On February 28, 2025, in his infamous meeting with Volodymyr Zelensky at the White House, Donald Trump told the Ukrainian president that "you don't have cards" in the deck of war against Russia.
Since then, Trump has cut off material aid to Ukraine and lifted some sanctions on Moscow. Paradoxically, it is Russia that seems to have fewer cards each day. This week, Moscow has lowered its growth forecast to 0.4% this year, which, according to the IMF and the World Bank, means a recession, as both institutions believe that official Russian data overstate GDP growth by at least six tenths. Even with oil prices hovering around $100, Russia is unable to achieve growth, largely due to its colossal defense spending, officially at 6.3% of GDP but possibly more than double that in reality.
The 'afroyuan,' a little brother to the 'eurodollar'?
For seven decades, part of the global economy has revolved around eurodollars, dollars owned by foreigners and managed by non-US financial entities (the term eurodollar comes from the fact that the traditional way to manage this money has been through London). But now, the afroyuan is emerging. Okay, the comparison is exaggerated, but somehow the renaming of debt in yuan that African countries owe to China in dollars needs to be addressed. Mozambique is considering converting $1.4 billion of Chinese debt into yuan, with very favorable conditions, to avoid a possible default. Ethiopia is contemplating doing the same with $5.38 billion. Zambia is accepting that some Chinese mines pay taxes in yuan instead of dollars or the local currency, the kwacha. And Kenya has already denominated a $5 billion debt in yuan.
Emirates swaps OPEC for Israel, Trump, and the dollar
The United Arab Emirates has not only left OPEC, dealing a blow to the organization and its neighbor Saudi Arabia. It also secretly participated in the bombing of Iran by Israel and the United States, increased its military purchases from both countries, and even allowed Israeli military presence on its territory. It has strengthened its economic alliance with the US, as evidenced by negotiations with the Donald Trump administration for a $20 billion swap line - essentially a credit line - to maintain the fixed exchange rate between its currency, the UAE dirham (AED), and the dollar. However, despite the impact of the war, the UAE's economy is not at risk of collapse, leading some to believe that the operation is aimed at further strengthening the alliance between Washington and Abu Dhabi. In return, the UAE can always buy more US debt to help curb rising interest rates in the country.
Anthropic's ethical artificial intelligence surpasses ChatGPT
OpenAI, the company behind, among others, the famous ChatGPT, is no longer the most valuable artificial intelligence company. Although valued at a staggering $852 billion, OpenAI was surpassed this week by Anthropic, which tripled its value in three months and is now worth $950 billion. Founded and led by Dario Amodei, a rare individual who left OpenAI because he felt that the company's ethical standards in handling something as sensitive as AI were insufficient (someone in Silicon Valley putting ethics ahead of business is quite outdated), Anthropic has clashed with the Pentagon because it does not want its AI to be used for lethal purposes (another eccentricity), and its chatbot, Claude, is one of the most rigorous in dealing with users with suicidal tendencies (see graph). Among the worst is Grok, by Elon Musk. Who could have imagined that!
India's dilemma: either they open Ormuz or close the jewelry
To imagine, outside the context of Monty Python - or Berlanga - a political leader telling voters, "If you keep buying gold and silver, you will lead the economy to bankruptcy," is at least a sign that medical attention is needed. This is only conceivable in a country associated with wealth, luxury, and tax evasion. However, this message was issued this week by India's Prime Minister, Narendra Modi. To discourage the purchase of imported gold and silver, which are very popular in the country, as in much of Asia, Modi's government has doubled tariffs on both. Other proposed austerity measures are more common, including not going on faraway vacations, using public transportation instead of cars, and spending less on fuel. The reason is the war with Iran and the blockade of the Strait of Hormuz, which threatens to disrupt India's economy, the world's second-largest oil importer after China.
The 'everything for a euro' war, deadlier than futuristic weapons
In the 21st-century war, hypersonic missiles are important. But sometimes, weapons that seem to come from a 'everything for a euro' store are even more crucial. These weapons have a name: FPV drones (First Person View). They cost around 425 euros, plus another 50 for an Artificial Intelligence (AI) system that guides them, with the help of a soldier directing the aircraft through a fiber optic cable. This basic system is causing up to 80% of Russian soldier deaths in Ukraine, according to The Economist magazine. The threat is such that several countries are developing lasers against them, which are as cheap or even cheaper. Each shot from the Israeli Iron Beam laser costs only between two and four euros, and eight euros for the British DragonFire laser. However, for now, lasers are not as easy to use as drones, which can become a serious problem in the hands of criminal or terrorist organizations.