Valuetainment
"This Is Cold War 2.0" - Michael Burry PREDICTS China–U.S. Escalation After Venezuela Clampdown
08 Jan 2026
Chapter 1: What major shift does Michael Burry predict regarding Venezuela?
So big short, Michael Burry says markets are missing a trick as the Venezuelan raid just changed the game. And to me, it's not even the Venezuelan game. Well, it's kind of geopolitics. Yeah, that makes sense. So Michael Burry says U.S. on a raid of Venezuela is much bigger than the markets here.
The big short, a message said, who recently pivoted from running a hedge fund to writing on Substack, publishing a post nearly early Monday saying the game just changed in the mid to long term market. and markets are not pricing in all that they may of this weekend's events. This is a paradigm shift despite the markets yawning.
He later wrote on X, benchmark oil prices climbed less than 1% on Monday, and U.S. futures opened higher after the U.S. captured President Nicolas Maduro over the weekend and President Trump. America run the oil-rich country. The seizure was a shot across China's bow.
Burry wrote, pointing to billions of dollars in loans that China has made to Venezuela under its belt, and wrote initiative which were collateralized using future oil output that is now in the U.S. hands.
Chapter 2: How does the Venezuelan situation impact U.S.-China relations?
The investor who shot the fame after the president Bet in 2000 Housing Bubble was featured in a book, The Big Short, wrote that China may now have a blueprint for how to take control of Taiwan, but must be in awe of Trumpian America's infuriating gall and decisive power. Burry said that China's stock... strike him as somewhat riskier now in terms of running afoul of sanctions.
He wrote that Alibaba, Baidu, and other potential sanction targets could be in for some volatility if China escalates. Yeah, I think something's going to happen. I think one of these big things could potentially happen because you are literally suffocating these people right now. Go ahead, Brandon.
Yeah. I mean, when it comes to what's more strategically important between Venezuela for us or Taiwan for China, I mean, it's probably Taiwan that's more strategically important. It'd be a bigger blow to the U.S. if China successfully took Taiwan than the fact that we took Venezuela. Right. I wasn't 75 percent of our semiconductor conductors come from there. Oh, yeah. Yeah.
So I think that's a bigger asset if they were able to take it. I don't think they would be able to take it even if they use the full force of their military. Like they're not capable of doing what we did just because of the way that Taiwan is set up. You know, we've done videos before in the past of like how harsh the conditions actually are for the Navy to go across and take it over.
It's like a mountain in the middle of the ocean. So I don't think they'd be capable of that. And if they did try to do it, I think we would try to get close with Russia really quick and stop selling China oil. China is extremely dependent on oil from other countries. So for that reason, I don't think they're just – I think they want to. I don't think they're capable of doing it though.
I think what Burry said, it's not about oil here, at least in this one respect. What he said was that, you know, through the Belt and Road Initiative, China has lent billions of dollars all over the world. And with Venezuela, it was collateralized by Venezuelan oil. Trump just took their collateral, which means those loans are worthless.
Because let's face it, Venezuela is not going to pay them back. And China knew that when they extended the loans. That's what China does. It extends loans to these countries that they know that they can't pay back, intending to either take the oil as the collateral or some other form of collateral, usually it's facilities like a railroad or a dam or some kind of mine.
So what Trump said is, OK, I see your Belt and Road Initiative, and I'm going to take the initiative and take the collateral right off the board, which makes that loan and your entire effort in Venezuela worthless.
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Chapter 3: What is the significance of China's loans to Venezuela?
Again, it's a piece on the chessboard that it's a pretty damn big one.
Yeah, the economic hitman principle, they took that away from, they took away the resource.
What does he want, though? He has to want something. Trump or Xi? Trump. What does Trump want? What does Trump want?
I think he realizes that this is Cold War II. Let's be honest about this. China is not a strategic rival or whatever they call it. No, this is Cold War II, and it has been. Why did they leak that story from, what was it, New York a couple of months back where they had all of those SIM cards in a room that could just basically fry the communication grid in New York? Why did they leak that?
To say that, look, we are kind of at war. Why have the Chinese been buying farmland next to air bases?
