The Treaty Of Versailles

By Michael Every of Rabobank

Yesterday, President Trump signed the US-Iran MoU in Versailles. It’s not a treaty, but the parallel with the one signed by Germany there on June 28, 1919, is notable: post-WW1, French Marshal Foch is widely credited with saying, “This is not a peace. It is an armistice for twenty years,” because he saw it as too lenient on the loser of that war.

‘Bravo’ says Macron after Trump signs Iran MoU at Versailles dinner. ‘Great job’ pic.twitter.com/5nDjGku4xS

— Danny Kemp (@dannyctkemp) June 17, 2026

This MoU is also lenient on Iran, who thinks it won, and again doesn’t look like peace, just an armistice for 20 weeks – which ends two days after the US midterm elections. Indeed, even as Trump was touting the importance of the deal to avoid “economic catastrophe,” he underlined he’ll bomb Iran again if they don’t honor it.

Yet what they honor depends on whose MoU version you read. The 14-point text the US catastrophe.” Even Bloomberg underlines what was flagged here months ago: if this MoU is a TACO not a can-kicking exercise until November, it will “unravel geopolitics”, the US creating a power vacuum others will try to fill.

That’s as South Korea’s President Lee just asked Trump to solve the North Korea issue… but they already have a nuke, so what do they get given – access to Anthropic AI?

As all is in flux, the US is also working with Europe to again back Ukraine, whose drone tech now means they hold some good cards, even as the EU reopens official communication channels with the Kremlin. It seems likely that US sanctions could soon go back on Russian oil, which would see the energy complex reshuffled again.

In market terms, the IEA is now seeing a gradual Hormuz recovery tipping into a significant 2027 oil surplus, flipping the narrative entirely – unless war restarts in 20 weeks. Most things remain a passenger to that dynamic.

Ironically, but as expected, the market is trading that possible Mou TACO as dollar positive even as it actually undermines the global architecture that holds the dollar up: but since when did FX look at the long term?

In other geoeconomics, as Europe seems set for a sustained trade war vs. China ahead, the G7 agreed to set up a critical minerals alliance platform to cut their reliance on China – which, as explained here before, logically implies trade decoupling downstream too and the emergence of geopolitical trade blocs.

Meanwhile, in a changing world, the Fed under Chair Warsh is ripping treaties up, not signing them. Tyler Durden Thu, 06/18/2026 – 10:40

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