War is the norm, peace the exception

Whether it is about tariffs, or direct conflict, history teaches us that war is the norm, peace the exception.

Those who believed in the end of history theorized by Fukuyama are and will continue to pay a dear price, starting with Europe.

GEOPOLITICS

USA

USAID is streamlined, not "dismantled," as confirmed by Secretary Rubio. The operation served two main objectives: cut public funding for left leaning NGOs doing the opposition soft power work, as well as taking USAID and NED back under control as a tool of foreign interference. It would have been naive to think the USA would cut its best tools of foreign influence at a time when Russia and China are rising.

Starlink has become a primary geo-strategic tool for the US and its allies (see the importance of Starlink for the war in Ukraine), that could disrupt the world's communication infrastructure. It is a much more difficult tool to control for other countries than terrestrial communication infrastructures, when satellites fly over all territories.

Conscious about the risk of letting the US dominate this field, China started developing its own version of Starlink since early 2020, when Starlink itself was launched in May 2019.

This became a question of sovereignty where Europe is nowhere to be found again (a plan for a European Starlink alternative called IRIS is years behind and expected around 2030).

Eastern Europe

Ukraine accepted the principle of a 30-day ceasefire proposed by the US. In return, the U.S. has agreed to resume the flow of weapons and intelligence to Kiev, which had been paused in recent weeks.

The issue is that Russia is not ready to participate in this US initiative as it makes progress on the ground regaining 86% of the Kursk oblast previously held by Ukraine, and also making progress on the Eastern front (depleted by the incursion in Kursk).

The Kursk incursion that was supposed to serve as a bargaining chip in peace negotiations is turning into a strategic disaster, not to mention losing 65,000 of its troops.

Russia is also concerned a ceasefire would only serve Ukraine and NATO interest to regroup and rearm.

Unfortunately, there is no real incentive for Russia to negotiate at this time, and Trump's proposal for a ceasefire, let alone peace may well reach a dead end.

As a consequence, Trump suggested expanding the Biden-era sanctions on Russia.

Failing to secure a peace agreement with Russia and see Ukraine fall completely would be a major L for Trump, the US and NATO. In this context, Trump is not excluding participating in the Ukraine war effort longer term.

Europe

Democracy is dying in Europe as the opposition leader C?lin Georgescu was barred from the presidential race in Romania.

The decision from Romania's central electoral commission triggered massive protests across the country (Georgescu had a significant lead in the polls - 44.1% of vote intentions).

Georgescu is known for his opposition to EU and NATO control over Romania and posed a direct threat to the EU leaders.

Middle East?

Massacres in Syria by the new western supported government continue, with victims among the Alawites, Christians and Sunnis (the current leader are Al-Qaeda affiliates from the Shia branch of Islam).

Meanwhile the European Union condemned the recent attacks, and reported them as performed by pro-Assad elements !

In this context, Israel aims to establish the “David Corridor” in Southern Syria, a buffer zone to protect Israel.

ECONOMY

At the crossroads of Geopolitics and Economy (and because sanctions work ??), the latest IMF report says Russia surpassed Japan? as the world's 4th largest economy (PPP) in 2024, when the Japanese economy was over 2.5 times bigger than Russia's in 1998.?

At the crossroads of Geopolitics and Economy part 2, the ECB president Christine Lagarde announced the launch of the EU CBDC in October 2025. Another step back for freedom in Europe.

The EU also plans to finance the deficits and huge defense investments +800 billion Euro from people's saving accounts, according to declarations from many top ranking leaders: Ursula von der Leyen, President of the European Commission, Christine Lagarde, ECB President, and Mario Draghi, Former ECB President and EU Competitiveness Advisor, notably.

The EU plans to seize savings, just like Cyprus did in 2013. This will only be easier with the EU CBDC.

On the tariffs front, the trade war intensified between the US and Canada, with new tariffs on Steel and Aluminum, counter tariffs, …

Canada even threatened to cut electricity supply to the US, and tariff-related headlines have impacted markets significantly last several weeks.

US real personal consumption expenditures dropped from December to January, the largest since February 2021, when personal consumption expenditures reflect ~68% of the total gross domestic product. This is significant.

Meanwhile, February CPI inflation eventually fell slightly, the first decline in both headline and core CPI since July 2024.

The gold rush mentioned before is still active, with US gold imports hitting a record $30.4 billion in January, the second consecutive month of sharp increases. This amount is double the amount seen during the 2020 pandemic.

When the initial gold repatriation to the US was coming from London, it appears to be coming now from the Swiss vaults.

The surge in gold repatriation usually signals economic issues or geopolitical tensions, as gold is seen as a safe haven, a status seemingly lost by Treasuries.

MARKETS

With uncertainty around tariffs, US Equity markets show a different pattern compared to Trump's first term.

Market volatility remains high and call options volume on the VIX have doubled in recent weeks amid market uncertainty. This comes at a time the VIX doubled in 3 weeks.

As seen before, pressure on gold raised its price to new all time highs, and gold prices have officially crossed above $3,000/oz for the first time in history.

For deeper market comment, please watch the "Market Dashboard" below

Until next week !

Quantaraxia believes the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.

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