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Chapter 4: How does Taiwan factor into the U.S.-China dynamic?
Yeah. To do what the Ukrainians did in a first strike to launch a drone attack to take out the U.S. air power.
Is this one you're talking about?
So what I'm saying is that the Trump administration at least realizes, even though they don't want to say it explicitly... This is Cold War II, and so we need to think Cold War II. Where is the Dunrogh Doctrine coming from? It's the execution of that strategic realization.
We are in a Cold War with the Chinese, and the worse it gets for the Chinese system, the more likely it turns into something that gets really bad. Yeah.
I think what people need to look at is what you're talking about. This is really 3D chess. Venezuela is not about Venezuela. It's not about Marxism in the Western Hemisphere. That's sort of like a benefit, right? I think that there's a part of Marco Rubio, and Marco Rubio is the guy whose desk this whole thing really sits on. This isn't the Department of Energy.
This is sitting on Marco Rubio's desk on 3D chess because it is the blow against Russia. It is the blow against China and their collateral. It is taking back the hemisphere. It is a blow against Marxism. And the U.S. mainstream media wants to talk about, oh, it was illegal to go in there. And now the greedy, you know, all the greedy energy companies are going to get the oil.
wait a minute, only Chevron's in there materially benefiting right now, and Trump's inviting everybody else. Would you like to invest in Venezuela?
Yeah, would you like to spend billions of dollars first?
With your money, not my money, with your money, and then pull the oil out and then pay the Venezuelans for the oil out of their country. So when he stabilizes Venezuela... The phrase that we all want to look at here is very simple, on our terms. And this is all related to the Cold War. He wants China to be a trading partner on our terms and not manipulating Venezuela. He wants Iran to be...
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Chapter 5: What are the implications of a Cold War II mindset?
You have to be here to see what it feels like. But it's... I agree with what you're saying on how unique of a time we're living in for this many things to be moving.
We're going to look back on it.
Yeah. You think about.
Oh, oh, oh.
The big if is if they can pull it off. I think they could pull it off because they have so much leverage right now, Jeff. The amount of pain.
But we have not yet seen the Chinese and Russians. Not retaliation, but them realizing. It's sort of like, do they know what Trump knows that they know that Trump knows?
Do you think they're not paranoid? Do you think? Well, I think that's why Trump has had to establish these precedents.
Let me ask you a question.
By nature, by DNA and nature, who do you think? is naturally more paranoid. American leaders, politically, Russian or Chinese? Chinese. And then second is who?
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Chapter 6: What strategies is the U.S. employing in response to China?
It's just not refinement. It's not easy to get right. So, I mean, so Trump is already sort of like ahead on that part saying, okay, we're going to start building our capacity. So we're going to take away the Chinese leverage before they can even use it.
And their biggest asset is getting the discounted oil from Russia and Iran. So, you know, if Iran suddenly falls and Russia has enough pressure on them to stop being so friendly with the oil they give to China, then China's really in a stranglehold where they stop getting the cheap Russian and Iranian oil. Because that's like China's nucleus is the ability to get cheap oil from Iran and Russia.
Yeah, I mean, you know, this is the other question as well. We talked about it on the podcast on Monday. It's very obvious that that Trump is relying on Marco a lot more than he's relying on JD to get things done. It seems as if the second most powerful person on his team is not Vance, it's Rubio. And by the way, if Rubio's in more of these meetings
doing the deals, world leaders are now accustomed to who? Rubio to be doing that, which means they're kind of sitting there saying, we either want this guy in 2028 or we don't. But if Vance is not in those rooms building those relationships, and Rubio is, it may be Rubio's turn in 2028 and then Vance's turn maybe in 2036.
You know, you bring something interesting up. I was watching the weekend news shows, and Rubio wasn't out there like a proxy just giving the administration's talking point. He was processing points and responding to reports. You know what I mean? Yeah, for sure. It's very different. different from the senator from Michigan.
I support what the administration has said about this, this, and this, and I think he's doing a fine job, and I think you're full of crap. You know, that's a proxy out doing the talking point. Rubio was going, no, no, no, you don't understand. A, B, C, this is how we're going to be. You know, and he was really there putting the processing down that impressed me.
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