targeting so-called "axis of evil" nations, and in the reinforcement of a modern-day "Iron Curtain" marked by significant restrictions on trade, investments, capital flows, and social mobility.

Mounting trade imbalances, which helped fuel the rise in trade barriers from the Trump administration to Biden-Harris, have also laid the groundwork for today’s outbreak of kinetic conflicts.

Geopolitical tensions have surfaced as a growing cold war in other regions as well.

This hegemonic competition to expand sphere of influences has percolated to Africa, Latin America, the South Pacific, and the Global South (BRICs), some of which channeled through mercenary or gang wars and local civil wars. (Dr. Malmgren, 2024)

Ironically, four of the five ASEAN majors, specifically, Indonesia, Thailand, Malaysia and Vietnam recently signed up for the BRICs membership.

The implicit cold war has also extended into previously uncharted areas: underwater territories, space, the Arctic, the Pacific, mineral resources (like rare earth elements), and technological domains such as DNA research, cyberspace, and microchips (Malmgren, 2023).

The point is that these evolving conflicts underscore the interconnectedness of U.S. foreign and domestic policy.

Given the powerful forces behind this trajectory or the "deep state"—including the Military-Industrial Complex, the National Security State, Straussian neoconservatives promoting the "Wolfowitz Doctrine," the energy industrial complex, Big Tech, and Wall Street—it is unlikely these developments will cease, whether under a Trump 2.0 administration or (Biden carryover through) a Harris regime.

Put simply, while media narratives may further lobotomize or impair the public’s critical thinking, potentially deepening societal division, a meaningful change in the U.S. and global sociopolitical and economic landscape remains unlikely if elections continue to focus on what I call as "personality-based politics."

As investor-philosopher Doug Casey rightly observed, "Trends in motion tend to stay in motion until they reach a crisis."

VII. Global Kinetic Warfare and the Cold War as Products of the Fed’s and Global Central Bank’s Easy Money Regime

Lastly, the public tends to overlook that current trends are merely symptoms of deeper issues or mounting disorders stemming from the decadent U.S. dollar standard.

As investor Doug Noland astutely wrote 

Bubbles are mechanisms of wealth redistribution and destruction – with detrimental consequences for social and geopolitical stability. Boom periods engender perceptions of an expanding global pie. Cooperation, integration, and alliances are viewed as mutually beneficial. But late in the cycle, perceptions shift. Many see the pie stagnant or shrinking. A zero-sum game mentality dominates. Insecurity, animosity, disintegration, fraught alliances, and conflict take hold. It bears repeating: Things turn crazy at the end of cycles. (bold mine) [Noland, 2024] 

Easy money has long fueled, or been instrumental in financing, the global war machine, leading to today's bellicose conditions.

Easy money has also powered the growth of big government and contributed to economic bubbles and their eventual backlash, as evidenced by China’s unparalleled panicked bailout policies to prevent a confidence crisis from imploding. 

The push for easy money is likely to persist, whether under a Trump 2.0 or a Harris administration. 

As Professor William Anderson noted, 

The unhappy truth is that both platforms will need the Federal Reserve System to expand its easy money policies, despite the massive damage the Fed has already done by bringing back inflation. While Harris claims to defer to the “experts” at the Fed, Trump wants the president to have more power to set interest rates. Obviously, neither candidate is acknowledging the economically perilous situation in which the government ramps up spending, which distorts the markets, and then depends upon the Fed to monetize the resulting federal deficits. As the debt grows and the economy becomes progressively less responsive to financial stimulus, the threat of stagflation grows. The present path of government borrowing and spending all but guarantees this outcome, and the candidates have neither the political will nor the economic understanding to do what needs to be done. (Anderson, 2024) 

U.S. debt is fast approaching $36 trillion, while global debt reached $315 trillion in Q2 2024 and counting. (Figure 6, middle and lower charts) 

"Trends in motion tend to stay in motion until they reach a crisis."

VIII. Conclusion: Trump or Harris: The Era of the Bond Vigilantes is Upon Us 

While the "Trump trade" provides a convenient pretext for the current tremors in the global financial market, this narrative relies on inaccurate premises and misleading speculative claims that are unsupported by empirical evidence. Instead, these assertions aim to sway the voting audience ahead of this week’s elections. 

In contrast, the current financial market convulsions reflect a significant pushback against the Fed’s and global central banks’ prolonged easy-money policies. As investor Louis Gave of Gavekal recently noted, "Zero rates were a historical aberration that need not be repeated." 

Needless to say, regardless of who wins the U.S. presidency, political agendas will continue to advocate for easy money and various forms of social entropy and conflict. 

