Weekly briefing 116

The Week in Brief

The new world order isn’t built on values—it’s built on protection rackets, political expediency, and a war economy. Issue 116 reveals how the emerging US–Iran ceasefire is no diplomatic victory but a cynical exit strategy, engineered to serve Trump’s election campaign while selling out Israel’s interests and forcing the Gulf states to bankroll Tehran’s reconstruction.

And while politicians sign papers in Switzerland, the global economy foots the bill: Europe’s central bankers are being forced to hike rates to contain the inflation triggered by the closure of the Strait of Hormuz, and the rush for the “new gold”—space tech and AI—is about to crown Elon Musk history’s first trillionaire. In a world where a fractured Europe abandons joint defense projects for Gulf arms deals, and Russia builds massive bases along NATO’s borders, “peace” is merely a timeout to rearm.

As part of our effort to adapt to the new era, here is our dedicated chatbot (Gemini Gem), trained on our latest updates. It’s ready to answer any questions you have.

Geopolitical Dynamics

A. Trump’s “Protection” Deal with the Gulf: The US and Iran are expected to sign an interim agreement in Switzerland to end the war and reopen the Strait of Hormuz. The timing is no coincidence—Trump wants a win sealed around his 80th birthday and ahead of the midterms. But the real catch lies in the funding mechanism: Iran stands to receive a reconstruction fund of roughly $300 billion, financed largely by... the Gulf states. In effect, Saudi Arabia and the UAE—pounded by Iranian missiles and drones throughout the war—are now being made to pay protection money to the very power that battered them, just to buy back their own economic stability.

B. Communication Breakdown at the G7 Summit: The meeting between Indian PM Modi and President Trump at the G7 summit in France unfolded under unprecedented tension. Washington is furious over India’s purchases of Russian oil (and has slapped retaliatory tariffs on it), while New Delhi is seething over the deaths of three Indian sailors in US strikes on ships trying to run the naval blockade of Iran. With half of India’s oil supply stranded by the Hormuz closure, the “strategic partnership” looks more fragile than ever.

Security and Threats

A. The Nuclear Arms Race and Russia’s Entrenchment: New figures show global spending on nuclear weapons has broken a record, reaching $119 billion—with the US alone accounting for $69 billion. At the same time, Scandinavian satellite intelligence confirms Russia is building military infrastructure to garrison 115,000 troops along its borders with Finland, Norway, and the Baltic states. Ukraine may be tying down Putin’s forces for now, but Moscow is openly laying the groundwork for a future confrontation with NATO—the threat now at its highest level since the Cold War.

B. Paris Ditches Berlin for Abu Dhabi: With the joint Franco-German next-generation fighter program (FCAS) in collapse, Paris is wasting no time pivoting to the Middle East. The French government is in advanced talks with the UAE to jointly upgrade and develop the Rafale. The move is a death certificate for the dream of “European defense independence”: as the economy stutters, Europe would rather ditch partnerships at home for fast, liquid cash from the Gulf principalities.

C. Ebola Bleeds into Congo’s Terror Front: Researchers have traced the source of the current deadly Ebola outbreak to the funeral of a priest in Congo, where a broken coffin was moved—infecting dozens of mourners. But the health tragedy is curdling into a geopolitical disaster: the epicenter sits in the heart of a war zone held by M23 rebels and the ISIS-affiliated ADF. These groups attack medical teams and block treatment, all but ensuring that a virus that kills half of those it infects will keep spreading unchecked.

Economy, Technology and Trade

A. Scars of Hormuz—Europe Hikes Rates: The European Central Bank became the first to raise rates (to 2.25%) since the Iran crisis erupted. The move cuts through the illusion that today’s inflation is transitory: even if Hormuz reopens tomorrow under the deal, the supply chains are already broken. Analysts warn price pressures will run deep into 2027, now pushing Japan and the US to weigh similar tightening measures.

B. China’s Financial Wall: Beijing is putting a stranglehold on capital leaving the country, scrambling to halt a record $809 billion in outflows in 2025. The government has ordered financial institutions to close Chinese citizens’ overseas accounts in Hong Kong and Singapore, and has begun censoring social-media content that explains how to invest abroad. The aim: cage private capital inside China and force it to fund the Party’s drive for technological self-sufficiency.

C. The Path to the First Trillionaire — and Europe’s Digital Revolt: Elon Musk’s SpaceX is going public in the largest IPO in history, at a staggering $1.77 trillion valuation—poised to make Musk the first person ever to cross the trillion-dollar threshold. The listing captures Wall Street’s mania for space tech and AI. Europe, realizing it’s fallen behind and become a digital colony of the US, is dispatching envoys to Brazil this week in a desperate bid to forge “America-bypassing” trade blocs and manufacture some semblance of “digital sovereignty.”

Crises and Domestic Politics

A. Hungary Dismantles the Orbán Legacy: Hungary’s new prime minister, Péter Magyar, is pushing through a constitutional amendment capping the premiership at eight years. The measure, passed with sweeping support, legally bars the return of ousted nationalist leader Viktor Orbán—who ruled for 16 consecutive years—and completes a swift counter-revolution pulling Budapest back into the fold of European liberal democracy, alongside new wealth-tax initiatives.

B. A World Cup of the Missing in Mexico: The World Cup opening ceremonies in Mexico City were marred by violent clashes between hundreds of protesters and police outside the Azteca stadium. Thousands more seized the global media stage for mass demonstrations in central plazas—railing against the government’s failure to address the 130,000 people disappeared in the cartel wars, and against the privatization of pensions. Global sporting events are increasingly becoming a political weapon for citizens who feel the establishment has abandoned them.

C. A Razor-Thin Race in Peru, a Hunt for Legitimacy in Myanmar: In Peru, more than a week after the vote, the country is paralyzed: right-wing candidate Keiko Fujimori leads her leftist rival by just 1,303 votes—and the rival refuses to concede, demanding a recount. The crisis could yield the country’s ninth president in a decade. Meanwhile, the head of Myanmar’s military junta is in Beijing scrounging for international legitimacy, while China, as ever, brushes aside Western sanctions to secure its strategic oil pipelines and ports in the country.

“Surely goodness and mercy shall follow” (Psalm 23).

The Geopolitics Lab Team