Tweet loudly and carry a big stick

US Foreign Policy is changing its methods if not its aims

The media is awash with push back against Elon Musk and his ‘attack’ on US AID, the secretive agency that is currently the subject of severe scrutiny by Musk and his team of teenage wizards. Much of the commentary is about the importance of the US Aid Budget, but it is not semantics to separate US Aid, from US AID, for while the former can plausibly be defended in terms of the proverbial starving children in Africa, the latter is a very different animal. Many of those defending US AID may be unaware of the difference, but many certainly are, not least because they are part of its ecosystem.

1) It’s an open secret in Washington

In the very simplest terms, US AID is a kind of ‘off the books’ catch-all agency for US foreign policy, with an annual Budget of around $60bn and is effectively the conduit through which the US government funds certain activities of the CIA. While the agency was set up under JFK, the modern shape evolved under Reagan; his predecessor Jimmy Carter had all but closed down the CIA after the scandals of the late 1960s so the new role of USAID became that of facilitating all the unofficial work of the CIA. To do this, it often used another ‘cutout’ as they are known, the National Endowment for Democracy (NED) and together they have channeled hundreds of billions into assorted NGOs around the world to ‘influence’ foreign countries and ensure that the aims of US foreign policy are met.

Some of this is revealed in the headlines coming out, the funding of foreign media, the support for opposition parties, the promotion of certain value systems with the knowledge they would upset the existing cultural balance (shall we say) and so on. But the unspoken part, as yet, is the funding of dozens of political coups and color revolutions, which is why many in government around the world will be very glad to see the back of US AID, while many will be hoping they don’t ask for their money back

One classic recent example is Georgia, where the Prime Minister tried to pass a bill requiring the thirty (yes thirty) thousand NGOs in his country to reveal the source of their funding and register as foreign agents. Fewer than 500 complied and, naturally there were ‘spontaneous protests’ and talk of Russian interference. He nevertheless succeeded and has now increased pressure in the wake of the moves on US AID

It is well known internally too, Robert Kennedy Jnr has talked extensively about it and one particular deep state insider, Mike Benz, who has made revealing this his life’s work, has been very active recently. His appearance last month on Joe Rogan has 1.9m views on YouTube and was undoubtedly a major factor in raising awareness across the alternative media ahead of the Musk Audit and Accountability drive.

2) It’s part of defunding Trump’s enemies

DOGE taking aim at the head of the five families USAID

So, as the expression goes, “Why are we being told this? And why now?” Well as far is we can see it is because the Color Revolution machinery went domestic and has been being used by Trump’s political enemies since 2015, not only in funding his opposition generally, but more specifically in areas like the ‘Soros prosecutors’ behind the so-called lawfare attacks on Trump. The new President realises that the best way to close down this type of opposition is to starve it of funds; exposing the waste and corruption is then seen as the best way to do this. Sunlight is the best disinfectant.

This is the equivalent of the Baptism scene in the Godfather

This is why the argument that the amounts are modest compared to the overall size of the budget misses the point. Team Trump realises that you drain the swamp, not with a bucket, or a big pipe, but start with a small irrigation ditch and then allow momentum to build.

3) It’s part of the new world of Tariffs

So why is this important for investors? Well, firstly it helps explain the new world of tariffs. Instead of pretending to be everyone’s friend while quietly undermining them in the background, Team Trump is doing everything in the open. Trump is not so much curtailing the activities of the CIA and other agencies of the Deep State as bringing them back under scrutiny.

Certainly it is important to clamp down on graft and corruption and it is as popular with voters as it is unpopular with those receiving the grants and the allocations, but the driving purpose from Trump’s point of view is to defund his enemies.

The US will now threaten to punch you in the face rather than silently stab you in the back

Meanwhile, instead of working to install a US friendly government, the US will now simply politely threaten the existing one with tariffs if they don’t co-operate. This won’t work everywhere, but substitutes a big stick plus a carrot model in place of subversion. In a weird way this clarity reduces uncertainty.

Interesting also that the pause in using the Corrupt Foreign Practices act, (so many things happening all at once) while attracting similar knee jerk responses and while undoubtedly partly to do with removing some of the suffocating bureaucracy, is also part of this new approach.

Although notionally about US companies, its biggest impact was arguably the ability for the US to control foreign companies in foreign countries. This move then suggests a shift away from using the US legal system to act against anyone whose business touches the US financial system. The notion of the US fining foreign companies for actions in foreign countries was always a bit ‘odd’ and it seems that Team Trump has decided that the trade off - making things much harder for US companies is no longer worth it. The big stick of sanctions will be used instead.

4) It’s part of the end of the old world of the WEF

It also points to a continued unravelling of the whole Globalist open borders and Net Zero project. We noted in the monthly how Davos is now effectively over and certainly without the $70m that WEF received from USAID its power and influence will wane further. This could be significant for Europe as the German Election this month is likely to push Europe further from Globalism, which offers at least the hope of a reset, particularly on the energy side of things.

This is thus the moment predicted by Peter Zeihan in 2022 (The End of the World is just the beginning), where the US steps away from its Defense guarantee and in doing so ends Globalisation as we know it.

5) It’s part of the focus on controlling the Budget deficit

The Audit and Accountability process is going to move to the bigger Budget areas of Education and certainly Defense. This ties in with the NATO ‘demands’ for allies to spend more with the US Military Industrial Complex - keeping them happy while reducing the US tax payer contribution to their profits. Making a cut in the US discretionary Budget (Defense is roughly a third of this) achievable without encountering the resistance of the deep state is the aim here.

Jean Baptiste Colbert’s wise words on the art of taxation also apply to the cutting of spending. You can cut Defense spending much more easily if it is topped up by your ‘allies’. And now that you are using tariffs rather than aircraft carriers as your ‘Big Stick’ to encourage pro American behaviour, you can likely close down some of the (allegedly 800) military bases around the world.

This is all good for the deficit and, by extension US Treasuries.

The aims of US Foreign Policy may not be changing, but the methods are. As we discussed in Method in the Madness, simply saying Trump is, in the words of Lady Carline Lamb about Byron, mad or bad and dangerous to know isn’t good enough.

This is now the direction of travel and the winners will be those that adjust early.