I want to open this commentary with the words of General Laura Richardson (Ret.) in a brief video clip. Her last assignment was as commander of the United States Southern Command from 2021 to 2024. She was an army aviator who flew Sikorsky Blackhawk helicopters. She is the second woman to attain the rank of four-star general in the US Army and the third woman to lead a combat command. You can read her full bio here:
“Laura J. Richardson” | Wikipedia, https://en.wikipedia.org/wiki/Laura_J._Richardson
Speaking in January of 2023, she did not mince words about the US’s national interests in Latin America. Here’s a short video clip posted on X:
Readers should note that this brief excerpt comes from a lengthy, in-depth interview hosted by the Atlantic Council. The video in its entirety is available at https://www.youtube.com/watch?v=S2ry5Xl7AhM, and the quote excerpted begins at 20:55.
The Trump Corollary policy we have mentioned in other writings (and most recently on Sunday Jan 4TH) is clear. It’s about oil and minerals and power. Here’s the link to last Sunday’s Kotok Report:
“Is Cuba Next?”: https://kotokreport.com/is-cuba-next/
Let’s turn to our analysis from a year ago. Here’s an excerpt, but I encourage readers to review the rest:
The boundary dispute between Venezuela and Guyana has resurfaced as a threat of expanding war in 2024. See our guest commentary from Sam Rines: “Oil, Guyana, Venezuela, US Economics,” https://www.cumber.com/market-commentary/sam-rines-guest-words-oil-guyana-venezuela-us-economics. The issue is now about oil and particularly offshore oil drilling and production. Venezuela has run down its capacity and failed to maintain oil production facilities under the dictatorial regimes of Chavez and now Maduro. Meanwhile, Guyana has initiated and developed oil leases offshore, and American companies have successfully initiated development and production.
(“Putin, Maduro, Oil, Defense” | Cumberland Advisors, https://www.cumber.com/market-commentary/putin-maduro-oil-defense)
Mauldin Economics linked to our discussion in
“Get Ready for Resiliency-Driven Inflation” | Global Macro Update | Mauldin Economics, https://www.mauldineconomics.com/global-macro-update/get-ready-for-resiliency-driven-inflation
This piece is an excellent read. Hat tip to Ed D’Agostino, who joined our delegation for one of the Cuba trips I co-led for the GIC [www.interdependence.org].)
I think Maduro sealed his fate when he declared war on neighboring Guyana, where US entities were already helping to develop oil production. In my opinion, a weak and indecisive Biden administration waffled the response to Maduro and, as a result, empowered Maduro to push the envelope farther beyond the line he had already crossed.
In the run-up to Venezuelan elections, the Barbados Agreement, mediated by Norway in 2024, was intended to ensure free and fair elections in Venezuela:
“Barbados Agreement” | Wikipedia, https://en.wikipedia.org/wiki/Barbados_Agreement
In response to its signing, the Biden administration granted temporary relief from certain sanctions and allowed Venezuela to engage in secondary market trading, with the stipulation that the relief would be contingent on the Maduro regime’s sticking to the terms of the agreement.
“Biden administration revives oil sanctions on Venezuela, saying Maduro reneged on democracy deal” | POLITICO, https://www.politico.com/news/2024/04/17/biden-oil-sanctions-venezuela-00152821
Maduro took advantage of the additional leeway. The history and analysis from the past are now confirmed by events.
My view
Whether you like it or not, the Trump Corollary has arrived. It’s not about ideology. It’s about power, money, materials, assets. It’s about keeping Chinese and Russian influence out of the Americas, North and South. It views the Americas as off limits to others. That was James Monroe’s view in 1823, but he was focused only on the existing European powers he knew at the time.
Trump practices “gunboat diplomacy.” I recommend a short reading of the history of using this form of power. Specifically, see the section about Theodore Roosevelt and Venezuela in the article below:
“A Whittled ‘Big Stick’” | The American Legion, https://www.legion.org/information-center/news/magazine/2019/january/a-whittled-big-stick
When you finish this five-minute read, you will understand the Roosevelt Corollary. That is the context for observing the new Trump Corollary — or the “Donroe Doctrine,” as Trump himself termed it after the raid.
A final observation. The entire region of coastal Venezuela and Guyana holds the largest oil reserve in the world, much larger than the Arabian Peninsula’s and much larger than Russia’s. And it is developed mostly by American oil companies. It is proximate to the United States for capital, defense, investment, and security. The US dollar is the region’s monetary reserve.
I expect financial markets to reflect the dominance of the US power in this region. Over the next few years, a massive positive oil supply shock will unfold from this policy. We will see it in the way it impacts all energy prices and money flows in the energy sector. Add the AI productivity gains, and the outlook for large asset redeployment shifts is unfolding as this commentary is written.
The alliances in the Southern American hemisphere are shifting rapidly and powerfully.
More will be forthcoming about the transition from the Monroe Doctrine (1823) to the Trump Corollary/Donroe Doctrine (2025–?). Note that it only took 200 years, with an interim stop at the Roosevelt Corollary on the way.
I will close with a graphic released by Alan McCleod on X, for historical context.
