• Assad overthrown – and now? –

The world seems to be on its head at the moment, with momentous events and breaking news coming thick and fast. Last week, one piece of bad news followed another. On closer inspection, each report contains incredibly explosive material. This may give a small taste of what to expect next year, which will be very turbulent under Trump. But perhaps the events are also related to something bigger that is looming and will only come to fruition next year. 1. In South Korea, the president declares martial law and then, six hours later, revokes it after strong protests from demonstrators and parliament. 2. In Georgia, there is a threat of a second violent ‘Maidan’ and overthrow of the government 3. In Syria, there is a change of power: Assad has to flee, but who will fill the power vacuum?+++ 4. Putin threatens to send missiles to the countries that allow their missiles to be fired from Ukrainian soil into Russia, which would mean a World War 3 5. Trump meets with Macron and Selinskyi in Paris to discuss a peace solution in Ukraine 6. Trump threatens the BRICS countries with tariff increases if they establish their own BRICS currency 7. China bans the export of some raw materials, Russia wants to ban the export of uranium to the USA. 8. France and Germany’s government crisis could jeopardise the euro.

Despite all these not insignificant dangers, the Wall Street indices and also the DAX and the Bitcoin rose to new all-time highs, with the DAX reaching over 20,000 index points and the Bitcoin over 100,000 BTC/USD. But many stock exchanges in Eastern Europe are also rising to new annual highs and can even outperform the DAX, such as the indices from Ukraine (+38%), Kazakhstan (+35%), Serbia (+34%), Slovenia (+32%), Hungary (+27%), Croatia (+25%), all of which once again clearly outperformed the DAX (+21.6%).

Risk-seeking investors can purchase shares in Kazakhstan directly online from the Cyprus-based broker Freedom Finance (Freedom Broker) if they open an account there first, which is easily done via the following link: https://freedom24.com/invite_from/2952896 .

Andreas Männicke also gives his assessment of the new opportunities in Eastern Europe in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 242 at www.YouTube.com. You can also register for free with the new BRICS TV channel on YouTube and subscribe to the new market letter BRICS Trends by emailing info@eaststock.de. You can watch the first BRICS TV video here: https://www.youtube.com/watch?v=FEKI72GKCzs&t=315s Please also register if you are interested in receiving the new BRICS newsletter. You can also read an introduction to the BRICS topic in VTAD News No. 42 and/or request it by emailing info@eaststock.de.

France in distress = euro in distress?

After the successful vote of no confidence by the opposition against Prime Minister Barnier, Barnier did in fact submit his resignation, but he remains in office on an interim basis until President Macron appoints a new prime minister. As a result, however, the budget for the coming year cannot be approved, just as it cannot in Germany. This puts the French government in a similarly difficult position to Germany, which is currently being ruled by a minority government until the new elections on 23 February – a model that already exists in Saxony, after a coalition with the Wagenknecht party BSW did not materialise. But now there was a coalition with the BSW party. It will be interesting to see whether the BSW party will now also enter the Bundestag on 23 February and then possibly tip the scales, or whether the desolate FDP will be allowed to remain in the Bundestag after all. Both now have only 4 percent of the votes in the election polls. We seem to be getting more and more ‘Weimar conditions’ in Germany, with a large number of parties and a strong right-wing fringe, which could become a danger to democracy.

But the acute government crisis in France is even more critical, because France, unlike Germany, has built up a huge mountain of debt. In France, the national debt ratio is 110% of GDP. In Germany, however, it is only 60%, partly because of the debt brake. In France, the budget balance deficit is 6% of GNP, while in Germany it is considerably lower. Since average interest rates rose significantly last year, France will have to budget €60 billion next year for the interest burden alone, which is more than the defence budget.

If the economy then slides into a slight recession next year, France could very quickly find itself in a financial emergency – quite apart from the 2025 budget, which has still not been decided. Furthermore, companies in France are the most indebted in the whole of Europe, and they will also suffer from higher interest rates. French banks are also heavily invested in Turkish bonds, where there could be high write-downs and losses in value. It would not be surprising if there were burning cities in France next year, especially in Paris, because there is not enough money for social purposes and education and savings are made in the wrong place. Then even Le Pen could win the presidential elections and Le Pen wants to get out of the euro. If the driving forces behind the EU – France and Germany – are also dragged into a recession next year by the new US president Donald Trump’s excessive tariffs, there is a risk not only of a wave of insolvencies, but also of the euro and democracy in the EU coming under threat.

Mass protests in South Korea and Georgia

Almost simultaneously, there are astonishing mass protests in South Korea and Georgia, which are not insignificant even for the world. In South Korea, the president suspects subversive forces from North Korea and has therefore declared martial law, but after the mass protests on the streets and in parliament, he withdrew it after just six hours. It remains to be seen whether he can now stay in office.

In Georgia, there may now be mass protests on the streets, some of them violent, because the pro-Russian party ‘Georgian Dream’, which was confirmed as the winner of the election, has put the planned EU accession on hold until 2028. The US and the EU have now threatened Georgia with sanctions. This now threatens to become a second ‘Maidan’, where, as in Ukraine in 2014, foreign forces – and here above all the forces of the USA and the CIA – may also launch a coup attempt against the government. It would not be impossible that Russia will intervene at some point, which is already partly the case. Putin is now apparently being overwhelmed and encircled by the US and the CIA with many external conflicts, so that he is losing power and influence in Ukraine.

Assad disempowered, but who now fills the power vacuum?

But Russian support was also hoped for by Syrian President Assad from Putin, after the jihadists advanced more and more and pushed back the Syrian military, but Putin could not help because he had enough to do with Ukraine. Now Assad has apparently fled Damascus and fled the country, and the Syrian Prime Minister is now negotiating with the rebels for a peaceful transfer of power. This is a truly surprising and historic event for Syria, because both Iran and Russia have lost an important ally in Syria. It is also not good for Russia, as a significant military base at the port in Syria could fall into the hands of the rebels, which is of great geopolitical importance for Russia. This can certainly be seen as a defeat for Russia and Iran, but also as a victory for Turkey, the Kurds, Israel and the USA. However, Iran wants to continue to maintain good relations with Syria. The USA does not want to withdraw from Syria and Israel will continue to maintain its position on the border on the Golan Heights.

There will be no democracy in the western sense in Syria!

The Syrian Prime Minister reaches out to the opposition and proposes new elections. But be careful: whoever emerges as the winner from the new elections, there is no reason to expect democracy in the western sense. It may even be the case that you go from bad to worse. You only have to look at developments in Tunisia or Egypt. However, it would be highly desirable for the transfer of power to be peaceful so that many Syrians could return to their homeland. This is above all the wish of Erdogan, who has had to take in too many Syrians because of the civil war in Syria.

Whether peace will now return to Syria and which power group will fill the power vacuum is still completely open, since the opposition has formed very different groups, but they also all pursue different interests. It may even be that the Islamists will soon attack again and lead the country into a new civil war. Then a new civil war will break out in Syria without Assad, with many new refugees heading for Europe, even though many Syrians now living abroad are celebrating Assad’s removal from power.

Can Trump bring peace to Ukraine?

It will also be interesting to see whether Trump succeeds in bringing about a ceasefire or even peace in Ukraine, as he announced he would do after his inauguration. This will not be as easy as Trump imagines, since both parties want extensive security guarantees. Selinskyi is already willing to temporarily cede the territories in eastern Ukraine if Putin approves Ukraine’s entry into NATO. However, this is precisely what Putin wants to avoid at all costs, so there can be no compromise here. In any case, Putin will try to create new facts by the inauguration of Trump on 20 January, i.e. to extend the frontline in the Donbas in his favour and also to win back large parts of the Kursk region with the help of North Korean soldiers. However, this will be difficult, as they are already being tracked and fired upon by Ukrainian soldiers in the Kursk region with the help of NATO’s reconnaissance system.

Macron, the ‘Sun King’, who is under severe domestic political pressure, met with Trump and Selinskyi in Paris to discuss proposals for a peaceful solution to the war in Ukraine on the occasion of the reopening of Notre-Dame. However, no details were disclosed and it is also unknown whether Putin will then accept the peace proposals made. At the same time, the USA is once again sending almost $1 billion to Ukraine so that Ukraine can buy even more drones (from the USA?) and is also authorising Ukraine to fire on Russia with American medium-range missiles, which is dangerous and could lead to further escalation. It will probably not be a peaceful Christmas.

Biden opens Pandora’s box

Joe Biden has now opened Pandora’s box by allowing American medium-range missiles to fire directly at Russia from Ukraine. The use of American, British and French medium-range missiles will cause Russia to respond accordingly with an even more massive attack on infrastructure using its new Orschink hypersonic missile, which supposedly cannot be intercepted by any anti-aircraft system. So it will be very bloody in Ukraine until 20 January with the danger of a 3rd world war.

Is a new BRICS currency coming despite Trump’s threats?

But Trump will not only meet with resistance from Putin, but also from the BRICS, despite all his threatening gestures. Trump has already threatened to impose 100% tariffs on all BRICS countries if they establish a new, separate BRICS currency that could be used as a unit of account in bilateral relations among the BRICS countries, thus replacing the US dollar as a unit of account. In this regard, Saudi Arabia has already terminated the Petro-Dollar Treaty with the USA and Saudi Arabia will play a greater role in the BRICS next year.

