Let’s start from the beginning of this presidency and take in to account all that has happened. Trump learned a lot from his first time in office in regards to China. Keep in mind that since the 80’s Trump has been resolute about getting the US out from under the thumb of China. In his first term he learned that we really didn’t have any leverage against them to make any meaningful changes with negotiations. Now with this term he started by targeting the Belt and Road initiative in our hemisphere starting with the Panama Canal. There has been plenty of people talking about the fact that China was well on its way to either taking over the canal or completely building a new one what would have destroyed entire communities. Sadly much of the public doesn’t know about this. Now that Trump stepped in and threatened to take the canal back, China has been forced out of the country.
The next step was Venezuela. To those that weren’t paying attention we “kidnapped a foreign leader”, which the same leader has been wanted by the government for years. The truth of the matter is that trump was getting back the oil fields that the US companies invested billions of dollars in, just to have them taken by the dictatorial government. All the while Venezuela has been selling oil to China for pennies on the dollar because of debt owed to China. So what is the problem with that? Well the petrodollar is the problem with that. I will explain this later, but for now let’s just focus on the fact that Venezuela was shipping oil to sanctioned countries illegally. That is why you saw reporting of tankers getting seized. Now that Trump basically has US control back over the oil there, China is no longer getting discount oil on the black market from there. By now you should see the pattern. It’s all about choking out China because they didn’t want to play ball with Trump in his first term, and this is all significant in building the American economy.
Next I will move to the Middle East. I saw many news reports about things gong on here in the US and bashing Trump for spending so much time in the Middle east countries. Those visits weren’t just diplomatic visits to stop problems there. Even though Trump states to the public he was there to stop wars and conflicts, which he did, that wasn’t his overall objective. Trump is a deal maker after all. This all ties back to the petrodollar. For the uninformed the petrodollar was established in 1974 as an agreement between the US and Saudi Arabia that all oil being sold would do so using the US dollar. In exchange the US would protect the trade routes. After the agreement the rest of the OPEC countries signed on as well. This did two things. It gave us the obligation to be the world police of waterway trade routes and made a global demand for the US dollar. This was extremely important due to the fact that the US dollar broke from the gold standard in 1971. So what does this all mean? Put simply it means that because the dollar was no longer backed by gold it was about to be worthless. Linking it to oil sales made a global demand for it giving it value again. This also solidified making the dollar the global reserve currency. This all matters today because this deal expired in 2024. So oil trade was able to be made in other currencies. The more this goes on the less of a demand there is for the dollar. This increases the rate of inflation because the value of the dollar goes down. Trump knew all of this being a business man. So in order to solve conflicts he made deals with the Middle East countries to reestablish the petrodollar preventing the collapse of the US dollar. I am sure that in the meetings that he had with the leaders of the countries that Iran was discussed forming an alliance with them to edge them out.
Now we get to Iran. Iran has been a problem for more than 50 years. There has been many attempts by the US government over the years to diplomatically work with Iran over the years. All have been in vein due to the regime being religious ideologically motivated. Their religious leader is who ruled over the country. According to their beliefs, the western nations are infidels and must be destroyed. This is why they were known to be the state sponsor of terrorism. They have funded many terrorist organizations over the years all targeting anyone who does not share their beliefs. With all of this in mind, it would be detrimental to the world if they were to achieve nuclear power. Whereas every other nuclear power in the world has an understanding of mutually assured destruction, Iran would not share the same concerns. To them dying in the act of killing infidels is an honor. Now this doesn’t mean that every person in Iran believes this. Like I said the religious leader controlled the government. When we bombed the nuclear sites we destroyed their refinement facilities, but it was unclear if all of the nuclear material was destroyed. There was no way to verify this. There were some rumors that were reported on that they were moving the materials right before the bombing run. Not much has been put out about it since.
Moving forward some time, we get into the conflict that we are currently involved in. This is a little different in so far as underlying goals as there are a few. There is the obvious of taking out the radical ideologue ruler. I would venture to say that it may have something to do with the agreements that were made with the other Middle Eastern countries regarding the Straight of Hormuz and the unrestricted travel through it. Also it has to do with yes, China. China gets the majority of it’s oil from Iran. Now there has been many turnovers of the Straight being open and shut over and over. Right now the US has a blockade on the straight and is working to clear the mines that are in it that Iran no longer has the ability to remove if they wanted to with their entire Navy less small fast boats being on the bottom of the ocean. You might ask what is the point of all of this? Well right now we are essentially economically squeezing them into submission reserving dropping more bombs or putting boots on the ground. At the same time we are drying China out of oil.
In other little reported news Trump has been making deals and collecting control of trade routes south of China. So lets do a little bit of a recap regarding China. Their attempts to infiltrate our hemisphere using their Belt and Road initiative was thwarted safeguarding the Panama Canal. We took back control of the Venezuela oil fields, taking away the oil that China was getting from them. Now we are blockading the Straight of Hormuz against Iran choking off China’s supply of oil from there. With all of this put together China is weeks away from running out of oil. This makes it so that the US holds all of the cards for Trump to bargain with ahead of his scheduled visit to China. Trump has essentially cut off any ambitions that China had in becoming the world’s new super power. He flexed our military power putting the whole world on notice.
So how does all of this benefit the US and our economy? Let’s go through it. Maintaining the free passage of the Panama Canal is paramount for us as a trade route as well as shipping materials from one coast to the other. Maintaining this ensures that shipping cost do not rise due to new control over it by the Chinese. Next being the reclamation of the Venezuelan oil fields is going to increase revenue for both countries as well as giving the US access to the lion share of the worlds oil. Trumps visits to the Middle Eastern countries reestablishing the petrodollar protects the value of the dollar with it not being backed by anything else. As the conflict in Iran is still ongoing, I cannot say for sure the direct positive impact that it will have on our economy. I can say this though, Iran is a very short time away from having to cap off their oil wells. If this happens it is a very costly and difficult process to reopen them. So it may be safe to say that Iran will be out of the oil business very soon. Even if it is for a few years that they are out of the business, it will give the US and the countries that it has agreements with the monopoly on the global oil trade. This would quickly pay off the US debt and make us an oil rich country. This doesn’t even include whatever kind of trade deals that Trump may be able to make with China during his visit.
So from what I can surmise, Trump is attempting to regain control of our hemisphere both with trade routes and as far as National security. This was the main argument about Greenland if you remember. My belief is that he is working to set up the US as a net exporter of oil which would be an explosion of wealth for the country. All the while securing trade routes and partnerships with other countries that would benefit us in some way yet to be revealed. From what I can tell this is Trump’s goal as lofty as it is. With where we sit right now I would say that he has a very good chance of actually pulling it off too. This would make since of why he keeps saying short term pain for long term gain.
At this point I wouldn’t panic just yet. I know that it doesn’t feelgood right now and that it may have an effect on the midterms because of it, unless some of his plan is revealed as an October surprise. For now trust the process and let the man cook. I know we live in an instant gratification society, but just like the old saying “Rome wasn’t built in a day”, a complete shift in geopolitics doesn’t happen overnight either.