A new dawn for the Middle East?

Key Markets report for Tuesday, 24 Jun 2025

In a few articles over the last few weeks I’ve shared my thoughts about the events in the Middle East, especially the Trump administration’s schizophrenic and unintelligible role. My suspicion that this role wasn’t what it appeared to be was based on two aspects of it. First, Trump’s confrontational, threatening approach toward Iran and Yemen seemed so over the top reckless and stupid, it made no sense whatsoever. Even if Trump and the people around him were as dumb as their harshest critics insist that they are, their policy was still too idiotic; Trump would make Yosemite Sam seem thoughtful and tame by comparison.

Second, Trump’s action appeared completely at odds with the positions which he and many of his cabinet’s officials expressed, not only since his inauguration in January but also during his previous, 2016-2020 administration. Recall, in January this year, Marco Rubio stated that the post-World War II global order was more than obsolete and that it was even being used as a weapon against the United States. On the same occasion he said that multipolar integrations are the new reality in the world and that the US should embrace this new reality.

The tales about Trump’s undying devotion to Israel and his subservience to Benjamin Netanyahu didn’t strike me as convincing either. In 2020, when the DNC stole US elections in favor of Joe Biden, Netanyahu was the first foreign leader to call up Biden and congratulate him on his victory - about 3 hours before this victory was even announced. I very much doubt that Trump forgot that affront.

If you can’t beat them, trick them!

We also know that during his first administration, Trump intended to withdraw US forces from Afghanistan, Syria and even from Europe, but this initiative was overruled by the permanent, unelected echelons of the US bureaucracy which wield disproportionate power on behalf of their political sponsors. Broadly speaking, we are talking about the military-industrial complex, big ag, big pharma, big oil and the too-big-to-fail banking interests.

Unable to challenge all these forces head on, Trump either surrendered to them or he decided to lead them into a trap. At any rate, the effects of his actions in the Middle East are now becoming apparent:

• Iran’s retaliation against the American base in Qatar was as ineffective and theatrical as Friday’s US bombing raid against Iran’s nuclear facilities. Trump even said, “I want to thank Iran for giving us early notice, which made it possible for no lives to be lost, and nobody to be injured.”

• Trump announced that, “a complete and total ceasefire” between Israel and Iran has been agreed (we’ll see: as far as Netanyahu’s concerned, ceasefire means their enemies stand down and Israel continues to lob bombs and missiles at will).

• A senior Iranian official told Reuters that Tehran has formally agreed to ceasefire talk as proposed by the US and mediated by the Qataris.

• All this could have a tectonic effect on Israeli politics: Netanyahu’s associates are allegedly considering the possibility of moving toward early elections after the wars in Iran and Gaza wind down. If the Israelis can get rid of Netanyahu and his government, who knows, maybe the Middle East can find peace.

• To my mind however, the most significant statement came from Vice President Vance, who said that “this could be a new dawn of an economic age of prosperity” for Iran and the entire Middle East.

A new age of peace and prosperity?

If what Vance expressed reflects the true intentions behind the Trump administration’s Middle East policy and they are successful in implementing it, this implies nothing less than a wholesale overhaul of the region’s security architecture, which will almost certainly be consistent with the foundations that Russia, China and Iran have begun to lay over the recent years. This implies then, that the United States really is embracing multipolar integrations and flushing the post World War II global order down the drain.

It’s early days… Syria is still the issue.

A new era of peace and prosperity will be possible then, but the big losers from this change will be Europe’s colonial powers, primarily Great Britain and France. We should not forget however, that pacifying Israel and Iran is only a step in that direction. Syria is on the verge of a civil war where Israel, Turkey, Kurds and the Iranian proxy forces could come to blows at any moment. Syria is now the main base from which Britain and France are seeking to destabilize the region and defend their hegemony. In all, we may have witnessed a watershed moment in the Middle East, but it was only the first step toward peace. It’s early days…

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Today’s trading signals

With yesterday’s closing prices we have the following changes for the Key Markets portfolio: