Zero Hedge

A Burning Man Festival For Autocrats

A Burning Man Festival For Autocrats

By Eric Peters, CIO of One River Asset Management

“Today, humanity is once again faced with critical choices: peace or war. Dialogue or confrontation,” said Xi Jinping, celebrating the 80th anniversary of the victory in the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War. “Win-win co-operation or zero-sum rivalry?” continued Xi, his People’s Liberation Army rolling its tanks across Tiananmen Square as it does from time to time.

“The Chinese people firmly stand on the right side of history and on the side of human civilization and progress.” North Korea’s pudgy leader stood with Xi. Russia’s little dictator too. A proper Burning Man festival for autocrats.

Xi pulled out his newest big boy toys. Pyrotechnics. Killer drones. Hypersonic missiles. Lasers. His nuclear triad, with weapons of mass destruction built to be fired from air, land and sea. Military strategists marveled at the innovations. But none of it came as a surprise.

Everyone now knows the US and China have embarked on a multi-decade long war that neither can afford to lose, nor dare wage. The capital expenditure necessary to maintain a standoff will be as staggering as the deficits required to fund them.

“Many Americans died in China’s quest for Victory and Glory. I hope that they are rightfully Honored and Remembered for their Bravery and Sacrifice!” posted Trump on his Truth Social network. “Please give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America.”

No one quite knows how to avoid direct kinetic conflict. The best we can reasonably hope for are low-level proxy wars.

The Chinese appear to be implementing the strategy the US used to win its conflict with the USSR. The US, on the other hand, is adopting an unorthodox and isolationist stance, at least for now.

It’s far too early to tell which approach will prevail.

And if we, in finance, have learned anything, it is that governments tend to fight the last war, even as history tells us that future crises rarely resemble their predecessors. 

Tyler Durden Mon, 09/08/2025 - 07:20

"We Will Hunt You Down": ICE Launches "Patriot 2.0" Operation Against Illegals In Sanctuary City Boston

"We Will Hunt You Down": ICE Launches "Patriot 2.0" Operation Against Illegals In Sanctuary City Boston

Fox News National Correspondent Brooke Taylor wrote on X, "Ahead of anticipated immigration enforcement operations in Chicago this weekend, ICE has also launched 'Patriot 2.0' in the Boston area." 

"ICE launched 'Patriot 2.0' to target the worst of the worst criminal illegal aliens living in the state of Massachusetts, following the success of Operation Patriot in May," a Department of Homeland Security official told Taylor on Sunday. 

The DHS official continued, "Sanctuary policies like those pushed by Mayor Wu not only attract and harbor criminals but also place these public safety threats above the interests of law-abiding American citizens," adding, "ICE is arresting sex offenders, pedophiles, murderers, drug dealers, and gang membersreleased by local authorities. Under President Trump and Secretary Noem, nowhere is a safe haven for criminal illegal aliens. If you come to our country illegally and break our laws, we will hunt you down, arrest you, deport you, and you will never return."

On Saturday, Fox News joined Immigration and Customs Enforcement agents in the arrest of criminal illegal aliens in the Boston metro area. 

A senior DHS spokesperson told NBC10 Boston yesterday that the Patriot 2.0 operation continues the surge in the sanctuary city where 1,500 criminal illegal aliens have been arrested since May. 

"Sanctuary policies like those pushed by Mayor Wu not only attract and harbor criminals but also place these public safety threats above the interests of law-abiding American citizens. ICE is arresting sex offenders, pedophiles, murderers, drug dealers, and gang members released by local authorities," the DHS spokesperson told the local media outlet. 

Boston Mayor Michelle Wu's sanctuary policies have been anything but "America First"; instead, they are "America Last," draining public resources on illegal aliens.

Perhaps a recent Daily Caller News Foundation investigation into Wu's open-border globalist stance shows suspicious China links, which is not surprising, given her priority over illegals.

Mayor Wu has drawn particular criticism for her sanctuary policies, which the Department of Justice is now challenging in court. Attorney General Pam Bondi accused Boston of being among the worst sanctuary offenders:

"The City of Boston and its mayor have been among the worst sanctuary offenders in America — they explicitly enforce policies designed to undermine law enforcement and protect illegal aliens from justice. If Boston won't protect its citizens from illegal alien crime, this Department of Justice will."

Last week, Trump's border czar, Tom Homan, said to expect increased ICE operations in multiple sanctuary cities, saying they would "flood the zone."

Tyler Durden Mon, 09/08/2025 - 06:55

Germany Ignores Bond Market Warnings Amid Fiscal Paralysis

Germany Ignores Bond Market Warnings Amid Fiscal Paralysis

Submitted by Thomas Kolbe

In terms of media strategy, the German government operates on Champions-League level. While the Chancellor emphasizes the pressure for fiscal consolidation in statesmanlike interviews, party representatives simultaneously prepare the public—through coordinated media messaging—for tax increases. Meanwhile, the bond market has already given its verdict: thumbs down.

The Berlin political machine continues in routine mode: budget negotiations consistently end with new borrowing, the Chancellor calls for cuts in the social budget, while left-leaning factions across both parties aim to mobilize taxpayers to fill the yawning gaps in public finances. A hectic debate is underway about the dramatic state of the German economy and the immediate consequences for government coffers. There is no indication that policymakers are bending to reality or abandoning the ideological path that has led to this decline.

Infantile Envy Campaign

This debate is accompanied by an infantile envy campaign orchestrated by the DGB (German Trade Union Confederation), which once again proves itself to be a club of functionaries largely detached from its members. Rather than tackling the structural problems of the economy seriously, the union prefers to light divisive fires.

According to DGB strategists, the wealthy, heirs, and private investors are to blame for Germany’s economic catastrophe. It is a shameful campaign, which—hopefully—will not gain significant traction in the media.

The union confirms the diagnosis that eco-leftist policies and the leadership cadres of business and unions have largely merged into a corporatist unit—held together by the gigantic subsidy machine of the green transformation. The silent cartel is willing to accept the collapse of the German economy, as long as the sweet poison of corruption money—commonly known as subsidies—keeps flowing. As a result, Germany moves forward in a somber mood, socially unsettled, economically paralyzed, and heading toward eco-socialism.

Agenda 2030

The last remnants of bourgeois politics act clumsily, trapped in media routines.

CDU Secretary General Carsten Linnemann now calls for an “Agenda 2030,” apparently aimed at achieving a psychological effect—similar to Gerhard Schröder’s Agenda 2010. In reality, Agenda 2010 was mostly an administrative reform of social welfare: fiscally modest, with savings of at most ten billion euros per year and minimal tax cuts.

Its fame rested not on substance, but on favorable external circumstances: a low-interest cycle, strong global growth, and China’s expansive demand policies made the measures appear far larger than they actually were—a media-exaggerated myth that continues to resonate today.

From the south of the country, calls are growing to reverse destructive regulatory policies in the automotive sector. Bavarian Prime Minister Markus Söder demands the removal of the combustion engine ban and technology-neutral solutions for mobility. At the same time, however, he continues to support one-sided subsidies for e-mobility.

Neither fish nor fowl. He, too, has failed to recognize that the foundations of the German economy are fractured and that piecemeal reforms will no longer suffice. Germany continues to lose capital abroad and refuses to acknowledge the severity of the crisis it has itself triggered—through erratic energy policy, dogged support for the proxy war in Ukraine, and a grotesque open-border policy.

Heating Law as Blueprint

At least policymakers are beginning to realize that the economic disaster will soon manifest in sharply declining tax revenues. Now would be the time to unleash the economy and enable new growth. Yet no one dares challenge the green agenda. This is particularly evident in the Building Energy Act (GEG).

It will burden citizens with more than nine billion euros annually, even though households and businesses have already reached their limit. Rather than making rational corrections, policymakers insist on ideological mandates.

Emission targets remain unchanged; only timelines, financing, and alternative heating options—such as pellet stoves—are under discussion. Thus, the law remains a central pillar of the green agenda, fully absorbed by the party cartel.

Prisoners of the Cult

Berlin already knows this agenda has failed. Yet, from a media-psychological perspective, it has so thoroughly infected the parties that their representatives are unable to correct this dramatic mismanagement. Citizens now pay the price for political vanity and infantile ideology. Climate propaganda and Russia-phobia are used to align them with an economic artifice—whether it is the green subsidy economy or the new war economy—keeping it artificially alive.

When distilled, the German debate over state debt, regulation, climate policy, and the endless saga of defending democracy against supposedly imperial, invasion-ready Russia paints a clear picture: politicians have entrenched themselves in morally elevated narratives. With emphasis, plenty of historical bending, and reality denial, they persist undeterred.

Even the increasingly fragile situation in Ukraine hardly affects their decisions. There is no real Russian diplomacy; instead, the expensive war economy is pushed forward with full force—all to maintain the illusion of a functioning, morally superior state and to keep the credit mechanism alive.

Bond Markets Unimpressed

The German self-reflection meets deaf ears in the bond markets. Pressure is growing everywhere on over-indebted states. Interest rates are rising, and with them, fiscal leeway is shrinking. Germany’s debt mountain of 2.5 trillion euros currently costs the Treasury—i.e., taxpayers—around 34 billion euros per year in interest.

If interest rates continue to rise at a similar pace as in recent years, rough calculations suggest that about 13 percent of debt must be refinanced annually, adding roughly seven billion euros in interest costs each year.

Every one-percentage-point increase in interest rates triggers interest expenses of 27 billion euros under current debt levels. The situation is therefore more than merely dramatic. Neighboring France faces a week of truth, with a confidence vote in parliament. Prime Minister François Bayrou’s government is attempting budget cuts of 44 billion euros, which is already considered doomed given political divisions in parliament. The country braces for general strikes and political chaos.

Klingbeil Holds Course

In Germany, Finance Minister Lars Klingbeil continues on his course. Next year, he plans additional government spending of four percent, expanding the federal budget from 502 billion euros to over 520 billion euros. His calculations rely on overly optimistic assumptions. The ongoing economic depression will severely strain social funds and force the federal government into further borrowing and supplementary social payments.

Anyone who thought the economic crash would pressure policymakers to end their crash course with reality is sorely mistaken. Stubborn, ideologically radicalized, and detached from reality, the Merz-Klingbeil duo continues Brussels’ disaster agenda unabated. Debt and senseless government spending are intended to trigger a turnaround. Market-oriented reforms are nowhere in sight, as these would imply a loss of power and the political willingness to focus on core state responsibilities.

If economic decline materializes in the coming months through rising refinancing costs and widening deficits, it will be fascinating to see who the first strike-breakers in the political apparatus will be—who abandons the sinking ship or demolishes the firewall, forcing the collapse of the party cartel.

We must not underestimate the power of the bond market: no central bank in the world can permanently control the yield structure of over-indebted states if the market has already given its thumbs down.

