Abolish The Fed? Mises Institute And George Mason University Face Off

We will abide by all norms of the Geneva convention.

— Robert P. Murphy (@BobMurphyEcon) July 9, 2025

Recent tensions between Fed Chair Jerome Powell and former President Trump have ignited fresh controversy: Trump publicly accused Powell of “tank­ing the economy” and threatening America’s recovery — escalating the spotlight on central bank policy. But is anyone asking… do we even need a central bank in the first place? We are.

Tonight at 7 pm ET, ZeroHedge will host and Rebel Capitalist founder George Gammon will moderate: Mises Institute senior fellow Bob Murphy against George Mason University researcher David Beckworth (Fed reformist).

Murphy the abolitionist

A senior fellow at the Mises Institute and author of The Politically Incorrect Guide to Capitalism, Murphy argues that the Federal Reserve’s creation of fiat money leads to inflation, credit bubbles, and cyclical crashes—all hallmarks of Austrian economics. He supports dismantling the central bank completely, replacing it with a free banking system where sound money—potentially gold or other commodities—emerges naturally .

David Beckworth the reformer

A Senior Research Fellow at the Mercatus Center, Beckworth focuses on improving the Fed’s governance, transparency, and monetary policy framework. He actively works with lawmakers and advocates for reforms like NGDP (nominal GDP) targeting to stabilize economic growth, and restructuring Fed oversight—without abolishing the institution altogether.

When & Where:

• Date: Tonight
   
• Time: 7 pm ET
   
• Where: Live on the ZeroHedge homepage, X, YouTube and Rumble

We’ll see you tonight…

Tyler Durden Thu, 07/10/2025 - 11:05

Minting Control: The Stablecoin Gambit & The New Dollar Diplomacy

Authored by Bepi Pezzulli via AmericanThinker.com,

In the end, it wasn’t the metaverse, the NFT craze, or libertarian utopians in hoodies that brought crypto to Washington’s doorstep. It was the dollar. Not the theoretical native value of crypto whitepapers, but the hegemonic, meticulously engineered dollar that underwrites global power and American primacy.

And so, when the U.S. Senate approves a bipartisan bill to regulate stablecoins—those crypto-assets pegged to the U.S. dollar - it isn’t just about financial innovation. It is about sovereignty.

The GENIUS Act and the New Regulatory Perimeter

In June, the U.S. Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with a bipartisan vote of 68–30, signalling strong cross-party support for stablecoin regulation. The bill is now tabled for second reading before the House of Representatives, which is concurrently working on its own version, the STABLE Act (Stablecoin Transparency and Accountability for a Better Ledger Economy Act).

Though the two chambers differ in legislative language, they share broadly aligned goals. The House version is attracting even greater bipartisan backing, increasing expectations of a swift reconciliation process. Lawmakers are aiming to consolidate the two into a final compromise bill before year-end, a timeline seen as realistic due to the executive branch’s backing and the urgency placed on the issue. Observers expect the GENIUS Act to provide the structural basis for the unified legislation.

The legislation creates a regulatory framework that gives both federal and state authorities oversight over dollar-backed tokens, particularly those issued by nonbanks. The bill requires full reserve backing, prohibits algorithmic stablecoins, and authorizes state-chartered issuers under national standards. Critics will nitpick the usual turf war between state-chartered issuers and the Federal Reserve, but the strategic subtext is hard to miss: this is the first real move to anchor the digital dollar into the U.S. security architecture.

Re-centralisation in the Age of Tokens

This is not a Silicon Valley experiment in decentralisation anymore. It is a project of re-centralisation, only this time through code and compliance. A privately issued, regulated stablecoin, backed by U.S. Treasury bonds, offers something traditional crypto never could: a vector for the dollar’s reach in a world where SWIFT, sanctions, and even correspondent banking face rising geopolitical friction. If the eurodollar was the invisible engine of postwar hegemony, the stablecoin is the programmable chassis of what comes next.

For all the mainstream media’s criticism of President Trump, this is a stroke of genius: the White House needs a weaker dollar to boost exports without undermining global appetite for U.S. Treasuries. Stablecoins make that balancing act possible.

A New Vector of Dollarization

That is why the pending legislation is a turning point. It enshrines a model where dollar dominance can be transmitted not through bank balance sheets, but digital wallets. It invites a new kind of dollarization: faster, cheaper, unmediated by traditional institutions, and potentially unstoppable in frontier and fragile economies.

For Washington, this is not a bug; it’s the feature. From Argentina to Ghana to Turkey, crypto is already the informal lifeline of last resort. With regulatory blessing, stablecoins could become America’s unofficial export to collapsing monetary regimes, the soft touch of a hard power.

Italy Breaks from the Pack

Rome, of all places, has seen this clearly. Italian commentators are now openly calling for a “re-dollarization” strategy, one where adopting U.S.-regulated stablecoins is not a surrender, but a hedge against euro decay and European irrelevance. Commodity trading adviser Gianclaudio Torlizzi puts it bluntly: “Stablecoins are the perfect solution: anchored to the dollar, they float freely against local currencies, erode governments’ monetary sovereignty and become a financial Trojan horse.”

Torlizzi’s is not an ideological position; it’s a realist one.

When your central bank is boxed in by fiscal orthodoxy and political sclerosis, outsourcing trust to the dollar can look like prudence, not capitulation.

Countering China’s Digital Ambitions

The implications extend beyond finance. In an increasingly adversarial world, where China is racing to internationalize its e-CNY and build payment rails through BRICS partnerships, a sanctioned, supervised stablecoin ecosystem gives the U.S. a countermeasure that doesn’t require new troops or treaties.

It’s a monetary containment strategy without the Cold War theatre, one that installs Washington not as the jailer of global liquidity, but its indispensable architect.

Europe’s Regulatory Paralysis

European regulators, by contrast, remain trapped in a protectionist mindset.

The EU’s Markets in Crypto-Assets (MiCA) regime, hailed in Brussels as pioneering, is already obsolete. Its design, heavy on precaution and bureaucratic drag, reflects a broader pathology: mistaking legalism for leverage.

