In today’s issue:
- Using fentanyl and genocide to sell tariffs
- The Third Opium War has begun
- Why gold is the only way out for investors and nations alike
President-elect Donald Trump is not content with the chaos his “terrifying” cabinet appointments are causing in financial markets. He’s started announcing his “dangerous” economic policies too. And tariffs are top of the list.
Calling tariffs “the most beautiful word in the dictionary” and calling himself the “tariff man” converted more Democrats to free trade than Milton Friedman ever did.
But there’s been an interesting twist in the story since Trump argued tariffs just need a PR firm to improve their image. He’s found a way to sell them to the American people. Perhaps even those world leaders suffering the very worst cases of Trump Derangement Syndrome too.
The Don posted this on his social media site Truth Social:
“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States – But to no avail.
“Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before. Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America. Thank you for your attention to this matter.”
What? Tariffs because of fentanyl?
If this comes as a surprise to you, you must not be a Fleet Street Letter subscriber.
A year ago we told our readers just how bad the fentanyl crisis was getting. We explained how it worked (Chinese manufacturers via Mexico) and predicted what consequences it was about to trigger. Here’s some of what we published last November:
My argument is that China’s economic and foreign policy includes mimicking the UK’s during the Opium Wars, with one added feature. China is not just aware of the socially destabilising effects of widespread opioid use, but is deliberately exploiting this feature.
Just as Britain’s opium-fuelled mercantilism of the 1800s helped cause China’s internal political, economic and social chaos, so too are opioids today causing much the same trouble in the West.
The political, social and economic cost is large enough to prompt a response, especially if I am correct about opioid abuse spreading beyond the West.
As one expert witness told a Congressional hearing: “If a foreign country had infiltrated the United States with terrorist agents, released ricin or anthrax that killed over 100,000 Americans in a single year, what would our response be?”
Just as the issue of opium unexpectedly and nominally became the cause of two wars 200 years ago, I suspect the issue of opioids, addiction and trade policies could escalate again today.
Sure enough, the link between fentanyl and trade policies is precisely what Trump mentioned in his social media announcement of tariffs.
Long-suffering subscribers might remember much the same thing happened in 2020. In January, I published a report arguing China’s human rights abuses in Xinjiang would trigger trade war policies:
The reason many Western leaders bend over for Beijing is because disrupting Chinese trade would cause economic pain in their own countries, which would harm their re-election chances and scuttle their second career working for some pro-China institution.
But the horrors of Xinjiang can only be politely deflected by the political classes, media and Hollywood for so long.
We described some of those horrors in sickening detail. But the point was to explain what happens next. Trade war policies against China would undermine markets there and cause a lot of economic disruption around the world.
Five months later, Trump used the threat of sanctions over China’s treatment of the Uighurs there to push through his trade deal with the country.
Just as things were hotting up over Xinjiang, the pandemic came along and overshadowed everything. But now Trump is back. With a new cause in fentanyl, but the same trade war policies.
The big question is how Europe responds this time around. Is fentanyl as unpopular as genocide in the EU?
Vote with your heart or your wallet?
It’s no surprise that Trump isn’t very popular in Europe. Let alone his tariffs. It’s hardly fair to give the Europeans a taste of their own protectionist medicine, after all.
Back in January 2020, we predicted that Europe would side with the US because the moral outrage over the revelations from Xinjiang would be overwhelming. But the pandemic largely swept those under the rug, quick smart.
This time around, Trump is using the opioid crisis as his cover for trade war. Is Europe going to go along with that?
A year ago, our Fleet Street Letter analysis argued they would. The opioid crisis has spread rapidly to places like Canada and parts of central Europe. (Anywhere near a major train station, for some reason.) And our research explained how China is the key source of the problem.
A distant genocide may or may not have been enough to trigger a trade war with China back in 2020, if the pandemic hadn’t stolen the show. But the opioid crisis is likely to because of the chaos it is causing in Western countries.
What does any of this have to do with gold?
Well, there’s some immensely ironic history to consider for a start. Almost 200 years ago, the Chinese refused to trade for British goods. They only accepted silver for Chinese tea and silk. Both of which were rather popular in the UK.
Why silver? Because, back then, silver was the monetary asset of choice. It’s less valuable and more abundant, making it more suitable as a circulating currency.
The Empire didn’t appreciate being drained of its monetary metal. And so the Brits got China addicted to drugs to fix the trade balance and reverse the outflow of silver. Which means the UK only dumped Indian opium into China because of its protectionist trade policies and the outflow of precious metals.
When the Chinese objected to the opium trade because of the complete social chaos the drug caused, the Royal Navy quickly changed its mind, twice. And we kept Hong Kong for good measure.
But the Chinese remembered. And they used precisely the same weapon against the US.
History isn’t repeating. But the extent to which it is rhyming is really extraordinary. We believe precious metals are about to make a comeback on the back of the Third Opium War president Trump just declared.
Gold is the last reserve currency standing
The one topic all our guests at the Gold Summit 2025 want to talk about is the split taking place in world trade right now. And Trump’s trade war is a key part of that.
When the Americans and Europeans decided to freeze and confiscate Russian assets to help finance the war in Ukraine, they crossed a rather important line. Russia’s reserves had been obtained by trade over the years. Taking them away amounts to theft of legally earned property.
The trouble is, the US and Europe have a rather long list of geopolitical enemies that they trade with. Countries like China are now wondering whether their own reserves are safe. And deciding they are not.
But what alternatives can countries with trade surpluses invest their legally gotten gains?
Almost all assets are under the thumb of Western institutions and legal systems. They can be taken on the basis of things like war, genocide and drug peddling.
The exception to this risk is of course gold held within your own borders.
And so countries risking the ire of US foreign policy are shifting their reserves into gold and onto home soil. Even the Europeans are joining in.
So, if you’re expecting geopolitical chaos to hot up in 2025, perhaps as Trump presses the world into taking action against China over the fentanyl crisis, it’s time to sign up for our Gold Summit.
Until next time,
Nick Hubble
Editor, Fortune & Freedom