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About the author: Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 09/08/2025 - 06:30

Sacks, Chamath Describe 'Surreal' White House Dinner With Trump And Tech Elite

Sacks, Chamath Describe 'Surreal' White House Dinner With Trump And Tech Elite

President Donald Trump hosted a high-profile dinner at the White House, drawing a roster of Silicon Valley’s most influential leaders to discuss artificial intelligence and U.S. investment. The gathering included Meta's Mark Zuckerberg, Apple's Tim Cook, Microsoft's Bill Gates, and OpenAI’s Sam Altman, many of whom have publicly criticized Trump in the past. Elon Musk, once a close Trump ally, was notably absent, with scheduling conflicts and a public falling-out underscoring strains in their relationship.

AI and Crypto Czar David Sacks and Chamath Palihapitiya, both attendees of the dinner, offered an insider account of the event on the “All-In” podcast. “It started with a group that Chamath organized in Silicon Valley. They were the core nucleus, and then more and more people wanted to join,” Sacks said. “Pretty soon, the president invited the top tech leaders, and it turned into the room you saw. It’s pretty amazing—President Trump’s ability to convene all these folks. I’d say maybe half the tech industry was there by market cap.”

Palihapitiya agreed with Sacks, explaining how being in that room "felt surreal."

"You’re seeing the leaders of the most important companies in the world, all sitting together, with this sense of alignment and cooperation. That was really cool,” Palihapitiya said. “These folks don’t have to show up anywhere, but the fact that the president could convene them says a lot about him and his agenda.”

Palihapitiya said that attendees were “incredibly supportive” of Trump’s policies, which he contrasted with “the difficulties under Biden,” noting that, “Even hard-core liberals like Tim Cook and Bill Gates have now fully embraced President Trump."

"That’s a testament to his agenda,” he said.

Palihapitiya then offered a play-by-play account of Trump hosting the tech leaders inside the Roosevelt Room. “You’re seeing the most powerful people who’ve built these incredible businesses—about 30 folks, but the table only fits 15. So you’ve got Tim Cook, Sam Altman, and Satya Nadella sitting on a couch, Dylan Field and Alan Wag nearby, just chilling,” Palihapitiya recounted. “In their own worlds, they’re kings, but in the White House, they’re American citizens there to meet the president. Everyone’s egos were checked.”

Then they had us line up single file - Sundar, Satya, Bill Gates - like we’re backstage at a Zeppelin concert,” he added.

The group’s visit to the Oval Office added a ceremonial touch.

A visit to the Oval Office added ceremony, with attendees like Oracle’s Safra Catz and her husband mingling for photos at the Resolute Desk. An impromptu moment came when Catz’s husband asked for a pen, prompting Trump to hand out challenge coins and pens. Google’s Sergey Brin sparked a policy discussion that carried into dinner, while an attendee’s request for Trump’s playlist led to Fleetwood Mac playing in the Rose Garden, as captured by AMD’s Lisa Su. The camaraderie, however, couldn’t mask the underlying tension: these leaders, once vocal critics, now appeared to prioritize access and influence over their past principles, casting doubt on whether their earlier opposition was genuine or merely posturing for public favor.

The event raised questions about the motives of tech leaders who once opposed Trump. Zuckerberg, who banned Trump from Meta’s platforms in 2021 after the January 6 Capitol riot, had justified the move as a stand against incitement, drawing accusations of censorship from Trump’s supporters. In 2016, Zuckerberg criticized Trump’s immigration rhetoric as divisive during Meta’s F8 conference. Cook, a vocal advocate for social justice, opposed Trump’s 2017 travel ban, calling it “not the right approach,” while Altman compared Trump to "hateful" demagogues.

Oh...

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Tyler Durden Mon, 09/08/2025 - 06:15

Global Mail Disruption Deepens As U.S. Tariffs Trigger International Postal Shutdowns

Global Mail Disruption Deepens As U.S. Tariffs Trigger International Postal Shutdowns

International mail to the United States has plunged by more than 80% in one week after the Trump administration ended a long-abused tax exemption on small packages, prompting widespread suspensions of postal services around the world, according to the Universal Postal Union (UPU).

The postal service in France is among those that stopped taking US-bound parcels following Trump's decision to impose new tariffs on them (Thomas SAMSON)

In late July, the U.S. government announced it would revoke duty-free treatment for low-value parcels entering the country. The change, which took effect Aug. 29, has rattled global logistics networks and forced dozens of national postal operators to halt or scale back shipments to the U.S.

The UPU, a United Nations agency that oversees global postal cooperation, said 88 postal operators have either fully or partially suspended service to the U.S. Among them are major national carriers, including Germany’s Deutsche Post, Britain’s Royal Mail, and postal authorities in Bosnia and Herzegovina.

Postal services in India, Australia, France, Germany, Italy, Japan, and the U.K. are no longer accepting most U.S.-bound parcels, citing logistical disruptions and uncertainty over customs processing under the new tariff regime.

According to UPU data, postal traffic to the U.S. on Aug. 29 fell 81% compared with the previous week. “Furthermore, 88 postal operators informed the UPU they have suspended some or all postal services to the US until a solution is implemented,” the agency said in a statement.

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UPU Director General Masahiko Metoki said the organization is working with affected postal services and U.S. authorities on a “rapid technical solution” to restore normal mail flows. However, he provided no timeline for when shipments might resume.

The Bern-based UPU, founded in 1874 and representing 192 member countries, sets international postal rules and facilitates cooperation among national mail systems. While the agency has mediated disputes before, industry analysts warn the current disruption highlights vulnerabilities in global supply chains that depend on inexpensive cross-border shipping.

The sudden halt comes amid mounting trade frictions as Washington uses tariff policy to rebalance foreign commerce. For small businesses, e-commerce sellers, and consumers relying on international packages, the suspension has created uncertainty and extended delivery delays.

Without an agreement, logistics experts warn that U.S. buyers and overseas exporters alike could face lasting disruptions in the global flow of goods - underscoring how deeply interconnected the world’s postal infrastructure has become.

Tyler Durden Mon, 09/08/2025 - 05:45

Tether Denies Bitcoin Sell-Off Rumors, Confirms Buying BTC, Gold, Land

Tether Denies Bitcoin Sell-Off Rumors, Confirms Buying BTC, Gold, Land

Authored by Amin Haqshanas via CoinTelegraph.com,

Tether CEO Paolo Ardoino has denied recent rumors that the stablecoin issuer is offloading its Bitcoin holdings to buy gold.

In a Sunday post on X, Ardoino said the company “didn’t sell any Bitcoin,” and reaffirmed its strategy of allocating profits into assets like “Bitcoin, gold, and land.”

The comments came in response to speculation from YouTuber Clive Thompson, who cited Tether’s Q1 and Q2 2025 attestation data from BDO to claim the firm had reduced its Bitcoin position. Thompson pointed to a drop from 92,650 BTC in Q1 to 83,274 BTC in Q2 as evidence of a sell-off.

However, Jan3 CEO Samson Mow debunked the claim, noting that Tether transferred 19,800 BTC to a separate initiative called Twenty One Capital (XXI) during the same period. That included 14,000 BTC sent in June and another 5,800 BTC in July.

Tether CEO denies Bitcoin sell-off rumors. Source: Paolo Ardoino

Tether moves $3.9 billion in BTC to XXI

In early June, Tether moved over 37,000 BTC, worth approximately $3.9 billion, across numerous transactions to support XXI, a Bitcoin-native financial platform led by Strike CEO Jack Mallers.

“Tether would have had 4,624 BTC more than at the end of Q1 if the transfer is accounted for,” Mow explained, adding that the firm actually increased its net holdings.

Ardoino echoed the explanation, saying the Bitcoin was moved, not sold. “While the world continues to get darker, Tether will continue to invest part of its profits into safe assets,” he wrote.

Tether, the issuer of the USDt stablecoin, holds over 100,521 BTC, worth around $11.17 billion, according to data from BitcoinTreasuries.NET.

Tether holds over 100,000 BTC. Source: BitcoinTreasuries.NET

El Salvador buys $50 million in gold

Tether’s Bitcoin sell-off rumors came as El Salvador revealed it has added 13,999 troy ounces of gold worth $50 million to its foreign reserves, marking its first gold acquisition since 1990. The central bank said the move is part of a diversification strategy to reduce reliance on the US dollar.

Before turning to gold, El Salvador built a $700 million Bitcoin reserve, holding 6,292 BTC. However, an International Monetary Fund report in July claimed that the Central American country has not made any new Bitcoin purchases since February.

Tyler Durden Mon, 09/08/2025 - 05:00

Over Half Of Berlin's New Police Recruits Need German Language Training, Officials Admit

Over Half Of Berlin's New Police Recruits Need German Language Training, Officials Admit

For some reason, Germany loves recruiting migrants into its police force in the name of diversity. In 2022, roughly 42% of police recruits who took the most common path into Berlin's police force were migrants or came from migrant families, according to a major survey (37% including all pathways). 

What's more, Berlin is the only German state where the proportion of new police recruits with a migration background matches or exceeds the city's own population share (35%) according to that same survey. 

Now, (shocker!) roughly 55% of Germany's new police recruits don't meet German language standards for the job - so obviously that percentage of migrant recruits went way up. 

Out of 240 police trainees who began their training in spring 2025, a staggering 132 recruits, roughly 55% need extra German-language support, the Berlin Police confirmed to Nius (via Apollo News).

The problem, authorities say, hits hardest in the first semester of training. “About half of the new recruits require regular language support at the start of their training,” the police statement said. However, they noted that the need for assistance drops over time as recruits progress through the program.

No word on where these recruits are migrating from. Maybe it's the Poles? The Turks?

Police Blame Broader Social Decline

Berlin’s police stressed this isn’t just a law enforcement issue, it’s part of a nationwide trend of falling written-language skills.

Authorities cited multiple causes:

  • Teacher shortages
  • Increasing diversity in classrooms
  • Rising demands on schools, particularly in German language instruction and digital media literacy

The agency also pointed to cultural and technological shifts as contributing factors. Young people are growing up in a world “where written text is everywhere,” the statement said, but that doesn’t mean they’re writing it correctly.

There are hardly any error-free texts anymore,” the police noted, blaming a growing reliance on technology like spellcheck, autocorrect, and AI tools for weakening spelling and grammar skills.

High Stakes for Future Officers

For Berlin’s future officers, language proficiency isn’t optional, it’s required by law. Police trainees must demonstrate C2-level German fluency - the highest possible level under the Common European Framework of Reference - by the end of their training.

That proficiency is tested through a final exam. Failing twice means automatic dismissal from the police force under Berlin’s Police Act, the agency confirmed.

Berlin’s recruitment challenges come amid growing concerns about Germany’s education system, integration policies, and workforce shortages. But for law enforcement specifically, the stakes are higher than ever: police officers must be able to write reports, testify in court, and communicate flawlessly in complex, high-pressure situations.

Bigger Questions About Integration and Standards

The numbers highlight a broader debate over educational decline, integration policy, and workforce standards in Germany. Critics argue that lowering expectations in schools, combined with rising classroom heterogeneity, has left new generations less prepared for professional demands, especially in fields like policing, where precision in language can affect public safety.

As Berlin struggles to recruit and train enough officers, questions are mounting about whether Germany’s schools are adequately preparing graduates for essential roles, and whether institutions like the police force will eventually lower entry requirements to keep up with staffing shortages.

