[POST] Sunday Cutdown LXXVIII (15 June 2025)
Clearing my inbox of stories I want to document
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1) The coming comeuppance
REUTERS: The dollar's crown is slipping, and fast
Donald Trump wants to devalue the dollar and he’s getting his way. Already the roughly 10 percent drop in value is the most for any US president this century.
Trump wants to revive US manufacturing, which he argues has been hampered by an overvalued dollar that makes American exports more expensive and less competitive globally, thus widening the US trade deficit and undercutting domestic manufacturers.
It is a logical argument but a somewhat dangerous one, given the dollar’s longstanding status as the world’s reserve currency.
The bet: no other currency out there is able to step up and dislodge the US dollar — for now, so why not seek some grand devaluation bargain, something America has done in the past? This is the imagined “Mar-a-Lago Accord” that would replicate the success of Secretary of Treasury James Baker’s “Plaza Accord” agreement in 1985.
In sum, this is a logical strategy and it seems to be working for now. The cost? Higher borrowing costs in general and thus inflation for Americans.
True to his form, Trump blithely accepts the risk of undermining the dollar’s reserve currency status and the long-term economic costs that could follow.
Could this effort be all but swamped by higher oil prices in response to Israel-Iran?
Yes, yes it could.
The general tumult of instigating a tariff fight with the world isn’t helping either. Baker pulled off the Plaza Accord working with long-term friends, whereas Trump now faces a crucial player in China (one-third of our trade deficit) that we routinely threaten and demonize.
But some such devaluation accord is to be anticipated in any grand US-China trade bargain. What we’ve seen to date doesn’t come close, but we can hope.
2) The war I’ve actually been worrying about
AP: UN nuclear watchdog board censures Iran, which retaliates by announcing a new enrichment site
NYT: Much of Iran’s Nuclear Program Remains After Israel’s Strikes. At Least for Now.
REUTERS: Putin tells Netanyahu issues surrounding Iran's nuclear programme must be solved through diplomacy
The UN report, and Iran’s response, seems like the trigger, but Netanyahu made this decision months ago, back when Israel was whooping the Axis of Resistance sequentially. All that effort cleared the deck for these strikes, as did Israel’s previous degradation of Iran’s air defense systems.
What I’ve been predicting all along:
Gaza goes away as physical reality, then Israel does same to West Bank.
This will take years, so Israel has to aggressively degrade Iran and its proxies in the meantime.
Ideally, Israel’s aggression encourages some revolution in Iran, but we’ve all been hoping for that sort of dynamic for years and years now, so unlikely.
Trump making nice with Putin keeps him on the sideline, working Ukraine, so Iran is pretty darn isolated right now.
Thus, it is a good time to take the fight directly to Iran, which Netanyahu decided to do last November — right as I was elucidating this logic.
But Putin is right, and the argument I’ve been making all the way back to Blueprint for Action (2005) remains true: kinetics alone can’t kill Iran’s program. The only way to kill that program is to change the regime.
This means Putin is basically right in calling for a diplomatic solution (in addition to signaling he’s not playing this round, although you never know about Russia’s diplomatic ambitions here; I just can’t see the PG monarchies being superseded by Moscow or Turkey as the convener of choice).
So, the question for now is: since this is not a mass casualty war (yet), it comes down to how much punishment and humiliation Iran is willing to absorb before coming to the table chastened and ready to deal.
Israel seems committed to finding out that pain threshold, with Trump hawking a diplomatic escape on the sidelines, which is truly clever and might just work, especially if Trump is willing to open up economically to Iran in reply.
In the end, killing the regime with kindness and economic opportunity remains the best path. It just may take some serious beat-downs delivered sequentially by Israel to trigger, so we all wait and watch.
3) Taiwan paying attention
ECONOMIST: Taiwan thinks the unthinkable: resisting China without America
Taiwan is right to consider the unthinkable. Trump remains in load-shedding mode when it comes to security requirements in the Eastern Hemisphere (Ukraine, Gaza, Iran, Taiwan). He wants it all gone so he can focus on his economic ambitions and culture wars at home — so worthy means for bad ends.