By treating stablecoins as a threat to monetary autonomy rather than an instrument of strategic alignment, Europe has ceded ground not just to American firms, but to American statecraft.

Monetary Annexation Through Innovation

The irony is sharp. Crypto was supposed to displace fiat power. Instead, it may entrench the most powerful fiat of all.

The stablecoin bill doesn’t just regulate tokens; it conscripts them.

And for the United States, that’s not financial accommodation—it’s monetary annexation.

Tyler Durden Thu, 07/10/2025 - 10:45

Rare Earth Producer MP Materials Soars 50% After US Government Becomes Largest Shareholder

Late yesterday, we published an in depth note to our premium subs titled "The Coming Rare Earth Revolution And How To Profit: All You Need To Know About The Ex-China Supply Chain". Ir referenced a recent Morgan Stanley analysis of several early-stage Rare Earth Element projects, which also mapped how Western countries might source these critical minerals on their own, now that a belligerent China is to be excluded from supply chains as a result of Trump's trade war. And, in the Key Takeaways section, we specifically highlighted MP Materials as most likely to benefit, to wit: "MP Materials, Lynas, and ILU are best positioned to capitalize as REE trade flows and pricing adjust."

The timing turned out to be prescient, because just 7 hours later, the company announced that the US Department of Defense (i.e. the US government) would become the largest shareholder in MP Materials after agreeing to purchase $400 million in preferred stock. Shares have exploded over 50% on the news.

And that's just the start, because at the moment the US Government became the largest shareholder, 23% of the float was short, something we pointed out a month ago when we first discussed the name.

The investment marks a "transformational" public-private partnership by the Trump admin, aimed at building a domestic rare earth element supply chain. MP Materials, which owns the only operational rare earth mine in the U.S. at Mountain Pass, California, will use the funds to expand processing and magnet manufacturing capacity.

As part of the deal, the Pentagon will receive convertible preferred shares and warrants equal to a 15% stake—surpassing stakes held by CEO James Litinsky and BlackRock. The shares convert at $30.03 each and carry no cash dividend.

CNBC wrote that the investment will support a second U.S.-based magnet plant, “10X,” expected to begin commissioning in 2028. The Defense Department will guarantee the purchase of all output from the facility for 10 years and backstop pricing at $110/kg for NdPr products, a key material used in permanent magnets for military systems like F-35 jets, drones, and submarines.

The move reflects growing U.S. efforts to reduce reliance on China, which supplied roughly 70% of rare earth imports in 2023, according to the U.S. Geological Survey. Interior Secretary Doug Burgum said in April that the Trump administration is exploring direct equity investments to secure critical minerals.

MP Materials is also set to receive a $150 million Pentagon loan to expand rare earth separation at Mountain Pass, and will receive $1 billion in financing for the magnet facility from JPMorgan and Goldman Sachs.

CEO James Litinsky called the initiative a decisive step toward U.S. supply chain independence.

In our piece out yesterday, we also discussed two of MP Materials' key initiatives within the rare earth elements (REE) supply chain: its downstream magnetics project, the Independence Magnet Facility (#1), and its upstream heavy rare earth separation effort at Mountain Pass (#2).

The Independence facility in Texas is already producing magnets at pilot scale, with plans for full commercial output by year-end 2025, backed by a long-term supply agreement with GM.

Meanwhile, at Mountain Pass, MP is ramping up its light REE separation and advancing the construction of a heavy REE separation facility, targeting full-scale production in 2026. These two integrated projects position MP Materials as a vertically aligned U.S.-based REE producer, and one of several strong plays likely to benefit from increasing global concerns around rare earth scarcity.

For the full note and all of the names mentioned therein, you can use this link.

Tyler Durden Thu, 07/10/2025 - 10:25

Why Is Every Natural Disaster Being Politicized?

Authored by William Anderson via The Mises Institute,

Even while the search for missing people in flood-ravaged Texas continues, the politicized invective has come from the Left. Perhaps the most shocking comments came from Dr. Christina B. Propst—a Houston-based pediatrician who mocked the victims and their families because she perceived some of them might have voted for Donald Trump. Propst—who was fired by her employer—posted on Facebook:

May all visitors, children, non-MAGA voters and pets be safe and dry. Kerr County MAGA voted to gut FEMA. They deny climate change. May they get what they voted for. Bless their hearts.

Sade Perkins—who had been appointed to her position by Houston’s former mayor—posted the following quote on social media:

I know I’m going to get cancelled for this, but Camp Mystic is a white-only girls’ Christian camp. They don’t even have a token Asian. They don’t have a token Black person. It’s an all-white, white-only conservative Christian camp. If you ain’t white you ain’t right, you ain’t gettin’ in, you ain’t goin’. Period.

(Actually, a look at the Camp Mystic website shows that the camp has black camp counselors, and counselors often are drawn from former campers. No doubt, when the camp was founded 99 years ago, it would have been all-white, but the camp has changed with the times, as one would expect.)

Besides cheering on the multitude of deaths, others on the Left blamed the Trump administration, claiming that recent cuts in National Weather Service staff left people vulnerable to the floods by not giving them enough warning, something Connor O’Keeffe covered in a recent article. All of this leads to the question of why people are politicizing natural disasters, and the politicization is not limited to the Left. For example, during the Los Angeles wildfires early this year, many conservatives blamed DEI for the carnage without taking into account the many factors that led to the out-of-control fires in the first place.

In the past, political accusations were made about the government’s response to the natural disaster once it happened. In August 1992, during the presidential campaign, Hurricane Andrew, the “strongest and most devastating hurricane on record to hit South Florida,” Democratic Candidate Bill Clinton immediately accused the George H.W. Bush administration of malfeasance by not doing enough to help Andrew’s victims. Given that the federal government’s emergency agency, FEMA, was not set up to do mass relief, one can imagine the confusion that followed the Bush administration’s attempts to provide relief. Clinton, not surprisingly, won Florida and the presidential election.

(James Bovard, in his book about the Clinton years, Feeling Your Pain, devotes a chapter to how Clinton used FEMA to score political points and to buy votes. If there is ground zero for politicizing natural disasters, it would be the Clinton presidency.)

When Hurricane Katrina slammed into New Orleans and other Gulf Coast cities and communities, the public had come to believe that the federal government—and only the federal government—could rescue an entire city and its inhabitants. The efforts of the George W. Bush administration would never have been successful even had FEMA done everything right, as the task was too large for a single government agency. However, even by the Bush administration’s low standards, the response to Katrina was abysmal and destroyed President Bush’s political reputation.

But Katrina unleashed another kind of political infestation dealing with natural disasters: the role of climate change. While he didn’t directly claim Katrina was the result of global warming, former Vice-President Al Gore intimated it was in his documentary, “An Inconvenient Truth.” The introduction of climate change into American politics has been the catalyst in the modern politicization of natural disasters, and especially weather events.

Accompanying the modern doctrines of climate change is the underlying belief that there is a state solution to this supposed problem. Furthermore, every major weather event—from the flooding in Western North Carolina and East Tennessee last year to the deadly flooding on the Guadalupe River in Texas—is claimed to be the result of climate change, so those who might question this narrative are deemed responsible for it happening.

As one who has followed every US presidential election since 1960, there was a time when someone running for president and promising to create conditions conducive to creating better weather would have been laughed off the podium. Today, (as we saw with Christina B. Propst’s unfortunate social media post) those who might support political candidates who show some skepticism about the apocalyptic claims made by environmentalists are worthy of death—and plenty of people will cheer on your demise.

For that matter, climate change is not only blamed for rain-fueled disasters, but also for disasters that occur when there is too little rain, such as last January’s wildfires in Los Angeles that devastated whole communities. To doubt the modern culture’s views on climate change is to doubt the efficacy of science itself, according to climate activists. Thus, activists argue, if the earth is warming because of the use of fuels such as oil, natural gas, and coal, then it is up to governments around the world to force the use of technologies that can create electric power without burning fuels, and that requires a political “solution.”

At this point, people who believe such political narratives believe that a vote for candidates who support the use of state power to prohibit the burning of oil, gas, and coal and who want to use government to build and promote alternative energy sources such as wind and solar is also a vote for better weather. One is tempted to say that a vote for pro-alternative energy candidates is a vote against floods, droughts, and wildfires. Likewise, a vote for political candidates who are skeptical of the current climate narratives or who are against using state power to force energy changes are seen as pro-flooding and pro-wildfires, candidates who want people to drown in floods and burn up in wildfires.

Given this set of attitudes, it is not much of a leap from voting for Donald Trump to being responsible for both the flooding and the death toll in Texas. This is not a logical position, by any means, but nonetheless it now is acceptable in many Democratic Party circles and has become virtually an article of religious faith by leftists.

The flash point of this discussion is the Green New Deal, which was the crown jewel in Joe Biden’s policy initiatives. As I noted in an article earlier this year, there is a huge disconnect between the ambitious goals they had to supplant fuel-burning electric power plants and gasoline and diesel-powered vehicles with electric cars and trucks, along with “renewable” energy and the ability to meet these goals. Furthermore, there is no guarantee that making these huge changes will have even an insignificant impact on climate.

To support the Green New Deal, according to the activists, is to want a better earth and fewer floods, hurricanes, and wildfires. However, anyone who might question the efficacy of Biden’s environmental initiatives does so with malice aforethought, as even the act of questioning such things is tantamount to wanting LA to burn down and people to be swept away in floods.

When I taught at Frostburg State University several years ago, one of my colleagues told me that had Gore won the 2000 election, there would have been no Hurricane Katrine because Gore would have stopped global warming which was responsible for the storm. Believing something like this requires either an imagination that most of us don’t have or one simply has become unattached to factual thinking.

But we must remember that millions of people believe something like what my friend said to me. These are people who hold to a faith in the political process that is well beyond the ability of even the best and most level-headed scientists to counter. Once people like Al Gore declared (and got people to believe) that we can reverse climate change by empowering the state to levels well beyond anything we have had in our history, then it was inevitable that even weather events would become grist for the political mill.

Tyler Durden Thu, 07/10/2025 - 10:05

WK Kellogg Shares Surge On Report Of $3 Billion Ferrero Takeover

Shares of WK Kellogg Co., the cereal maker behind Froot Loops, Frosted Flakes, and Rice Krispies, surged in premarket trading Thursday following overnight reports that Ferrero International SA is close to acquiring the company in a deal valued at around $3 billion.

Frosted Nutella flakes, now with a free dose of Ozempic https://t.co/OB3JhvREg2

— zerohedge (@zerohedge) July 9, 2025

First reported by The Wall Street Journal, Ferrero is planning a North American expansion with the purchase of the breakfast cereal conglomerate. Already, Ferrero is the world's third-largest chocolate confectionery and previously acquired Nestlé's U.S. candy business, Fannie May, Wells Enterprises, and healthy snack brands like Eat Natural and FULFIL Nutrition.

WK Kellogg shares surged 57% in premarket trading on reports of the deal. The cereal division has struggled since its spin-off from Kellogg Company, facing slumping demand due to rising competition from private-label store brands.

Shares are flat on the year, with short interest in the stock about 17.9%, or about 10.9 million shares. 

The deal comes as Kellogg slashed its annual sales guidance in May, with CEO Gary Pilnick warning of a "challenging operating environment" as consumers shift away from sugary foods and gravitate toward lower-cost, private-label cereal options.

Cereal makers have also come under increased scrutiny for their use of artificial food dyes. Goldman Sachs analysts recently noted a growing consumer pivot toward "better-for-you" products, driven by the rising momentum of the MAHA (Make America Healthy Again) trend.

Bloomberg noted, "Ferrero has been making efforts to diversify both its products and geographic spread, in part to help it manage surging cocoa prices." 

