Dark clouds are gathering...
Key Markets report for Wednesday, 30 September 2025
The crescendo of ominous news is still gathering pace on multiple fronts, making it seem that something, somewhere must break and that this break is coming soon.
West losing in Ukraine
The imminence of Ukraine’s defeat to Russia seems to have European leaders panicked. Speaking at the Warsaw Security Forum yesterday, nervous-looking Prime Minister of Poland, Donald Tusk, once more warned his audience about the gravity of this situation:
“If we lose this war, and we must speak in the first person, the consequences will affect not only our generation, but also future generations in Poland and across Europe, in the US, everywhere in the world. Let’s have no illusions about this.”
Mr. Tusk did not specify whether losing that war would affect this and future generations in a good way or in a bad way, but we know the mindset he shares with other Western leaders and they’re clearly not rejoicing at the prospect of Russian victory. Back in April 2023, Tusk’s predecessor Mateusz Morawiecki said that, “If we lose in Ukraine, we will lose the world for decades. Defeat in Ukraine could be the beginning of the end of the golden age of the West.”
But as Tusk said, it’s not just Poland. It’s across Europe, in the US and everywhere in the world. Thus, General Mark Milley said that, “If we lose in Ukraine, the world order we created 80 years ago will crumble.” Last April, seemingly inebriated Boris Johnson thought that, “If Ukraine falls, it would be a catastrophe for the West, it would be the end of Western hegemony…”
Things have not improved since then and it seems that our leaders’ response to the crisis is to double down on the narrative management and continue to claim that Ukraine is winning, Russia is losing and that Putin’s days at the Kremlin are counted. Social media are deluged with messages conveying this, plus countless posts demonizing Russia and lionizing Ukraine in every way conceivable.
The obvious objective of this propaganda is to convince the public that Russia is finished, so if we all come together for one last hurrah, we can snatch victory out of the jaws of victory that was always certain and inevitable. Besides, the Russians are asking for it with their increasingly brazen provocations and violation of NATO nations airspace. Even though these false flag “provocations” have been such amateurish jobs, they could be laying the groundwork for a real false-flag attack: something that would galvanize emotions in the Western world and finally stiffen the Westerners’ fighting spirits.
If Western leaders are concerned that losing in Ukraine means that they lose hegemony forever, or for generations, for them the war in Ukraine is an all-or-nothing proposition, which could justify extreme means. We should therefore be prepared that some such event is in the works and could take place any day. But things aren’t only tense in Ukraine: a large escalation seems imminent also in the Middle East.
Metastasizing instability…
Even though Trump coerced Benjamin Netanyahu to apologize to the Emir of Qatar for last month’s bombings, the Emir rejected Netanyahu’s apology. Trump also got Netanyahu to agree to his 20-point peace plan, which he also did. But the peace plan is unlikely to succeed. If Netanyahu tries to implement, his governing coalition is almost certain to split apart. Furthermore, the plan foresees disarmament of Hamas, but nobody seems to have asked Hamas about it.
Hamas won’t disarm, that’s about 100% certain. Neither will Hezbollah in Lebanon. And the Iranians are convinced that Israel will have to attack them again and the Israelis are doing nothing to deny this (to the contrary). So, something could happen in the Middle East, between Iran and Israel, literally at any moment. In addition, Ansarullah in Yemen ended their ceasefire agreement with the US and announced renewal of hostilities against US vessels in the region. Egypt and Pakistan have also voiced readiness to step in and protect the people of Gaza against Israel.
And as far as the Iranians are concerned, if/when Israel attacks again, Iran will not hold back and won’t stop after 12 days: it could be the last attack Israel launches. There again, it’s all-or-nothing as far as the Western hegemon is concerned.
As if all this wasn’t enough, President Trump apparently announced that the U.S. would invade Venezuela in order to take their oil fight drug cartels. I have a hard time believing that this could possibly be for real: the same military that couldn’t defeat the Taliban in Afghanistan after 20 years of trying, or Yemen’s Ansarullah since 2015, now has Venezuela in its crosshairs? Venezuela has been preparing for this clash for over 20 years and Venezuela’s military is not the Taliban.
Whatever happens, the tensions are palpable, which may be why the prices of gold and silver are still vaulting to new highs almost every day. But if fighting escalates either in the Caribbean or in the Middle East, I believe that energy prices could follow in the same path as silver and gold, even though presently, the prices of crude oil are plumbing near the lowest levels of this year (today, Brent crude is trading below $66/bbl today). Recall, back in March 2022 Brent reached $140/bbl!
As always, we’ll find out when we do. But stability and business as usual are not on the cards through this year and the markets could go through a period of high turbulence in the near term.
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Today’s trading signals
With yesterday’s closing prices we have the following changes for the Key Markets portfolio:
