We already have privateering via Letters of Marque, so why not do unto others what they do unto you if reciprocity is normal in all areas? Of course, there’s a “DM = EM” tone to this “Who’s doing what to whom now?” & “What, no rules-based order social niceties?” argument…

For those who recall why the Bank of England was set up, how cheap government borrowing was needed to win physical control of supply chains via war to keep inflation low and national power high, what happened to the former BOJ governor and then finance minister in 1936, and to the Fed in both WW1 and WW2, what @ctindale and @SantiagoAuFund are saying makes perfect sense. Indeed, it’s long been a when not an if this would happen in the U.S. - I flagged it would be necessary as part of economic statecraft the day Trump was reelected. Now we need people brave enough to say *how* it will happen rather than just speculating on precisely how many basis points of rate cuts or hikes fit on the head of next year’s pin without asking “What is a central bank *for*?” Kudos to those doing it! 👏 👏 👏

…and the winning answer was Azerbaijan! Thanks for playing “Which foreign country did the former head of German intelligence betray his country to?” See you for the next round in another country soon!

It’s early doors by 2026 standards, but the below ⬇️ is the silliest, shallowest take of the day so far from the “because markets” thinkers at Bloomberg, who are paddling out into deep, dark, shark-infested waters on a shiny intellectual inflatable rubber duck. Do borrowing costs matter? Hugely. Are they the metric of hegemony? Hardly. Were Japan or Germany heading that way when they had negative rates? Of course, their neomercantilist and neo-Merkelcantilist models weren’t dominating global supply chains while deliberately running at a loss, with double digit fiscal deficits on top, all propped up by capital controls and a political rather than “because markets” central bank - and that supply chain domination DOES back real power. However, there is a Grand Macro Strategy that can match it; and those who know know that U.S. borrowing costs can actually be a weapon vs the rest of the world. If bad analysis walks like a duck and quacks like a duck…

Significant escalation in the Black Sea this morning, Russian drones have hit two ships in Bulgaria's EEZ (one has reportedly been sunk). Neither ship was heading to or from Ukraine. Russia appears to be targeting all trade in the Black Sea.

Oh 2026, where will we be when you are finally over? Perhaps, given the 2024 > 2025 > 2026 exponential trend, in a 2027 where aliens are doing the chat-show circuit to discuss the big issues of the day or the small gossipy ones…. or perhaps in a reality even more bizarre or scary than that(?)

If you back 🇪🇺+🇨🇦, as 🇩🇪 elections saw the far left & far right smash other parties, now add 🇧🇷, where pro-Trump Bolsonaro, Jr. might win the October election, and… Kenya. BEUCK? EUBCK? CEUBK? KEUBC? Their ‘Partners for Multilateralism’ makes as much realpolitik sense.

