Special edition: The iceman cometh
Greenland, Venezuela, Iran, Ukraine, Russia, and the US.
Hello,
We interrupt our publishing break once again to bring you another special edition of Geopolitical Dispatch. These reports are usually only available to paid subscribers and Geopolitical Strategy clients, but like last Monday, in light of ongoing developments and as a taster of our analysis, we are providing today’s free of charge. Our regular daily briefs otherwise recommence on Monday 19 January.
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Here are the five things you need to know today:
GREENLAND. The territory’s attractions hide in plain sight.
VENEZUELA. Running Caracas is a means, not an end.
IRAN. Foreign pressure helps the regime deepen its grip.
UKRAINE. RUSSIA. Washington tries to school Moscow before a deal’s done.
UNITED STATES. Trump toys with the hyperloop to serfdom.
Geopolitical Dispatch is a daily strategic briefing for business leaders and investors, based on the US Presidential Daily Brief. Covering five top global developments at 5am Eastern Time, Geopolitical Dispatch gives you visibility of events in context.
GREENLAND. All caps
The territory’s attractions hide in plain sight.
Donald Trump reiterated his claims to Greenland Sunday as Denmark’s prime minister said “this is a fateful moment”. Diplomatic talks were allegedly scheduled for Wednesday as the UK and Germany discussed a presence on the territory.
INTELLIGENCE. Denmark and its European allies are taking Trump at his word, both in the seriousness of his intent and his purported reasons. Yet underscoring existing US military and mineral access is not the point. Trump wants Greenland’s icecap simply because it’s big and he can. And a military takeover, while strategically insane, might politically be safer than explicitly using tax dollars to buy the locals. Media reports of a Pentagon plan are likely real.
FOR BUSINESS. Greenland looms large, particularly on a Mercator projection. Irrespective of the merits (and there are few), it would be the real estate grab of the century. And judging from his ringfencing of Venezuelan oil and the privatisation of the East Wing ballroom, Trump may see an arrangement for Greenland in the model of a 21st-century Congo Free State, where, as in King Leopold of Belgium’s day, a head of state, but not the state, runs a foreign empire.
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VENEZUELA. How to spend it
Running Caracas is a means, not an end.
Donald Trump said there would "be no more" Venezuelan oil or money going to Cuba Sunday and that Exxon might be blocked after its CEO called it "uninvestable". Trump signed an order firewalling Venezuelan oil revenues held in the US.
INTELLIGENCE. Trump wants to limit legal claims (particularly from China) over any proceeds from Venezuelan oil sales, though the courts may have other ideas. Monies that sit outside the US, yet can be indirectly controlled through military coercion, may be another matter. But beyond the redirection of proceeds from Havana to Miami, there’s little to be said for Venezuela, despite 300 barrels of reserves. The world is awash with the stuff, and it’s hard to extract.
FOR BUSINESS. Like the tariffs, “owning” Venezuela may be more useful as a cudgel than a source of revenue, particularly to the US taxpayer, which must also foot the bill for an armada off Caracas and interdictions at sea. Yet if it shakes out Cuba (assuming it’s not rescued by Mexico), undercuts Russia (a supplier of heavy grades), or forces China (owed $60 billion) into more concessions, many (particularly Marco Rubio) will judge the costs to be worth it.
IRAN. Ayatollah you so
Foreign pressure helps the regime deepen its grip.
The Artesh, Iran’s regular army, said it would join the Islamic Revolutionary Guards in defending public property as human rights groups estimated 500 protesters had been killed. Tehran warned it would retaliate against any foreign attack.
INTELLIGENCE. For all the diaspora’s elation over recent protests, including around the idea of the Shah’s return, Tehran’s establishment seems to be coalescing, not splitting, and that will decide how things develop. Whether elites judge that swift and brutal action is necessary to pre-empt action from Trump and Israel, or that such intervention will only encourage a rally-round-the-flag effect, there are few signs the regime is cracking (beyond existing fissures).
FOR BUSINESS. Had Trump and Benjamin Netanyahu played it cool, Iran’s protesters may have had more chance at regime change. And while that’s still a possibility, there’s now an external threat the authorities can blame. Weaker states, like Tanzania, have effectively crushed larger protests in recent months, and Iran has more experience than most. Today’s protests are still a shadow of those in 2022, let alone 2009. Oil exports and nuclear research continue.
UKRAINE. RUSSIA. Putin his place
Washington tries to school Moscow before a deal’s done.
US representatives verbally joined a Europe-led “Coalition of the Willing” framwork on Ukraine as Senator Lindsey Graham said Trump would soon greenlight a “500%” Russian sanctions bill. Much of Kyiv remained without power Sunday.
INTELLIGENCE. Increased strikes on Ukrainian infrastructure, including with nuclear-capable Oreshnik missiles, have come in response to a bad week for Vladimir Putin, where, despite gains on the frontline, he lost a friend in Venezuela, saw a claimed tanker seized, and had his understanding with Steve Witkoff seemingly overturned at another Paris peace summit. Claims the US Senate’s secondary sanctions bill is back on will have also caused him consternation.
FOR BUSINESS. In the wake of Nicolas Maduro’s detention, Trump may judge he has leverage on Putin. And for much the same reason (buoyed by unsubstantiated claims of a Venezuela-Ukraine “swap”), Putin may judge the same. Still, extra sanctions seem unlikely, and even if implemented, there could be as many loopholes as exist for the current Lukoil and Gazprom package, which haven’t reduced Russian exports at least in volume, or slowed its military assault.
UNITED STATES. Marx-a-Lago
Trump toys with the hyperloop to serfdom.
Futures fell Sunday after Jerome Powell said he had been served subpoenas as a "pretext" over rates. Trump said he would call for a one-year 10% credit card rate cap "effective January 20." Trump released jobs data early on Truth Social.
INTELLIGENCE. Fiscal dominance has long been a risk to US monetary policy, but seldom has the spectre of central planning loomed so large. Institutions and laws should prevent Trump dictating price discovery, but his bully pulpit tactics risk further diminishing faith in the US economy, just as faith in US strategy (“I don’t need international law”) comes into doubt, and job numbers (falling industrial employment, flat growth since April) indicate a non-AI recession.
FOR BUSINESS. Trump’s desire to juice the household economy is understandable. Beyond concerns of a “K-shaped” recovery, the US is arguably suffering Dutch disease (with AI and data centres substituting for North Sea oil). Yet while top-down diktat can spur quick growth (per China and the early Soviet Union), it creates more opportunities for inefficiency and graft (unless that’s the point). Stagnating, managed economies are also liable to foreign aggression.
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Michael Feller, Chief Strategist
michael@geopolitical-strategy.com
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If Trump were to enact a 10% cap in credit card interest rate it seems very likely that many credit card companies would cease offering credit terms - when the adjusted net loss associated with credit card debt is taken into account it would almost certainly be a losing proposition for credit card providers to do otherwise
That events surrounding the US Fed are #5 of today’s analyses shows just how fast this year is already moving.