Tyler Durden Thu, 07/10/2025 - 09:45

China Property Stocks Erupt On Rumors Beijing May Revive 2015 Stimulus Playbook

Chinese property equities surged overnight, with the Bloomberg Intelligence real estate index jumping as much as 11%, fueled by speculation of an imminent high-level government meeting aimed at reviving the country's struggling real estate sector.

Unverified reports suggest Beijing may assemble a policy conference next week reminiscent of the 2015 Central Urban Work Conference, which triggered large-scale shanty-town redevelopment and infrastructure stimulus.

"Since the founding of the republic in 1949, Chinese senior leadership held only four "urban work conferences" at the central government level: 1962, 1963, 1978, and 2015. Thus, if the reports turned out to be true, it would be closely watched by the market given policy direction implications," Goldman Sachs analyst Fred Yin told clients. 

China's property sector has been locked in a downward spiral for the past four years. Major developers have defaulted on their debt, while Beijing has cracked down on speculation amid persistently weak sentiment among homebuyers. Although officials have implemented a range of countermeasures (read: here) to slow the decline, none have successfully established a bottom. Home sales fell again in June, prompting renewed calls for stimulus. This report suggests a potential shift in policy direction from President Xi Jinping, signaling mounting political pressure.

Hao Hong, chief investment officer at Lotus Asset Management, noted, "The central government really needs to do something, especially after the disastrous June sales." 

In markets, the Bloomberg Intelligence index of the nation's real estate stocks jumped 11%, while Goldman's China-H Real Estate basket gained 7.4%. Individual stocks, Logan Group Co. skyrocketed 85% in Hong Kong, and Sino-Ocean Group Holding Ltd soared 37%. 

Reports that Beijing is considering dusting off its 2015 playbook to support the property market imply President Xi's leadership is attempting to quell growing dissent. The larger question is whether another shanty-town redevelopment stimulus package will have the same effect as it did a decade ago.

Tyler Durden Thu, 07/10/2025 - 09:05

Biden's Doctor: Take A Fifth And Call Me In The Morning (With Immunity)

Authored by Jonathan Turley,

Dr. Kevin O’Connor appeared before the House Oversight Committee, but he had little to say about the investigation into the alleged cover-up of President Joe Biden’s mental and physical decline. The former White House physician invoked his privilege against self-incrimination in refusing to answer any questions. His prescription for the Committee seems clear: take a Fifth and call me in the morning (with an immunity grant). The question is now whether Congress will move to compel his testimony. 

O’Connor appeared with counsel and repeatedly read the same line: “On the advice of counsel, I must respectfully decline to answer based on the physician patient privilege and the reliance on my right under the Fifth Amendment.”

The development adds another interesting dimension to the controversy over the alleged cover-up of Biden’s decline.

Dr. O’Connor insists that he cannot compromise a patient’s privacy under federal law and ethical guidelines. However, his client was the president of the United States, and Congress is investigating allegations that he was no longer competent or engaged in running the nation. That raises potential criminal conduct from falsification of documents to perjury that an oversight committee is pursuing.

Generally, courts have waived confidentiality protections for reporters, doctors, and lawyers under a crime or fraud exception in federal criminal cases.

A good example is the testimony of the psychiatrist in the Menendez brothers’ murder case.

Dr. O’Connor is an essential witness in that investigation. President Biden has clearly not given him the authority to fully disclose the medical records and testing results from his presidency. The question could become whether Congress can now compel such disclosures. Both Biden and O’Connor could go to court to seek to prevent such compulsion.

Congress often examines private information, including tax records and background investigations, as part of its oversight functions. Moreover, many past investigations would have been obstructed by sweeping privacy claims. Consider the Kennedy assassination investigation into the examinations of the president or confirmation fights over allegations of mental or physical disabilities of nominees.

Under the Health Insurance Portability and Accountability Act (HIPAA), subpoenas are regularly used to obtain otherwise protected medical information.

The law specifically allows for disclosures in criminal or fraud investigations.

Congress has a compelling basis for demanding disclosure. However, the question is time. With the approaching midterm elections, the runway is getting shorter for the Oversight Committee. If the Democrats retake the House, these investigations will be halted, as Democratic members have pledged to resume impeachment investigations targeting President Trump.

The House Oversight Committee could grant Dr. O’Connor immunity and compel his testimony. He would then have to either secure a court order of protection or face a contempt of Congress charge for refusing to testify. If he elected to testify, he would still be subject to potential charges for any false statements made to investigators or committee members.

There is sufficient time to compel such testimony, but the Committee will have to move with some dispatch if it wants to hear more from the doctor.

Tyler Durden Thu, 07/10/2025 - 08:46

Continuing Jobless Claims Hit New Cycle Highs

Having risen to eight month highs just a couple weeks ago, initial jobless claims tumbled back to 227k last week and well within the comfortable low end range of the last four years...

Source: Bloomberg

However, continuing jobless claims remain at the highest since Nov 2021....

Source: Bloomberg

...as DOGE's impact on the 'Deep TriState' continues...

Source: Bloomberg

It seems Musk has something to be proud of after all.

Tyler Durden Thu, 07/10/2025 - 08:38

US Futures Steady As Tariff Fears Ease

US equity futures are flat, reversing an earlier loss but lagging the Asia-Pac and EMEA sessions, following the latest batch of tariff letters with the most impactful being a 50% tariff on Brazil. As of 8:15am ET, S&P and Nasdaq futures are flat after closing just shy of an all-time high on Wednesday. Pre-market, Mag7 names are mixed with NVDA leading the Semis bid post positive TSM revenue update. Treasuries resumed their decline after Wednesday’s rebound, with the 10-year yield rising two basis points to 4.35%. The dollar was steady. Cmdtys are rebounding with bids across all 3 complexes with gold, steel, and natgas the standout performers. Today’s macro data focus is on initial jobless claims and continuing claims.

In premarket trading, Mag 7 stocks are mixed (Tesla +1%, Nvidia +0.9%, Meta little changed, Microsoft -0.1%, Alphabet -0.07%, Amazon -0.3%, Apple -0.5%). 

• MP Materials (MP) soars 42% after the company struck a multi-billion dollar public-private deal with the US Department of Defense to build a new magnet plant and expand rare earth capabilities, backed by $400m in equity and a $1b loan commitment.
• Conagra Brands (CAG) falls 4% after the packaged food manufacturer posted 4Q sales that disappointed.
• Delta Air Lines Inc. (DAL) rises 12% after the carrier issued a new profit target for this year after pulling the goal three months ago.
• Embraer (ERJ) ADRs fall 6% after President Donald Trump said he will impose 50% tariffs on goods from Brazil. 
• Mach Natural Resources (MNR) shares are halted for news pending.
• Mereo BioPharma Group (MREO) US-traded shares slide 34% and partner Ultragenyx Pharmaceuticals (RARE) drops 22% following a disappointing trial update for an experimental drug aimed at treating a bone disorder called osteogenesis imperfecta.
• WK Kellogg (KLG) rises 51%, with Ferrero International SA said to be nearing a deal to acquire it for about $3 billion. Shares first jumped after the WSJ reported Wednesday that the two companies are nearing a deal.

While tariff headlines have dominated the newsflow this week, there’s been little to derail a rally in US stocks. Signs of economic strength, confidence in the upcoming earnings season and optimism for artificial intelligence have given traders the conviction to keeping buying equities. 

“The market’s sensitivity toward tariffs has diminished,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. “The key driver of equity returns for us has been and remain corporate earnings, particularly in the IT sector, and here policy and trade uncertainty have not caused too much damage.”

US President Donald Trump issued a fresh batch of tariff demands on Wednesday, including a 50% rate on Brazil that sent the real tumbling. He also confirmed that the US would begin levying a 50% tariff on copper next month.

Meanwhile, sentiment got a boost from China, where a gauge of property shares jumped the most in nearly nine months, fueled by speculation a high-level meeting will be held next week to help revive the struggling sector. 

Overnight, Goldman Sachs warned against loading up on stocks exposed to the economic cycle, while also recommending investors don’t be overly defensive. Trade war uncertainty is rife, with Goldman cautioning against one-sided allocation. “The equity market appears to be pricing an optimistic outlook for the US economy, but we believe there are risks in both directions and investors should not be clearly cyclical or defensive,” strategists including Ryan Hammond said. Within defensives, Goldman recommends investors own utilities and real estate, which typically benefit most from lower bond yields. In terms of cyclicals, the strategists favor basic materials versus energy on the expectation of lower oil prices. 

Katharine Neiss, chief European economist at PGIM Fixed Income, warns that the average US tariff rate could ultimately exceed current expectations of “a shade above 10%.”

“There is still a huge amount of uncertainty and I don’t expect that it’s going to get resolved,” Neiss told Bloomberg TV. “These negotiations are going to drift, maybe by the time we get to the end of the year. That’s kind of bad news because the uncertainty itself is depressing decisions.”

LME copper rose 1% on Thursday, snapping a five-day losing streak. The metal gained 1.9% in New York, extending an advance to more than 11% since Monday, the day before Trump first floated the size of the tariff.

The Stoxx 600 is up 0.6% tracking their longest winning streak in a month, as miners rally on the back of higher iron ore prices. Swiss chocolatier Barry Callebaut sinks after once again cutting its guidance, while advertising group WPP ekes out gains after Wednesday’s plunge as it announced new CEO. Local bourses are led by UK FTSE 100, where mining stocks lead a 1% gain tracking gains across the metals complex. Here are the biggest movers Thursday:

• European miners are the best-performing sector in the Stoxx 600 index as iron ore headed for the highest close since May amid renewed optimism over China’s determination to eradicate industrial overcapacity
• WPP shares rise as much as 3.6% on Thursday, recouping some of Wednesday’s record drop, after the advertising agency announced that Microsoft executive Cindy Rose will be its next CEO, replacing Mark Read
• Stocks with a heavy exposure to China gain in European trading on optimism in the country’s media regarding potential fiscal stimulus, with a UBS basket of European stocks exposed to China rises as much as 1.7%
• Liontrust Asset Management rises as much as 7.7%, the most in over two months, after its trading update offered few surprises following recent annual results. Peel Hunt upgraded the stock due to recent weakness
• LISI shares rise as much as 7.7%, to the highest since January 2018, after private investment firm SK Capital submitted a firm offer for its medical division, according to a statement released after market close Wednesday
• Tecan shares gain as much as 6.5% after the Swiss laboratory equipment maker said Monica Manotas — who previously worked at Thermo Fisher Scientific — will replace Achim von Leoprechting as CEO
• Europris shares gain as much as 7.2%, the most since 2022 and taking the stock to a record high, after the Norwegian retail group reported its latest second-quarter results. DNB Carnegie sees a “strong” report
• Barry Callebaut falls as much as 10% in early trading, the most in three months, after the chocolate bulk maker cut its guidance for the second time in three months following a miss in volumes led by North America
• Grafton shares fall as much as 8%, their steepest decline in three years, after the building supply retailer and manufacturer failed to confirm its guidance for the year in a trading update that analysts called cautious
• Kemira falls as much as 6.1% after the Finnish pulp and energy equipment group released preliminary 2Q results and cut its guidance for 2025. Analysts said the report is bound to trigger smaller estimate revisions
• Johnson Service Group shares drop as much 18%, the most since May 2020, after the British textile rental and cleaning provider published a trading update that RBC described as weaker than expected
• Icade falls as much as 5.7% to the lowest in almost three months after Goldman Sachs downgraded the French commercial property investor to sell from neutral, citing sluggish growth in France and a weakening office market
• Macfarlane Group plummets as much as 15%, the most in over five years, after the company reduced its outlook and warned it expects annual adjusted operating profits to be about 10% lower than last year

Earlier in the session, Asian equities edged higher, with South Korean shares climbing following the central bank’s decision to leave its policy rate unchanged. Japanese stocks underperformed as the yen rose, while concerns remained about US tariffs. Key gauges advanced in Indonesia, Australia, Vietnam and Taiwan. The MSCI Asia Pacific Index traded in a narrow range, with TSMC and SK Hynix the biggest boosts, and Sony and Nintendo among the major drags. Stocks advanced across much of the region, amid broad optimism over trade talks with the US. South Korea led gains as investors welcomed news that the Bank of Korea is keeping its monetary policy accommodative. The benchmark Kospi rose 1.6%, advancing for a fourth-consecutive session. Chinese shares staged a late afternoon rally, fueled by speculation a high-level meeting will be held next week to help revive the struggling property sector. The jump followed unverified social media reports of a potential meeting, which analysts said sparked speculation of a possible resumption in the development of shanty-town areas.