"Good language skills are mandatory for the job," the Berlin Police stressed.

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Tyler Durden Mon, 09/08/2025 - 04:15

These Are The World's Top Industrial Robotics Companies

These Are The World's Top Industrial Robotics Companies

The global industrial robotics market is on a sharp growth trajectory, projected to hit $10.2 billion in sales by 2025.

As factories automate and smart manufacturing expands, robotics play an increasingly vital role in production. By 2025, industrial robots are expected to handle nearly 60% of new installations in the automotive and electronics sectors alone.

This visualization, via Visual Capitalist's Bruno Venditti, breaks down the market share of leading industrial robotics manufacturers.

The data for this graphic comes from Statista’s Market Insights.

ABB and Epson Lead the Pack

Switzerland’s ABB and Japan’s Epson each hold a 13% share of the global market, making them the two largest manufacturers of industrial robots. ABB’s reach spans multiple industries, while Epson focuses heavily on precision automation for electronics and small-part assembly.

Japan’s Dominance in Robotics

Japanese companies represent half of the top 10 manufacturers, including Epson, Fanuc (11%), Kawasaki (8%), Yaskawa (8%), and Denso (4%). Japan’s decades-long investment in robotics R&D and its export-driven manufacturing economy have cemented its leadership in the sector.

This deep bench of robotics companies has enabled Japan to cater to both domestic and global markets with cutting-edge automation solutions.

Fragmentation and Emerging Players

Beyond the top players, 32% of the market is occupied by smaller firms or those with regional dominance. Companies like Universal Robots (Denmark), KUKA (Germany), and Comau (Italy) each capture smaller but significant market segments.

If you enjoyed today’s post, check out The 10 Most-Used AI Chatbots in 2025 on Voronoi, the new app from Visual Capitalist.

Tyler Durden Mon, 09/08/2025 - 02:45

The Gamechanger: Merz Plunges Germany Into A Debt Crisis

The Gamechanger: Merz Plunges Germany Into A Debt Crisis

Submitted by Thomas Kolbe

The Bundestag’s Budget Committee reached agreement on Friday regarding this year’s federal budget. In the end, record debt remains, publicly masked with accounting tricks and hopeful rhetoric. Friedrich Merz is driving Germany deeper into a debt spiral.

Political chaos in Berlin, including early elections and failed budget negotiations, delayed the adoption of the federal budget this year. On Friday, the Union parties reached agreement with the SPD in the Budget Committee on the final budget. Germany will spend €502.55 billion over the course of the year, continuing its fiscal record chase – year after year, the political circus demands ever-increasing allocations.

There is no talk of austerity or structural consolidation of state finances, despite the deep economic depression in the private sector. Still, on Friday, the term “gamechanger” circulated in coalition circles with regard to the budget.

A Budget of Superlatives

It was SPD member Torsten Rudolph who, looking at this mega-budget in the midst of the economic catastrophe, spoke of a gamechanger, echoing the enthusiasm of his colleague Christian Haase of the Union, who called the debt budget a budget of superlatives.

And in fact, they are essentially correct. If one calculates realistically and adds the debt hidden in special funds to the official debt, the total comes to €140 billion this year, equating to a net new debt of 3.3% of GDP. Germany is now violating all Maastricht criteria, quietly buried by EU central planners and statists in the eternal hunting grounds of fiscal euphemisms.

With particular pride, government officials pointed to the increase in the defense budget to €90 billion initially, set to rise to €150 billion in the coming years. Haase expressed confidence that this would send the strongest signal to opponents worldwide: Germany is making itself defensible once more. Alongside this spending euphoria comes a manic paranoia – Berlin is stirring a fiscal cauldron that threatens to boil over.

Champagne Popping in the Arms Industry

Meanwhile, the German arms industry is likely celebrating. Berlin is vigorously building a second artificial economy – alongside the already failed green planned economy. Government circles evidently believe that by propagandistically portraying Russia as a potential invader, the population has been sufficiently aligned to extract the resources necessary for building its own war economy.

That is precisely where this is heading. Every budget deficit shifts the burden to future taxpayers – returning either as inflation or higher taxes like a boomerang.

It is almost unbelievable: Germany’s defense budget last year totaled around €78 billion, about two percent of GDP.

Had it been invested strategically in cutting-edge defense technologies, it would have more than adequately supported the defense of a country surrounded exclusively by allies and friends. Yet in Brussels as well as Berlin, the prevailing belief is that the state must overcome structural weaknesses in the economy through artificially generated demand. These are well-worn Keynesian recipes – leaving nothing in their wake but rising debt and growing poverty.

Continuing the Spiral

The debt orgy is set to continue spiraling in the coming years. For 2026, Finance Minister Lars Klingbeil plans a budget of €520.5 billion – a further increase of four percent.

Meanwhile – and it bears repeating – the private sector continues to shrink, which will inevitably depress tax revenues. All financial planning in Berlin is therefore built on sand, relying on far too optimistic assumptions. Compared to what Klingbeil and the budgeters still face, the 2025 and 2026 budgets are almost a breeze.

Already, huge funding gaps are emerging: around €34 billion is missing for 2027, the ministry notes a “need for action” of €63.8 billion for 2028, and a gap of €74 billion looms for 2029.

Some of the causes are homegrown: the federal government is compensating for state tax shortfalls, expanding the mothers’ pension a year earlier than initially planned, and simultaneously repaying extensive COVID-era loans. Klingbeil stresses that no previous coalition in Germany’s history has faced a €30 billion gap. This is why the vice chancellor has already begun work on the next budget months earlier than usual.

The “Gamechanger” Is Actually an Accelerator

The gaps in social budgets will dramatically widen in the coming months and years, rooted solely in the ideological overreach of policy. The subsequent tax-raising orgy has already been prepared in the media, so the public is more or less primed for it. The state’s share of GDP, now at 50 percent, will reach French-style heights of 57 percent or more in the coming years.

Germany is thus heading inexorably toward socialism. The federal budget is therefore not a “gamechanger” – it is a fire accelerant.

Unless the bond market forces a brutal budget consolidation through dramatically rising yields in the coming years, Chancellor Friedrich Merz will go down in German history as the first post-WWII leader to plunge the country into a debt spiral.

No one in Berlin will then be able to claim they underestimated the economic situation. Germany’s collapse unfolds in the blazing light of the brightest day.

The Federal Republic has regressed evolutionarily into a party state, where a fatal consensus among the political cartel governs the strategy to overcome the economic crisis. The very cancer that triggered the crisis – ideological regulation and brutal statism – is now artificially encouraged to metastasize. Germany is once again the sick man of Europe, albeit surrounded by other severely ailing problem patients.

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About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 09/08/2025 - 02:00

Bolivia's Defeat Of Socialism Signals A Continental Realignment

Bolivia's Defeat Of Socialism Signals A Continental Realignment

Authored by Emmanuel Rincon via the American Institute for Economic Research,

It took 20 years to defeat Evo Morales’s Movement Toward Socialism (MAS) in Bolivia through elections.

Two decades of political battle lines, along with a so-called “cultural war,” run deep in the region.

MAS rose to power thanks to the financing it received from Hugo Chávez, who, using the vast pockets of Venezuela’s oil rents, injected money into campaigns across almost every country in the continent. For a long stretch, he and his allies virtually took control of South America—except for Colombia.

The Venezuelan crisis left them exposed, however. Not only did the money used to fund political campaigns run out, but the tragic example of Chávez and Maduro’s socialism—driving more than nine million people to flee their country in search of better living conditions—became the starkest warning of the chaos caused by a system in which the State regulates and controls the economy at the same time.

On August 17, it wasn’t just that the left lost power in Bolivia. What was most shocking was the crushing manner in which it happened. Beyond local factors, an unexpected external influence also played a role: Javier Milei’s rise in Argentina.

The Electoral Collapse of the Socialist Option

The name of Bolivia’s next president is still unknown; Opposition figures Rodrigo Paz and Tuto Quiroga advanced to the runoff scheduled for Oct. 19. The ruling MAS, by contrast, suffered a historic defeat: its candidate failed to reach 4 percent of the vote, and in the legislature, socialists saw their representation slashed from 75 seats to just one. This collapse was also fueled by internal divisions.

Evo Morales, the party’s historic leader, had initially backed Luis Arce. Once in office, though, Arce began to distance himself from Morales, partly due to Morales’ interference in government decisions and partly because of ephebophilia allegations against him—charges for which he was ultimately convicted, though he remains free, protected by what he calls his “indigenous praetorian guard.”

But politics alone can’t explain MAS’s downfall. Bolivia was experiencing one of its worst economic crises in decades.

Many factors contributed, including:

  • Collapse of the energy sector: Gas production, the country’s main revenue source, plummeted from 60 million cubic meters per day in 2014–2015 to just 28 million in 2025. Mismanagement and lack of maintenance slashed exports and so, foreign trade.

  • Depleted reserves: In 2014, Bolivia held $15 billion in international reserves, but by 2025 that figure had dropped to under $2 billion. This left the government unable to maintain subsidies or import fuel normally.

  • Shortages of diesel and gasoline: 66 percent of stations stopped selling diesel and 38 percent stopped selling gasoline. In many cities, lines stretched over 11 hours. The crisis hit agriculture and transportation so severely that the government authorized payments in cryptocurrency to import fuel.

  • Food crisis and inflation: Prices of staples such as rice, meat, and fish rose as much as 58 percent in a single year. Annual inflation reached 23 percent in June 2025, with food inflation hovering between 17–24 percent.

  • Widespread poverty: According to the World Bank, over 35 percent of Bolivians now live in poverty, with extreme poverty around 11 percent. Many households cut back from three meals a day to just one.

  • Debt and fiscal deficit: Public debt hit 95 percent of GDP at the end of 2024, while the fiscal deficit surpassed seven percent of GDP, leaving no fiscal margin.

Ordinary Bolivians felt this collapse firsthand: endless gas station lines, skyrocketing food prices, and the impossibility of accessing dollars as their local currencies became worthless. That combination eroded whatever support MAS still had left.

The Milei Factor

Meanwhile, next door in Argentina—a country that had faced a similar crisis years earlier—a wild-haired libertarian was steering the nation onto a new course. He had campaigned with a chainsaw as his symbol, vowing to slash public spending, government payrolls, and state control of the economy, all while shouting, “Long live freedom, damn it!”

At first, few took him seriously. But within two years, he became an international phenomenon. Milei won the presidency against all odds and began implementing exactly what he promised by shrinking the state and freeing the economy.

Milei inherited Argentina with 211.4 percent annual inflation in December 2023. By May 2025, the consumer price index rose only 1.5 percent—the lowest in five years. Poverty fell from 52.9 percent to 38.1 percent. A country once seen as doomed to hyperinflation and misery began to rapidly recover.

Bolivians took notice. Both Rodrigo Paz and Tuto Quiroga—the candidates who made it to the runoff—have pledged to cut public spending and reduce the size of the state. This shift has already become a regional trend.

The Rightward Turn in Latin America

Before MAS’s defeat in Bolivia, Ecuador had elected Daniel Noboa, a president closer to the United States and more distant from the region’s socialist regimes. Around the same time, Argentina’s Javier Milei had secured his own victory. Now it’s Bolivia. Step by step, the political map of the region is shifting.

