It’s Trump’s War Now

It’s Trump’s War Now

“Trump may understand the art of the deal, but he does not understand the art of war,” Jim Rickards wrote Monday to his Strategic Intelligence subscribers. “Those are two quite different skills.”

We’re about 48 hours away from a summit in Alaska between Trump and Russia’s Vladimir Putin.

Apart from the Russia-Ukraine war, this meeting has huge implications for global trade and energy. We’ll get to that soon enough — but first, it’s necessary to get a handle on the war.

In recent weeks, “Trump has flip-flopped between his support for Ukraine and his positive remarks about Russia and Putin,” says Jim. “But lately he has come down firmly on the side of Ukraine and the neo-Nazis around President Zelenskyy.

“This means the war in Ukraine is now Trump’s war,” says Jim — underscoring a warning he issued as soon as Trump returned to office in January.

“Trump has promised more weapons to Ukraine and legislation is now moving to provide an additional $50 billion in aid.

“At the same time, Trump gave Putin an ultimatum to accept an unconditional ceasefire in Ukraine, which Russia naturally rejected. After all, Russia is winning the war decisively and none of the U.S. weapons systems provided so far has been effective. That won’t change.

“Where Trump has really gone off the rails is to threaten secondary sanctions on China and India,” says Jim.

Last month, Trump gave Putin 50 days to agree to a ceasefire — and if Putin didn’t comply, Trump said he’d impose 100% tariffs on any country that buys Russian energy.

Then Trump shortened that timeline to 10 days — setting an effective deadline of Aug. 8, last Friday. On that day, Trump announced he’d be meeting with Putin in a week’s time.

So the deadline is on hold — while the threat remains.

Here’s the problem — and why Trump doesn’t have any leverage. “India and China need the Russian oil to fuel their growing economies,” says Jim. “They will continue to buy it.”

Amid the threat of these 100% tariffs, the Trump administration continues to try to negotiate trade deals with India and China.

“It should come as no surprise that the India and China tariff negotiations have not been going well,” Jim wrote his Insider Indel readers this morning. “Why should they agree to regular tariffs without knowing whether punitive tariffs are right around the corner? They won’t.

“China and India have various ways to respond. They could redirect their exports to friendly countries in Europe or Brazil and Australia. They could impose countervailing tariffs on U.S. exports to them, including on soybeans and High Tech. They could restrict U.S. investment in their growing economies. The list goes on.

“What is certain is that the Trump tactic of secondary sanctions will hurt world trade and increase costs on many traded goods.

“The biggest single cost will be a higher price for oil,” Jim continues.

“That’s because Russia, India and China will all incur costs in insurance markets and ghost tanker fleets needed to evade the sanctions in the first place. Who wins from higher oil prices? Russia. Who loses? U.S. consumers who pay higher prices for gas at the pump compared to a world without sanctions.”

We’ll be standing by to see what comes out of the summit on Friday — and whether Trump is able to resist the advice of the Russia hawks on his team like retired Gen. Keith Kellogg and Secretary of State Marco Rubio.

Ironically, Jim says if Trump really wanted to hurt Moscow… he’d work with U.S. producers and Saudi Arabia to flood the global market with oil, driving the price down and depriving Russia of oil revenue. Stay tuned…

Hey, Big Spender…

Like it or not, DOGE hasn’t made a damn bit of difference to Uncle Sam’s balance sheet — and tariff revenue is barely filling the gap.

Yesterday afternoon the U.S. Treasury issued its monthly statement of income and outflows. Federal spending totaled $629.6 billion in July — 9.7% higher than July of last year.

Meanwhile, revenue totaled $338.5 billion — up only 2.5% from a year earlier despite a 290% leap in tariff revenue.

The result was a monthly deficit of $291.1 billion — up from $243.7 billion in July 2024.

For the first six full months of the Trump 47 administration, February-July, federal spending totaled $3.37 trillion — up 3.2% from the same period a year earlier, when the Biden administration was spending like the proverbial drunken sailor to ensure its reelection. And the six-month deficit of $880 billion is 1.7% higher than the same period in 2024.

The growth of the government’s budget gap translates directly to rising long-term interest rates: Bond traders have less and less confidence that Uncle Sam will ever get his act together.

The yield on a 10-year Treasury note sits at 4.26% this morning — compared with 3.82% a year ago. And those higher rates only make the debt spiral worse…

But for now, no worries for the stock market. The S&P 500 and the Nasdaq are reaching higher into record territory today — and the Dow might catch up soon.

At last check, the S&P 500 is up 13 points to 6,458… while the Nasdaq is up 31 points to 21,712.

The big mover is the Dow — up three-quarters of a percent to 44,794 and a little over 200 points away from its record close on July 23.

As for nondollar assets, gold is moribund at $3,353 but silver is on a tear — up over 50 cents to $38.39. Bitcoin is back over $121,000 — perhaps coiling for another run at a record.

Oil has sunk nearly a buck after the Energy Department’s weekly inventory numbers — now $62.27, the lowest since early June.

Making Videos: Almost as Easy as Sending a Text

“Remember when making a decent video meant dropping thousands of dollars? Those days are gone,” says Paradigm’s AI authority James Altucher.

I remember. When I was breaking into the TV news business nearly 40 years ago, “video editing” was done strictly on analog tape. It entailed a huge playback deck… a huge recording deck… a controller with buttons and jog/shuttle dials… and a couple of 13-inch tube TVs to monitor what you were doing.

Oh, and a rat’s nest of cables connecting it all.