In FX, the Bloomberg Dollar Spot Index slips 0.1%, with the Swiss franc leading G-10 losses as it edges lower against the greenback. The Norwegian krone outperforms, climbing 0.5% after core inflation rose for the first time in four months. The Aussie dollar also gains, buoyed by the rally in iron ore. 

In rates, treasuries are lower, paring some of Wednesday’s advance ahead of a sale of 30-year bonds. US 10-year yields rise 2 bps to 4.35%. Bunds edge lower. Gilts curve flattens, with longer-dated maturities rising while the front end drops. The last of this week’s three coupon sales follows good results for 3- and 10-year note auctions.  For the 30-year TSY reopening at 1pm New York time, WI yield near 4.875% is ~3bp cheaper than last month’s auction, which stopped through by 1.5bp

In commodities, spot gold climbs $15 to around $3,328/oz. WTI falls 0.4% to near $68.10 a barrel. Iron ore futures are up over 3% in Singapore and heading for the highest close since May amid renewed optimism over China’s determination to eradicate industrial overcapacity. LME copper climbs 0.5%. Bitcoin rises 0.4% and above $111,000.

Looking at today's calendar, US economic data slate includes weekly jobless claims at 8:30am. Fed speaker slate includes Musalem (9am) and Daly (2:30pm)

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.1%
• Russell 2000 mini -0.1%
• Stoxx Europe 600 +0.6%
• DAX +0.2%, CAC 40 +0.7%
• 10-year Treasury yield +2 basis points at 4.35%
• VIX +0.1 points at 16.06
• Bloomberg Dollar Index little changed at 1195.51
• euro little changed at $1.1731
• WTI crude -0.3% at $68.16/barrel

Top Overnight News

• Trump announced a 50% tariff for Brazil and to initiate a Section 301 investigation on Brazil due to its "continued attacks on the Digital Trade activities of American Companies".
• Trump announced a 50% tariff on copper effective August 1st after receiving a robust national security assessment, while he noted that copper is necessary for semiconductors, aircraft, ships, ammunition, data centres, lithium-ion batteries, radar systems, missile defence systems, and hypersonic weapons.
• South Korea Trade Minister says more time is needed for US trade talks; US expresses interest around cooperation in chips and shipbuilding.

Trade/Tariffs

• EU is discussing car import quotas and export credits with the US in trade talks, according to sources cited by Reuters.
• Indonesia's Economy Minister said tariff discussions with US Commerce Secretary Lutnick and US Trade Representative Greer went positively. It was later reported that Indonesia and the US agreed to intensify tariff negotiations within three weeks to achieve optimal outcomes for both parties, while negotiations cover tariffs, non-tariff barriers, digital economy and commercial partnerships, according to the Economy Ministry.
• Philippine Economic Affairs Minister said they are concerned the US decided to impose 20% tariffs on Philippine exports and officials are to fly next week for talks with US counterparts,
• Indian Trade Official says Indian trade delegation to visit US soon for further trade talks.
• Vietnam said to be preparing new rules and penalties to crack down on trade fraud and illegal transhipments; focused inspections on Chinese products which face high tariffs in the US.
• South Korea Trade Minister says more time is needed for US trade talks; US expresses interest around cooperation in chips and shipbuilding.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded with a mostly positive bias following the gains on Wall St although some of the upside was limited as participants digested the latest batch of tariff letters and with underperformance in Japan due to recent currency strength. ASX 200 gained with the index led by strength in mining names due to recent upside in metal prices.  Nikkei 225 bucked the trend amid headwinds from a firmer currency and following somewhat ambiguous Japanese PPI data. KOSPI outperformed despite the BoK's widely expected rate pause, while the central bank's language remained dovish as it maintained the rate cut stance and a majority of members were open to a cut in the three months ahead. Hang Seng and Shanghai Comp were marginally positive in quiet trade with little fresh macro drivers, although China's State Council recently issued a notice on stepping up support for employment and will support enterprises in stabilising jobs. TSMC (2330 TT) Q2 (TWD): Revenue 933.8bln (exp. 927.8bln), via a Reuters calculation; YTD sales +40% Y/Y, June sales +26.9% Y/Y.

Top Asian News

• BoK kept the base rate unchanged at 2.50%, as expected, with the rate decision unanimous, while it stated that it will maintain the rate cut stance to mitigate downside risks to economic growth and will adjust the timing and pace of any further base rate cuts. BoK said consumption is expected to gradually recover due to an improvement in economic sentiment and the supplementary budget but noted significant uncertainties concerning the pace of recovery in domestic demand and that future economic growth faces significant uncertainties concerning developments in trade negotiations with the US. BoK said it is to closely monitor changes in domestic and external policy environments and will examine the impact on inflation and financial stability. Furthermore, BoK Governor Rhee revealed that four board members were open to a rate cut in the next three months and two members saw the policy rate unchanged in the next 3 months, while he added that uncertainty is too high to say when to lower the interest rate and by how much.
• Gauge of Chinese property shares posting largest gain in nine months amid speculation a high-level meeting will be held next week to help revive the property sector, according to Bloomberg.
• BoJ Osaka Branch Manager says there is no big impact from US tariffs seen on Kansai Western Japan's economy for now; wage hike momentum likely to be sustained.
• BoJ's Nagoya Branch Manager says some firms are putting off capex plans. Auto exports to N. America are solid given robust demand, tariff impact is extremely high.
• Shanghai Securities Times, on Chinese CPI, reports "experts interviewed believe that CPI is expected to improve and show a trend of mild recovery from a low level".

