Not easy, but not so difficult (Part2) Refreshed/extended version

(Settling 2 closely connected conflicts (ME and Ukraine) and some Essential Deals)

Preface

In the first part I have outlined the needed Chinese/US macroeconomic adjustments to avoid major economic calamities and referred to some Special Deals, which are badly needed to get an optimal outcome. The Deals needs to cover economic and some national/global securities issues. There are two major global fire zones, which needs to be settled. One is in Ukraine/Russia and the another is in Middle East. Both areas need hundreds of billions of dollars, just to settle, especially after such large destructions. At the same time US needs to bring in several hundreds of billions of new demand for its goods and services.

1.) US needs new large export markets

US needs to generate an additional 450 B USD worth of external demand for its goods and services just to sustain its economic growth around 2% in a time of major macro adjustments. Half of the demand should come from Europe and half from BRICS+ plus GCC nations.

1.a) New US exports to Europe

Europe can import larger amount of energy products (40-50 B USD/year) and substantial amount of defense products (any 1 percentage points/GDP increase in European defense spending results an about 0,25 percentage points/GDP increase in defense import from US).Europe is currently spending about 2 percent of its GDP on defense, if it will spend the same amount of funds as US, then its defense import from US must grow by 50 B EUR per year. Europe must increase its oil and gas import from US, but it can happen only at the expense of GCC countries, which need to sell their products to other places, mostly to ASIA. US can increase its oil and gas export even more, if it is able to push out GCC countries from Europe. DEALS with Europe requires only a threat to Europe, that US will immediately abandon Europe in its security arrangements, if Europe is not willing to raise its defense, oil/gas or any kind of imports from US by an immediate effects. If the threat is credible, then Europe will bend. US plays with many cards and can easily convince EU. Tariffs and purchases of Europeans will have an immediate positive effect on the US economy and can stabilize US economy in 2025/26, but its major boost will wane off from 2027 onwards and due to shrinking size of the European economy the US needs to make very sizable DEALS with ASIA.

1.b) New, unique possibilities (in Eurasia) come from past and present sanctions.

EURASIAN MARKETS ARE ROUGHLY twice as big as EU and their relative size will grow even more in the following 10 years . EURASIA has a capacity to absorb very large amounts of US non defense products every year, but major purchases require substantial security and economic compromises from both sides. Russia is able to snap up 50 B USD worth of US products in each year and same could be true for IRAN (40B). China is alone capable to increase its US imports by minimum 100 B USD within 2 years and rest of Asia can add up to an additional 50 B USD import demand.

In the past 2 years I have worked out several DEALS, which can benefit both the US and ASIA (including Russia) as well and at the same time could help to resolve enormously difficult and complex geopolitical issues. Some of them have been published here, some of the have been shared with relevant persons both in ASIA and in US.

2) Ukraine and ME wars and their connections to some special situations

Before I would dive a bit more deeper into the solution. we need to understand couple of things. The Ukraine war is related to some special events and its conclusion partially relies on the final and definite resolution of those reasons/root causes. The original value of those special problems on 2022 February 22nd was close 380-400 B USD. Up until now a single dime out of that amount was not settled and we should not forget, that asset prices in the past 3 years moved up about 35 percent, so current value of special Ukraine/Russia related issues are close to 500 B USD and this calculation does not take into account cost rebuilding of Ukraine and costs of lost gas sales of Russia, etc.

2a) Questions/answers related to potential Russian compensations

Altogether, the direct/indirect financial cost of settling the Ukraine/Russia war is roughly around 1 T USD. We can be sure, that Russia is not willing to pay a single dime for rebuilding of Ukraine, neither Ukraine is willing to pay for the explosion of Nord Stream gas pipelines. Russia has around 300 B USD worth of frozen FX reserves, which can be utilized in a clever manner with the approval of Russia.., but it is not enough.

2a1) Russian payments

Russia could be willing to pay up to 50 B USD to buy out Crimea and additional 100 B can be paid by them in the following 15 years for the currently occupied/annexed territories. This is still not enough to cover the roughly 350 B USD rebuilding/development cost of Ukraine for the next 15 years.

2a2) Other potential payments for Ukraine and how to sort out the special issue

An additional 200 B needs to be poured into Ukraine by some other players (mostly from the EU budget). US will not give more money, so all other costs will fall on Europe, which will be quasi forced to pay. But we are still nowhere close to sort out the 500 B USD. Those funds are currently locked down and heavily guarded and could be channeled through a special financial and trading app or through a large special company by using for commodity trading purposes/purchases, etc

2b) Better living environment and economic development will create peace in ME

Gaza needs similar type of funds for the rebuilding, but the situation is even worse here, since there is no Russia, who could be willing to cough up annual 10 B USD for the rebuilding efforts in each of the following 15 years. In. case of the whole Middle East the situation is even worse, since Lebanon/Syria/Yemen also need serious amount of financings for rebuilding/economic stabilization. Altogether minimum 15 B USD/year will be needed to stabilize the region on top of Gaza/West Bank.

Netanyahu must understand, that solution for a long lasting peace rests on better Living standards. We can be sure, that without deployment of serious funds Syria will turn back into an even bigger chaos and same is true for Yemen/Lebanon. These mentioned financing needs require annual 25 B USD for 15 years in a row.. If such funds will not be put into work in a well organized manner, then Israel will get into a much bigger trouble, since this war can only be won through better education/healthcare/infrastructure/ living standards. It is obvious, that more suffering will result in only bigger resistance. Safety of Israel and a real Peace depends on whether there is 25 B USD/year (Grant/Credit(50/50)) available for the creation of better living standards or not. Unfortunately we can be sure, that none of the regional countries are willing to provide such amount of financing in a guaranteed manner (there will be many promises, but no-one will deliver) . We can be also sure, that if such funds will not be created on a constant manner, then Syria and totality of Palestinians/ Yemen (including Sunnis) will turn out to be much worse than now.

3) Sanctions

The current unique geopolitical situation and major technological advancements of the past decade has resulted in an exceptional opportunity. The sweeping sanctions on Russia and Iran has totally distorted the global commodity markets and have created major opportunities. Although Russia and Iran were able to circumvent the sanction policy of the United States/EU, but those still resulted in major changes in the Commodity markets. There is an about 70 B USD lost revenue per year for this countries just due to costs of circumventions and lower prices. These funds could be utilized in a much better way. At the same time a minimum additional 70 B USD is lost due to lower prices and an additional 70-80 B USD is lost due to non materialized investments.

The latest sanctions of US (January 10th) against Russian oil industry creates further costs and creates even bigger opportunity. The new US President Trump could have a unique chance to create something meaningful and extremely fast, if he is able to understand the value of the time, since opportunities can come and go.

4)Road to an optimal solution goes through Sub-optimality

On January 17th Putin and Pezeshkian will sign a wide ranging agreement between Iran and Russia, which will cover many fields, but it will definitely cover commodities/energy. It is sure, that the 2 countries will cooperate in many areas together from now onwards, which - paradoxically - could be helpful for almost everyone. They (Russia, Iran) will sign binding agreements for the utilization of Iranian gas fields, joint sales of certain commodities and many other areas will be covered.

4a) No deals with US means full blown sanction evasions through Gold (very easy)

US sanctions makes it difficult to sell Russian/Iranian oil and gas against hard currencies and even against crypto, since crypto transactions can be traced quite easily. But there is a way, how sanctions can be easily circumvented and that is through gold, since gold can be melted and it will become non traceable during the process and any Asian Bank is willing to lend against it, so most probably Russians and Iranians will sell their natural resources against gold and those golds will stay deposited in the banks of the buyer countries and will be used as a collateral against Loans. I would not be surprised, that the 2 countries will sign a very strong cooperation deal, which will cover even the area of blending the Russian, Iranian oils/gas, etc. If Russia will be willing to enter into such cooperation (no reason for not), then Iran will give large access to to its gas fields, which will make it easy for Russia to continue its gas export. I would also be not surprised, that Iran would get powerful defense protection, which could make it easier for them to control flows through the straits of Hormuz.

It is also almost guaranteed, that due to heavy sanctions against Iran/Russia and higher US tariffs against Chinese products, gold settlement swill gain tremendous momentum in the next 1 year. we can be sure, that China will favor those commodity exporters, whom will be willing to settle their exports in gold and deposit those in Chinese Banks.

4b) Prepayment deals and long term contracts will become more and more attractive

The new US sanctions makes it even more inciting for China/India to enter into long term fixed price prepayment deals, since in that case they can buy oil without sanctions, since prepayment prices could be under the 60 USD cap. We can say, that the opportunity is enormous and even some European Companies can be interested to sign such deals.

Although Lukoil and Rosneft has been left untouched for now, but if no deal is agreed between US and Russia/Iran by the end of the 1st week of Trump, then the new administration will/could move against them as well, since in that case US can totally take over EU markets (shrinking, but still large). US has created an opportunity for extremely Large agreements or for a potential to cut the commodity world into 2 large pieces, since the heavy sanctions against Surgut and Gazpromneft will make it obvious, that they will start to deal with Iranians even now. In this large Chess game the US has cleverly pushed RUSSIA/IRAN together, but let the door opened for a once in a lifetime opportunity. Putin is kind of forced to sign a very comprehensive and strong cooperation agreement with Iran, which means joint gas developments and joint oil and gas sales. If Putin/Pezeshkian plays cleverly, then they will build a very strong cooperation and will create a joint platform to deal very fast with Trump, based on a later described agenda. Practically speaking the new US sanctions make it more easy to sort out the problematic issues around the Middle East and Ukraine .

it has become crucial for Russia and Iran to sign a powerful cooperation agreement (Russia could even provide nuclear umbrella for Iran in an exchange of access to minimum 5 T cubic meter of gas reserves). Latest US sanctions has practically cut the world into 2 pieces, but left the door open to build one large and new trading network. It is an enormous opportunity for all sides . The current situation creates one final/optimal solution, where major agreements can and must be signed, which can be at the benefit of all parties and could create a lasting peace in all areas. IF sides decide not to cooperate, then oil and gas prices will skyrocket, which will create a major European recession.

5) The optimal solution

Step 1) Putin and Pezeshkian signs a major energy and financial cooperation agreements, which covers all areas, including joint sales of oil, gas, petrochemicals, minerals. They should also agree to sell their commodities for gold or for other hard and stable assets. In the backside China/India should prepare major oil and gas purchases from these countries on a prepayment basis through a special channel by the end of January. The purchases should go through a special entity and should happen against Gold or RMB/RUPEE, etc.

Step 1/a)

Ukraine should be prepared to sign a Peace Deal based on my previous proposals and additionally against an up to 12,5 percent share in Seraphim's Trust, which must have substantial share in the 2 special company, which will get the sanction waivers from US to manage Iranian/Russian currently sanctioned commodity flows.

Step 2)

Step 2/a) Iran

Trump must send an offer to Iran on January 21st , based on one of my previous Linkedln newsletter, which was named as Iran, Trump, Netanyahu and has been published at December 23rd, 2024 . The concept is very clear and offers enormous advantages for all sides. Any oil/gas/petrochemical sales on top of the waived amount and outside of the special company should stay sanctioned in the next 15 years. No need for long discussions, either Iran takes the offer within 5 days or gets a maximum pressure policy plus all of its foreign assets will be - forcefully- transferred to a special company, where asset management will be based on the agreements, which has been agreed and signed between me (Peter Heim) and IRI between 2016-18 with the acceptance/support of US/CHINA/RUSSIA.

As a major part of the nuclear agreement Iran needs to guarantee for 25 years, that it will not enrich uranium above 20 percent and minimum 15 IAEA agents will station in IRAN to monitor/check the nuclear activities of IRI. If majority of the agents will say, that Iran has breached the agreement, then all foreign assets of IRI will be immediately blocked and transferred under the management of the special company (profit split will be based on agreements signed between 2016-18). Iran also must guarantee, that it will not support certain organizations (in my Iran,Trump, Netanyahu newsletter it is clearly defined, what is/should be banned).

US must guarantee , that sanction waiver cannot be taken back until majority of IAEA agents do not certify, that IRAN has breached this so-called new nuclear agreement. All missile and drone program of Iran and any GCC countries should stay untouched, since Iran also needs certain deterrent power.

If all part of the proposed agreements are signed and the needed funds has arrived(role of my newly created Seraphim's Trust is crucial, due to my previously signed agreements and kind of special envoy role) , then Hostages must be immediately released, since it will guarantee continuous funds for rebuilding of the region, which is in the interest of Palestinians, Syrians, Yemenis and lately but not lastly Israelis.

None of us should forget, that safety of Israelis largely depends on the improving living standards of the war torn areas. If everything is done properly, then all hostages can be released in less than a month (first batch of hostages can return to their families by the end of January and every one can be released by the mid of March as latest plus the region will turn to be a much better place. I know it is still very long for many families, but this is the fastest what can be done, but this is real and not a dream. All part of the offer must be delivered by a special envoy to Doha. Qatar must take a lead role in the discussion with Iranians during that 5 days (between January 21st and 26th). The success depends on, whether everything is delivered on time and all steps are done in the proposed manner or not. The most important thing is to end the current quagmire. One way or the other.

Step 2/B) Russia

Trump should prepare a same type of concept for Russia, but in case of Russia, the special company should get an access only to 30 percent of Russian oil/gas and commodity exports, but the special company should get the products at a minimum 7 percent discount for 15 years. The concept must be based on my earlier documents and should cover most war related issues as well. Offer of Trump must be sent to Putin and Zelensky on January 21st and they should have 5 days to decide whether to accept or not.