In the coming months, presidential elections will take place in Chile and Honduras—both governed by the left. Polls in both countries currently show center-right candidates with strong chances of victory. These candidates openly reject socialism, criticize excessive state intervention, denounce the brutality of Cuba, Venezuela, and Nicaragua, and advocate for strategic partnerships with the United States rather than China, Russia, or Iran.

Not all of them can be described as “libertarians” or as followers of Hayek’s economic thought, like Milei. But they are far removed from the region’s recent enmeshment in statism, repression, and narcotrafficking cartels. They also appear willing to cooperate with Washington on regional security, migration, and economic matters.

What’s remarkable is how the Argentine phenomenon has shifted the regional dynamic.

In a Latin America long accustomed to government handouts, presidential candidates no longer compete to offer more subsidies and social programs. They now compete to promise deeper cuts, less government, and greater individual freedoms.

The cry of “Long live freedom, damn it!” began in Buenos Aires, echoed in La Paz, and the rest of Latin America now awaits its turn at the ballot box, to join the libertarian wave that seems to be reshaping the continent’s political landscape.

Tyler Durden Sun, 09/07/2025 - 23:20

Up To 37% Of Circulating Bitcoin May Be Lost Forever In Silent Supply Shock

Up To 37% Of Circulating Bitcoin May Be Lost Forever In Silent Supply Shock

Submitted by Ronan Manly of the Sound Money Report 

While Bitcoin’s fixed 21 million coin cap was designed to counteract fiat inflation and mirror gold’s scarcity, a massive pool of permanently lost coins further tightens supply.

Estimates from on-chain analyses suggest that between 2.3 million and an incredible 7.8 million BTC (roughly between 11—37% of total supply), may have vanished forever, trapped in lost wallets, forgotten keys, or in addresses abandoned due to unexpected deaths. These ‘zombie’ or ‘ghost’ coins then effectively reduce Bitcoin’s effective circulating supply from the current 19.9 million to as low as a range of 12.1—17.6 million BTC.

A Donation to Everyone

As well as intensifying Bitcoin’s existing inherent scarcity, coins that permanently vanish boost the true value of all remaining Bitcoins. As Satoshi Nakamoto, Bitcoin’s pseudonymous creator/creators, stated in a foresightful observation in April 2010 in a post on the BitcoinTalk forum: “Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.

The lost coin range estimate (2.3—7.8 million) also comfortably exceeds the combined total of Bitcoin ETF and corporate treasury holdings which together total approximately 2.2 million BTC, a point rarely highlighted by a mainstream financial media fixated on the latest Blackrock Bitcoin ETF inflows and [Micro]Strategy’s latest BTC purchases.

No Keys, No Coins

Bitcoin’s rarity is thus magnified by these permanent losses, as the lost coin supply shock increases the value of every remaining coin, in contrast to traditional centralised assets such as stocks or bonds, In Bitcoin, there is no safety net. Once access is gone, the coins are effectively removed from circulation.

With a self-custodial architecture of ‘be your own bank’ but on an immutable blockchain, any lost and inaccessible coins on the Bitcoin network remain visible but untouchable. There is no bank and no bailout - only the owner and their private keys.

The familiar warning about exchange-held BTC of “not your keys, not your coins” now becomes the even more dramatic “no keys, no coins” in the off-exchange world.

Bitcoin relies on private keys (unique 256-bit cryptographic strings) to control and transfer ownership between addresses. Forgotten passwords, lost seed phrases, overwritten files, corrupted drives, or discarded hardware all result in irreversible inaccessibility.

Real-World Losses

Real-world cases highlight the dramatic scale and drama of lost Bitcoin. In 2013, the now infamous Welsh IT engineer James Howells accidentally discarded a hard drive containing private keys to 8,000 BTC in a landfill, worth roughly USD 900mn at current prices. But local city council rulings about environmental regulations prevent the obsessed Howells from launching a search for the lost hard drive.

Stefan Thomas, former Ripple CTO, lost access to 7,002 BTC (circa USD 777mn today) after forgetting his IronKey hard drive password, which locks permanently after 10 failed guesses. In January 2021, with two attempts left, Thomas described to the New York Times his repeated, desperate, and unsuccessful efforts to regain access.

Deaths also contribute to Bitcoin inaccessibility when holders die without succession plans. Gerald Cotten, CEO of Canadian crypto exchange QuadrigaCX, allegedly died in 2018 without revealing how to access USD 190mn in client funds, which included substantial Bitcoin holdings.

Romanian early Bitcoin miner Mircea Popescu drowned off a Costa Rica beach in 2021, widely rumoured to have left up to 1 million BTC inaccessible. (potentially worth USD 111bn). While the size of Popescu’s BTC holdings is unproven, he was known to have had sizeable holdings.

And then there’s Bitcoin’s creator, Satoshi Nakamoto, who pulled his own vanishing act in April 2011, leaving behind an estimated 1 million BTC mined between 2009— 2010. This Satoshi stash is now possibly ‘lost’ forever, or has been left intentionally dormant as a ‘donation’ to the network.

Estimating the Extent of Loss

But just how many coins may be gone forever? Numerous studies have utilised blockchain analytics, wallet inactivity metrics, and even factor in human behaviour to try and pin down the extent of lost and inaccessible Bitcoins.

In a May 2025 report, Ledger cites analyst estimates of between 2.3—3.7 million lost Bitcoins, representing 11—18% of Bitcoin’s max 21 million coin supply. Cane Island Digital’s Timothy Peterson, in a June 2025 report, estimates over 6 million BTC irretrievably lost, potentially reaching 7 million by late 2025.

In 2023, Glassnode, the blockchain data and on-chain analytics platform, estimated approximately 7.8 million BTC or 39% of mined supply, were either “HODLed or lost coins”, although this may include dormant wallets held intentionally, which would overstate the estimate. This came from a Glassnode study in conjunction with ARK Invest, which used a metric of ‘Vaulted Supply’ aka “HODLed or lost coins,” which “multiplies outstanding supply times vaultedness to measure the number of coins that have not been moved. Either they are in strong hands, or they are lost.

In June 2025, Fidelity Digital Assets estimated that Bitcoin’s ancient supply, defined as the amount of bitcoin that has not moved for 10 years or more, accounted for over 17% of total issued supply, which is terms of BTC is over 3.3 million coins. In late 2024, River Financial, a Bitcoin financial institution were citing 3-4 million BTC as lost.

Despite varying methodologies, these studies, as a group, converge on a range of 2.3—7.8 million BTC lost, with the higher estimates like Glassnode’s and Peterson’s potentially overstated due to combining dormant and truly lost coins. Whatever the exact number, this range highlights a substantial and growing loss of Bitcoin, which enhances the scarcity of the remaining supply.

Losses vs ETFs and Corporate Treasuries

Comparing this loss range to the high-profile holdings of Bitcoin ETFs and corporate treasuries is eye-opening. As of August 2025, spot Bitcoin ETFs collectively held about 1,036,000 BTC or 5–6% of the roughly 19.9 million BTC so far mined, with Blackrock’s IBIT holding approximately 555,000 BTC of that total.

Corporate and treasury holders add another layer, with the top 100 corporates holding a combined 988,000 BTC (5% of the mined total) according to the Bitcoin Treasuries website, chief among them MicroStrategy (rebranded as Strategy) with 632,457 BTC, and such well-known names as MARA Holdings (50,639 BTC), Riot Platforms (19,225 BTC), and Japan’s Metaplanet (18,113 BTC).

Combining ETF plus corporate BTC holdings yields approximately 2.2 million, which is even less than the lower bound for estimated lost BTC of 2.3 million, and is a vivid illustration of the sheer scale of inaccessible coins. In other words, there is a hidden supply shock that the market has not yet fully processed, one which dwarfs both the US Bitcoin ETF inflows and Michael Saylor’s buying sprees.

From a circulating supply of 19.9 million BTC, subtract 5 million lost coins (midpoint estimate) and 2.2 million institutional holdings to get 12.7 million BTC in individual hands. Assume 30% of this (~ 3.8 million) is HODLed by long-term investors, which tallies with Glassnode’s 70% ‘unmoved supply’, which includes institutional and some misclassified lost coins.

Shrinking Free Float

This allows us to calculate a Bitcoin “Free Float”, that may be available to trade in the public market:19.9 million BTC mined so far, minus 5 million (lost), minus 2.2 million (institutionally held), minus 3.8 million (HODLed by individuals) = a free float of just 8.9 million BTC, or 42% of the 21 million total supply, and 45% of circulating supply. That is far less than the free float of S&P 500 stocks, which have a free float of 70—90%, and where ‘lost’ shares don’t exist as the centralised system can reissue them, unlike Bitcoin’s unforgiving blockchain.

The reported Bitcoin market cap of over USD 2.1trn market cap (19.9 million * USD 109,000) then is also a mirage, and is overstated by ~USD 500bn due to counting lost ‘ghost’ coins. With 5 million coins lost, the true supply is ~14.9 million BTC, which results in a real market cap of ~USD 1.6trn.

Conclusion

Bitcoin is scarcer than the market realises. Lost Bitcoins of between 2.3—7.8 million (11—37%) reduce accessible supply from 19.9 million to between 12.1—17.6 million. Irrecoverable coins inflate the value of every remaining coin, and intensify Bitcoin’s narrative as a store of value even rarer than gold. The widely accepted market cap of USD 2.1trn is overstated by about USD 500bn, with the true market cap near USD 1.6trn.

This silent supply shock, which dwarfs institutional demand and is ignored and underestimated by the mainstream media, positions Bitcoin not just as digital gold but as an asset with unparalleled rarity. It also has the potential to trigger a seismic price surge as the market wakes up to the scarcer than realised reality, and a free float barely half its total supply.

*  *  *

Top sellers this week:

Steak Lover's Bundle

Rancher's Classics 

Rancher's Seasoning Trio

Raw Organic Honey

Tyler Durden Sun, 09/07/2025 - 23:15

Sexually-Transmitted Infection Rates Drop For First Time In Decades

Sexually-Transmitted Infection Rates Drop For First Time In Decades

After years of the rate of sexually transmitted infections rising in the U.S., some progress was made at least for gonorrhea and clamydia, numbers from the Centers for Disease Control and Prevention show.

In the case of more deadly infection syphilis, only the rate of increase has slowed for now.

Overall, as Statista's Katharina Buchholz reports, the number of reported STIs in the United States decreased by 1.8 percent between 2022 and 2023, the latest year on record. However, the number of annual STI reports remains very high in the country.

 Upwards Trend Broken? | Statista

You will find more infographics at Statista

Jonathan Mermin, Director of CDC's National Center for HIV, Viral Hepatitis, STD, and TB Prevention, called the development "a glimmer of hope".

The CDC also said that introducing home tests, preventative antibiotics available after risky sexual encounters and a syphilis task force contributed to the results.

Health officals had voiced serious concern for years after the U.S. had experienced significant spikes in sexually transmitted infection prevalence in recent decades.

