A history of conspiracies

Key Market report for Thursday, 209 February 2025

Today's breathtaking events constitute proof positive that it is not correct to regard any nation as a monolith nor to regard the slow grind of history as something predestined or inevitable. For the third time in a row, the American people elected Donald Trump as their President and the rapid fire execution of the new administration's radical policies is changing the course of history in ways that only a few weeks ago seemed unimaginable. This should change the way we look at history and how it is shaped over time.

If the current global conflict could be captured in one photo, this one would be it!

American historian Ramsay MacMullen wrote that, in order for us to interpret history correctly, it is necessary to consider the motivations of groups and individuals who shaped it. It's a simple thing, really: powerful groups and individuals have motivations and they exert their influence to shape historical events. They might even meet in dark smoke-filled rooms or ski resorts in Switzerland to discuss the ways and means of pursuing their agendas and attain their objectives.

“Ruthless and monolithic” coincidences?

This idea may pose a conceptual challenge to the coincidence theorists out there who are content to hold the view that history is just one damn thing after another, that the pursuit of imperialistic objectives is an inevitable consequence of power imbalances whereby more powerful nations will always and inevitably seek to subjugate the less powerful ones, etc. Also, if policies seem incompatible with policymakers' declared values, coincidence theorists believe that this is only due to incompetence and honest errors, and never, ever due to deliberate deception, or - gasp - a conspiracy, god forbid.

Conspiracies only exist in the minds of intellectually inferior, deplorable individuals out there. Individuals like John F. Kennedy who warned us about the "monolithic and ruthless conspiracy." He might have unmasked that conspiracy were it not for the lone gunman who assassinated him with a magic bullet. Another deplorable conspiracy theorist was the historian Carroll Quigley who wrote that,

"The powers of financial capitalism had [a] far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. … The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and direct injury of all other economic groups."

Quigley’s book, "Tragedy and Hope," was quickly banned and its printing plates destroyed by the publisher, but hey, what's the big deal, sometimes books get banned in the free world, probably due to honest mistakes. Maybe they were just not so very interesting to begin with.

In the context of today's events, up until a month ago, it seemed that the war in Ukraine and the genocide in Gaza were also just episodes in the irrepressible march of history, driven by power imbalances and the innate badness in human nature, perhaps only made worse because of the incompetence or personal flaws of the protagonists of these crises - flaws like ambition, greed and lust for power.

A new sheriff’s in town!

But now, as JD Vance informed the sensitive attendees in the Munich Security Conference, there's a new sheriff in town in Washington D.C. Suddenly the irrepressible march of history took a 180 degree turn. The same leaders who couldn't drop enough bombs on the population of Gaza, those very same leaders stopped dead in their tracks and the bombs stopped falling. One would almost think that they were just cogs in the wheels of a much larger machine pursuing some unstated agenda, formulated somewhere in smoke-filled rooms in London or New York!

The new administration also took a sharp turn in their policy toward Russia. By all appearances the tone of the discussions between the two powers is very constructive and cordial. Leaders in Europe and Ukraine are hugely vexed that they are not included in the negotiations. But until the new sheriff arrived, they all explicitly refused to talk to the Russians; Volodymyr Zelensky even made it illegal for any Ukrainian official to engage in negotiations with the Kremlin. Now that events have taken a sharp turn between two superpowers, the British, the Europeans and the Ukrainians are panic-stricken that peace might break out, something for which they were evidently entirely unprepared.

Toward the end of EU and NATO

It gets worse from there: Trump officials are now clearly washing their hands of Zelensky, and will demand new elections in Ukraine. They also appear amenable to the Russian 2021 demand that NATO be rolled back to its pre-1997 positions, and might withdraw US forces from all nations added to the alliance since that year. This will destabilize many governments in Europe and even lead to new wars. One of the flashpoints could be the Balkans: if US forces withdraw from Kosovo and abandon their massive Bondsteel military base there, Serbia might move to recapture their breakaway province.

The existing power balances on the old continent may lead to an avalanche of democratic changes in places like Romania, Germany and France, and from there to other nations. While tomorrow's events may be impossible to predict, the direction of changes is very much discernible, and will include a rejection of NATO/EU governing structures and a reclaiming of national sovereignty. For all the tears and protests of EU's unelected bureaucrats, these changes are now irreversible. Today we can appreciate that the United States is not a monolith and that it is in fact a battleground between forces vying to impose alternative systems of governance.

There's a lot of background and context to this last statement, an unfinished story that stretches back to 1776. One author who applied Ramsay MacMullen's approach to reading and interpreting history is the Canadian historian Matthew Ehret. His brilliant "The Clash of the Two Americas" (in 4 volumes) comes perhaps closest to accurately delineating the philosophical and ideological outlines of the battleground USA and I highly recommend it as a profoundly relevant reading for today's changing times.

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Trading signals for Key Markets, 20 Feb. 2025

With yesterday’s closing prices we have the following signals: