Transcription
Hello everyone, it's Atrid. Happy New Year to all. I hope you've had a good start to this year. In any case, that's not the case for Venezuela, and that's what we're going to look at in this video. This is a topic that is extremely important to master because these macroeconomic points will determine the impact on the real economy and on the assets we bet on. This can be risk assets, just as it can be commodities, notably oil or precious metals. And so we're going to try to predict and anticipate what might happen to the economy. And to answer this question, we need to address three points.
First point, it's the direct economy. What will be the consequence on GDP, notably, on industry, and on the economy in general? Second point, we will indeed look at whether the USA-Venezuela war can cause harm or at least have an impact on a particular asset in particular, on which Venezuela would have a quasi-monopoly, or even a total monopoly in terms of exports. And finally, the last question to address is international sanctions, because naturally, a country that starts a war can face international sanctions that will affect its economy.
So, the first point, which is extremely important, and we'll focus on risk assets, so the S&P 500 but also cryptocurrency. What is the direct consequence of the USA's participation in an armed conflict, or even the start of an armed conflict initiated by America? And you can see here, we are on the S&P 500, weekly timeframe, and I've put for you, well, not all the times the US has participated in confirmed conflicts because it's a bit of an addiction for them, they do it almost all the time, but the main participations, or even the launching of armed conflicts by the USA, and the price reaction on the stock market, which is by definition one of the most volatile, most at-risk markets among global assets that can be traded on the markets.
And what you can see is that right here, we had the participation in the conflict in Iran with, as you can see, an impact that was not at all bearish on prices. We had here the participation and strikes in Yemen, which marked the bottom in Q1 2025. We had the US intervention in the Red Sea. Here, no negative impact on the price. On the contrary, the bullish momentum continued for weeks and weeks, or even months. Here, in Afghanistan, it was the same. And if we go back in time, almost every time the impact is really not noticeable. In any case, we have a continuation that is bullish. We have Libya, Yemen, Afghanistan, Iraq here, and if we go further back, we still have conflicts each time that mark either bottoms or simply a continuation of the bullish momentum.
And this is a first important point, which is to say why do we have these reactions? And these reactions are explained. They are explained thanks to this chart, which shows you precisely the reaction of a country's GDP depending on whether the war takes place at different levels. The first level is within the country, naturally. The second level is outside the country. And there are different levels like this where there are projections. And the projection that interests us is naturally this projection here, which shows you the GDP when the armed conflict takes place outside of one of the states participating in the conflict. So we are exactly in this scenario because the United States has launched strikes on Venezuela. So the armed conflict is taking place in Venezuela.
And what we can see is that the GDP curve increases as time passes and the war unfolds. And this is explained by what? Because naturally, all industry participates in the military effort. We have all the manufacturing of armed vehicles, armor, missiles, ammunition, and so on. And this involves the real economy, all the industry that will participate in this war effort. Important point, in this video, we are not looking at ethical, moral, or other conditions. We are just looking at the impact on the economy. Yes, in a perfect world, there would be no wars. Now, there are. So, we who are in the markets, our only ambition is not to talk about ethics and morals, but to talk about impact, economy.
And so, we see that precisely at the American level, GDP, in any case, the longer the war lasts, the more positive its impact is on American GDP. For Venezuela, we would be more in this category right here, where we have the war precisely on the territory, and there, it's awful. We have a GDP that collapses. And this gives two hypotheses for the continuation of the conflict: that firstly, Venezuela, in a simple balance of power, does not necessarily have an interest in having a war against the United States because they are not a match, let's say it directly, and also because naturally, the entire internal economy of Venezuela can collapse, and this is a very important consequence for policymakers, which will be taken into consideration to potentially reach negotiations quite quickly. And this explains why we have had, not crashes as soon as the war was announced or in any case, participation in an armed conflict was announced by the United States. We potentially had a week, or perhaps two weeks of fear in the markets, but then it quickly recovered because naturally, the big players, those who make this market, who have a lot of money and who have dozens of people even more competent than me on these subjects, know what I'm explaining to you, know the impacts it has in the medium term on assets, and therefore they make bullish bets on this kind of market.
On crypto, I had already explained these impacts to you when the USA participated in armed conflicts in Yemen and between Iran and Israel. These were two occasions for me to remind you of these principles, and you can see that on Bitcoin, it led to the same thing. Yemen was an almost absolute bottom for Bitcoin, and the participation in the Iran-Israel conflict resulted in a bearish week. But then, we recovered this bearish movement with three strong weeks that led to a bullish explosion on Bitcoin of almost 23% to 24%. So these impacts are known, they are demonstrated, we have been able to observe them quite a few times over the years, and this allows us to make a prediction that we will not have a bearish impact here in the medium term. It is entirely possible to have a small bearish week to reach certain objectives. Notably here, it's the lows that are accumulating right there. It would indeed be a magnificent pretext to open next week bearish, to trap a lot of people who will think that the armed conflict will lead to a market downturn. We forget what is happening at the macroeconomic level and we give way to emotions, which one should never do, by the way, and then the price will go higher. In any case, this is what we have been able to observe once, twice, three times, and again, I've only put the most recent examples here, but each time, we have had risk markets that have appreciated precisely, unfortunately, these armed conflicts. I say unfortunately from a moral point of view because naturally, profiting from war is not what we all want to do, but in any case, this is the reaction that prices have had.
The second scenario will be to be able to observe if indeed Venezuela has a monopoly on an asset and the impact that the war could have on that asset. And Venezuela does not have a monopoly on a specific asset, but the asset it exports the most is oil. So I'll let you read this article. You have the address right here, and what it essentially says is the following: indeed, Venezuela's biggest export is linked to oil. Now, oil has had a very specific evolution in Venezuela's history, making Venezuela one of the largest oil exporting countries at the time. So when I say at the time, it was just before the 2000s. We were almost at 3 million barrels per day, which is quite substantial. And we went from 3 million to about 900,000 barrels today because naturally, other competitors are emerging. There is a lack of infrastructure that is starting to weigh on Venezuela. There is internal legislation, but I won't go into that because it's not the subject of the video, which limits exports. And since 2025, we have had an American company called Chevron Corporation that has invested heavily to develop oil fields in Venezuela. So oil itself will not necessarily be greatly impacted. Especially since we are still in a situation at the moment where there is much more supply than demand for oil. So there will not be a sudden halt in exports and the supply of the entire oil chain. And therefore, we cannot predict that because of this shock, there will be an oil shock with oil prices exploding.
And indeed, when we look at the oil dynamics here on a weekly basis, we can clearly see that it has been very bearish since around June 2022. This is normal, and I will explain in a future video why. Because it relates to asset rotation. What is happening currently is not conducive to a rise in oil prices and a bottom in the oil market. And this simple shock between demand and supply, where supply is much greater, will ensure that we should indeed have a continuation of these bearish dynamics. In any case, what is happening in Venezuela will not be enough to reverse the trend.
And the last point, international sanctions. Well, I don't think we should kid ourselves. We are talking about America, the leader of the West. So, I can't see the ICC issuing an international arrest warrant against Trump. I can't see the UN, OPEC, and other organizations led primarily by the States imposing international sanctions against the USA. So, I think this is a point we can directly dismiss. And so all of this allows me to assess that there will not be a major impact on the markets. In any case, on the markets that interest us, the stock market and cryptocurrency.
So, that's it, it was a quick weekend update just so you don't panic and start making decisions that won't be profitable for your portfolios. I'll stop here directly. We'll see you on Monday for a new video on crypto and the stock market. I wish you a very good weekend.