TSMC's 'Silicon Shield' Holds Strong Despite US Chip Deal

A limited military strike could be the key to giving the Iranian people a chance to overthrow their own government. With protests in Iran leading to thousands of deaths and the regime’s brutality exposed by the killing of figures like Mahsa Amini and Hadis Najafi, the government's power now rests on terror.

As a potential Donald Trump presidency revisits conflict with the Islamic Republic, the playbook looks familiar. A second term could see strikes against the regime’s nuclear program, echoing the first term's killing of Quds Force commander Qasem Soleimani.

Any US military action would not aim for devastation or a failed state that destabilizes the region. The strategy would be built on two core objectives:

1. Systematically break the power of the clerical establishment and the Islamic Revolutionary Guard Corps (IRGC).

2. Preserve the state's capacity to govern a post-theocracy Iran.

The ultimate goal would be to create an opening for the Iranian people to end the post-1979 order for good.

Airpower as a Tool for Political Change

In 1999, NATO’s Operation Allied Force used an air campaign to end Serbia's abuses in Kosovo. After 78 days, President Slobodan Milošević capitulated. Airpower was decisive, but indirectly; Serbia’s international isolation and the economic pain inflicted on its elite forced the government to concede. The Kosovo campaign proved that airpower can function as a tool of political warfare.

Even without an aircraft carrier in the region, the US has options. The USS Abraham Lincoln carrier strike group is reportedly moving to the Middle East. Strategic reach was demonstrated in June 2025's Operation Midnight Hammer, where B-2 Spirit bombers flew missions over 13,000 miles and 36 hours from Whiteman Air Force Base in Missouri. Submarines, difficult to track, can launch surprise Tomahawk cruise missile attacks.

Israel has already set a precedent by using F-35I stealth fighters to penetrate Iranian airspace during the 12-Day War, paving the way for the US Air Force's F-22s and F-35s. Alternatively, waiting for the USS Abraham Lincoln would allow for maximum force projection.

However, a modern conflict requires more than just military force. The US would need to ensure Iranians have internet access to bypass government blackouts, while launching a major cyber offensive to disrupt the regime's control over information.

Splitting Iran's Military Forces

A US air campaign must send a clear political message by prioritizing strikes on hardline IRGC targets while sparing the Artesh—Iran's conventional military—whenever possible. This operational plan should be reinforced with public rhetoric urging the regular army to honor its oath to protect the Iranian people, not the regime.

This strategy draws a sharp line between the IRGC, which acts as a shield for the clerical elite, and the Artesh, which could instead shield the population from the government.

This approach would tap into Iran's own history. After the 1979 revolution, the new leadership purged the Imperial Army, doubting its loyalty. They elevated pro-Khomeini militias, which became the IRGC, specifically to counterbalance the army and prevent coups. This initial suspicion created a lasting institutional rivalry between the two military bodies.

The High-Stakes Calculus of Intervention

Military action against Iran would operate in a legal gray area, much like Operation Allied Force, which proceeded without UN Security Council authorization. The justification rests on the premise that a state loses its sovereign rights when it commits mass killings against its own citizens.

History offers a warning against hesitation. Former President Barack Obama later admitted that failing to support Iran's 2009 Green Movement was a mistake, and the Iranian people paid the price. Once a regime successfully crushes dissent, it consolidates its power. Iran's current vulnerability following the 12-Day War is a rare window of opportunity.

If no action is taken, the regime may become more aggressive. Iran still possesses significant ballistic missile capabilities, receives assistance from China, and is exploring intercontinental ballistic missiles that could threaten the United States.

However, the risks of a limited campaign are significant. If it fails to achieve a decisive political outcome, it could leave Iran wounded but defiant. Operation Allied Force required 78 days and over 38,000 sorties to work. A campaign against Iran would need to be far more surgical. Tehran could also retaliate against US forces in the region or strike key targets across the Middle East, risking a wider conflict.

Choosing Iran's Inevitable Future

Regime change in Iran is a question of when, not if. Supreme Leader Ali Khamenei is 86, and there is no clear successor with his authority. If the current uprising is suppressed, the most likely outcome is a military dictatorship dominated by the IRGC.

The alternative path is one that undoes the legacy of 1979. Nostalgia for the old order is not a solution; the exiled crown prince Reza Pahlavi’s appeal is limited, as the pre-revolutionary monarchy had its own forms of repression.

Iran is headed for one of two futures: a militarized state or a chance for its people to reclaim their country. A US military campaign, while risky, would force a decision on which path Iran will take.

Bitcoin's price plunged by nearly $4,000 in a sudden evening sell-off after President Donald Trump announced plans for significant new tariffs on European goods. The sharp downturn triggered a cascade of forced liquidations across the cryptocurrency market.

Around 6 p.m. EST, a wave of selling pressure sent the world's largest cryptocurrency from approximately $95,500 to an intraday low of $91,935 in just two hours. This rapid decline wiped out over $500 million in leveraged long positions within a single hour, with total crypto long liquidations exceeding $525 million in the same timeframe.

The bitcoin price has since found a floor near $92,600 but remains down roughly 2.5% over the last 24 hours.

New Tariffs Trigger Market Uncertainty

The market sell-off aligns with rising macroeconomic uncertainty following Trump's announcement that the U.S. will impose new tariffs on European nations starting February 1.

The proposal outlines a 10% tariff on goods from eight countries:

• Denmark

• Norway

• Sweden

• France

• Germany

• The United Kingdom

• The Netherlands

• Finland

This rate would escalate to 25% by June 1 if no agreement is reached. President Trump explicitly linked the trade measures to U.S. efforts to secure Greenland, intensifying already strained transatlantic relations.

European leaders responded with strong opposition. In a joint statement, the affected nations warned the tariff threats could ignite a "dangerous downward spiral." Danish Prime Minister Mette Frederiksen asserted that Europe "will not be blackmailed." Protests were also reported in Denmark and Greenland over the weekend.

In a classic flight to safety, gold prices climbed to a new all-time high of around $4,670.

Supreme Court Case Adds to Economic Tension

Compounding the tariff issue is a high-stakes U.S. Supreme Court case that could redefine presidential authority on trade. The court is set to rule on whether President Trump has the power to impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA).

The case centers on Trump's use of the act to declare trade deficits a national emergency, which served as the legal basis for a baseline 10% duty on most imports. The ruling has major implications for trade policy and federal revenue.

A decision against Trump could compel the government to refund more than $100 billion in collected tariffs, potentially disrupting defense and budget plans. Conversely, if the court upholds the president's authority, existing tariffs will stand, and future actions—like the proposed duties on European goods—could move forward.

Bitcoin's Current Market Snapshot

Following the recent volatility, Bitcoin is trading down approximately 3% from its seven-day high of $95,468 and remains within a narrow range above its seven-day low of $92,284.

The asset’s circulating supply stands at 19.98 million BTC, out of a maximum possible supply of 21 million. The global Bitcoin market capitalization is approximately $1.85 trillion, a daily decrease of about 2%, while 24-hour trading volume has hit $32 billion.

European Union leaders are set to hold an emergency meeting this week to formulate a response to a new tariff threat from US President Donald Trump. The move comes after Trump announced plans to impose a 10% tariff on eight European nations starting February 1, citing their actions related to Greenland.

Emergency Summit to Forge a Unified Response

Ambassadors from EU member states met in Brussels on Sunday evening to devise a joint strategy. Following the discussion, European Council President Antonio Costa confirmed the bloc's commitment to unity, stating that member states stand in solidarity with Greenland and Denmark.

In a social media post, Costa emphasized that Trump's proposed tariffs would be "incompatible with the EU-US trade agreement." An EU official confirmed that the bloc's leaders intend to meet in person toward the end of the week.