2.6 million cases of gonorrhea, chlamydia and syphilis combined were recorded in 2019, an all-time high. The data is part of the Sexually Transmitted Disease Surveillance Report published by the CDC.

Numerous factors contributed to the recent increase, particularly funding cuts for local health departments that have caused staff shortages and clinic closures, as well as a decrease in condom usage.

Reuters quoted the CDC's directer of STD Prevention, Gail Bohan, who sad that "the resurgence of syphilis, and particularly congenital syphilis, is not an arbitrary event, but rather a symptom of a deteriorating public health infrastructure and lack of access to health care.”

Cuts resulted in fewer people going to screening, aiding the spread of the diseases by undiagnosed individuals.

Cases are highest among adolescents and young adults with over half occurring among people aged 15 and 24.

The CDC said that "it is imperative that federal, state and local programs employ strategies that maximize long-term population impact by reducing STD incidence and promoting sexual, reproductive, maternal and infant health".

Tyler Durden Sun, 09/07/2025 - 22:45

Censorship Concerns Surge As China Yanks Video Of Xi–Putin Organ Transplant Discussion

Censorship Concerns Surge As China Yanks Video Of Xi–Putin Organ Transplant Discussion

Authored by Eva Fu & Frank Fang via The Epoch Times,

China’s state-owned broadcaster has rescinded international wire agency access to a hot mic video of Chinese and Russian leaders discussing longevity and organ transplants, an effort that shows the Chinese regime’s fear of attention on the topic, critics say.

The open mic exchange between Russian President Vladimir Putin and Chinese leader Xi Jinping took place in Beijing on Sept. 3, as the two leaders walked together ahead of a military parade commemorating World War II.

Xi at the parade told Putin that “these days at 70 you are still a child,” prompting Putin to remark that continued organ transplants could allow one to live younger and even reach immortality. Xi in response said that it is predicted that there’s a chance of humans living to 150 years old.

The conversation became global news and sparked discussions about the Chinese regime’s state-sanctioned forced organ harvesting, a taboo topic in China. CCTV has since taken down the livestream video that captured the exchange and removed the moment from replays.

CCTV also sent a letter through its lawyer to Reuters—which licensed the video through CCTV and edited it into a four-minute clip—requesting the news agency to remove the footage on the grounds that the clips Reuters published exceeded the agreed-upon scope.

CCTV lawyer He Danning claimed Reuters’ “editorial treatment applied to this material has resulted in a clear misrepresentation of the facts and statements contained within the licensed feed.”

Reuters withdrew the video and issued a “kill” notice to its clients on Sept. 5. The agency said it had earlier distributed the clip to more than 1,000 media clients around the world, including major international news broadcasters and TV stations.

In a statement, Reuters said it was removing the content because it no longer has the legal permission to publish this copyrighted material.

“We stand by the accuracy of what we published. We have carefully reviewed the published footage, and we have found no reason to believe Reuters longstanding commitment to accurate, unbiased journalism has been compromised,” Reuters stated.

According to the London-based China Tribunal, forced organ harvesting has taken place in China for years “on a significant scale,” and practitioners of the Falun Gong spiritual group are the primary victims. It said that persecuted religious minorities including Uyghurs are also potential targets. Since 1999, millions of Falun Gong practitioners have been incarcerated in prisons, labor camps, and other facilities, with hundreds of thousands tortured and untold numbers persecuted to death, according to the Falun Dafa Information Center.

The International Coalition to End Transplant Abuse in China (ETAC), an Australian advocacy group comprising lawyers, medical professionals, researchers, and human rights advocates, said it was not surprised by CCTV’s demand, considering that organ transplants in China “are linked to crimes against humanity.”

“The now-withdrawn ‘hot mic’ recording between Xi and Putin highlighted the possibility of using organ transplants to seek immortality, rather than to treat seriously ill patients,” ETAC said in a statement to The Epoch Times.

“Such a conversation in China immediately raises the spectre of forced organ harvesting from prisoners of conscience.”

The group said the incident should be “a reminder of the responsibility of media outlets to resist undue influence, the necessity for governments to respect press freedom, and the urgency of addressing credible allegations of forced organ harvesting and other human rights abuses in China.”

“Efforts to suppress or dilute media coverage risk silencing victims and obstructing informed public debate. Independent journalism is critical in holding governments accountable, especially when issues involve systemic human rights violations.”

Two pieces of U.S. legislation that aim to sanction perpetrators of forced organ harvesting—the Stop Forced Organ Harvesting Act and the Falun Gong Protection Act—have already been approved by the House. The Uyghur Genocide Accountability and Sanctions Act of 2025, introduced a month ago to both the Senate and the House, seeks to expand sanctions of the existing law, the Uyghur Human Rights Policy Act of 2020, regarding the human rights abuses in the predominantly Muslim Uyghur Xinjiang region.

“Each addresses forced organ harvesting in distinct ways, and swift passage is critical to avoid U.S. complicity in these crimes,” ETAC stated. “The international community cannot afford selective silence when fundamental human rights are at stake.”

Tyler Durden Sun, 09/07/2025 - 22:10

Kevin O'Leary's Continentalist Proposal Deserves Further Consideration

Kevin O'Leary's Continentalist Proposal Deserves Further Consideration

Authored by William Brooks via The Epoch Times,

Late last December, Canadian businessman Kevin O’Leary, affectionately known as Mr. Wonderful, re-opened a longstanding public debate over the idea of “continentalism” in North America.

Within weeks after the re-election of President Donald Trump, O'Leary pitched the merits of an EU-style economic union between Canada and USA.

“I like this idea and at least half of Canadians are interested” he said.

Unfortunate Timing

As it happened, the timing of O’Leary’s proposal could not have been worse.

The credibility of his idea was instantly undermined by the incoming U.S. President’s controversial insistence that Canada should become the 51st state.

After Trump’s inauguration, Washington pivoted to hardball positions on tariffs and trade and it was clear there would be no special concessions for Canada. Signals from D.C. warned of tough USMCA trade negotiations to come.

In March, a beleaguered Justin Trudeau left office and former Bank of England President Mark Carney took over the Liberal Party of Canada. In April, Mr. Carney was elected prime minister, but his party fell short of winning a clear majority in the House of Commons.

The new Liberal government immediately adopted an “elbows up” disposition in the brewing trade war with the USA. By the summer of 2025, any talk of a Can-Am economic union was crowded out by strong feelings of resentment and ill will on both sides of the border.

An Idea Worth Revisiting

The idea of an EU-style Can-Am union has a long and respectable history and it is well worth revisiting.

After the British North America Act of 1867, Canadian scholar Goldwin Smith led a vigorous philosophical movement that supported closer ties with the USA in the form of a continental economic order. Smith defended the concept in a 1891 book titled “Canada and the Canadian Question.” Opposing movements favoured closer ties with the British Empire or total Canadian economic independence. Neither of the latter positions stood the test of time.

Today, the arguments for the development of a Can-Am union are more compelling than ever. Economic integration, the elimination of trade barriers, and the removal of regulatory mismatches could boost cross-border investment well beyond current USMCA levels. A strong shared currency would eliminate exchange rate volatility, reduce transaction costs, and improve price transparency. EU-style citizen mobility could reduce labour shortages, provide enormous opportunities for young workers, increase productivity, and fill demographic gaps created by aging populations.

Infrastructure and environmental coordination would support integrated transportation systems, energy production, and transnational communications networks. Coordinated pollution policies could establish reasonable emissions standards and enhance environmental protection without obstructing sorely needed drilling, mining, and manufacturing initiatives.

A larger unified market with consistent rules would incentivize investors. Harmonized policies would secure critical materials and technologies within North America and reduce dependency on hostile suppliers. A Can-Am union would bring together a population of some 388.8 million on 19.82 million square kilometres of territory with and a combined GDP of close to $32 trillion.

In the realm of education, mutual credential recognition, research collaboration, and professional mobility would multiply opportunities in a North American cultural market that could stand up to the Chinese Communist Party and other global influencers.

All in all, a new continental order would increase the geopolitical influence and security of citizens in both Canada and the USA. A unified bloc dedicated to Western democratic principles and free enterprise could rival the economic, diplomatic, and military weight of China, Russia, and other totalitarian regimes.

With a southern border wall already in place, our security could be further improved by a joint force that could act against illegal migration and drug smuggling at the water’s edge. Shared intelligence, cybersecurity, and a coordinated military would bolster North America’s defence systems in what has become a dangerous multipolar world.

Modelled after EU governance mechanisms, a North American commission or council could allow for cooperative decision-making without sacrificing national sovereignty. If historical adversaries like Germany, France, Italy, Spain, and Portugal can coexist in an economic union, why not Canada and the United States?

Resistance to Change May be Overcome by Facts on the Ground

As it was in the days of Goldwin Smith, there is still plenty of cross-border resistance to Mr. O’Leary’s continentalist proposal.

All manner of entrenched interests regard an economic union as overreach and fear the loss of personal power and control. Big Labour warns of downward pressure on salaries and benefits in an open job market. Canadian politicians fear being overwhelmed in an unbalanced partnership, and American lawmakers are reluctant to support anything that might dilute congressional supremacy.

But facts on the ground are leading to a kinder disposition toward the continental alternative. Among young, ambitious North Americans trapped in a collapsing middle-class there is a powerful yen for greater mobility and the new opportunities that bold change can invoke.

This is especially true on the Canadian side of the border. In 2024 alone, approximately 106,000 Canadians permanently left the country. This figure marked one of the highest outflows in recent memory. Some of the most commonly cited reasons for leaving are the soaring cost of living, low salaries, high taxes, limited career opportunities, and loss of confidence in government institutions. In spite of the anti-American rhetoric constantly served up by Canada’s legacy media, the United States remains the primary destination for departing Canadians. Over a million now live there.

So perhaps it’s time for a second look at Kevin O'Leary’s proposal. As the late British Prime Minister Harold Wilson once asserted: “He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.”

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sun, 09/07/2025 - 21:00

Democrat New Mexico Governor Admits National Guard Making Progress In High-Crime Albuquerque

Democrat New Mexico Governor Admits National Guard Making Progress In High-Crime Albuquerque

Authored by Allen Stein via The Epoch Times,

In the shade of a tall fence along Central Avenue, a group of homeless people lingered in Albuquerque’s troubled International District as three squad cars and a medical vehicle swept onto the scene.

Police and first responders moved in quickly, scattering the group as a homeless woman began shouting epithets from the middle of the street.

Matthew, a resident of a nearby halfway house, stood at the edge of the turmoil and watched as the situation unfolded.

“They’re just making people leave, man,” he said, frowning.

“They give you a chance to leave. If you don’t leave, they give you another chance. If you don’t leave again, they just run your name.”

He said if the information shows there is an outstanding warrant, handcuffs come out.

Matthew, who did not want to share his last name, said police have been more visible in a neighborhood that has struggled with crime, homelessness, and drug use for a long time.

The display of force by law enforcement is anything but accidental.

On April 8, Gov. Michelle Lujan Grisham activated the New Mexico National Guard to assist Albuquerque police in addressing increased crime and safety concerns, particularly on busy Central Avenue.

This allowed officers to return to regular patrols and other duties.