Taiwan cannot help but notice this strategy and realize what danger it presents for them, so these efforts are welcomed as being highly realistic.
If Taiwan can resist Chinese invasion forces for a month, then Communist Party leaders in Beijing can be deterred. That calculation has long guided war planners and politicians in Taiwan. The democratically ruled island would need to survive weeks of bombardment, blockade or even amphibious landings by the People’s Liberation Army, to give America time to turn up and save the day.
Alas, Taiwanese confidence that America will arrive at all is growing weaker by the day. That is reshaping the plans that the island’s sitting government, which is determined to resist Chinese aggression, must make for its defence.
Yes, all the war-games in the West focus on TSMC being wiped out and those chip supply chains going down, but let’s be real: that is not a good enough reason to risk WWIII. Beijing knows it, Trump knows it, and now Taiwan knows it.
Would Taiwan be willing to go Ukraine on China — i.e., accept the losses and then go into resistance mode? Huge uncertainty on that score.
My take remains the same one offered two decades ago: The one thing America needs to make sure is that, if Taiwan is going down, we get something valuable from China in reply — like maybe the end of the DPRK.
Radical acceptance here says realize what you can and cannot prevent and make sure you get paid either way.
4) We are not a mystery to the wider world
DAILY MIRROR: Rage in America: Donald Trump has thrown gasoline on the fire to appease MAGA base
Tell me this doesn’t sound accurate:
Trump America is a case in point of the self-reinforcing effect of race-baiting, which, once put in place, takes a life of its own, creating a carnal base with an insatiable appetite. Unlike many leaders in this part of the world, such as India’s Narendra Modi or our own Mahinda Rajapaksa, who resorted to nativism to win elections but also knew how to put breaks on once in power, Donald Trump has persisted in it. He has turned it into the primary source of his political legitimacy, more so as much of the other promises are crumbling in the face of a self-defeating trade war and a looming recession.
This is why I dub Trump a Nativist Neo-Con: he wants wars and military interventions; he just wants them at home.
5) The status quo ante miraculously achieved!
ECONOMIST: America and China have spooked each other
Per the above, we are nowhere near a Mar-a-Lago Accord on the dollar’s systematic and long-term devaluation, which remains Trump’s Holy Grail ambition here.
Instead, all we’re seeing with Bessent is Trump threatens and Bessent covers his chickening out. Good theater but no real accomplishment.
What I wouldn’t give for a good James Baker.
Trump’s problem is that this tariff fight isn’t costing Beijing all that much. Instead, it’s just re-directing its trade to Europe and the rest of Asia, which Xi is fine with.
China planned for this fight long ago and is ready. Put that strategic patience up against a mercurial Trump and I have to bet on Beijing winning, sad to say.
6) Stand!
HULU: Sly Lives! (aka The Burden of Black Genius)
Sly and the Family Stone were big touchstones of my youth, in no small part for being biracial and not just all males. Amidst all the tension of the late 1960s and early 1970s, you just wanted some examples toward which you could direct your innate optimism.
Sly and the Family Stone stood out in their make-up but more so in their output, with their catalogue being chock-full of classics that recall Paul McCartney’s take on the Beatles legacy (mostly songs about love and getting along and that’s something to be proud of).
Sly’s last line in the excellent QuestLove doc: “We deserve anything that we get in this life.”
Per yesterday’s No Kings marches around the country:
Stand, in the end, you'll still be you
One that's done all the things you set out to do
Stand, there's a cross for you to bear
Things to go through if you're goin' anywhereStand for the things you know are right
It's the truth that the truth makes them so uptight
Stand, all the things you want are real
You have you to complete and there is no deal …Stand, you've been sitting much too long
There's a permanent crease in your right and wrong
Stand, there's a midget standing tall
And a giant beside him about to fall …Stand, they will try to make you crawl
And they know what you're sayin' makes sense at all
Stand, don't you know that you are free
Well, at least in your mind if you want to beEverybody
Stand .,..
7) Working toward the alt-Right’s desired civil war
NYT: Minnesota Lawmaker Is Assassinated in Act of ‘Targeted Political Violence’
This is an example of “working toward the Fuhrer” — a recent post of mine. Nobody needs to coordinate anything. The signals are sent, the motivations and means made clear, and then you just sit back and wait for the violence.