Exploring a €93 Billion Retaliation Package

According to sources familiar with the internal discussions, the EU is considering several countermeasures. The most prominent option is the revival of a plan to impose retaliatory levies on US goods valued at €93 billion (US$108 billion).

Other potential responses being discussed include:

• The Anti-Coercion Instrument: French President Emmanuel Macron suggested on Sunday that the EU should consider using this powerful new tool. However, France has previously hesitated to deploy it after threats of retaliation from Trump.

• Withholding Trade Pact Approval: European lawmakers suggested over the weekend that they may delay the final approval of the existing EU-US trade agreement in light of the latest tariff announcement.

Last year, the EU had already approved the retaliatory tariffs on €93 billion worth of US products but suspended their implementation after both sides reached a trade pact. The current threat from the US now puts that entire agreement in jeopardy.

The European Union is pushing for diplomatic talks to resolve tariff threats from the United States concerning Greenland, choosing negotiation over immediate retaliation. This strategy aims to de-escalate a conflict that could impact up to €93 billion in US goods and disrupt transatlantic economic stability.

EU leaders are emphasizing a unified commitment to dialogue to protect peace, security, and the bloc's sovereignty. By prioritizing talks, the EU hopes to avoid a trade war and safeguard its economic interests.

EU Leaders Present a United Front

Top European officials have consistently presented a united front against the US tariff threats. Ursula von der Leyen, President of the European Commission, highlighted the shared security interests in the Arctic.

"We have consistently underlined our shared transatlantic interest in peace and security in the Arctic, including through NATO," von der Leyen stated. She noted that a pre-coordinated Danish exercise with allies was designed to strengthen Arctic security and "poses no threat to anyone."

Von der Leyen warned that tariffs would backfire. "Tariffs would undermine transatlantic relations and risk a dangerous downward spiral. Europe will remain united, coordinated and committed to upholding its sovereignty," she added.

This position is backed by other prominent leaders, including Emmanuel Macron and Antonio Costa, who argue that the proposed tariffs are incompatible with existing EU-US agreements. Their collective focus remains on protecting shared European interests.

A Strategy of Patience and Negotiation

Rather than immediately preparing retaliatory measures, the EU is exploring strategic patience. The European Parliament may consider delaying votes on trade pacts to signal its preference for a coordinated diplomatic response over escalating tensions.

While the EU has an anti-coercion instrument (ACI) under discussion, it remains cautious about the economic fallout of a trade dispute. The consensus is that negotiation is preferable. Analysts suggest that maintaining EU-US trade synergy is vital to prevent broader economic repercussions, as historical data shows peaceful negotiations often lead to more favorable outcomes for both market stability and international relations.

Precedent for Peace: Lessons from Past Disputes

The EU's current approach is guided by past successes. Just last year, a prepared tariff package against US goods was suspended following successful trade agreements with Washington. These events demonstrate the value of diplomatic resolution in averting economic conflict.

Ongoing negotiations are a constant feature of the transatlantic relationship. Recent White House actions emphasizing reciprocal trade and tariffs, along with the suspension of duty-free de minimis treatment detailed in a Federal Register notice, underscore a continued commitment to diplomatic engagement to resolve trade issues.

The Indonesian Rupiah is moving dangerously close to a record low against the US dollar, with analysts forecasting further weakness as concerns over the nation's fiscal health intensify.

Major financial institutions now predict a significant slide for the currency. MUFG Bank Ltd. projects the Rupiah could weaken to 17,000 per dollar within the first quarter, while analysts at Barclays Plc see a potential drop to 17,300 this year. The currency has already fallen for two consecutive weeks and is just 0.4% away from its all-time low set in April.

Fiscal Deficit Fears Drive Investor Concern

Investor anxiety has flared up after a January 8th announcement revealed that Indonesia's budget shortfall for last year nearly breached the legal limit. This news, coupled with weak revenue collection, has renewed pressure on the Rupiah.

"Investors are still pretty much concerned about the fiscal outlook for this year," explained Lloyd Chan, a currency strategist at MUFG. He noted that while Bank Indonesia is stepping in, "there are quite a lot of constraints on the policy side."