Trump threatens a global trade and currency war in 2025

But with that, Trump will trigger a global trade and currency war next year. China has already imposed an export ban on strategic raw materials that are important for the semiconductor industry as a test. Russia will stop supplying uranium to the US next year. This will lead to supply chain problems and bottlenecks again, resulting in a global recession that neither China nor the US can afford, given their excessive debt. Next year, the US will have to roll over 10 trillion in government bonds at much higher interest rates, which could put the US in financial difficulty. All this indicates that next year will be very turbulent and that there could be major disruptions in the capital market, which would be positive for gold and silver. Cryptocurrencies, on the other hand, could collapse across the board next year, which Trump and Musk would not like at all.

Eastern European stock markets outperform the DAX

So far, the world’s stock markets have ignored all the risks mentioned and are rising from one high to the next. The DAX 40, for example, broke through the 20,000 mark for the first time and is now up over 21%, with the indices on Wall Street performing even better in some cases (DJI +18.4%, S&P Index +28.4%) and NASDAQ Comp. Index + 34.5%). However, there are also clear outperformers in relation to the DAX on many stock markets in Eastern Europe, such as Ukraine (+38%), Kazakhstan (+35%), Serbia (+34%), Slovenia (+32%), Hungary (+27%) and Croatia (+25%). In particular, the Balkan region, but also Kazakhstan, which is rich in raw materials, continue to look very promising.

Will the rouble be rolling again soon?

The US recently sanctioned Gazprombank as well, jeopardising the gas supply from Russia to Hungary, Slovakia and Austria. The rouble immediately collapsed as a result, although the Russian central bank had already raised the key interest rate to 21% around October, which was also the level shortly after the start of the war.

If Trump were to lift the sanctions against Russia as part of a deal with Putin and the war were to end, access to the Russian capital market would probably be possible again, in addition to Kazakhstan. However, the EU will again have something against this. The EU is currently putting together another package of sanctions against Russia, which is aimed primarily at paralysing the grey Russian tanker fleet. In any case, if peace is indeed achieved, the Ukrainian stock market is likely to be among the top performers, as it has been this year. This will also lead to a major economic upturn in Ukraine.

Freedom Broker offers market access to Kazakhstan

The KTX Local Index for stocks from Kazakhstan has already risen by 35% this year. You can also buy stocks from Kazakhstan directly online through the broker Freedom Finance from Cyprus, which has the advantage that you can quickly receive the sometimes very high dividends into your securities account. For example, Halyk Bank even has a dividend yield of 16% and a return on equity of 34%. The world’s second largest uranium producer, Kazatomprom, could benefit from Russia stopping the export of uranium to Russia next year. A counter-opening is easily possible online at the following link: https://freedom24.com/invite_from/2952896 If you still need advice on exchanging Russian ADR for original shares, Freedom Broker, which also has a branch in Berlin, is also the place to go.

Inform before investing

Find out now in detail about the background and development of the Ukraine/Russia crisis, but also the future recovery potential of undervalued Eastern European equities. There are also new opportunities in the Baltic states, Southeastern Europe and the CIS republics (Kazakhstan, Georgia), with the respective stock indices all up in 2023. In 2023, 12 stock markets from Eastern Europe were among the 30 best-performing stock markets in the world, with 5 clearly outperforming the DAX. In 2024, 9 stock markets in Eastern Europe outperformed again with a strong plus. So it’s still worth taking a look beyond your own backyard at Eastern Europe.

So order a trial subscription now (3 issues by email for just €15) of the monthly market letter EAST STOCK TRENDS (EST), which includes a further Ukraine/Kazakhstan/Russia special and a dividend special, as well as a lot of background information and new investment suggestions such as the ‘share of the month’ and lucrative certificates at www.eaststock.de, there under Börsenbrief. The last EST was published on 29 November 2024.

TV/Radio Notes: On 5 February 2024, Andreas Männicke was interviewed by Carola Ferstl on Money Talk about gold, commodities and the new opportunities in Eastern Europe. On 5 December 2024, Andreas Männicke was interviewed by Heinrich Leben on Börsenradio Networks about the new opportunities in Eastern Europe, particularly in Ukraine after the end of the war. All radio and TV interviews can be downloaded from the video archive at www.eaststock.de, including the latest video on EastStockTV, episode 242. By the way: Have you already subscribed to the new YouTube channel – BRICS TV, in addition to the EastStockTV YouTube channel?

Reading note: in the new issue of VTAD News No. 42, Andreas Männicke provides a detailed report on BRICS as a new investment opportunity.

Seminar note: If you are interested in new Eastern Exchange seminars ‘Go East’ or a BRICS seminar in Frankfurt/M or other cities, please contact the EST editorial team (www.eaststock.de ). If you are interested in Eastern stock market webinars and BRICS webinars, please also register.

You can now also order the free newsletter from Andreas Männicke with the latest news about the world and Eastern stock markets and the BRICS at www.eaststock.de. Please also register at info@eaststock.de if you are interested in a new BRICS newsletter from Andreas Männicke.