Unfortunately, there is no such thing as free lunch forever. 

Although trends in motion tend to stay in motion, the era of the bond vigilantes is upon us.  

Things have been turning a whole lot crazy. 

___

References 

Yahoo Finance, What Trump promised in 2016 on tariffs. And what he delivered (a lot). October 28, 2024, 

Dr. Pippa Malmgren The Cold War in Hot Places, March 12, 2024 

Dr. Pippa Malmgren WWIII: Winning the Peace, October 28, 2023 drpippa.substack.com 

Doug Noland, Vigilantes Mobilizing, Credit Bubble Bulletin, November 1,2024 

William L. Anderson  The Great Retreat: How Trump and Harris Are Looking Backward, August 30, 2024 Mises.org 

Louis-Vincent Gave, Behind The Bond Sell-Off, Evergreen Gavekal October 31, 2024

Donald Trump: I Loved Inflation, But Don’t Like it For the Country

Nice to hear some candidness from real estate mogul Donald Trump

From CNBC.com

Echoing comments made by Dallas Fed President Richard Fisher that an open-ended quantitative easing, or QE3, would do little to help revive the economy, Trump said only stocks, real estate, and the investors who owned them would benefit from the move. 

“Everything is artificial, there’s nothing that’s real,” the mogul said on CNBC’s “Squawk Box.” 

Stock markets — which recently surged to multi-year peaks — are on the rise less because of fundamentals, and more because of the expected liquidity from the Fed that will filter into asset markets. 

Trump warned that the Fed’s $40 billion a month mortgage-backed security buying program would lead to inflation. He also suggested wealthy asset owners would be the biggest beneficiaries of a potential surge in prices. 

“I should be very happy about [inflation] in theory … but I’m not happy because ultimately it will come home to roost, and it’s going to be very, very unfortunate in the form of [higher] interest rates and some very severe things happening later on with the economy,” said Trump… 

“Inflation is a great friend at a certain level of real estate. I’ve loved inflation, but I don’t like it for the country. But as an individual, inflation has made me very rich,” he said.

This just goes to show how inflationism promotes the politically privileged class or inequality (in terms of social, wealth and political categories) at the expense of society

Gold as Money: China’s Gold ATMs and Donald Trump’s Gold Security Deposit

We are witnessing more signs of gold’s reassuming its place as money.

From Forbes, (bold emphasis mine)

China’s got the gold bug. Recently, the government allowed citizens to actually own gold bullion. And now, starting on Sept 23, Chinese people can buy gold bars directly from vending machines.

Gold has caught on like a wrong and oversold political narrative. Is this WMD, or is gold for real?

The China machines, made by German firm TG Gold Super Market, is the first of its kind there, but are already up and running in Las Vegas and Boca Rotan in the U.S., as well as Abu Dhabi, Germany, Spain and Italy. The ATMs dispense gold bars weighing up to 2.5 kilograms and work just like the normal ATMs. The machines can accept both cash and credit cards.

The cash-for-gold machines will be on trial at Beijing’s upscale night clubs and private banks during the initial period for security reasons.

I posted Germany’s first gold vending machine or ATMs in 2009 here.

With gold more accessible to the public, it won’t be long when the function of payment and settlement in the marketplace will include gold bars or coins. (That’s if governments won’t engage in gold confiscation)

In fact, Donald Trump may be setting a precedent on this.

Mr Trump recently accepted gold bars as payment for Security Deposit for property rentals.

From the Wall Street Journal,

On Thursday, the newest tenant in Donald Trump's 40 Wall Street, a 70-story skyscraper in Manhattan's Financial District, will hand Mr. Trump a security deposit worth about $176,000. No money will change hands—just three 32-ounce bars of gold, each about the size of a television remote control.

The occasion will mark the first time the Trump Organization has accepted 99.9% pure gold bullion, rather than cash, as a deposit on a commercial lease. The tenant, precious-metals dealer Apmex, will sign a 10-year lease for 40 Wall's 50th floor at a leasing rate of about $50 a square foot, according to Apmex Chief Executive Michael R. Haynes. The company is promoting the use of gold as a replacement for cash in some situations.

As the great Ludwig von Mises wrote, (bold emphasis mine)

Under the gold standard gold is money and money is gold. It is immaterial whether or not the laws assign legal tender quality only to gold coins minted by the government. What counts is that these coins really contain a fixed weight of gold and that every quantity of bullion can be transformed into coins. Under the gold standard the dollar and the pound sterling were merely names for a definite weight of gold, within very narrow margins precisely determined by the laws. We may call such a sort of money commodity money.

Sound money could be in the future as the current paper money based system self-destructs.