This month alone, the Rupiah has declined more than 1%, making it the worst-performing currency in Asia after the South Korean won.

Bank Indonesia's Intervention Efforts Face Headwinds

Bank Indonesia (BI) has been actively working to stabilize the Rupiah, most recently intervening in currency markets on Wednesday. However, analysts suggest the central bank's efforts may be constrained by a likely tolerance for a modest depreciation, potentially limiting the impact of its actions.

To anchor the currency, BI is expected to hold its policy rate steady at its upcoming meeting on Wednesday. The central bank has also deployed several other tools, including:

• Adjusting the issuance of its bills

• Intervening directly in foreign-exchange markets

• Buying government bonds in the secondary market

Medium-Term Policy Risks Weigh on Currency

Looking ahead, the fiscal picture remains a primary concern. Analysts worry that this year's deficit could also widen beyond the 3% legal limit as the government aims to increase spending despite sluggish tax revenue.

A government plan to tighten control over exporters' foreign-exchange earnings could provide a buffer for the Rupiah, according to Shier Lee Lim, a strategist at Convera Singapore.

Still, the new administration's policy direction is adding to the uncertainty. President Prabowo Subianto's pro-growth agenda may lead Bank Indonesia to lower interest rates later this year, which would likely add further downward pressure on the currency.

In a recent note, Barclays analysts including Themistoklis Fiotakis highlighted these risks. "We see greater medium-term risks that the government will attempt to embark on relatively unorthodox policies which could fuel more bearish rupiah sentiment," they wrote, referencing the 3% fiscal deficit limit.

A leading think tank has issued a stark warning to the British government: abandon its pattern of policy indecision and embrace bold reforms, or risk squandering early signs of an economic recovery.

In a new report, the Resolution Foundation argues that to build on recent momentum, the government must stop its "flip-flopping" and take decisive action on trade, housing construction, and employment. The call comes 18 months into Prime Minister Keir Starmer's term, a period the think tank characterizes as being defined by U-turns and timidity.

A Pattern of Inconsistent Policymaking

According to the Resolution Foundation, the government's record has so far failed to match its economic promises. Despite pledges from Prime Minister Starmer and finance minister Rachel Reeves to accelerate the economy, there has been no significant change in its trajectory.

The report notes that planned reforms in critical areas like welfare and taxation have either been abandoned or significantly weakened. This inconsistency, it argues, is undermining the potential for real growth.

"With signs that productivity may be turning a corner, the government must capitalise by ramping up its plans," said Greg Thwaites, research director at the Resolution Foundation.

The £2,000 Path to Economic Revival

The think tank outlines a clear path forward with significant potential benefits for households. It calculates that a combination of key reforms could boost annual household incomes by £2,000 ($2,680). These reforms include:

• Housing: Changing planning rules to help cities meet housing targets.

• Trade: Pursuing deeper regulatory alignment with the European Union.

• Employment: Implementing policies to get more young and older people into the workforce.

Such growth would also yield major fiscal benefits, generating enough tax revenue to fund a 25% increase in spending for the public health service.

Decades of Stagnation and the Brexit Burden

The call for action comes against a bleak backdrop. The UK economy has largely stagnated in the nearly two decades since the global financial crisis. The report highlights that Britain's GDP per person has fallen further behind other major European nations since the pandemic.

This long-term trend was worsened by the combined shocks of COVID-19, high energy prices, and the economic impact of Brexit, which together caused a drop in productivity growth.

Furthermore, the Resolution Foundation presents growing evidence that the economic damage from Brexit may already be close to double the 4% impact assumed by Britain's official budget forecasters.

A Glimmer of Hope in Productivity Data

Despite the challenges, the report identifies a crucial opportunity. It points to a significant 3.1% leap in productivity in the year ending in the third quarter of 2025. This figure, which adjusts for previous under-recording of employment in official data, represents the "nascent signs of improvement" that the government is being urged to seize upon.