European bourses began with modest gains, upside that has gradually and incrementally increased across the morning, Euro Stoxx 50 +0.3%. Region deriving strength from the boost seen in China-related stocks on recent reports around housing support. A narrative that has led to outperformance in the FTSE 100 +1.1%, given the large number of mining names in the region and associated benefit from touted China housing construction support. Sectors opened entirely firmer, though a few have drifted slightly into the red. Basic Resources lead, given the mentioned China stimulus. Tech benefits with ASML bolstered alongside gains in NVDIA on Wednesday and after TSMC revenue beat consensus. Those in the red are the more defensive ones, with Utilities currently lagging marginally.

Top European News

• NBP's Wnorowski says another 25bps move is possible in September. Possible that there will only be one more rate adjustment in 2025.
• EU's von der Leyen survives no-confidence vote in EU parliament (as expected).

FX

• DXY contained but with a mild upward bias in a 97.271-97.469 range, vs Tuesday's 97.176-97.837 band. Specifics light thus far. On the Fed, ING wrote "Things can change a lot in the next three weeks, and our baseline call remains that the dollar will show significantly reduced interest in tariff noise. Data remains a bigger driver, and the potential FX impact of next week’s CPI figures still looks much bigger than trade news."
• EUR similarly uneventful in a thin 1.1715 to 1.1749 band, within Tuesday's 1.1682-1.1765. Commentary this morning includes European Commission President von der Leyen saying they are working non-stop to find a US agreement, to keep tariffs as low as possible.
• Havens flat. JPY and CHF contained in thin ranges. USD/JPY holding just above 146.00 but has been on either side of the figure at points. No move to Japanese PPI or remarks from various BoJ branch managers.
• Sterling a touch firmer despite a lack of newsflow, Cable in a 1.3587-1.3619 range at the time of writing, matching Wednesday's high before pulling back a touch. Ahead, BoE's Breeden scheduled on financial stability.
• Antipodeans firmer, AUD bolstered by ongoing gains in iron and copper prices with support emanating from speculation that a high-level meeting will be held next week to help revive the Chinese property sector, according to Bloomberg.
• Finally, the BRL lagged after Trump announced 50% tariffs and a Section 301 investigation.
• PBoC set USD/CNY mid-point at 7.1510 vs exp. 7.1757 (Prev. 7.1541)

Fixed Income

• A contained start to the day, awaiting fresh trade updates. USTs in a narrow 11-06+ to 111-13+ band, the upper point is a marginal WTD high. Resistance ahead at 111-28, 111-20+ and 112-12+ from last week.
• Ahead, aside from Fed speak and a few data points, 30yr supply rounds off the week’s outings. A tap that follows relatively average 3yr and 10yr issuance this week, with no sustained move spurred by US supply thus far.
• EGBs opened near-enough at highs and have been drifting since with specifics light aside from digestion of overnight trade updates. For Bunds, the peak is 130.08 and the benchmark is now down toward the 129.73 low, essentially flat on the day. No move to Final German CPI, unrevised.
• Gilts outperform, though are off best. Gapped higher and then lifted to a 92.19 peak early doors, seemingly a function of Gilts catching up to the strength seen in peers late-Wednesday. Since, with newsflow light from a few updates out of the ongoing US-France state visit (press conference expected later today), the benchmark has begun to conform to the gradual drift seen in above peers.
• Poland is considering JPY and CHF bonds, according to the Polish debt chief

Commodities

• Base metals firmer on Chinese stimulus hopes, amid speculation that a high-level Chinese meeting will be held next week to help revive the property sector.
• 3M LME Copper trades in a USD 9,635.20-9,711.15/t range at the time of writing., firmer but just off highs and back below the USD 9.7k mark.
• Precious metals also firmer, though gains are slightly more modest. XAU at a USD 3330/oz peak, seemingly deriving some further impetus above the USD 3.3k mark, benefitting from the contained USD with specifics otherwise very light thus far.
• WTI and Brent are in the red, came under a bout of pressure in the European morning though the magnitude of it keeps the benchmark within recent ranges. No move to remarks from the OPEC SecGen or the 2050 outlook from the organisation. Pressure this morning potentially a function of some constructive geopols, after President Trump said there is a chance this week or next of a Gaza ceasefire.
• WTI resides at the lower end of a USD 67.91-68.57/bbl range, similarly Brent in a USD 69.82-70.42/bbl.
• OPEC cuts world oil demand forecast for 2026-2029, peak demand not on the horizon.

Geopolitics: Middle East

• Senior Israeli official said a Gaza ceasefire deal with Hamas may be possible within a week or two weeks but not in a day’s time, while Israel will offer a temporary ceasefire and if Hamas does not lay down its arms, Israel would proceed with military operations. Furthermore, the official said Israeli intelligence showed that before strikes on Iran, its enriched uranium was in Fordo, Natanz and Isfahan sites, while it has stayed there and has not been moved.

Geopolitics: Ukraine

• US military is delivering artillery shells and mobile rocket artillery missiles to Ukraine, according to officials cited by Reuters.
• US State Department senior official confirmed that Secretary of State Rubio will meet with Russia's Foreign Minister Lavrov on Thursday on the sidelines of ASEAN.
• Drone said to have landed in the territory of Lithuania from Belarus. "Could be a jammed and diverted drone from this night's Russian assault against Ukraine, could also be a separate provocation, few details available", via a Lithuanian journalist on X.