2026, day 263 Good morning from Asia - another 2026 day with rumours of yet more war and of rising far-left and -right populism. GEOPOLITICS: 🌍🔥 ‘Trump on Iran: ‘My question is, if and when do I blow the entire nation up?’’ (The Hill); ‘Iran claims US preparing to resume attacks, threatens bases, supporting regional countries’ (JPost); ‘CIA chief meets Egypt’s al-Sisi in Cairo’ (Al Arabiya); ‘What’s behind Iranian authorities’ push for a mass mobilisation campaign?’ (AJ); ‘Qatari Premier Says Gulf States Have to Act Together on Iran’ (BBG); ‘Qatar Energy Chief Says Bessent ‘Wrong’ About Hormuz Future’ (BBG) - “Bessent is “wrong” when he said that the strategic Strait of Hormuz will be worthless in two years”; ‘QatarEnergy says Hormuz crisis may delay some expansion projects’ (Reuters); ‘Houthis Push to Expand Territory as Tensions With Saudi Arabia Rise’ (NYT); ‘Trump says Yemen’s Iran-backed Houthis have agreed not to fight U.S.’ (Al Arabiya); ‘Pew poll finds majority of Israelis and Palestinian say two-state coexistence impossible’ (ToI); ‘Ukraine fires new ballistic missile at Moscow’ (Telegraph) - “Kyiv deploys domestically-produced weapon in largest attack on Russian capital since war began”; ‘Russia’s secret plan to supercharge kamikaze drone production’ (Politico); ‘Trump to meet with Zelensky as Russia-Ukraine attacks intensify’ (Axios); ‘European spy chiefs warn Moscow is planning more decisive action against NATO’ (Guardian); ‘Canada, France to co-operate on space launches as part of Carney’s pivot to EU’ (Globe & Mail); ‘Trump Ramps Up Bid to Dismantle International Criminal Court’ (WSJ) - “Administration prepares sweeping sanctions that would cut the court off from much of the global financial system”; ‘PM’s UN bet: Middle powers must step up as superpowers break the rules’ (AFR); GEOECONOMICS: 🌍 ✈️ ⛴️ 🚛 ‘Grassley urges Trump to place embargo on diesel exports amid high prices’ (The Hill); ‘Former WTO head Pascal Lamy on the EU’s China choice: get a rebalance, or go protectionist’ (SCMP); ‘US, China Begin Trade Talks in New York Ahead of Trump-Xi Summit’ (BBG); ‘China's trade limits continue to bite into Japan's imports of rare earths, other minerals’ (SCMP); ‘Time to lower our elbows and make a deal’ (National Post) - “The delaying tactic of refusing to renegotiate CUSMA until the current American tariffs are addressed has clearly failed”; ‘Trump’s Greenland Deal Eases Way for U.S. Business on Arctic Island’ (WSJ); ‘China's Path to Tech Self-Sufficiency Accelerating’ (BBG); ‘China’s CXMT touts new chip manufacturing platform as close to ‘world’s most advanced’’ (SCMP); POLITICS: 🗳️ ‘Far left wins in Berlin, far right in Germany’s northeast vote: Exit polls’ (AJ); ‘German chancellor Merz vows to stay on despite ‘disaster’ in regional elections’ (FT); ‘Germany’s AfD partners with radical Italian ‘sister party’’ (Telegraph) - “Senior figures join forces as part of a ‘European Right that extends beyond state borders’”; ‘Meloni announces ban on burqa and niqab in Italian schools, cap on foreign students’ (Euronews); ‘Trump says 250ft arch will be ‘military complex’ with drones and snipers’ (FT) - “President claims national security justification for controversial Washington monument”; MARKETS: 📈 ‘Sovereign wealth funds stay away from China due to lingering property woes’ (Nikkei Asia) - “US cements dominance as AI companies attract investment especially from Middle East”; ‘France's debt climbs to highest since 1978’ (Euractiv); ‘Wall Street expects US to issue about $1tn of short-term debt as borrowing costs climb’ (FT); ‘Why It’s So Hard to Work Out What the Bond Market Is Telling Us’ (WSJ) - “Did bond yields rise because the economy is strong or because America’s credibility is on the line?”; ‘Big Tech uses guarantees to keep $300bn of AI exposure off balance sheets’ (FT); ‘China slow-walks yuan appreciation as US, Europe demand trade rebalancing’ (Nikkei Asia)

BREAKING: The Ukrainians have struck the Kaopotnya oil refinery in Moscow earlier today. They have now struck multiple Russia refineries in recent days after President Trump “claimed” Russia and Ukraine had agreed to stop striking energy infrastructure. Yet further damage to the global energy markets.

