**** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
Let me get to the punch line of my view on the financial markets for 2026. The remarkable equity bull run of the past couple of years is unlikely to stall, at least not in the first half of 2026. Corrections are inevitable, and we are indeed likely in an asset bubble.
But in the coming months, the benefits of President Donald Trump’s policy initiatives will go into full swing. The U.S. economy has been accelerating, with 4.3 percent gross domestic product (GDP) growth in the third quarter following 3.8 percent in the second quarter of 2025. Strong GDP growth should continue because of tax cuts, tariff easing, and lower interest rates.
The U.S. Federal Reserve, like central banks around the world, is easing monetary and financial conditions, ensuring that global liquidity will remain high. Until liquidity cracks, the markets won’t, and the world’s national governments have massive incentives in place—and massive firepower—to ensure that this doesn’t happen anytime soon.
Hopefully, this all benefits Main Street, which has struggled in what a year ago I called “the clash of the Dollar General versus Ferrari economies." Either way, Wall Street and asset values are likely to continue going strong, at least for now.
I have four main investment themes heading into 2026: geopolitics (wars and rumors of war), artificial intelligence (AI) and tech generally, the so-called debasement trade, and American Renaissance. ............
Naturally, as a systematic global macro investor leaving 2025, I reflected on the mechanics of what happened, particularly in the markets. That's what today’s reflection is about.
Though the facts and returns are indisputable, I see things differently from most others. While most people see US stocks and particularly US AI stocks to be the best investments and hence the biggest investment story of 2025, it is indisputably true that the biggest returns (and hence the biggest story) came from 1) what happened to the value of money (most importantly the dollar, other fiat currencies, and gold) and 2) US stocks significantly underperforming both non-US stock markets and gold (which was the best performing major market) principally as a result of fiscal and monetary stimulations, productivity gains, and big shifts in asset allocations away from US markets. In these reflections, I step back and look at how this money/debt/market/economy dynamic worked last year, and I briefly touch on how the other four big forces—politics, geopolitics, acts of nature, and technology—affected the global macro picture in the context of the evolving Big Cycle. ......................................
As for US stocks last year, the strong results were due to both strong earnings growth and a P/E expansion. More specifically, earnings were up 12% in dollar terms, the P/E rose by about 5%, and the dividend yield was about 1%, so the total return of the S&P was about 18% in dollars. The “Magnificent 7” stocks in the S&P 500, which account for about a third of its market cap, had earnings growth of 22% in 2025, and, contrary to popular thinking, the other 493 stocks in the S&P also had strong earnings growth at 9%, so the whole S&P 500 index had earnings growth of 12%. That happened as a result of sales increasing by 7% and margins increasing by 5.3%, so sales were responsible for 57% of the earnings increase and margin improvements were responsible for 43% of it. ...........................
While it is easier to know the past than the future, we do know something about the present that can help us better anticipate the future if we understand the most important cause/effect relationships. For example, we know that with PE multiples high and credit spreads low, valuations appear to be stretched. If history is a guide, this portends low future equity returns. When I calculate expected returns based on where stock and bond yields are using normal productivity growth and the profits growth that results from it, my long-term equity expected return would be at about 4.7% (a sub-10th percentile reading), which is very low relative to existing bond returns at about 4.9%, so equity risk premiums are low. Also, credit spreads contracted to very low levels in 2025, which was a positive for lower credit and equity assets, but it leaves these spreads less likely to decline and more likely to rise, which is a negative for these assets. All this means that there isn't much more return that can be squeezed out of the equity risk premiums, credit spreads, and liquidity premiums. ....................
In summary, just about everything went up a lot in dollar terms because of the big fiscal and monetary reflationary policies and are now relatively expansive.
One cannot look at the changes in the markets without looking at the changes in the political order, especially in 2025. Because markets and the economy affect politics and politics affect markets and the economy, politics played a big role in driving markets and economies. More specifically in the US and for the world: .........................
................. Regarding technology, obviously the AI boom that is now in the early stages of a bubble had a big effect on everything. I will soon send out an explanation of what my bubble indicators are showing, so I won't get into that subject now. .....................
If the last few years felt a bit like walking through a casino where almost every table was paying out, 2025 has been the point in the night when the lights come up a bit and you notice the house edge again.
From 2020 through 2024, the equity market rewarded almost any risk you took. In that period, more than half of S&P 500 companies delivered annualized returns above 15%, and about 90% had positive annualized returns. In other words, simply “putting chips on the table” worked unusually well.
This year has been different. As 2025 winds down, around 40% of the S&P is heading for a negative year.
That shift in the odds is the core of how we’re thinking about 2026. The coming year looks less like a casino and more like an investor’s market. You win not by chasing every hot trade, but by sizing positions thoughtfully and focusing on high-probability outcomes. ................
The good news first: the inflation storm that dominated the last few years looks largely behind us. ................
If inflation is no longer the central problem, what is? Labor. .............
...................
So where does that leave the macro regime as we look into 2026?
A few points stand out:
- Growth can remain resilient even as labor softens. Real private domestic final purchases continue to point to an economy growing in the neighborhood of 2% in real terms, boosted by robust investment in intellectual property, software, and the AI-related build-out of data centers and power infrastructure.
- Policy is still broadly supportive. Fiscal deficits remain large, liquidity is not scarce, and the Fed should continue moving the rate to neutral, all of which provide a meaningful cushion against a classic demand-side recession.