The emergency request from the Albuquerque Police Department (APD) cited the fentanyl epidemic and rising violent juvenile crime as issues requiring immediate intervention.

“The safety of New Mexicans is my top priority,” Lujan Grisham, a Democrat, said in a statement.

“By deploying our National Guard to support APD with essential duties, we’re ensuring that trained police officers can focus on what they do best—keeping our communities safe.”

In May, 60 to 70 National Guard members were sent to the city for Operation Zia Shield. Their training was overseen by New Mexico’s Homeland Security, Public Safety, and local police agencies.

National Guard members have been assisting with tasks such as providing aid along Central Avenue, processing and transporting prisoners, maintaining security at Metro Court, and monitoring the city with police cameras and drones.

“The National Guard will serve as a visible, trusted presence supporting law enforcement duties, which will enhance officer presence in high-crime areas and reinforce community trust through visible engagement,” Lujan Grisham said.

Transit Police vehicles line Central Avenue within the International District in Albuquerque, N.M., on Sept. 3, 2025. Allan Stein/The Epoch Times

Criticism

Lujan Grisham and Albuquerque Mayor Tim Keller criticized President Donald Trump’s deployment of National Guard troops in Washington, D.C., after he declared a crime emergency in the nation’s capital on Aug. 11. The president also federalized the D.C. Metropolitan Police Department.

“President Trump’s massive executive overreach in Washington sets a dangerous precedent and undermines safety in our nation’s capital,” Lujan Grisham and Keller said in a joint statement.

Pentagon press secretary Kingsley Wilson during a press conference on Aug. 11, said, “it is disgraceful that we have allowed D.C., to become so incredibly dangerous.”

“I think there’s no more important job for this department than alongside federal law enforcement partners and local police in securing our nation’s capital,” Wilson said.

Meanwhile, Lujan Grisham received criticism for deploying National Guard personnel in her state, including from the American Civil Liberties Union (ACLU) of New Mexico.

A mural depicts the historic Nob Hill section of Albuquerque, N.M., near Central Avenue on Sept. 3, 2025. Allan Stein/The Epoch Times

In April, the ACLU expressed “serious concerns” that military deployment would lead to civil rights violations and further criminalize the homeless.

“All of us deserve to be safe at home, at work, and in our community. We, like so many in Albuquerque, know that that’s not always the case in our city,” Daniel Williams, ACLU of New Mexico policy advocate, said in a statement.

“However, Governor Lujan Grisham’s deployment of the National Guard to support Albuquerque police is a show of force, not a show of solutions.”

A group of people squats in the shade of a building off Central Avenue in the International District of Albuquerque, N.M., on Sept. 3, 2025. Allan Stein/The Epoch Times

Despite this criticism, Lujan Grisham’s office said Operation Zia Shield, now in its third month, has been “highly successful.”

“Initial plans cited a minimum of six months in order to make a positive impact in the community,” a spokesman told The Epoch Times.

Officials will continue to review the situation to decide whether to proceed or end the mission, he said.

Field operations in Albuquerque began on June 5, with National Guard personnel monitoring city streets under the direction of police dispatch.

“Having National Guardsmen assisting with these calls reduces the number of sworn law enforcement officers needed at each call, freeing them up for more serious calls,” the spokesman said.

Jonathan Tafoya stands inside Fonzy's Barbershop, in the Nob Hill section of Albuquerque, N.M., on Sept. 3, 2025. Allan Stein/The Epoch Times

Since mid-May, Operation Zia Shield has devoted nearly 4,000 hours to responding to 1,216 incidents throughout the city.

These included 210 calls for patrolling neighborhoods, which took 282 hours; 35 calls for medical assistance; 117 calls to assist other officers; 107 special tasks; and 194 calls to patrol public transportation areas.

On July 28, a Zia Shield unit effort provided guard personnel with job training to assist with paperwork and expedite court case processing.

Guard members processed 549 criminal summons and prepared and sent 1,347 officer trial notices, according to the spokesman.

On Aug. 8, selected Guard personnel monitored traffic cameras and earned drone pilot licenses. They flew drones 180 times, totaling almost 39 hours.

One week into the mission, National Guard members monitoring traffic cameras noticed a person who appeared to be having a medical emergency in a bus shelter.

Their observation helped save the person’s life, the spokesman said.

Since Operation Zia Shield started, Guard members have processed 2,248 people under arrest. This allowed police officers to focus on other tasks.

Jonathan Tafoya, owner of Fonzy’s Barbershop along Monte Vista Boulevard near Central Avenue, opened his shop six months ago.

While he hasn’t seen much crime in his area, he thinks using the National Guard to support law enforcement is a good idea, “because there aren’t enough cops.”

‘More Police Needed’

As of Sept. 3, the city has reported 50 homicides so far this year. In 2024, there were 66 confirmed homicides, while in 2023, the number was 73.

The APD has 864 officers who serve a city that spans 189.5 square miles and is home to 558,874 people.

In 2023, 40 APD officers resigned, representing a 32.2 percent decrease from 2002—when 59 officers resigned—and a 36.5 percent decrease from 2021, when 63 officers left the force, according to Police1.

“They need to step up their police presence,” Tafoya told The Epoch Times. “Just hire more cops—but nobody wants to be a cop.”

A police substation in the Nob Hill area of Albuquerque, N.M., on Sept. 3, 2025. Allan Stein/The Epoch Times

Robert, a local business owner on Central Avenue in the Nob Hill neighborhood, said homelessness is a major problem in the city.

“I know in our back alley, they‘ll be back there using drugs, and they’ll try and camp back there, and we’ll tell them to move,” said Robert, who didn’t want his last name used out of fear of retaliation.

The solution, he said, is hiring more police officers. The problem is, “Who wants to be a police officer?”

“It’s a very hard role to fill now because it comes with a lot of politics, a lot of baggage,” Robert said.

“There are no consequences anymore for a lot of things that people do, especially in Albuquerque. The juvenile crime is out of control. Our legislators won’t take action. They give them a slap on the hand.”

Christian works as a cook at a restaurant on Central Avenue. He said he feels sympathy for the homeless but sometimes sees them as part of the problem.

“A lot of homeless people do drugs and everything. We shouldn’t have to deal with that,” he said

A man waits for public transportation to arrive in Albuquerque's Nob Hill East section on Sept. 3, 2025. Allan Stein/The Epoch Times

Christian, like Robert, believes that using National Guard members to help local police is a “good thing.”

Better Days

Robert recalled that the International District was once known as the “War Zone” because crime was so prevalent.

“It used to be a nice part of town way back when,” he said. “But that’s where a lot of the homeless are now.”

Matthew said every day, people experiencing homelessness gather in the shaded areas along Central Avenue across from the casino.

It can still be a dangerous place, he said, even with police patrolling nearby.

“Everybody’s doing drugs out here, bro. They’re getting their pills and syringes everywhere. It’s disgusting,” he said.

After the police moved the group of homeless people away from the shaded fence, he offered some advice to someone walking by.

“Be safe, man,” Matthew said.

Tyler Durden Sun, 09/07/2025 - 19:50

Undersea Cable Cuts Kill Internet To Parts Of Asia, Mideast

Undersea Cable Cuts Kill Internet To Parts Of Asia, Mideast

Undersea internet cables in the Red Sea have been cut, disrupting internet access to parts of Asia and the Middle East. The cause of the cuts weren't immediately clear, though China does have a shiny new deep-sea cable cutter (which we're sure a bunch of countries have too). 

Saudi Vision Cable, laid in 2022, connects Jeddah, Yanbu, Dibba and Haql, the major subsea hubs in Red Sea cities of Saudi Arabia.

Associated Press (via NBC) seems to think ('there has been concern') that Houthi rebels from Yemen have been targeting the cables, which sounds absurd - though parts of the red sea are only as deep at 100m (330 ft). 

While the Houthis might not have submarines, undersea robots, or the ability to hit the deepest parts of the Red Sea, it’s possible to inflict damage on subsea cables without the backing of a major navy.

In March 2013, three divers were arrested by the Egyptian Navy off the coast of Alexandria after cutting the SeaMeWe-4 cable by detonating underwater explosives. Internet speeds reportedly fell around 60 percent after the incident. A motive wasn’t revealed and it’s unclear if they were charged and/or sentenced for the damage.

In 2007, it was reported that police had seized more than 500km of telecom cable taken by fishing vessels to sell for scrap – including an 11km segment identified as belonging to the SeaMeWe-3 cable. -Data Center Dynamics

So, who knows - but AP (deep state) spends considerable ink on the Houthis 

Yemen with its capital, Sanaa. AP

Undersea cables are a major component of the internet, along with satellite connections and land-based cables, with internet providers having multiple access points through which to reroute traffic if necessary. 

According to Microsoft, the Mideast "may experience increased latency due to undersea fiber cuts in the Red Sea," though it did not elaborate.

According to internet monitor NetKBlocks, a "series of subsea cable outages in the Red Sea has degraded internet connectivity in multiple countries," which is says includes India and Pakistan. It blamed "failures affecting the SMW4 and IMEWE cable systems near Jeddah, Saudi Arabia."

In August of 2022, the 'Saudi Vision Cable' was laid near Jeddah.The Vision Cable spans 1,160km connecting Jeddah, Yanbu, Dibba and Haql, the major subsea hubs in Red Sea cities of Saudi Arabia, according to Submarine Cable Networks.

Beyond that, the South East Asia-Middle East-Western Europe 4 cable (say that three times fast) is operated by Tata Communications - part of the Indian conglomerate, while the India-Middle East-Western Europe cable is operated by another consortium overseen by Alcatel-Lucent. 

Pakistan Telecommunications Co. Ltd., a telecommunication giant in that country, noted that the cuts had taken place in a statement on Saturday.

Saudi Arabia did not immediately acknowledge the disruption and authorities there did not respond to a request for comment.

In the United Arab Emirates, home to Dubai and Abu Dhabi, internet users on the country’s state-owned Du and Etisalat networks complained of slower internet speeds. The government did not immediately acknowledge the disruption. -AP

Subsea cables can be cut by anchors dropped from ships, on purpose or otherwise. Repairs can take weeks, as a ship and crew must be dispatched to locate and repair the damaged cable.

*  *  *

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Tyler Durden Sun, 09/07/2025 - 19:15

The Battle Brewing: Mass Surveillance Vs The People

The Battle Brewing: Mass Surveillance Vs The People

Authored by Susan D. Harris via The Epoch Times,

Behind the scenes of breaking news, culture wars, and moral division, a significant battle is brewing: mass surveillance vs. the people.

One surveillance technology in particular is rising to the surface of the national conversation: automated license plate readers (ALPR).

Flock Safety, a leader in ALPR technology, is one of the companies in the eye of the storm. Last week, Flock’s CEO and co-founder Garrett Langley made headlines when he released a statement announcing the company was going to “pause” its pilot programs with the U.S. government.

The company said that while it has no current contracts with any U.S. Department of Homeland Security agencies, it did engage in “limited pilots with the U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI), to assist those agencies in combatting human trafficking and fentanyl distribution.”