2026, day 262 Good morning from and goodbye to Australia on a sleepy Sunday - but 2026 never sleeps. Not when the FT is talking about “the end of human existence” and Bloomberg says watch 50’s monster movies to understand AI. GEOPOLITICS: 🌍🔥 ‘Iran says it has conveyed conditions to re-engage in talks, end war with US’ (JPost) - “The conditions include ending the war on all fronts, unfreezing Iranian funds, and ending the US naval blockade”; ‘US working to keep Strait of Hormuz open and secure: CENTCOM chief’ (Al Arabiya); ‘Yemen’s Houthis Claim Attack on Saudi Capital After Fuel Depot Burns at Airport’ (WSJ); ‘Houthis say they targeted ‘sensitive sites’ in Riyadh, oil sites in Saudi port city Yanbu’ (AFP); ‘Houthis eye Yemen’s oil-rich east after seizing Red Sea coast’ (ToI); ‘Syria’s military is rebuilding, but foreign influence may slow security progress’ (FDD); ‘Al Jazeera fires 24 Gaza staff amid US lawsuit alleging Hamas, Islamic Jihad ties’ (Ynet); ‘Somali piracy rise tests China’s long-running Gulf of Aden mission’ (SCMP); ‘India Is Again Squeezed Between the Threat of Trump Tariffs and Russian Oil’ (NYT); ‘Turkey: We proposed Russia and Ukraine halt attacks in Black Sea, awaiting response’ (Reuters); ‘Putin accuses Ukraine of interfering in Russian parliamentary election’ (Reuters); ‘EU Allocates €100bn for Ukraine in 2028-34 Budget Plan’ (Kyiv Post); ‘Greenland, Denmark say Trump deal won't compromise sovereignty’ (Reuters); ‘Danes mock Trump for ‘status quo’ Greenland deal’ (Telegraph); ‘Trump’s Greenland deal aims to boost leverage at Xi summit, midterms: analysts’ (SCMP); ‘Carney’s Euro trip inflames Trump tensions’ (The Hill); ‘The economics of Alberta separation would be disastrous for everyone’ (National Post); ‘US state department under pressure to disclose Venezuelan oil takings’ (FT); ‘Inside Machado’s Plan to Return to Venezuela and Revive Its Democracy’ (WSJ) - “The Nobel laureate is planning her comeback from exile in Panama, setting up a clash with the U.S.-backed interim government”; ‘Koizumi and U.S. defense chief Hegseth agree to boost security cooperation’ (Japan Times); ‘Is Africa becoming a 'testing ground' for Chinese power projection?’ (SCMP); ‘Defense firms ride export wave, but supply chain stabilization poses new challenges’ (Korea Times); ‘‘Inspired by Israel? North Korea showcases mass production of suicide drones resembling Harop’ (Ynet); ‘The Rise of A.I. Is Raising Threats From Drones, Police Group Warns’ (NYT); GEOECONOMICS: 🌍✈️⛴️ 🚛 ‘World Running Short of Supertankers Threatens Long-Haul Oil Flow’ (BBG); ‘EU fuel prices hit records as ECB experts see diesel margins peak in October’ (Euronews); ‘US, China Trade Teams Set to Huddle in New York on AI, Iran’ (BBG); ‘Trump Announces an ‘AI Force’ After Industry Sounded Alarm’ (WSJ) - “The president calls for federal oversight of the industry as opposition toward AI grows among voters”; ‘Trump wants a new AI czar and an "AI Force" modeled on Space Force’ (Axios); The White House has officially characterized systematic abuses of the H-1B visa program as a "national security threat”: POLITICS: 🗳️ ‘‘There are no decent parties left’: Sham elections underscore Putin’s grip on Russia’ (Politico); ‘How Germany’s far right learned to put on a smile to win elections’ (Politico) - “The AfD is wrapping its dark vision of national decline in a package of hope and optimism”; ‘In Dubbo, the migration reality is a far cry from the political debate’ (AFR) - “Big regional employers rely heavily on foreign workers and scoff at One Nation’s view that unemployed Australians can take their place”; ‘Pip benefits bill set to double by 2030’ (The Times) - “The budget for disability payments is on track to reach £45bn a year, bigger than all but three government departments”; MARKETS: 📈 ‘How should investors position for the robot apocalypse?’ (FT) - “The end of human existence might be bad for financial markets”;

This is your reminder of the great circle routes that ICBM would take to hit the center of the USA from: Iran (Red); Purple (Pakistani) [NB: these are also the routes from most of the Russian ICBM fields]; Russia (Yellow); PRC (Orange); NORK (White). Adjust actual launch sites and actual targets as needed. You can do this yourself on GoogleEarth. Greenland is the shield for North America from most of the worst places in the world. To have it under utilized as such has always been a threat to the USA since the invention of intercontinental bombers and missiles. This is by far an exceptional net good. Well meaning people can argue about how we got here, but we got here. No one else made it happen.