- Yet the distribution of outcomes is widening. After a decade-plus of financial repression, with rates anchored at the floor, the return to a higher cost of capital is re-introducing dispersion—across sectors, across balance sheets, and across countries. We expect more frequent idiosyncratic defaults and downgrades, even if the aggregate macro data remains respectable.
In that world, 2026 looks like a year in which both upside surprises and downside accidents become more common. It is, in many ways, the best opportunity we’ve seen since the Global Financial Crisis to play both sides of the distribution: to own high-quality income and durable growth where you’re being paid for the risk, and to be selective (and sometimes short) where valuations ignore fragility. ...........................................................
.......... Take a glance at markets and its looking bright and breezy – fair sailing weather as the barometer would tell us. Stocks are broadly higher anticipating a fine year ahead. Bond yields are generally lower, looking forward to lower rates and declining inflation. Nothing to worry about… Apparently.
......... The trick to connecting the big picture of geopolitics, macro and micro economic factors that drive markets (and I not claiming to have mastered this yet in my brief 4-decade market career), is catching the signals that matter amidst the tumult of activity ..........
Kelton: My Brief Remarks at the Annual ASSA Meeting
In some important ways, what we experienced in 2025 was a radical break from Trump 1.0, an era in which Trump’s then budget director—Mick Mulvaney—publicly confessed that “nobody cares” about deficits or the trajectory of public debt. House and Senate Republicans voted for, and Trump signed into law, the Tax Cuts and Jobs Act of 2017 with little regard for its budgetary impacts. They ignored warnings from the likes of Paul Krugman, Larry Summers, Jack Lew, and the many beltway debt scolds who raised the usual conventional fiscal concerns—higher interest rates from crowding out, lower growth, and a threat to our national security. Instead, after passage of the TCJA, we got accelerating growth, 3.9 percent unemployment, and a substantial increase in military spending.
When COVID hit in March 2020, Trump signed a $2.2 trillion fiscal package—the CARES Act. That came alongside the $4 trillion federal budget. He defended the spending in a press conference, saying, “It’s $6.2 trillion, because its 2.2 plus 4, and we can handle it easily because of who we are and what we are. It’s our currency. It’s our money.” Ah, the beauty of MMT. .................
................... Trump 2.0 is about building an economy that prioritizes private gains for the few over broad-based prosperity for the many. It is concentrating wealth, weakening democracy, and abandoning the public purpose. As Keynes, Kalecki, and Minsky might remind us, that does not mean that the stock market cannot grind higher or that the labor market will necessarily crack. It does, however, suggest the exacerbation of a very K-shaped economy. ...........
We’ll be putting out our 2026 non-outlook later this week. It’s a non-outlook because we at MO don’t make predictions; we assess probabilities. To properly assess where we are now, it sometimes helps to pull back and take the 30,000-foot view. So let’s do that today.
Household allocation to equities as a percentage of financial assets is at an all-time high (blue line). Historically, this is bad juju for the subsequent rolling 10-year returns.
Record-high equity holdings go hand in hand with record-high valuations. Neither are timing tools, as each condition can persist for some time. But over a sufficiently long time horizon, valuations are the predominant driver of returns. As we head into 2026, both of these will increasingly become headwinds ..............
Summarize bullet points from Citadel on the fiscal and liquidity outlook:
Policy Inflection Point: The start of 2026 marks a key shift in policy, with fading tariff uncertainty and a reversal in fiscal impulse from a Q4 2025 drag (-0.6% of GDP) to an early 2026 tailwind (+0.5% to +0.9% of GDP) driven by the “One, Big, Beautiful Bill Act.”
Front-Loaded Fiscal Stimulus: Retroactive personal income tax cuts expected to deliver ~$80 billion in Q1 2026 refunds to U.S. households, with a high economic multiplier potentially boosting retail equity trading activity.
Monetary Policy Support: Lagged effects from 175 basis points of Fed rate cuts over the past 18 months will ease financial conditions, adding an estimated +0.5% to quarterly annualized GDP growth through much of 2026.
Upside Risks to Stimulus: Policy risks lean toward more support, including additional tariff relief or targeted transfers (e.g., $2,000 payments to households earning under $75k, equating to ~$150 billion in extra fiscal aid), which could further amplify aggregate demand.
............. Lepard believes the surge in precious metals is not merely speculative but reflects deep structural changes in global finance. Tight physical supply, de-dollarization, and rising distrust in government finances are converging:
“We are in the first or second inning of a nine-inning game… this is a secular trend.”
Bubble Fare:
................ The defining feature of every bubble is the same: a growing inconsistency between the long-term returns that investors expect in their heads – based on extrapolation of the past, and the long-term returns that properly relate prices to likely future cash flows – based on valuations. Every bubble smuggles the same tragic past into the same tragic future by packaging it with new wrinkles that convince investors that “this time is different.” Ultimately, they still end the same way.
................. A related, and I think equally challenging complication is that, in the short run, market prices will be whatever the consensus of the crowd chooses them to be. Nothing that we can measure affects market prices – whether earnings, GDP, employment, interest rates, monetary policy, or any other factor – except through the expectations and risk-preferences in the heads of investors at any moment in time. As the Buddha said, “With our thoughts we create our world.”
China Fare:
During his New Year’s Eve address broadcast, China’s Communist leader Xi praised the country’s advancements in key sectors. Images ranging from humanoid robots performing kung fu to new hydropower projects rolled on the screen as he spoke. He also announced that the National People’s Congress would discuss the country’s new five-year plan at its upcoming legislative session in March.
