by Jim Rickards, Daily Reckoning:
Today Donald J. Trump will be inaugurated as the 47th president of the United States. This marks a major turning point in U.S. history. Not only is the U.S. political system moving from a Democratic to a Republican administration, but it’s also moving from a centralized, elite, neo-fascist regime to a decentralized, popular and pro-liberty movement. This is a welcome change for America and comes not a moment too soon. It’s a breath of fresh air for those buried under taxes, regulations, censorship and woke ideology. It’s a good day in America.
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Still, it would be naïve to believe that the Biden team have not done everything possible to handicap the Trump transition before they take office. All the money that could be spent has been spent. Where the money could not be spent quickly, long-term contracts were signed to make sure it will be spent during Trump’s second term even if Trump opposes it.
Decisions have been made, funds and weapons delivered, and outsourcing operations to other nations have all been done to tie Trump’s hands and limit his options. This all goes by the name of “Trump-proofing” the government against Trump’s policies. Some of it can be undone by Trump, but not all by any means.
The Fork Move
One of the techniques used by Biden to derail Trump’s policies and tarnish his new administration is based on a chess move called the fork. It’s a relatively simple but powerful move.
In a fork, one player advances a piece to a space where it is attacking two opposing pieces at once. The bishop is good for this because it can move diagonally in any direction and can advance as far as it wants in a single move.
A white bishop might advance to a place where it threatens a black knight (ahead and to the right) and a black rook (ahead and to the left) at the same time. The combination of the advance with two lines of attack creates a kind of “Y” pattern, which is how the name “fork” arises. Black might be able to save one of the pieces by moving it out of danger, but the other piece will definitely be lost. The idea is that the player caught in the fork may have choices but will definitely lose in some manner when the move is played out.
Joe Biden and his team have set up several forks on different chessboards to ensure Trump suffers defeats in the weeks and months ahead. It’s important to understand these forks because investors may also lose as the game progresses.
Biden’s Three Fork Moves
The first Biden fork involves new economic sanctions imposed on Russia in connection with the war in Ukraine.
Biden has imposed new “ghost fleet” sanctions on Russian oil exports. The term ghost fleet refers to oil tankers that are not insured in the London market and may involve vessels that are re-flagged, renamed or turn off their transponders while in transit. In short, the ghost fleet is used by Russia to deliver oil exports (usually to China or India) in defiance of western oil export sanctions.
Biden’s new sanctions prohibit ghost fleet vessels from entering and docking in ports of countries that support the sanctions. A number of NATO nations, especially those in the Baltic Sea and Gulf of Finland, have said they will board Russian vessels to check their insurance documents. In extreme cases, oil cargoes may be seized by NATO navies, although that is rare. All these actions closely resemble high seas piracy.
Sanctions of this type never work for long. There are too many ways around them, beginning with the fact that importers like China and India do not support the sanctions. That said, the ghost fleet sanctions will tend to raise the price of oil because finding insurance or taking circuitous routes can be expensive.
Here’s the fork: If Trump keeps the sanctions in place, he’ll be blamed for causing inflation resulting from higher oil prices. If Trump removes the sanctions, he’ll be branded as a Putin puppet. Trump can choose his response, but either way he’ll lose. He’s either causing inflation or bowing to Putin.
The Second Fork
The next fork involves the course of the war in Ukraine. Biden and Ukraine are escalating the war to a point that’s dangerously close to nuclear war. This escalation includes using intermediate-range ATACMS missiles to strike targets inside Russia. Russia responded by using its Oreshnik hypersonic missile to strike a factory in Dnipro. The missile not only destroyed the factory, but turned it to dust.
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