If Russia decides to refuse the offer, then Rosneft, Lukoil and even Gazprom should be put under blocking sanctions, similarly to Surgut and Gazpromneft. If Zelensky decides to refuse the offer, then US must stop all financing towards Ukraine. No need to have any discussion among the Leaders until formal comprehensive proposal of Trump is not agreed/accepted . Offer needs to be delivered by General Keith Kellogg and he should stay in the region (Russia/Ukraine) in those 5 days. No reason to change the offer. Kellogg must use all its influence to convince Russians and Ukrainians to accept it. If the offer is accepted, then a formal meeting must be organized in a safe country , which is not member of ICC. Best place could be Qatar, where Iran/Hostage deal can be signed as well. Theoretically Trump could make an Ukraine and Middle East deal at the same day in Doha. He could fulfill his election promises. Either side rejects such comprehensive offer, that must be punished. If Ukraine rejects such offer, then they should be abandoned by US, if Russia rejects it, then they deserve to get a maximum sanction pressure, plus US should offer an immediate NATO membership for Ukraine.

Ownership in the special company should be similar to the Iranian ones, but it is preferred to have 25 percent share for Americans and for Seraphim's Trust as well, not 20% as it was mentioned in my December 23rd newsletter. Operational management of the Companies should belong to the newly created Seraphim's Trust in both cases.

Ukraine should get additional compensation through Seraphim's Trust (Ukraine will get 12,5 percent ownership in Seraphim's Trust) similarly Yemen/Syria/Lebanon/Gaza (they will get 7,5% ownership in Seraphim's Trust. Capital of the Russia related Special company should be largely financed through unblocking of Russian assets (21 B USD), but must get 9 B capital infusion from other sources. Same time with this initial offer all part of my proposed Peace agreement should be sent to the relevant parties/countries. Although Russia will get a sanction release, but part of its FX reserves will stay blocked until all proposed and agreed compensation/purchase price is not paid by them.

When Russia and Ukraine agrees and signs these broader agreements, then 120 B USD worth of funds will be freely accessible for Russia, 21 B will be used for the special company as capital contribution, 50 B USDS will be paid to Ukraine for Crimea and the rest will stay blocked until the agreed compensation for the occupied territory are not paid in its fullness. Ceasefire must be announced for 2 months period right after Zelensky/Verkhovna RADA, Putin/Russian Duma accepts such formal offer. Russia must get a formal guarantee from NATO, that Ukraine will not be a member of it, in the next 50 years. US/NATO must sign a security guarantee, that in case of Russia attacks Ukraine, then it will militarily step in, except if it happens as an answer to Ukrainian attacks against Russian territory in a proven manner. For the sake of stability and to sustain the peace minimum 10000 peacemakers must be stationed in Ukraine until 2040. Peacemakers must come from European countries, plus from China and India. 75 percent of the Peacemakers must station in a 25 km wide demarcation zone. All agreements must be ratified by Verkhovna RADA and by Russian Duma within 15 days of signing. I personally believe, that there is no reason for Russia or Ukraine to refuse such offer, so successful rate is high, but either way is good and Qatar or UAE is the best place for all kind of signatures.

As an addition to the above described ones, Seraphim's Trust is willing to give its 12,5 % share to Ukraine in all of its major activities and 7,5% to the configuration of Syria/Yemen/Palestinians in Gaza/Lebanon. Seraphim's Trust major activity will cover setting up an AI boosted and blockchain based Financial/Trading super app (so-called everything app), an ideal stablecoin, macro and arbitrage focused Hedge Fund, a new Clearing House. Seraphim'sTrust intends to consolidate the Eurasian commodity trade under its newly developed super app

Such longer term supply contracts and special sanction waivers make it possible and easy to create very Large Prepayment Deals. There is a theoretical chance to create trillions of USD worth of Commodity Deals, which could make it possible to pay out very sizable dividends to the shareholders of the companies, which could speed up the rebuilding process in the current war torn areas. There is n about 10 percent financial arbitrage possibility, which can be earned right at the beginning. Since we are talking about 2 M barrel/day of oil plus roughly around 20 M tons/year of petrochemical products and about 50-120 BCM/year gas in case of Iran and about one and half times more products in case of Russia, theoretically these could mean a possibility to structure up to 3 T USD worth of prepayment deals. All the above described Deals can help to stabilize the world economy and could unlock tremendous amount of funds, which could be partially channeled through the newly created Super-App

Peter Heim

Budapest

PS: I reserve the rights for all the above described deals and agreements, since all of those are my own creations/inventions and are based on my 30 years working experience with the involved countries and markets.