China’s 15th five-year plan is all about AI. The 14th Plan (2021-2025), which has just ended, focused on the “dual circulation” strategy (domestic + foreign trade) i.e driving economic growth not just through exports, but also through investment in the domestic economy, particularly aiming at self-dependence in technology. The new plan will continue that drive for technological independence, but this time through the diffusion of AI into industrial processes, consumer products, consumer products, health care, education and digital government. The plan is that by 2030 AI is expected to be as widespread as electricity or the internet – and so a big driver of economic growth. The government talks of China becoming an “intelligent society” by 2035.
It seems that China’s leaders are even more committed to making AI succeed than in the major economies of the West, where there are sceptical voices about what it can deliver in new discoveries, higher productivity and profitability. To me, the difference is that in China there is a plan to meet key targets in technology that will boost the whole economy etc, while in the major capitalist economies, all the AI eggs are in a basket owned by the privately-owned AI hyperscalers and the Magnificent Seven giant tech media companies – and for them, profitability is key, not technology outcomes. ...........
Quotes of the Week:
“We’re in the business of making mistakes. Winners make small mistakes, losers make big mistakes.”
(not just) for the ESG crowd:
1 Introduction
In Spring 2025, the Council of Foreign Relations (CFR), a US-based think tank specializing in imperial foreign policy, launched its ‘Climate Realism Initiative’. The initiative, or ‘doctrine’ as the CFR alternatively calls it with a vainglorious wink to Monroe and Truman, is billed as a ‘new strategy to confront the risk of climate change, compete in the global energy transition and stay the course regardless of which party is in power’ (Sivaram 2025). The Climate Realism initiative recommends the US pursues planetary geoengineering, seizes resource rich land in newly thawed arctic territories, and engages in geostrategic conflicts with China and other developing nations. In all these ways and more it is paradigmatic of imperialist and ecomodernist thought on a warming world.
To mark the initiative’s launch, CFR fellow Varun Sivaram, former advisor to John Kerry during his time as President Biden’s climate envoy, published a blog debunking ‘four fallacies’ about the consequences of global heating for US foreign policy, and teeing up the climate realist doctrine’s imperial and ecomodernist tenets. ‘The United States faces ever-worsening risks from climate change, with no relief in sight’, Sivaram begins forebodingly (ibid.). According to Sivaram, for too long the US state machinery has been deadlocked on climate action because the subject has been tackled along partisan lines. Democrats roll out climate policies like Biden’s Inflation Reduction Act, and the Republicans repeal them (Krawczyk 2025). The Republicans permit further oil and gas exploration on public lands and offshore and the Democrats, in turn, ban it (Institute for Energy Research 2024). The climate realist doctrine says that the way out of this electoral tit-for-tat is to reframe cascading ecological crises as a threat to the ‘homeland’ and all that it stands for. US imperial domination, in other words, is a bi-partisan issue. ‘The climate realism doctrine is both realist and realistic’, Sivaram intones. ‘It is realist in that it prioritizes advancing U.S. interests and recognizes that other countries will single-mindedly prioritize their own interests. And it is realistic by dispensing with four fallacies that too often muddle policy thinking on climate’ (Sivaram 2025).
The first of these fallacies is the idea that the world’s climate target can be met. The climate realist doctrine prepares the US for a world defined not so much by the temporary ‘overshoot’ of climate commitments diagnosed by Malm and Carton (2024), as a world that ‘blows through’ these targets on its way to ‘average global warming of at least 3°C this century’ (Sivaram 2025). Sivaram is clear-eyed about what this extent of planetary warming would unleash. The US should do what it can to support those disrupted and displaced, but it must also strengthen its borders against the ‘mass migration of at least hundreds of millions of climate refugees’ and ‘prepare for global competition for resources and military positioning that is intensifying in the melting Arctic’ (ibid.).
Sivaram’s second fallacy is the idea that reducing US emissions would ‘make a meaningful difference’ to the world’s course towards hot house earth (ibid.). This despite the fact that the US is the world’s largest producer of oil and gas and has the highest per capita emissions in the world. Sivaram’s back-of-the-envelope calculations find that US emissions will be just 5% of the global total towards the end of the century. It therefore makes little sense to harm the “homeland” by decarbonizing when it is principally China, and behind it, India, Brazil, Indonesia and South Africa that must reduce their emissions. Responsibility for the now unavoidable 3°C of global warming, in other words, lies not with the world’s greatest historical emitters, or the world’s largest producer of oil and gas, but with the formerly colonized and developing Global South.
The third fallacy is that global heating poses a ‘manageable risk to U.S. economic prosperity’ (ibid). Sivaram points to evidence suggesting that 6% could be wiped off US GDP by 2100, while ‘the risks of seven-foot sea-level rise, dramatically intensified hurricanes, wildfires, and hailstorms, and entire U.S. cities being wiped off the map this century are nontrivial’ (ibid). Without mitigation, such events would ‘endanger the survival of American society as we know it’ (ibid). Action both internationally and domestically to adapt to a rapidly warming world is thus obligatory. Domestically, the US should impose austerity to ‘create the fiscal headroom’ required to mitigate and adapt to cascading eco-social crises. Internationally, it should embrace geoengineering, testing ‘approaches at ever greater scales to prepare for a “break glass” emergency when these techniques may need to be deployed’ (ibid).