So why would a company decide not to aid their own government in the fight against human trafficking and fentanyl distribution? Who are the voices that swayed them?

The company’s statement likely stems from criticism (or demonization) of Flock Safety for developing technology that has been adapted for use by ICE agents.

In a July interview with 9News Denver, Flock Safety CEO Langley was asked about the Denver city council voting against extending the city’s Flock contract “out of concerns the system would be exploited for immigration matters.”

Langley straddled the fence:

“Every city needs to make a decision what’s right for them. Some cities work really closely with federal authorities … Now in the case of Denver, if there’s no desire to work with ICE, that’s great. We need to create a safer city while still upholding the values we have.”

Ultimately, however, Denver Mayor Mike Johnston, a Democrat, extended the contract through October 2025 after the dollar amount was reset to a figure that didn’t need council approval.

A spokesman for the mayor said the cameras are “an important tool for fighting crime.”

Meanwhile, Denver city leaders formed a special task force to discuss the technology’s privacy concerns. The policy director for the ACLU of Colorado said he would like the cameras turned off entirely—"until there are policies in place to regulate the use of them ...”

Reason magazine claims that that “Flock Safety’s 40,000 cameras present in over 5,000 communities across the U.S. are being used to detain undocumented immigrants, many of whom have no criminal history.”

To be clear, it’s not a matter of Homeland Security or ICE agents directly accessing the Denver system—or any ALPR system. It’s a complex issue of state and local law enforcement agencies sharing information or granting access to other agencies. As Denver7 reported, “Flock Safety’s cameras capture billions of photos of license plates each month. However, it doesn’t own that data. The local agencies in whose jurisdictions the cameras are located do, and they’re the ones who receive inquiries from other law enforcement agencies.”

The same issue has been unfolding in other parts of the country as well.

In 2019, the ACLU of Northern California complained of ICE “using driver location data from local police for deportations.” The company at the center of that controversy was Vigilant Solutions. Now a subsidiary of Motorola Solutions, Inc., it too provides license plate recognition technology and intelligence platforms for law enforcement and commercial applications.

As a matter of fact, there are tons of companies clamoring to be Number One in the ALPR industry. Genetec’s AutoVu, PlateSmart Technologies, and Rank One Computing are just a few.

Beyond the field of computer science known as computer vision that encompasses license plate recognition, there also lies the lucrative field of biometrics: the physical field of analyzing body traits and the behavioral field that analyzes patterns. In short, there’s a virtual feeding frenzy happening in the marketplace of digital panopticons. (For a great commentary on Bentham’s panopticon—the prison designed for total surveillance—and the modern era, see “The Age of the Digital Panopticon” on the Neuroscience ABS blog.)

But before we balk at having our license plates zapped into a searchable database, let’s consider the advantages.

Local TV station Denver7 reported that Flock Safety cameras “led to 353 arrests, 251 recovered stolen vehicles and 39 recovered firearms as of August 12.”

Cities like Dallas and Fort Worth, Texas, began installing Flock Safety cameras years ago, and law enforcement reports the cameras have made a difference in fighting crime. Fort Worth authorities say the cameras have helped with gun detection, while Dallas police note their use in real-time crime fighting by sending license plate images to the Dallas Fusion Center. (For those not in the know, there are at least 79 fusion centers across the United States, run by state and local law enforcement in collaboration with the U.S. Department of Homeland Security. These centers act as hubs for collecting, evaluating, and sharing intelligence and public safety data.)

Additionally, Flock Safety markets its ALPR technology, as well as its gunfire locator systems, far beyond law enforcement and city management: Companies like Lowe’s and Home Depot use them.

They also sell to neighborhood associations (HOAs), schools, and private individuals. Think of their advantages in emergencies like school or church shootings or Amber alerts. ALPR technology seems to be making us all safer.

Yet as with most of the surveillance technology that we’ve reluctantly embraced “for our own good”—especially after the attacks of 9/11—Americans are having second thoughts about the privacy they’re being asked to forfeit in the name of safety.

The movement against license plate readers is making strange bedfellows: Some conservatives criticize it as government overreach, seeing it as a digital dragnet that tracks all vehicles without probable cause—directly infringing on fourth amendment protections against unreasonable searches. Simultaneously, some progressives are also focusing on it as a violation of civil liberties, alleging that it’s being used to target “undocumented migrants.”

Flock Safety’s recent announcement is the first sign that a company providing this kind of surveillance can be swayed by public opinion. It is a clear harbinger of a larger public debate that will likely drive new legislation at the local, state, and possibly even the federal level. It’s a conversation that is long overdue.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sun, 09/07/2025 - 18:40

Maryland Scrambles To Deploy More Law Enforcement To Crime-Ridden Baltimore After Trump Threat 

Maryland Scrambles To Deploy More Law Enforcement To Crime-Ridden Baltimore After Trump Threat 

Maryland Governor Wes Moore and Baltimore City Mayor Brandon Scott, both leaning left on the political spectrum, announced late last week that additional law enforcement resources will be deployed to support the crumbling Baltimore City Police force, which is suffering from a dangerous officer shortage after years of disastrous criminal justice reforms, including "defund the police" initiatives and other progressive programs that have backfired.

At a joint press conference on Friday, Mayor Scott declared, "We do not need an occupation. We do not need troops on our streets," adding, "We can do this ourselves." 

The state plans to deploy Maryland State Police and Transportation Authority officers into high-risk "no-go" zones controlled by violent gangs that have been allowed to flourish under City Hall's progressive regime, leaving the city plagued by violent crime, which only sparked a population exodus. 

What's alarming is that Gov. Moore and Mayor Scott only moved to bolster the city's police force after President Trump's recent threat to deploy federal law enforcement to restore law and order. 

Years of violent crime chaos, but no action? Why is that? 

"Chicago is a hellhole right now, Baltimore is a hellhole right now," Trump said earlier this month, adding, "I have an obligation .... this is a political thing."

Mayor Scott stated, "This announcement is about using government resources in a targeted, evidence-based way, in order to make our neighborhoods safer. We are grateful that Governor Moore has chosen to reinstate this partnership after it was eliminated by the previous administration. This is the kind of support we need for our violence intervention work, which has brought crime to record lows across the board. It takes all of us—state, city, and federal law enforcement, including the ATF, FBI, and DEA, community violence interrupters, and residents—to build on this progress and create the safer, healthier Baltimore we know is possible."

The confusing part is why far-left politicians running the state and city into the ground didn't act before Trump. Why did it take a strong leader in the White House to force state and city officials to respond finally? Shouldn't these local leaders be serving the people of Baltimore and prioritizing their well-being?

Yet the optics certaintly show that Moore might serve someone else besides Marylanders.

Sigh Moore... 

And Mayor Scott.

The chart Democrats in the state don't want the nation to see...

Baltimore is a crime-ridden hellhole. Everyone knows it. Democrats own it, yet there's been zero accountability for years of failed criminal and social justice reforms that plunged the city into an era of violent crime and death.

Another massive failure is the school system, which enriches leftist unions that, in turn, fuel the Democratic Party's machine while robbing youngsters of any chance at future success. Democrats preach diversity, yet once they seized power, they shun anyone with an opposing political view.

Tyler Durden Sun, 09/07/2025 - 18:05

Reality Checks

Reality Checks

Submitted by Peter Tchir of Academy Securities

Reality Check - Jobs

We published Weak Jobs Data ahead of the NFP release, in case the NFP turned out to be surprisingly good (who knows, with this data). We could have saved some time by not digging through ISM Employment, JOLTS Openings and Quits, ADP, or the soon to be released revisions to Q2 2024 to Q1 2025 numbers, since the NFP report was weak across the board.

We always like to look for “inconsistencies” within this report. Things that are either inconsistent in the report itself, or relative to other data. This basically just reinforced and confirmed the view that the labor market is weak (and made us even more bitter that the June number, released as a “glorious” beat on July 3rd, was actually negative, which was in line with our views as a potential outcome at the time).

We couldn’t even find “glimmers of light” as earnings declined more than expected, hours worked dropped, and the unemployment rate went up (partly due to a small increase in the Participation Rate). Of greater concern was that the Underemployment Rate increased to 8.1%, the highest since the end of 2021! It had been above 10% prior to 2016, so it isn’t alarming, but it isn’t helpful either. The Household Survey did show a gain of 288k jobs, but its 3-month average is 40k, pretty much in line with the Establishment Survey’s 3-month average of 29k. For the past 2 months, the Household Survey has had full-time job losses of almost 800k and part-time job gains of about 850k. That is not good and the number of people who are working part-time is rising steadily.

Source: Zerohedge

For those of you who regularly read our criticisms of the birth/death model, it added 90k. Normally, we’d highlight that it is “odd” that a model of new businesses contributes this much relative to the total, but we will be kind and admit that we could be seeing new businesses starting, trying to take advantage of the myriad of policies being implemented. Change creates opportunity and there are many positive developments (for growth) on the tax side, shifting priorities, and reduced regulation in some industries.

With ongoing uncertainty around policy:

  • The courts are still deciding on the legality of many existing tariffs (and the admin is working on how to keep them in place even if the courts rule against them, by using other rules to impose the tariffs, or even pointing to the trade “deals”).
  • The admin still seems to change some tariff levels somewhat arbitrarily (at least compared to “traditional” standards), though nowhere near as much as around Liberation Day.
  • There still is little in the way of formal, detailed documentation regarding the deals announced, and it seems fair to say that what the U.S. says about some deals, versus what the other country is saying, doesn’t always tie out (Japan’s “investment” in the U.S. as one pretty big example).
  • What are other countries doing behind the scenes? No country was really in a position to lose a lot of business with the U.S. (other than maybe China, primarily due to their stranglehold on many rare earths and critical minerals – with magnets taking center stage). So of course, some “deals” were struck, but it is impossible to believe that many aren’t taking steps to insulate themselves from what they may see as “erratic” or “aggressive” behavior.

The job market needs to be addressed better, though it is possible that the combination of tariffs and other policies will bring a flood of jobs to the U.S. as they fully take effect. We remain most optimistic around ProSec™ (Production for Security) – and have seen some steps taken on that front (though some of the steps have raised issues about control, etc.)

Reality Check - Tariffs

Clearly, tariffs came up in our discussion of the job market. We believe tariff policy, both the uncertainty and the time it takes to have an effect, is hurting employment at the moment. Uncertainty does not encourage aggressive spending.

The disruption of tariffs comes first. Then, over time, once companies believe high tariffs are here to stay, and they have negotiated deals with suppliers, they can turn more attention to making products in the U.S. Some of that is already starting, but in general it takes time to build out. The build-out phase will also generate some jobs, but the big impact will come from a serious increase in domestic manufacturing. We remain concerned, that outside of ProSec™, the administration’s goals related to tariffs may not be achieved:

  • The build-out time for many facilities is measured in years, not months, making the economy susceptible to the negative consequences of tariffs.
  • In some cases, the cost disadvantage is so great, that even with large tariffs, domestic manufacturing may still have limited gains.