There is going to be a lot more of this, sad to say.
8) Another sign of the idiot apocalypse
GUARDIAN: Eight US states seek to outlaw chemtrails – even though they aren’t real
I got nothing.
This is so life-is—like-a-box-of-chocolates stupid, it speaks for itself.
Only in America, folks.
9) Old hatreds die hard
TIMES OF INDIA: ‘China is the enemy’: Leaked Russian intelligence reveals Kremlin's actual view of Beijing; accuses it of espionage
Our feverish desire to make China + Russia + Iran + NorKo into some ten-foot-tall monster is utter bullshit.
China is China and that’s impressive on its own.
Russia is busy and self-cannibalizing and beginning to realize that its embrace of Beijing only accelerates that self-consumption.
Iran is hoping to survive the year, because NOBODY is coming to its rescue.
NorKo remains NorKo — to zero strategic effect.
The Russians have always disliked the Chinese and always will. There is no love to be lost in that supposedly “no-limits” partnership.
10) The future, Mr. Rango!
ECONOMIST: How managing energy demand got glamorous; Technology and power come together
Virtual power plants as the way ahead:
The shed, a glittering cultural centre in Manhattan’s Hudson Yards where Ralph Fiennes and Sir Kenneth Branagh have graced the stage, hosted an unlikely gathering of utility and technology bosses on May 29th. They were there not for Shakespeare, but for something as dramatic in its own way. The event celebrated Mercury, a new effort led by the Electric Power Research Institute (EPRI), an industry body, to create interoperability standards for “micropower” devices inspired by the Bluetooth technology that revolutionised consumer electronics. It will allow such things as electric-vehicle (EV) chargers, heat pumps, solar panels, smart thermostats and residential batteries to communicate seamlessly with electricity grids.
Days earlier, NRG Energy, a big American utility, announced the purchase of CPower, a pioneer in “virtual power plants”. Because VPPs aggregate and manage many small dispersed sources of electricity (like the micropower devices Mercury will connect) to act as one large power plant, they can help balance supply and demand remotely. CPower’s micropower units together produce over 6 gigawatts (GW), as much peak power as six nuclear plants.
The Trump Administration’s push to devalue renewable energy sources works against this promising and inevitable the-more-the-merrier pathway. It will be built and pursued nonetheless — thank God.
Tortoise John to Rango: “That's what the future holds. You can either be part of it or you can be left behind.”
11) Alienating your friends and neighbors
ECONOMIST: How Trump is pushing European firms back towards China
This is your real “three-body problem”: Trump believes he has Europe over a trade barrel, but with China established as the great alternative for Europe and vice versa, that logic no longer rules.
Firms listed in the EU rely on America for almost a fifth of their sales on average. Some are turning instead to a market that has recently fallen out of favour: China. America’s rival superpower has launched a charm offensive to help revive European investment. Volkswagen, Europe’s biggest carmaker, announced at the Shanghai auto show last month that it would launch 11 models exclusively for China, and aims to sell 4m cars in the country annually by 2030, up from 2.9m in 2024.
Plenty of European bosses believe that they are now better prepared for the political and legal risks of doing business in China. But there are reasons to be cautious. European firms still face significant barriers to investment, procurement and data handling in the country. Alicia García Herrero of Natixis, an investment bank, put it to me bluntly: “They won’t make any money.”
In most industries, America remains European companies’ most promising market. Mr Trump should welcome them.
In the end, each of the three pillars of the global economy need each other to thrive — plain and simple. Europe and China seem to know that; America, not so much.
12) Pull the other one!
AXIOS: Trump promises farmers "changes are coming" to immigration crackdown
One can tell Trump is realizing he’s racing against a timer he clicked on back in early April.
Our farmers are being hurt badly … They have very good workers. They've worked for them for 20 years; they're not citizens, but they've turned out to be ... great, and we're going to have to do something about that.
It’s called amnesty. It is a well-established route.
The biggest one? Reagan, 1986.
As the harvest nears, it will soon be time to TACO up, Mr. President. Having ICE chase farm workers through fields ain’t going to work.
