ENERGY SECURITY: Top officials Present Trump with Military Options for Venezuela
Senior military officials Nov 12 presented President Trump with updated options for potential operations in Venezuela, including land strikes, sources told CBS.
- Secretary of War Pete Hegseth, Chairman of the Joint Chiefs of Staff Dan Caine and other senior officials briefed the president on military options for the coming days, the sources said.
- No final decision has been made, sources added.
- The USS Gerald Ford carrier strike group entered US Southern Command’s area of responsibility earlier in the week. This region covers the Caribbean and South America.
- The US has conducted strikes against at least 21 vessels it claims were transporting drugs from South America to the US, killing at least 80 people.
- While the operations have been under the auspice of counter narcotics, the DEA estimates that less than 10% of cocaine arriving into the US comes via Venezuela. Furthermore, flows of fentanyl from Venezuela, most responsible for US drug deaths, is negligible.
- There were previous reports by the NYT of one US option to seize Venezuela’s oil fields. However, this would require significant military, intelligence, and logistics support beyond what has already been deployed to the region.
- Given that the major oil reserves are in the Orinoco belt in the country’s southeast, the US would also have to protect the pipelines moving oil to upgrader plants and then to export terminals.
- Venezuela’s geography would also advantage the formation of guerrilla groups.
- BI noted that during the 2003 Iraqi invasion, oil supply initially dropped and did not recover to its 1990 level until 2012.
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US: Trump's Approval Rating Strengthens Slightly Despite Govt Shutdown
There is no sign that the US government shutdown is weighing on President Donald Trump’s approval rating, with Trump’s approval strengthening slightly since the shutdown started on October 1.
- Silver Bulletin notes, “As of today, Trump has a net approval rating of -8.4. Compare that to one week ago (-9.3), two weeks ago (-9.4), and three weeks ago (-7.5) and you’ll notice a remarkable lack of long-term movement. The percentage of Americans who strongly disapprove of Trump is also down from its peak of 44 percent on September 30th to a more normal (for Trump) 42.5 percent.”
- The absence of negative polling for Trump may increase pressure on Senate Democrats, as they are betting that negative fallout from the government shutdown, and broader concerns about the political implications of allowing Obamacare subsidies to expire, will ultimately compel Trump to strike a deal with Congressional Democrats.
- Trump’s approval rating may be bolstered further in the coming days in light of positive news coverage of the US-brokered peace deal in Gaza.
Figure 1: President Donald Trump Approval Rating
Source: Silver Bulletin
FED: Powell: May Be Near QT End "In Coming Months", In Line With MNI Expectation
Chair Powell's speech Tuesday, titled "Understanding the Fed’s Balance Sheet", is largely focused as the title suggests on the Fed's balance sheet policy. He gives the clearest sign yet that the balance sheet runoff which started in June 2022 and has reduced the SOMA portfolio by $2.2T is nearing an end. He says: "Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions. We may approach that point in coming months, and we are closely monitoring a wide range of indicators to inform this decision."
- This shouldn't be considered a major surprise. We wrote last Thursday after the release of the NY Fed's latest Survey of Market Expectations that consensus was still for reserves levels to fall below $2.9T by early 2026, with balance sheet runoff still expected to conclude in early 2026.
- And the September FOMC minutes showed the SOMA deputy manager noted at the meeting reserves were expected "to be close to the $2.8 trillion range by the end of the first quarter of next year".
- We took that as a fairly clear signal that the Fed is beginning to eye the end of QT by early 2026, with reserve management purchases restarting the balance sheet rebuild later in the year.
- Powell's comments are clear confirmation that this is a decision that will be discussed at the upcoming October meeting, potentially with an announcement coming in December or perhaps January.
