Hormuz traffic slump, yuan-clearing expansion and prospective U.S.-Colombia operations shape the update

Off Leash update 13 August 2026

CHINA •China's central bank granted Germany's Deutsche Bank permission to be the first non-Chinese bank allowed to clear transactions in renminbi (yuan). •Deutsche Bank is likely to be the first of many non-Chinese - and non-American - banks to get China's approval to deal in yuan. China's economic planners want to dislodge the U.S. dollar as the main currency for cross-border banking as part of their long-term plan to challenge American leadership of the global financial system. •It's likely to take decades to unseat the dollar. Dollar assets represent 58% of global currency reserves (vs. 2% for the yuan), 49% of global SWIFT transaction value (vs. 5% for the yuan), and 64% of global debt (vs. less than 2% for the yuan - despite China's best efforts to finance its development projects abroad in yuan).

IRAN •Iranian officials vigorously refuted Pres. Trump repeated claims that the U.S. has "total control" of the Strait of Hormuz in a series of taunting social media posts and interviews. •Mohammad Reza Naqdi, a top advisor to the commander of Iran’s Islamic Revolutionary Guard Corps (IRGC), told PBS that "the American military is weaker than what we perceived," and Foreign Minister Abbas Araghchi posted on X that the U.S. "has long miscalculated due to intelligence failures," citing the war on Iran and the debacle in the Strait as examples of U.S. miscalculations. •In reality, both the U.S. and Iran seem to have just enough "control" over the Strait to ensure the other can't unilaterally reopen it. Maritime data showed that daily traffic through the chokepoint dropped to near its lowest level since May 12 - and 90% below pre-war levels - this week.

RUSSIA •Russia's Pres. Putin provoked outrage in Japan yesterday by visiting the Kuril Islands - which the two countries have disputed for decades - for the first time. •The four Kuril Islands were historically Japanese, but after World War II the Soviet Union annexed them and deported their ~17,000 Japanese residents. (Incidentally, the rift over Moscow's annexation of the Kurils was the main reason the Soviet Union and Japan never signed a peace treaty ending that war.) •Japan's Prime Minister Takaichi Sanae called Putin's visit "absolutely unacceptable," and said it had "worsened Japanese sentiment towards Russia" - which wasn't great to begin with. Russia particularly resents the sanctions Japan imposed in 2022 over Putin's war in Ukraine.

COLOMBIA •U.S. Secretary of War Pete Hegseth said that Colombia's new right-wing president, Abelardo de la Espriella, asked for U.S. military help fighting narco-terrorism and authorized joint military operations to strike drug traffickers in Colombia. •De la Espriella's left-wing predecessor, Gustavo Petro, was less keen on the idea of U.S. military intervention in his country: he preferred a softer approach. •But de la Espriella has reinvigorated the fight against armed groups in Colombia. Just days after his inauguration last week, he authorized a military operation that killed the head of a left-wing rebel group in central Colombia. His outreach to the Pentagon could see the U.S. join his fight.

AFGHANISTAN •This week marks the fifth anniversary of the Taliban's takeover of Afghanistan. •It also marked the publication of some grim new reports on how the country is faring under Taliban control. A new UN report revealed that half of Afghan women never leave their home or leave only once or twice per month, while separate research by Save the Children found that one in 10 Afghan children suffers from acute malnourishment.