Weekly Forecasts 4/2025
The possible failure of President Trump in Ukraine and the two worlds of U.S. credit recession
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Forecasts:
President Trump looks to head into a failure in Ukraine (at first).
Rays of (credit) light in the U.S. economy, versus
Darker (credit) clouds over the U.S. economy.
Is President Trump heading into a failure in Ukraine?
Donald John Trump was inaugurated as the 47th President of the United States on Monday. He is only the second President who has returned to the White House after losing an election, following Grover Cleveland, who served in 1885-1889 and 1893-1897. We will devote the January Black Swan Outlook to the policies of President Trump (unless something truly drastic occurs). Here we make a preliminary forecast on his policy concerning Ukraine. He looks to continue with the ‘madman’ foreign policy which, very successfully, dictated his first term. However, this is unlikely to lead to a desired outcome (lasting peace) in Ukraine.
To begin with, we issue a warning of deepening escalation to occur in Ukraine during the first 100-days of the (second) presidency of Donald Trump.
The main geopolitical challenge President Trump (from now on DJT) faces, is to acknowledge the changed global power structure. The U.S. military might has turned fragile.
Russia has effectively crushed two NATO equipped and trained armies in Ukraine. Iran has shown its capability to penetrate the highly sophisticated Israeli/U.S. air defense systems. Russia’s Oreshnik missile system looks to carry the capacity to destroy U.S. aircraft carries at will, almost anywhere in the world,1 and the only way for the U.S. to respond to such an onslaught would be a nuclear strike. None of these issues were present, or at least visible, during the first term of DJT.
In Ukraine, DJT has also chosen the road of bullying. His national security adviser, Mike Waltz, has floated an idea to lower the draft age of Ukrainians from 25 to 18. He has also discontinued U.S. aid to Ukraine for 90-days to review whether it “suits his agenda”. Based on the information we’ve received, this would include also military aid. The idea looks to be to bully Kiev into throwing more “meat” on the grinder in an effort to threaten to draw Kremlin into a pro-longed conflict to create a more favorable environment for negotiations. DJT has also re-iterated his view of “one million dead Russian soldiers” in a war, which is a propaganda-number. It’s difficult to say, whether he truly believes on this figure, fed to him most likely by the U.S. intelligence apparatus, or is this just part of his public negotiation strategy.
President Trump is well-known on his ‘shock-and-awe’ negotiation tactics,2 but in Ukraine they are likely to turn to ‘disappoint-and-grind’. The point is that Kremlin has seen this “movie” already. The Minsk agreements failed in everything else but on buying Kiev, and the West, a bit more time to arm Ukraine. The latest taunt with peace during the summer ended with the Armed Forces of Ukraine invading parts of the Kursk-region in Russia. It seems very unlikely that Kremlin could be bullied into peace, and such efforts would probably be met, by Kremlin, with (another) disappointment and carrying on in the battlefield hastening the impending collapse of Armed Forces of Ukraine.
Moreover, while economy is important for ordinary Russians and Kremlin, and further sanctions would hurt, not losing a war they consider existential is far more important. Based on the information we’ve received, Russian populace now sees the war in Ukraine as a hostility of the NATO, that is, as an existential war of sort. To note, the federal budget deficit of Russia has been estimated to be 1.7% of GDP for 2024, compared to 8% in the U.S. Revenues of Russia’s government have also kept on growing rapidly, while Russia’s economy is also growing robustly (at least for now). The sanction policy looks like a failure.
The military history of Russia is full of examples of catastrophic defeats, which the nation has turned into decisive victories (e.g., the campaigns of Hitler and Napoleon into Russia). They show that while Russia and her populace may bend to the brink of breaking, and beyond, they will not yield. The idea that Russia could be strong-armed into unsatisfactory peace in a war it considers existential, is a dangerous fallacy. Yet, this is what President Trump seems to be currently aiming at. It’s our hope, and belief, that he will turn from this course, when he realizes the epic failure of his policy line. After that point is reached, we can start to hope for a peace.
The NATO Deep State is also unlikely to go ‘gently into that good night’. The U.K. is openly discussing sending her troops to Ukraine, into a “peace-keeping” mission. It has also been reported that French troops have trained in an exercise mimicking the conditions in Dnieper River north of the Ukrainian capital Kiev. Just before Christmas Polish Prime Minister Donald Tusk ruled out European troops in Ukraine.
It has been a tradition in European politics, at least since setting up of the EU, to introduce ideas to be enacted in a ‘push-and-pull’ maneuver. What this means is that first some idea sounding preposterous is floated by an European leader(s), only to be shot down by another leader(s). This cycle is repeated few times and (alleged) credibility is added to the idea by politicians, and the media they control, in each turn. At the end of this process, the European populace and political class would have been nurtured to accept the idea as a “necessary evil”.3 Therefore, the recently floated idea of European “peace-keeping force” is likely to be the aim of both European political elite and the NATO Deep State. This is very dangerous, and should be acknowledged by President Trump.
What such a force in Ukraine would do, is to ensure that the conflict does not end. There’s no way to present European NATO-forces bordering newly annexed Russian territory to Kremlin as “neutral”. Even if President Putin could be coerced in some way to accept such a force, tensions would not ease, but the opposite. There’s only one force in the world that could surveil the line of ceasefire in a (somewhat) credible cover of neutrality: the U.N. Tuomas explained this in Peace in Ukraine.
In his inauguration speech, President Trump re-iterated that he seeks for “peace and prosperity”. We have zero doubt on that, but we consider that the road there is still lost on him.
Thus, we are warning that President Trump is fighting a uphill battle in Ukraine with outdated policies. We should also not rule out the possibility of false flag attack, on which we have been warning several times, conducted by the NATO Deep State and/or Ukrainian President Volodymyr Zelensky, to tie the new U.S. administration tightly into the conflict. Because of these, we need to be prepared for escalation of the conflict in Ukraine in the coming months.