The fourth and final fallacy is the assumption that a green energy transition of any kind is a ‘win-win for U.S. interests and climate action’ (ibid). On the contrary, China’s predominance in solar, wind, and solid-state lithium batteries puts it in the driving seat of the global transition, threatening US imperial dominance. A global green energy transition is undeniably needed, but the US must overtake China in the struggle for advanced green technologies. This means moving aggressively into green technologies, ‘such as next-generation geothermal, advanced nuclear, and solid-state batteries’ (ibid). At the same time, the US should work with its imperial allies to introduce ‘aggressive trade tools, tariffs, and so-called “climate clubs” that penalize countries with large and fast-growing emissions’ (ibid). By squeezing out China and the rest of the developing world, the US can benefit from monopoly rents that accrue from selling “green” technologies internationally.
Sivaram knows how all of this sounds. ‘Granted’, he concludes:
that this approach is fundamentally unfair. Emerging economies often reasonably argue that they should have every right to the fossil fuel-led economic development that Western economies enjoyed. Nevertheless, the fact is that foreign emissions are endangering the American homeland (ibid).
The CFR’s climate realism doctrine is worth such sustained consideration because of the vivid hues with which it paints its vision for an ecomodernist imperialist future. But what do we mean by bringing the concepts of ecomodernism and imperialism together like this? There can be no question that the climate realist initiative Sivaram describes is a recipe for green imperialism, previously defined by two of us as a means of capital accumulation that ‘aims to preserve the imperial mode of living in the core at the expense of the labor, materials, and energy of the periphery’ (Pedregal and Lukić 2024: 122). Nor can it be denied that the initiative’s proposals for greater militarization and strengthening of borders will intensify an already existing regime of ‘eco-apartheid’ through which the world’s most vulnerable and exploited peoples—invariably racialized, frequently women—are put in harm’s way to secure capital accumulation in the imperial core (Heron 2023). What makes the climate realist initiative ecomodernist is its insistence on discrete technological solutions to deep-rooted contradictions within the capitalist world-system, not least the planet-sculpting practice of geoengineering.
For ecomodernists, the world’s ecological crises may be severe, but they are no match for the ingenuity of human technological progress (Symons 2019). Ecological thresholds may indeed exist, and the world may even overshoot them for a time, but through interventions like carbon capture and storage, ocean fertilization, stratospheric aerosol injection, land-sparing vertical farming systems, nuclear power, AI powered coral reef building robots, and plastic consuming bacteria, the world’s ecological problems can be overcome. To borrow an idea from the arch ecomodernist think-tank, the Breakthrough Institute, we inhabit an era in which humanity has become a geological force. But whereas some lament the dangers, mass extinctions, and toxifications that this milestone implies, for ecomodernists this is good news (The Breakthrough Institute 2015). Like the arrival of Hegel’s Absolute Spirit in the figure of Napoleon, the becoming-planetary of humanity marks a critical point of attainment in the human endeavor (Hegel 1806). 1 We have become what the contrarian and self-identified ecomodernist Mark Lynas calls the ‘God species’ (Lynas 2012).
The Climate Realism initiative stands out among ecomodernism’s proponents for its overtly imperialist ambitions, its stalwart defence of a polarised and hierarchical system of capital accumulation on a world-scale (Amin 1977). Yet more subtle green imperialist agendas are also invariably accompanied by ecomodernist principles in the proposals of thinkers and organizations as varied as the Council of Foreign Relations itself, the Breakthrough Institute, Ezra Klein and Derek Thompson’s ‘Abundance Agenda’, some versions of the now practically defunct Green New Deal, and Jacobin magazine USA’s editorial line on environmental issues. Despite this, and despite growing critical interest in imperialism and ecomodernism today, the question of how the two phenomena relate, or how each manifests the characteristics of the other, is poorly understood in academic and activist literature. This is a theoretical problem as much as a practical one, and poses intellectual challenges as much as political ones.
It is, for instance, difficult to imagine a green imperialist agenda that does not contain ecomodernist features, and yet ecomodernism need not necessarily result in imperial designs. China’s agenda for ecological civilization is ecomodernist in both its conceptualization of non-human nature as something that humanity can shape around its interests and in its application of technological solutions to eco-social contradictions (Huang and Westman 2021: 4). In 2007 the Chinese Academy of Sciences even published a report entitled ‘China Modernization Report 2007: A Study on Ecological Modernization’ (Chinese Academy of Sciences 2007; Zhang et al. 2007). That same year, the concept of ‘ecological civilization’ was introduced at the 17th National Congress of the Chinese Party. Yet despite what Minqi Li calls China’s ‘exploitative relationship with South Asia, Africa, and other raw material exporters’, China’s economy is that of a semi-periphery and not an imperialist power (Li 2021). It is not imperialist, Li argues, because China both ‘continues to transfer a greater amount of surplus value to the core countries than it receives from the periphery’ and because China’s foreign investments contribute only a small portion to its overall profits. ‘China’s domestic capital stock’, Li calculates, ‘is about five times as large as China’s overseas assets’ (Li 2021). Zhongjin Li and David M. Kotz corroborate this account, finding that Chinese loans, often cited as evidence of imperial ambitions, are ‘aimed at reaching mutually beneficial deals rather than securing conditions for extracting extra-high profits by Chinese capitalists abroad’ (Li and Kotz 2021: 608). China thus remains a semi-peripheral nation whose development is, to borrow a phrase from Mao, tightening the noose around US imperialism’s neck (Mao 1958).
How, then, to understand the interconnections between imperialism and ecomodernism today? .......................................
Sci Fare:
U.S. B.S.:
We bombed a country, took its president, and the media calls it 'capture.'