Fast-forward to this summer: “In June,” James tells us, “a Los Angeles dentist with zero filmmaking experience created a video that looked as good as a Super Bowl ad. The concept was ridiculous but brilliant.

“A gorilla goes skydiving while drinking beer. He crashes on landing, breaking his two front teeth. Desperate for help before his date that night, he visits a Hollywood dentist who fixes his smile in under an hour.

“The ad cost less than $50 to make. It generated millions of views and brought in new patients worth tens of thousands of dollars.”

That’s just one example: “With AI video now making it possible for anyone to create high-quality content, executives at the big movie studios are scrambling to figure out how they stay relevant.

“The secret behind this revolution is Google's Veo 3,” says James — “released in May and already used to create more than 40 million videos in just 12 weeks.

“It was the first tool on the market to generate realistic videos complete with synchronized sound effects and dialogue.”

No, it’s not free. You need a Google AI Pro subscription — $20 a month, although sometimes you can score a one-month free trial.

James is always on alert for interesting side hustles his readers can pursue — and AI-generated videos are definitely one of them.

“Small businesses are desperate for affordable video content,” he wrote his Inner Circle Elite readers on Monday. “They need ads for social media, their websites and local TV. Some creators are charging $500–1,000 per AI-generated video that would have cost $5,000–10,000 to produce traditionally.

“In one day, you can create a few good sample videos showcasing different styles and concepts for ads. Post them on social media with a conclusion about how they were made with AI and you can help other businesses do the same. Set up a Facebook or YouTube ad account targeting small-business owners and watch the interest pour in.”

James’ bottom line: “In five years, we'll look back at this moment as the turning point when creating professional-quality video became as accessible as sending a text message.”

Of course, AI has both its upsides and downsides. It’s the latter we move on to next…

Great Moments in the Law

AI in the courtroom is no longer a laughing matter.

More than two years ago, we treated you to a good chuckle when lawyers in a personal-injury case relied a little too much on ChatGPT to prepare their brief.

Their client was suing the Colombian airline Avianca in federal court because he smacked his knee on a metal serving cart during a flight to New York. The lawyers’ brief included several nonexistent decisions and quotations, invented by ChatGPT.

The judge dismissed the case and fined the plaintiff’s lawyers $5,000. The case is so notorious it has its own Wikipedia page.

Now it appears that federal judges are relying on AI to render their decisions.

“In recent weeks,” reports The Washington Times, “two federal judges have had to withdraw rulings because of fabricated information that experts said likely came from faulty artificial intelligence queries.”

• A Reagan appointee in Mississippi struck down a state law forbidding state agencies from sponsoring DEI programs. Three days later, he withdrew his opinion because the Times says it “referred to nonexistent state law and parties and cited declarations that weren’t part of the case”

• Meanwhile, a Biden appointee in New Jersey withdrew an opinion that according to the Times “misstated case outcomes and included fabricated quotes attributed to litigants and other court precedents.”

The judges haven’t publicly explained their errors. But legal experts say it sure looks as if they relied on AI.

Wonderful as large language models like ChatGPT are, they have an unfortunate tendency to “hallucinate” as techie types say — or to make **** up as you and I would say.

“This should be thoroughly investigated,” says our Jim Rickards, who spent decades as a Wall Street lawyer. “The judges should be reprimanded and possibly subject to more serious discipline if it turns out they were using GPT to do legal research.

“Even if these mistakes were the work of law clerks, those judges should have exercised greater oversight, and the clerks should be fired.

“GPT is powerful and useful, but users must understand the flaws and limitations. Letting GPT run wild in the classroom or the courtroom is a recipe for disaster.”

Or anywhere else. Your editor prepared today’s write-up about the monthly Treasury statement with help from the Perplexity AI engine — way less time-consuming than tracking down six months of figures and plugging them into a spreadsheet.

Perplexity initially served up numbers I knew couldn’t possibly be right. “Thanks for catching the error!” it told me chirpily before correcting itself.

Mailbag: Sink the Antoni!

A reader writes to take issue with my tentative assessment of E.J. Antoni — Trump’s nominee to run the Bureau of Labor Statistics — as a straight shooter.

“Maybe he is. But he also has a wall-sized multipanel print of the famous Nazi warship the Bismarck plastered across his office.”

The reader supplied several screengrabs like this one to back up his case.

“This is Trump's MO. Loyalty over ethics. This man will say whatever Trump wants him to say.

“So no, I cannot agree with your assessment of his character. No one involved with the Heritage Foundation carries any credence in my book. Seems like a great choice if the plan is to lie and push more authoritarian power grabs forth, as we are witnessing in D.C. right now.”

Dave responds: No one wants to remember, but Heritage is the policy shop that dreamed up the “individual mandate” to buy health insurance — which became the cornerstone of Obamacare.

Anyway, I did qualify my straight-shooter statement by saying, “on the few occasions I’ve encountered Antoni’s posts on social media…”

Antoni is making noises now about suspending the monthly jobs report because he says the data is unreliable — running instead with quarterly data he describes as “more accurate, though less timely.”

Again, my familiarity with Antoni is limited. But it’s worth noting many conservative policy wonks are appalled at his nomination, such as Jessica Riedl of the Manhattan Institute — not exactly a hotbed of progressivism…

As for the Bismarck… who knows what Antoni’s motivation is. If he’s celebrating Nazi technology or warfighting skill — well, he should study up a bit more.

The Bismarck met its demise at the hands of the Royal Navy only nine months after commissioning — an event celebrated in the 1960 movie Sink the Bismarck!

(No, I’ve never watched, but I seem to remember it was a staple of Sunday afternoon TV when I was growing up…)

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets