TACO or World War III
TACO or WWIII
Either the president will back down from his declaration of a blockade against Venezuela… or World War III starts this week.
It’s one or the other.
As you might have heard, last night Donald Trump declared “a total and complete blockade” of all “sanctioned oil tankers” entering or leaving Venezuela.
“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” he said on his Truth Social platform. “It will only get bigger, and the shock to them will be like nothing they have ever seen before.”
For decades, if not centuries, statesmen have looked upon a blockade as an act of war.
One of the things that made the Cuban Missile Crisis of 1962 so dangerous was that President John F. Kennedy imposed a U.S. naval blockade of Cuba.
But he was careful never to call it a “blockade” — knowing the nuclear-armed Soviet Union would see it as a declaration of war. (He used the euphemism “quarantine” instead.)
Around the same time Trump declared the blockade last night, a sanctioned Russian oil tanker began approaching Venezuela.
The Hyperion is called a “shadow tanker” because while it flies a Gambian flag — the better to evade U.S. sanctions — it appears to have substantial Russian ownership.
A U.S. attack on this ship would be a U.S. attack on Russia.
Your move, Mr. Trump.
For months now, financial observers have invoked the term TACO — short for “Trump always chickens out.” It seems Moscow just called his bluff…
Meanwhile on the economic warfare front, the Trump administration is ready to impose yet another round of sanctions on Russia “should President Vladimir Putin reject a peace agreement with Ukraine,” according to a Bloomberg report.
It appears existing sanctions on Russia’s “shadow fleet” would be stepped up — as well as sanctions on “traders who facilitate the transactions.” Bloomberg says Treasury Secretary Scott Bessent discussed the move last week with European diplomats.
Hmmm… Only last month, Bessent was being interviewed by Kristen Welker on NBC’s Meet the Press — slamming the European Union for planning an additional round of sanctions on top of the 18 already imposed.
“The Europeans tell me, ‘Oh, we are doing our 19th sanctions package.’ In my mind, Kristen, if you're going to do something 19 times, you failed.”
Perhaps American sanctions have some sort of magic pixie dust that European sanctions lack?
Yesterday, the price of oil sank to its lowest level since early 2021 on silly rumors that peace was about to break out between Russia and Ukraine. Today it’s up nearly a buck to $56.10.
DIS and AMZN and OpenAI
After Disney announced it would sink $1 billion into ChatGPT maker OpenAI last week, Amazon just said, “Hold my beer.”
We should back up a bit. Last week at the big annual gathering of the Paradigm editors at our Baltimore headquarters, trading pro Enrique Abeyta forecast what he called the “OpenAIpocalypse.”
Enrique has long thought that OpenAI’s head honcho Sam Altman is all hat, no cattle. He thinks 2026 is the year it will all come crashing down — in catastrophic fashion. Enrique even compares OpenAI’s likely fate to the collapse of Enron in 2001.
So… The big AI headline today is that Amazon is discussing a deal to invest $10 billion into OpenAI. In exchange, OpenAI would adopt Amazon’s Trainium series of AI chips and use Amazon Web Services’ data center capacity. At least that’s what the tech website The Information is reporting.
AMZN’s reported $10 billion gambit comes on the heels of a mere $1 billion investment in OpenAI announced last week by The Walt Disney Company. Under the deal, ChatGPT users would get access to Disney and Marvel characters to create their own AI-generated images and videos.
“Well, the devil is in the details,” Enrique writes this morning on the daily-feed section of the Paradigm Press mobile app.
“Now it has come out that OpenAi is paying DIS not in cash, but with warrants to buy OpenAi stock.
“Those are likely well in the money and Disney would only put the $1 billion investment in IF they were so — in fact — while Disney WOULD be investing $1 billion into OpenAi, they likely would be making much more money than that.
“Don’t believe the headlines!”
The reality check is having zero impact on DIS stock this week — trading near a one-month high. Meanwhile AMZN is up three-quarters of a percent a day after its own OpenAI announcement. Go figure…
The big market story once again today is… silver. The white metal is up $2.82 at last check — a whopping 4.4% — to $66.49.
“Mr. Slammy” — the mysterious forces in New York and London that can depress the silver price — is nowhere to be found today after another round of furious buying in Shanghai.
Gold, meanwhile, is tightening its grip on the $4,300 level — the bid now $4,338.
The major U.S. stock indexes are all in the red — the Dow holding up best, the Nasdaq faring worst. The S&P 500 is down nearly two-thirds of a percent at 6,757. If that holds by day’s end, it’ll be the first sub-6,800 close since Nov. 25.
Crypto appears stuck where it was 48 hours ago — Bitcoin under $87,000 and Ethereum under $2,900.
About Those Job Numbers…
Hustle or desperation? The number of Americans working more than one job is now its highest in records going back more than 30 years.
Digging a little deeper into the government job numbers released yesterday, we see that 9.3 million Americans reported working two or more jobs last month — 5.7% of all job-holders.
“Only in the mid-1990s, when the workforce was considerably smaller than it is today, was the share of multiple job holders higher, peaking at 6.5% in November 1996,” writes Felix Richter at Statista.
“But whereas in 1996, around two-thirds of multiple jobholders were not college-educated and presumably worked in low-wage occupations, half of those working more than one job now do hold a college degree, indicating that even an advanced degree no longer guarantees a job that pays well enough to make ends meet.”
The number of multiple job-holders in November of 2025 is substantially higher than it was in November 2019, ahead of the pandemic — as well November 2008, the nadir of the financial crisis.
Meanwhile, even by the new 2020s standard of what constitutes a healthy job market… job creation is looking punk.
Time was that it took 150,000 or even 200,000 new jobs every month for the economy to keep up with population growth.
But population growth has slowed to a crawl. The border has been effectively closed since last spring, illegal migrants already here are being deported and the native-born working-age population is stagnant.
Experts like demographer Neil Howe and Bianco Research founder Jim Bianco say the “breakeven” number of new jobs needed to keep up with population growth is now perhaps as little as 30,000.
But poring over the numbers released yesterday… the average for the last six months is less than 17,000. Not great.
That said, the Bureau of Labor Statistics acknowledges that because most of its personnel were furloughed for 43 days during the partial government shutdown, its data for October and November might be subject to “slightly higher than usual standard errors.”
Not that it was ever super-reliable to begin with, but that’s a story for another day…
TikTok: Still Not In U.S. Hands
For the record… TikTok ownership still hasn’t passed into American hands.
Maybe you don’t remember now… but the social media platform used by half of the U.S. population was in danger of disappearing earlier this year.
In fact, it did disappear for a few hours on the eve of Donald Trump’s inauguration — thanks to a law that overwhelmingly passed both houses of Congress last year and was signed by Joe Biden. Under the law, TikTok’s Chinese owners had to sell its U.S. assets to U.S. buyers.
Upon taking office, Donald Trump gave TikTok a 75-day reprieve to find a buyer. Then came another reprieve. And another…
As you might recall, an American consortium led by Oracle co-founder Larry Ellison was all set to take over. Trump himself made the announcement on September 20. The whole thing was supposed to be buttoned up when Trump met with Chinese President Xi Jinping at the end of October.
But it wasn’t to be. Beijing still looks upon TikTok as valuable leverage in ongoing talks with Washington about a host of issues including trade.
The most recent deadline was Dec. 16 — yesterday. And now it’s been pushed back to Jan. 23 of next year.
"We're just standing by and waiting to see what happens," says Frank McCourt — the former owner of the Los Angeles Dodgers and part of the U.S. consortium.
"But if the moment arrives,” he tells the BBC, “we're prepared to move forward... we've raised the capital to buy it — we'll see."
Mailbag: Silver Hoarding
On the subject of silver hoarding broached in Monday’s edition, a reader writes…
“Back when the Hunt brothers attempted to corner the silver market I understand they had purchased a lot (tonnes) of physical silver.
“When this was discovered, who advised, or ‘required’ them to get rid of their vast holdings? Do they still have possession of it?
“If they were required to divest themselves, how was this accomplished, and wouldn't that have caused the price of silver to decrease by dumping all of that physical silver? Or did they simply offer it to their like-minded ‘friends’ like JP Morgan and others who may have been happy to ‘take it off their hands’ as an investment?
“I recall buying silver dollars through the mail for $2–3 each in the early ’90s.”
Dave responds: What wrecked the Hunt brothers’ attempt to corner the silver market in 1980 was that the rules of the game were suddenly changed. The Comex changed the margin requirements on silver futures.
That’s the short story. Colleague Adam Sharp told the story in more detail over the summer at The Daily Reckoning. (Spoiler alert: It wasn’t all about the Hunt brothers…)