This morning I woke up to the New York Times telling me the United States had “captured” the president of Venezuela.
Let me say that again. The United States military conducted airstrikes on a sovereign nation’s capital, killed an unknown number of its citizens, and dragged its head of state out of his bedroom in the middle of the night. And the word the paper of record chose was “capture.”
Capture is what happens when you execute an arrest warrant. Capture is what happens when there’s an ICC indictment. Capture is what happens when the UN Security Council authorizes military action. Capture is what happens when Congress declares war.
None of those things happened here.
The word is kidnapping.
I’ve been writing about executive power. About how Congress abdicated its war-making authority decades ago. About how presidents from both parties have consolidated power while everyone looked the other way because the bombs were falling on someone else.
Last week I wrote about how the tools Trump is using to reshape the executive branch aren’t inherently authoritarian—they’re just tools. The problem is who’s wielding them and what they’re being used for. I stand by that.
But here’s the thing about tools: they can be used to build a house or burn one down. And what happened in Caracas this morning isn’t building anything. It’s the United States government deciding, unilaterally, that it has the authority to bomb a country, kill its citizens, and abduct its leader because we say he’s a drug dealer.
We say. Not the International Criminal Court. Not the UN. Not even Congress. Marco Rubio looked senators in the eye weeks ago and said this wasn’t about regime change. He lied. They knew he was lying. And the media is busy debating whether this was “constitutional” under some tortured reading of Article II instead of stating the obvious:
This is an act of war conducted without declaration. This is a kidnapping dressed up as law enforcement. And if any other country on earth did this to us, we would call it what it is. ..........................
The fourth estate is failing us again. ........................
This didn’t start with Trump. It didn’t start with Maduro. It didn’t even start with Chavez.
On January 1, 1976—fifty years ago this month—Venezuela nationalized its oil industry. President Carlos Andrés Pérez stood at the Mene Grande oilfield and announced that the world’s largest petroleum reserves now belonged to the Venezuelan people. Exxon, Gulf, Mobil—they all got bought out. They were compensated. There was no theft, no matter what Stephen Miller says. The oil companies themselves acknowledged the legality of the process. It was orderly. It was sovereign. And American capital has never forgiven it.
What followed was fifty years of pressure. Not from one party. From the monoparty.
Bush put Venezuela on notice after Chavez won in 1998. Obama imposed the first round of targeted sanctions in 2015. Trump 1.0 went full maximum pressure—financial sanctions, oil sanctions, the recognition of Juan Guaidó as the “legitimate president” in a failed coup attempt. Biden kept most of the sanctions in place, lifted some temporarily when it suited us, then reimposed them. And now Trump 2.0 has finished the job with bombs and helicopters.
Red or blue. It doesn’t matter. When it comes to empire, when it comes to oil, when it comes to keeping the Western Hemisphere safe for American extraction, there is no opposition party. There is only the party of American business interests wrapped in whatever justification polls best this decade. ....................
It's No. 19. Aggression of this kind against another people always fails.
I imagine others were as shocked as I to awaken Saturday morning to news that the United States had just invaded Venezuela and “captured” Nicolás Maduro. Immediately we are on notice that the language used to describe the events of this weekend will be highly manipulated: This is and will remain key to the manufacture of consent as the Trump regime proceeds brazenly on its way. The Venezuelan president was not captured: He was kidnapped. ...........................
Anything anything anything, I tell you, to avoid calling this a “coup”—a word you will never ever read in the pages of The Times or any of the other corporate dailies. ................
Alas, the wads of cotton-wool English these media deploy to keep America’s self-image in shiny shape. ..................
I felt literally sick to my stomach when I read of the abduction of Venezuelan President Nicolas Maduro and his wife by US forces. It is the latest in a series of crimes by the increasingly deranged Trump administration against that country: first murder (the extrajudicial killing of passengers and crew on boats in the Caribbean), then piracy (the seizure of an tanker carrying Venezuelan oil), and now kidnapping.
Mere criminality doesn’t explain why this move provoked in me such nauseous dread. Horrible crimes, some much worse than this, are happening all the time, whether perpetrated by my own country, its allies, or pretty much any government on earth. But this one strikes a particularly evil omen. ................
...................... The kidnapping of Nicolas Maduro is not an assertion of the rule of law; it is a repudiation of the rule of law. To be sure, Trump and his predecessors have set ample precedent for this latest disregard for legal and diplomatic principle. Particularly flagrant was the support for Israel’s assassinations of leaders of its enemies while in the midst of negotiations, and then our own bombing of Iran in a similar vein. Also, the “ceasefires” Israel agrees to and then promptly violates, again with US diplomatic and military support. If negotiations are used as a ruse to lull the enemy into complacency, then the very possibility of negotiation vanishes. Imagine, for example, if when Vladimir Putin showed up in Alaska to negotiate with Trump, Trump had him arrested. Imagine if Trump went to Beijing to meet Xi Jinping, and Xi had Trump arrested. Soon no leader would dare negotiate with anyone.
It would be unfair, though, to pin all the blame for this recent eruption of lawlessness onto Donald Trump. Rule of law has always been lipstick on the pig of imperial power. The empire wields the law selectively against enemies, resistors, and dissidents, exempting its own leaders and allies. Trump differs from his predecessors only in neglecting the pious homilies to “democracy” and “the rule of law” that customarily accompany the exercise of imperial power. He dispenses as well with subtlety. Instead of leveraging NGOs and CIA media assets to engineer a color revolution, Trump sends in the special forces. Instead of deploying a weaponized US dollar and sanctions to steal other countries’ assets, Trump sends the Coast Guard to seize oil tankers and promises ‘boots on the ground” to take Venezuela’s oil that, he says, they “stole.” Instead of talking about “nation-building” or “restoring democracy,” Trump says quite baldly, “We are going to run the country.”
