Letter 510, January 2026
The war for control of natural resources between the US and China took a turn for the worse following the events in Venezuela. It started with China using rare earths & other critical materials to counter Trump's tariffs, and escalated rapidly after threats on Greenland, Iran and Cuba.
Some analysts called ‘Operation Absolute Resolve’ in Venezuela a ‘masterclass in military muscle’. In reality, it marked a radical departure from the rules-based world order with the unintended consequences of expediting de-dollarization and gold backed currencies, which explains the rush for gold. A return to any kind of gold-standard jeopardises the system of ‘fiat’ money.
In response to Venezuela, China has resorted to strengthening its trade ties within a new framework. This Letter examines China’s strategic retaliation in this fast developing bipolar stage between the US & China.