2025 SitRep: Cleaning Up Biden’s Mess

Editor’s note: In honor of Inauguration Day, we’re sending you today’s Daily Reckoning earlier than we typically do. In this article, Jim breaks down all the challenges and opportunities President Trump will face over the next four years. This is must-read material. Enjoy.

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.

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.

Biden did not get the message. The ATACMS launches continued, followed by the brazen assassination of a top Russian general and his aide on the streets of Moscow. Biden also delivered tens of billions of dollars of new funding to Ukraine and supplied missiles and artillery shells from severely depleted U.S. arsenals.

The fork: If Trump continues on this pre-determined path, the war will go on as the Biden Neocons hope. That means Trump will get the blame for the ultimate collapse of Ukraine, which is coming. On the other hand, if Trump de-escalates, he’ll be called a Putin stooge and be blamed for any peace deal that concedes Ukrainian territory to Russia. Again, Trump can choose to escalate or deescalate, but either way he’ll be blamed for the Ukrainian defeat. Trump can choose but he’s bound to lose.

Fork Move #3

A third fork involves Biden’s move to steal Russian-owned U.S. Treasury securities to support a loan to Ukraine to be used in its war with Russia.

In February 2022, at the start of the war in Ukraine, the U.S. and European Union (EU) froze about $300 billion of Russian assets in the form of U.S. Treasury securities lawfully purchased by the Central Bank of Russia. About $200 billion of those securities were held in custody by Euroclear, a major global clearinghouse and custodian based in Brussels.

Freezing assets is a standard technique in financial warfare. Typically, the assets remain frozen while the war (or other cause for sanctions) persists but can be un-frozen once some treaty or other agreement is reached. In this case, the U.S. has gone further and actually stolen about $50 billion of interest on the securities to be used as collateral for a loan to Ukraine that almost certainly can never be repaid.

This extreme action is one reason why the BRICS nations (Brazil, Russia, India, China, South Africa and other group members) are moving quickly to build non-dollar payment systems and are acquiring gold as a reserve asset that cannot be frozen or converted by the U.S.

Again, Trump has no good options. If he continues to support the loan made with stolen assets, he contributes to the long-term decline of confidence in the dollar. If he stops the loan program and either demands that the loan be repaid or otherwise restores the stolen Russian assets, he will be accused of undermining Ukrainian war efforts or supporting Russia or both.

As an incoming president, Trump should have freedom of action with regard to policies involving economic sanctions on Russia, escalation of the war in Ukraine, and weaponization of the U.S. dollar through asset seizures. He won’t. Instead, his hands have been tied by Biden’s forking moves that leave Trump with options but none of them good.

Trump’s Countermove

In chess, one way to avoid losing a piece in a fork is to put one of your opponent’s high value pieces in jeopardy. For example, if Black is confronting a fork, it can position a piece to take the White queen in one move. That way, White will act to protect the White queen instead of taking the Black knight or rook. The player on defense (Black) moves to offense to avoid the White fork.

Trump can do the same to Biden. He could hold a press conference or give a speech explaining to the American people exactly how Biden has acted in bad faith and jeopardized the best interests of the United States with his forks.

A transition is intended to give time for a smooth transition from one administration to another. Instead, Biden has used the time to lay traps for the new administration. Trump should call him out, explain why he will act in the best interests of the nation, and insulate himself from the canned criticisms of the progressives and the legacy media. This high road approach will make for an ignominious end to the already failed Biden presidency.