Maybe the nakedness of his exercise of power will prove a good thing, exposing the empire for what it is and vitiating the pretense that our interventions are about freedom and democracy. Maybe, but I don’t think so. ..................
Again, the dissolving of the rule of law—and even the pretense of the rule of law—did not start with Donald Trump, and it would be vain to imagine that his overthrow would restore it. “Might makes right” as a shameless, explicit operating principle of foreign policy dates back at least to the rise of the neocons in the second Bush administration and their dreams of “full spectrum dominance.” The neocons started in the Republican Party but eventually came to exercise considerable influence in the Democratic Party too, installing their members in high positions under Obama and Biden. In the 2024 election many of their key leaders openly opposed Trump. ................
The path to Caracas – and potentially next to Colombia, Cuba and Greenland, other targets of Donald Trump’s colonial greed – was paved in Gaza
..................................... It is worth standing back, as one year ends and another begins, to consider how we got here, and what lies ahead.
The central conceit of the good cop, bad cop narrative is that both the US and Israel are the ones upholding the law and fighting the criminals.
Unlike the Hollywood version, neither of these real-world cops is in any way good. But there is a further difference: the spectacle is not intended for those the pair confront. After all, the Palestinians know only too well that they have been suffering for decades under the boot of a lawless, joint US-Israeli criminal enterprise.
No, the intended audience are the onlookers: western publics.
The US “honest broker” myth should have perished long ago. But somehow it persists, despite the evidence endlessly discrediting it. And that is because western capitals and western media keep propping the myth up, treating it as a plausible description of events it simply cannot explain. .......................................................
...................... Washington – the gangster-in-chief posing as global policeman – refuses to accept any limitations on its actions. If legal authorities, whether domestic or international, try to stand in its way, they are either punished or pushed aside. ...................................
The Trump campaign to regain control of Venezuelan oil is a remake of the 1953 CIA/MI6 coup – Operation Ajax – in Iran, when they orchestrated the removal of Prime Minister Mohammad Mosaddegh after he nationalised the Iranian oil industry in 1951. British and US control of Iranian oil supplies was immediately restored when they replaced Mosaddegh with the Dictatorial Shah.
Trump has announced that the US will take “back” control of “their” oil interests in Venezuela.
.............................. 13. What is for sure, however this operation was carried out, whoever supported it and endorsed it behind closed doors – the Venezuelan people will pay the ultimate price for the incoming instability and insecurity that comes with colonisation and the capture of resources by a predatory entity.
14. As journalist Hala Jaber wrote this morning – “Venezuela feels like Iraq all over again” – Invade. Disrupt. Install. No international mandate. No accountability. No thought for the chaos and violence left behind, civil strife, migration waves, proxy blowback. This is regime change by force. And once again, there is no plan for what happens next. Empire disrupts. It seizes. It stages photo ops and calls it peace. Then it abandons the wreckage. The worst consequences are likely yet to come
The US Department of Justice indictment of Venezuela’s kidnapped leader, Nicolas Maduro, is a political rant that relies heavily on coerced testimony from an unreliable witness
Anya Parampil joins Judge Napolitano to dismantle Washington’s “narco-state” fairy tale about Venezuela—a projection that obscures decades of CIA complicity in drug trafficking through the region. While Trump and Rubio brand Maduro a kingpin to justify oil piracy and regime change, the real cartel operates out of Langley, where covert ops and cocaine corridors have been standard policy since the Reagan era. Parampil connects the dots between fabricated pretexts, imperial resource theft, and a bipartisan narco-empire that weaponizes the drug war to strangle any government that won’t play ball.
................. The empire needs its skillful orators and apologists like Obama, but it also needs its iron-fisted overt tyrants like Trump. It needs good cop presidents to manufacture global consensus and expand US soft power, and it also needs bad cop presidents to inflict the hard power abuses the good cops can’t get away with. Both are essential components to the operation of the imperial machine. ....................
Yves here. Your humble blogger had started a broader post, in part triggered by proof of Trump’s increasing power-madness, confirmed by a fresh, must-read New York Times interview, but found it required more internal processing of the events of the new year. But sadly there are plenty of pressing alternatives to discuss, such Russia’s latest rain of blows on Ukraine.
But to continue briefly with the introductory observation: Trump seems to genuine believe no one, including Russia, can constrain him, Putin appears to be digesting that Trump’s extreme need to dominate and his casualness about risk and violence requires even firmer shows of force. As we’ll soon discuss, the Oreshink attack in Lvov, which destroyed not just Ukraine’s but Europe’s largest gas depot occurred in parallel with strikes all over Ukraine, which are likely to be even more consequential.
But having introduced the Trump interview, these sections show that his disregard for the notion that there are constraints on his power:
In his conversation with The Times, Mr. Trump sounded more emboldened than ever. He cited the success of his strike on Iran’s nuclear program — he keeps a model of the B-2 bombers used in the mission on his desk; the speed with which he decapitated the Venezuelan government last weekend; and his designs on Greenland, which is controlled by Denmark, a NATO ally.
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Three Truths About Trump’s Second Term
Three truths about this time that should not be lost:
- Trump didn’t invent America’s brutal world rule. He just pulled off its mask.
- Trump didn’t invent the imperial presidency. He’s just testing its tires.
- Trump didn’t create the cruel neoliberal world. He’s just the first to smile while delivering it.
And a fourth, that’s not about Trump, but perhaps you can relate this to some more current event:
- Cops have been murdering Americans since policing began. What’s different today?
Europeans tend to ask themselves: “What would I have done if?” Well, if you’re American, now you know the answer.
What would I have done if our country’s leader began threatening our neighbors with annexation?
What would I have done if people were being kidnapped off the streets and sent to a prison run by another country with no due process and held there, unable to talk to their lawyers?
What would I do if people received the death penalty without so much as a fair trial?
What would I do if my neighbors were getting shot in broad daylight by masked thugs?
Whatever you would have been doing, is probably whatever it is you’re now doing. ..........
Geopolitical Fare:
There is a tendency in alternative space, and it is tempting, to reframe losses as, in some subtle way, wins. It can help you cope with the downswings in the battle for a more equitable, just and peaceful world, and there have been plenty of those recently.
We’ve seen this play out over Gaza, Lebanon, Syria and Iran, where the optimists amongst us have assured us that, though bloodied, Hamas is still surviving triumphantly in its underground passageways; that Hezbelloh is regrouping in Lebanon; that the complete mess of Syria post-Assad (or Libya, post-Gadaffi, or Iraq post-Hussein) should somehow be comforting. And if that isn’t enough, then we can see how mighty Russia, in its resilient defiance against a quarter-century of NATO provocation in Ukraine and its amazing succession of technological breakthroughs in weaponry (dwarf nuclear reactor technology for the Burevestnik and Poseidon; non-nuclear nuclear-equivalent destructive power in the case of the Oreshnik; hypersonic missiles in the case of the Kinzhal and Zircon), or how mighty China, in its noble defense of its territorial rights to Taiwan and leadership of benevelont infrastructural investments and non-dollar trade throughout the Global South, have finally countered the increasingly brazen, reckless and, yes, stupid and desperate, latter-day US imperialists and their vassals in Europe and elsewhere.
Venezuela is instructive in this instance. On the face of it, what is it about really? ......................
How many lives, nations, and liberation movements has empire destroyed in my lifetime? Far more than you’ve been taught
Introduction
The story I’m about to tell is not comfortable. It doesn’t fit neatly into CNN’s soundbites or the glossy narratives of “freedom and democracy.” It is brutal, systematic, and far-reaching: the U.S. empire’s operations—military, political, and economic—have shaped the modern world in ways that are often invisible, but deadly.
From the bombs dropped on civilians to the leaders assassinated, from elections rigged to liberation movements crushed, the empire has left a trail of devastation in virtually every corner of the globe. And yet, in the Anglo-American political imagination, this carnage is rarely acknowledged, rarely debated, and almost never confronted. ....................
As the ‘American Century’ collapses under the weight of its own dogmas, Eurasia and the Global South are breaking the chains of Bretton Woods.
......................................................... This historical buildup is why the current situation is so critical.
When fracking exploded in 2010, the US flooded the market with Light Sweet Crude (LTO).
The US refiners looked at all this light oil and realized, “We can’t use it efficiently.”
If you put Light Oil into a refinery built for Heavy Sludge, you run the equipment inefficiently. You under-utilize the coker units (billions in wasted sunk costs).
The US exports its own high-quality light oil to Asia/Europe (who have simple refineries) and must import heavy oil to satisfy the diet of the Gulf Coast processing complex.
The capacity exists because Venezuela effectively paid to build it (via Citgo) and US executives in the 90s bet the house that heavy oil was the only game in town. Formerly permissive national economic policies supercharged the technological development.
The recent US military operation isn’t just about seizing new resources; it’s about feeding a starving industrial monster that was specifically designed to eat only what Venezuela produces. And that industrial monster must feed the US economy because now the shale party is about to end. The US administration knows this. They have made a 100% rational decision to force a bloody showdown with Venezuela to fund US energy needs.
It wasn’t about flexing US military might.
It was a calculated decision.
But this decision has shown to the world the US will definitely use military force to achieve its objectives.
This is a dangerous escalation of intent.
The US claims to be freemarket. Its recent actions are proving that state directed power is a necessary tool for resource exploitation. It is doubtful that any oil major individually or in combination could have forced the Venezuelan government to the negotiating table by any means.
This dramatic escalation in military spending is a recipe for more waste, fraud, and abuse
For decades, Canada has carefully cultivated a global reputation for principle, human rights, and moral clarity. However, that image is now cracking, and cracking fast. For too long, Canada has cloaked its inaction and complicity, rather spectacularly, behind political correctness. But as the global crises grow more brutal — and more visible — it has become harder for Canada to maintain this facade. ..............
............................ Canadian relations with Ukrainian intelligence, authorized or illicit, cannot be separated from Canadian imperialism’s collaboration with Ukrainian fascists since 1946. This unbroken relationship continues today via the far-right Ukrainian Canadian Congress (UCC), which has attained immense political influence in Ottawa.
................ The political meaning of the campaign to smear David Pugliese must be understood.
Canadian imperialism is terrified of the growing anti-war sentiment among workers and youth. Pugliese’s exposures within the capitalist press have thus become politically unacceptable as the ruling class launches a war-spending orgy, already in the hundreds of billions of dollars, to prepare for the planned carve-up of Eurasia. The campaign against Pugliese cannot be understood apart from the ruling class drive to criminalize all expressions of principled opposition to its imperialist policies, including tarring opponents of Israel’s genocide in Palestine as “antisemitic” and shutting down student solidarity encampments. .....................
Right wingers are like “Listen to Venezuelans! No, not the Venezuelans in the streets demanding Maduro’s return. No, not the polls saying most people in Venezuela oppose US regime change. Those are the wrong Venezuelans. I meant listen to the Venezuelan talking to Fox News from his mansion in Miami.”
They’re like, “Trump needed to invade Venezuela and abduct its president because otherwise that poor country would be victimized by the whims of a despotic tyrant!”
Actually fellas I’m pretty sure the real tyrannical regime is the one who’s claiming the entire western hemisphere is their personal property and they get to control what happens in every country on half the planet.
Pretty sure what’s tyrannical is invading a country, murdering scores of people, and abducting its leader in order to steal control of its resources.
I kinda think the real tyrant on the scene is whoever’s trying to rule the world and aggressively targeting any country anywhere on the planet that resists that agenda.
Like maybe a really good example of tyranny would be constantly toppling governments and starting wars of aggression and targeting civilian populations with starvation sanctions and waging proxy conflicts and dropping bombs and interfering in elections and circling the planet with hundreds of military bases and working to kill, subvert and subjugate any population anywhere on earth if they disobey your commands.
Pretty sure the tyrant we actually need to worry about is whoever’s doing that.
...................................... It’s sad for me that we are ruled by chaotic despots who can invade a sovereign nation and abduct its leader and suffer no consequences.
It’s sad for me that the people with their hands on the steering wheel of the fate of our species are a bunch of sociopathic thugs who can smash and rob any country they please with total impunity.
It’s sad for me that our planet’s population is subject to the whims of a globe-spanning empire which topples governments, wages wars, sponsors genocides, targets civilians with starvation sanctions, backs proxy conflicts, drops bombs, brainwashes entire nations with propaganda, uses its military and economic might to bully and cajole states into bowing to its dictates, and sows suffering, destruction and death around the world every moment of every day.
It’s sad for me that these are the people who are making the decisions which will determine humanity’s path into the future. The future of our society. The future of our planet’s resources. The future of our technological innovation. The future of our ecosystem. The future of our militaries. The future of our nuclear weapons.
That is what is sad for me. I have no special emotional attachment to Maduro as an individual, but I do have a strong emotional attachment to the possibility of a healthy world emerging in the future.
And as things stand right now it’s looking pretty dark.
All these abuses are going to continue until the people rise up and force them to stop.
Western governments are going to get more and more authoritarian.
Police forces are going to get more and more militarized and murderous.
Freedom of speech is going to be crushed with more and more aggression.
Military budgets are going to get more and more bloated.
The imperial war machine is going to get more and more belligerent, genocidal and expansionist.
The gap between the rich and the poor is going to keep growing and growing.
People are going to get more and more miserable and mentally unhealthy.
The systems we use to gather information about our world are going to get more and more tightly controlled by the powerful.
The extraction of resources and labor from the global south will get more and more abusive and overt.
The biosphere we depend on for survival is going to get closer and closer to death.
How do we know this will happen? Because that’s all that’s been happening. This is all the US-led capitalist world order has ever been doing. ...............
Other Fare:
Baudrillard’s America Forty Years On
In 1986, forty years ago, when Jean Baudrillard published America, it seemed less a sociological study than a series of shimmering impressions - a philosopher’s road trip through a civilisation that had already transcended the need for depth, reflection or historical consciousness. Written with the speed and detachment of a drive through the Nevada desert, it captured the strange purity of a society that had realised modernity’s utopian dream so completely that it no longer needed to imagine anything beyond itself. ..............................
Forty years later, this vision looks both prophetic and incomplete. The America Baudrillard observed in the 1980s was already living inside a simulation of itself, but he underestimated how far that simulation could metastasise once America’s unipolar dominance allowed it to remake the world in its own hyperreal image. The apotheosis of modernity, it turns out, carried within it the seeds of its own demise. ..............................................
.................................. Forty years after Baudrillard’s road trip through the American desert, the landscape remains, but its mirage has thinned. What he saw as the triumph of surface now reveals itself as the exhaustion of substance. America’s global dominance in culture, finance and media has exposed the inner fragility of the civilisation that produced it.
The utopia realised was not the end of history but the beginning of entropy. The dream of total simulation - a world where everything is image, flow and performance - has become the nightmare of informational chaos, political disintegration and social despair.
Baudrillard’s America remains prophetic precisely because it mistook the shimmer of triumph for its terminal glow. The bad dream of modernity was not that America failed to live up to its ideals, but that it succeeded; and in doing so, revealed that the full realisation of the modern project is indistinguishable from its collapse.
There’s a lot of confusion about the end of the American empire, and the fall of neoliberalism. Many people think the US will just be in “second place” and it’ll be OK.
No.
The problem is the nature of America’s decline. Since 1980 the US economy has been progressively financialized. Profits are all that matters, not what is done to make profits. In properly functioning markets the idea is that products fill a need, on net improve human welfare and lead to more growth of real products.
If a company doesn’t make a profit, that means it isn’t growing the real economy with products which are a net positive. In such a case it goes out of business.
This is approximately how the Chinese economy works. It’s how the US economy worked for much of its history. It’s how the British economy worked up till about 1890 or so.
It’s not how the US economy works. ..............