We continue to look to the monthly Tariff Revenue Charts for the cumulative impact. Only as the cumulative number grows should we expect to see the potential negatives – goods inflation/margin pressure – show up in the data. There are “whispers” in the data “hinting” that they are real and developing, but that could turn into a “crescendo” in the coming quarters as inventory has been rolled over to the point that it is completely tariffed, agreements with suppliers have been hammered out, and sales contracts get renegotiated.

Reality Check – AI Spend

The spending on AI (data centers, chips, electricity production) has been instrumental in keeping the economy going (and getting stocks to record levels).

So far, there are few, if any signs of the spending (investment) ebbing. By and large the talk from the chip companies, hyper-scalers, and large potential customers remains very positive and aggressive in regards to spending.

The President just met with the CEOs of major tech companies, so there should be ongoing support from the administration. Portions of the “Big Beautiful” Tax Act, such as accelerated depreciation, should add to the amount spent.

We have barely scratched the surface on the potential spending and growth as crypto in general and stablecoins make use of the tailwinds of recent laws and regulations. We are seeing Digital Asset Treasury companies being created daily and there is growing chatter of the potential for MSTR to be added to the S&P 500 (it was already added by Nasdaq).

Given the importance of this industry to the economy and markets, any cracks, even small ones, could have immediate, relatively large effects. Hopefully, we won’t find any cracks, but we are spending time on that front as it is truly mission critical that these industries continue to speed along!

Reality Check – Inflation

We concede, based on our views on tariffs, that there is some risk of goods inflation. But, if we are right on the economy, that will be relatively small. A weak job market doesn’t lend itself to consumers bidding up prices.

As we wrote recently, the housing inflation data is simply wrong. It doesn’t reflect what is currently occurring with rent, and it is “guaranteed” to catch up, since it is pretty much an exercise in math. It is difficult to believe that the Fed that missed rising rents in a timely manner during the “transitory” period, will make the same mistake, in reverse now, but that has been the path that they are on.

The goods inflation will pass through to the service economy over time (as service providers have to purchase equipment, products, supplies, etc.) but without job growth, it is difficult to see inflation running rampant.

Overall, I’d expect inflation to run somewhere close to (but likely below) 3% for the next year.

A touch high for the Fed to be comfortable cutting, but not so high that they shouldn’t respond to the already weak job market (after revisions, it has been weak for 3 months, and we think that Q1 was likely overstated for the reasons listed at the time – birth/death and invalid seasonality adjustments being the primary reasons).

Reality Check – Housing

Lower mortgage rates should help, but we continue to look at some “problem” areas that we have focused on before.

We hear a LOT about lack of supply, but we keep coming back to charts like this one.

The number of homes for sale in Florida has come down from recent highs, but it is still above where it was pre-Covid, and I believe it has improved due to seasonality (this chart is not seasonally adjusted).

We will be checking out other states, but we have a weird dynamic:

Affordability is low in most areas, especially for buyers who need a mortgage.

Supply of some types of residences is low in some areas (I’m told) yet we see several big states/regions with charts similar to the one above.

Not sure what is going on, but it seems like there is some risk that houses become affordable in a bad way (homeowners lose some of their equity – which tends to slow spending and the economy).

Reality Check – The Consumer

Never bet against the U.S. consumer continuing to spend. There have been periods that the U.S. consumer’s ability/willingness to consume has been tested, but not often nor for long since at least the GFC.

Being on the road this week on vacation, with a lot of spotty wi-fi during any downtime, we didn’t make much progress digging deeper into this risk. However, I’ve seen a lot more circulating on this topic. Nothing alarming, and some reports remain optimistic, but given our concern about the job market, taking a closer look at the consumer seems like a necessary project

Reality Check – The Fed, Treasury, and Interest Rates

While the market gapped closer to our target of 100 bps of cuts this year, even with some flattening on the week, we think the market is still underestimating the steps the Fed, in conjunction with Treasury, can take to reduce rates across the curve.

We’ve had numerous discussions on the subject since we published How We’d Drive All Yields Lower. We were playing “Devil’s Advocate” but worth a read, especially after this week’s data and some of Secretary Bessent’s recent talking points.

Given price action on Friday and our overall outlook, we like lower yields and flatter curves (rather than just a “theoretical like” as we think steepeners are crowded and could face some pain in the coming days).

Reality Check – Don’t Fight the Fed

The Fed is cutting.

If we are correct on even a few of our policy thoughts, we will see flatter yield curves.

But is that enough for stocks to keep going strong? That is literally the trillion dollar question.

Stocks seemed to think so initially on Friday (and even Thursday as they regained losses from a few of the prior days). Then they seemed to second guess that as they sold off, only to fight back to close to unchanged.

What will next week bring? I think the recent struggle to materially break higher will persist, with more risk of a 5% move to the downside before another 5% to the upside for major U.S. stock indices.

Guess we are encouraging “fighting the Fed” – at least a little on the equity side.

Bottom Line

Really like bonds here. Credit should be fine. Slightly cautious on equities. Exploring the crypto/stablecoin arena for the best opportunities. 

Had a great vacation, but am looking forward to full steam ahead as September through November is already looking like it will be extremely busy on so many fronts (and today we barely touched on geopolitics, the military, and the American Brand – so plenty more to assess and keep you posted on as the Geopolitical Intelligence Group continues to expand in size and scope).

Tyler Durden Sun, 09/07/2025 - 16:20

Japan's Prime Minister Ishiba Resigns, Most Likely To Be Replaced With Hard-Line Conservative

Japan's Prime Minister Ishiba Resigns, Most Likely To Be Replaced With Hard-Line Conservative

For much of the past two months, ever since the historic loss of Japan's LDP in July's parliamentary elections, we have mocked the highly unpopular Japanese PM Shigeru Ishiba, who was clinging to the post despite record disapproval and a clear shift in popular sentiment that had clearly stripped him of mandate to be Japan's leader. 

A few hours ago, Ishiba finally decided to prove us wrong and announced he will step down - following weeks of calls for his departure - a decision that will set in motion a leadership race that may generate concerns for investors. 

“While I feel there are still things I wish to do as premier, I have made the difficult decision to step down,” Ishiba said at a press conference in Tokyo on Sunday. “Having seen the US trade negotiations through, I felt that now is the right time to stand down and give way to my successor.”

“I felt that if I continued amid a vote on an early leadership race, it could have created an irreversible division within the party, which is certainly not my intention.” He will stay on as prime minister until his successor takes over.

Ishiba’s resignation brings to an end a tenure marked by humiliating election results that stripped the Liberal Democratic Party’s ruling coalition of its majorities in both chambers of parliament and left market participants unsure of Japan’s fiscal plans. His departure is likely to fuel uncertainty among investors over the coming weeks until a new leader is chosen. It will also likely spark debate among market participants whether his replacement will follow through with the trade deal that Japan reach with Trump.

As Bloomberg warns, the risk of further instability could weigh on the yen and longer-term bonds when trading opens Monday in Asia. Japan’s currency was one of the weakest performers among its Group of 10 peers last week, while yields on longer-term Japanese government debt reached fresh multi-decade highs.

“Prime Minister Ishiba was known for his strict stance on fiscal discipline,” said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management, flagging the likelihood of upward pressure on super-long yields. “While it remains unclear who will become the next prime minister, it’s difficult to envision anyone with a fiscal discipline stance better than or even equivalent to his.”

Which, in a country best known for the short tenure of its prime minister, more easing to placate the masses is on deck, even if it means another surge in inflation, and even higher prices in gold and crypto as the local population protects what little is left of its purchasing power.

The LDP was set to hold a vote Monday if it should bring forward a leadership election by two years, but that had looked increasingly likely to turn into a vote of no confidence in the premier. That vote will now be canceled, and instead the LDP will hold a leadership race, Ishiba said.

Lawmakers jockeying to position themselves as the next premier will need at least 20 other members of parliament to support their candidacy in order to enter the race. Whoever emerges top in the party contest will then have to win a vote in parliament to become prime minister in a fractured Diet.

Potential candidates within the ruling party include Sanae Takaichi, 64, a former internal affairs minister who finished second to Ishiba in an LDP leadership race last year. If chosen, Takaichi would be Japan's first female prime minister.

A party veteran who has held a variety of roles, including economic security and internal affairs minister, she is known for conservative positions such as revising the pacifist postwar constitution; Takaichi is a regular visitor to the Yasukuni shrine to honor Japan's war dead, viewed by some Asian neighbors as a symbol of past militarism.

She is a fan of Abenomics economic policies and favors stimulus measures which means any hope for a rate hike by the "independent" Bank of Japan would be quietly put to pasture under her leadership (we leave the discussion of BOJ "independence" to an other time). 

A member of Japan’s largest nationalist organisation Nippon Kaigi and known as a hard-line conservative, Takaichi opposes same-sex marriage and supports a requirement for couples to share a surname after marriage. She has also stated that a government gender equality plan could "destroy the social structure based on family units" has voiced opposition to proposals to change the law so that a woman could become the Emperor of Japan.

Takaichi supports imprisoning those who damage Japan's national flag, and is considered a China-hawk when it comes to foreign policy and supports revising article 9 of the Japanese constitution which prohibits Japan from entering armed conflict.  She’s also a vocal critic of Chinese economic practices such as intellectual property theft and calls on Japan to lessen its economic dependence on China.

Most notably, she believes that immigration to Japan risks destabilizing Japanese society and argues that Japanese heritage must be protected. As such, should she replace Ishiba, she would become the latest hard-line conservative to take charge in blowback to the catastrophic policies unleashed by the liberal left in recent years.

Among other possible candidates, Takayuki Kobayashi, a former economic security minister, is on the right-wing of the party and would be a possible rival to Takaichi in garnering support from that section of lawmakers. Yoshimasa Hayashi, the current chief cabinet secretary, as well as Finance Minister Katsunobu Kato, might also show interest in succeeding Ishiba. 

“If Ms. Takaichi is appointed, bond selling could intensify due to the risk of a credit rating downgrade,” Sumitomo Mitsui Trust’s Inadome said. In that scenario, “we could see a triple dip: falling bond prices, a weaker yen, and declining stock prices.” 

A Koizumi or Hayashi win is more likely to return the yield curve to its previous shape, he added.

Traditionally, the LDP’s dominance in parliament all but assures that its leader will become prime minister. With no majority in either house, there’s only a slim chance the leader of the LDP could fail to clinch the premiership, though that decision is still some weeks away.

The next premier will have to navigate challenges ranging from global trade headwinds to simmering resentment at home over soaring costs of living. Ishiba had called for fresh cash handouts to support consumers, while opposition parties sought tax cuts or higher spending, proposals that have given investors cause for concern.

In the press conference held Sunday, Ishiba said that consumers and businesses will need more support and pressed the need to maintain momentum for wage hikes. He indicated that he essentially decided to step down following the July election setback, but saw a need to make more progress on the trade deal with the US first.

US President Donald Trump signed his trade agreement with Japan and put it into effect with an executive order on Thursday. Although current tariff rates will be lowered with the new order, Japan will still have to pay a maximum 15% tariff on its products, including exports of cars and auto parts.

Still, the signing of the deal leaves Ishiba with some kind of legacy to walk away with after a troubled year at the helm.

Tyler Durden Sun, 09/07/2025 - 12:35

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