US Event Calendar

• 8:30 am: Jul 5 Initial Jobless Claims, est. 235k, prior 233k
• 8:30 am: Jun 28 Continuing Claims, est. 1,965k, prior 1,964k

Central Banks (All Times ET):

• 9:00 am: Fed’s Musalem Speaks on U.S. Economy and Monetary Policy
• 2:30 pm: Fed’s Daly Speaks on U.S. Economic Outlook

DB's Jim Reid concludes the overnight wrap

Optimism largely returned to markets yesterday, even as the lingering threat of further US tariffs on August 1 remained in the background. Indeed, a tech-led rebound helped the S&P 500 (+0.61%) to stabilise after its losses at the start of the week, whilst the NASDAQ (+0.94%) and the German DAX (+1.42%) hit an all-time high. In fact, there was a significant milestone, as Nvidia (+1.80%) became the first company to surpass a $4tn market cap on an intraday basis, before closing just shy of that at $3.974tn. So for everything else that’s happening right now, from tariffs to fiscal fears, AI is the great hope for US exceptionalism to return. The rally also got a further boost as lower bond yields meant that fears eased about the fiscal situation, and a strong auction helped the 10yr Treasury yield (-6.7bps) to finally decline after 5 consecutive gains. So it was a strong day all round, even if there wasn’t really a fresh catalyst to drive things higher.

However, just when you thought it was safe to emerge from the July 9th tariff deadline day, we’ve had a fresh set of announcements after the US close that signalled a more aggressive stance. First, Trump confirmed overnight that the 50% copper tariff will come into place on August 1, which is an important one given its applications across various products. And second, he announced a 50% tariff on goods from Brazil, which is significant as it broke with the trend of tariffs being broadly in line with the Liberation Day levels set on April 2. Indeed, Brazil had a 10% tariff at that time, so that’s a notable escalation, and it follows Trump’s threats to place higher levies on the BRICS over recent days. So that meant the Brazilian Real weakened by -2.29% against the US Dollar yesterday, its biggest decline since April 4 amidst the turmoil after Liberation Day. We also heard about several other countries, but the Philippines was the only other in the US’ top 50 trading partners, and they were given a 20% rate.

Meanwhile on the fiscal side, there was a lot of attention on a 10yr Treasury auction yesterday given recent fears around the fiscal situation, but strong demand meant that yields continued to fall. So it helped to push back against concerns that demand for longer-dated bonds was waning. The auction saw $39bn of notes sold, and were awarded at 4.362% versus a 4.365% yield at the bidding deadline. The bid-to-cover was 2.61, above the average of the last six similar auctions (2.57). So attention will now focus on the 30yr auction later today.

That Treasury rally continued after the auction as the Fed minutes from the June meeting were released. They indicated a divide about how restrictive policy currently was, as well as the tariff impact on inflation going forward. With regards to the current policy stance, it said “A couple of participants noted that, if the data evolve in line with their expectations, they would be open to considering a reduction in the target range for the policy rate as soon as at the next meeting.” So given recent commentary these could likely be Fed Governors Waller and Bowman. However, the minutes also highlight that “some participants saw the most likely appropriate path of monetary policy as involving no reductions in the target range for the federal funds rate this year.” Regardless, it said “several participants commented that the current target range for the federal funds rate may not be far above its neutral level”, indicating that any easing cycle may not lower rates significantly in the coming months. This growing divergence in expectations matches the dot plot distribution we saw last month, where 10 of 19 officials pencilled in at least two rate cuts this year while 7 officials saw no cuts, and the other 2 policymakers saw one cut.

On inflation, the difference of opinion was mainly on the effect of tariffs, even as there were questions on how inflation ex-tariffs was progressing. It said “Some participants observed that services price inflation had moved down recently, while goods price inflation had risen. A few participants noted that there had been limited progress recently in reducing core inflation.” Potentially the key sticking point going forward is that “while a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation, and some highlighted the fact that such persistence could also affect inflation expectations.” Looking ahead, the next FOMC meeting (July 29-30) will be just before the August 1st extension date for the “reciprocal” tariffs, so policymakers may still be awaiting clarity on what the trade levies going forward could look like even as they try and measure the impact from the tariffs already in place. In addition, oral arguments to the Court of Appeals on whether the International Emergency Economic Powers Act authorises the president to impose tariffs will be heard on July 31.

Ahead of the minutes, there had been fresh pressure from the administration to cut rates, as Trump posted that “Our Fed Rate is AT LEAST 3 Points too high.” And markets did move to price in more rate cuts yesterday, with the amount expected by the December meeting up +3.9bps on the day to 53.1bps. In turn, that helped sovereign bonds to rally across the board, with the 2yr Treasury yield (-4.8bps) down to 3.843%, whilst the 10yr yield (-6.7bps) fell to 4.332%. And that was echoed in Europe too, where yields on 10yr bunds (-1.4bps), OATs (-0.9bps) and BTPs (-1.3bps) all saw modest declines.

For equities, it was also a decent session, as the S&P 500 closed +0.61% higher, following some intraday volatility. Those gains were led by the Magnificent 7 (+1.23%), and Nvidia (+1.80%) in particular, which briefly became the first company to surpass a $4tn market cap on an intraday basis. Indeed, Nvidia is already up +21.29% this year, which is well ahead of the +6.49% gain for the S&P 500 and the +3.76% for the Mag 7, even if it’s not as rapid as its growth in 2023 and 2024 at this point. But in Europe the picture was much stronger, with the STOXX 600 (+0.78%) up for a third consecutive session, whilst the DAX (+1.42%) hit a new record.

Overnight in Asia, the major equity indices have seen a mixed performance. In South Korea, the KOSPI is up +1.06%, which comes after the Bank of Korea kept interest rates at 2.5% as expected, and Governor Rhee said that four board members were open to a cut in the next three months. However, in Japan the Nikkei is down -0.43% this morning, and a 20yr government bond auction saw a bid-to-cover ratio of 3.15, which was beneath the 12-month average of 3.29.

Otherwise, the Shanghai Comp (+0.36%), the CSI 300 (+0.30%) and the Hang Seng (+0.09%) have all posted modest gains. But US equity futures are pointing in a more negative direction, with those on the S&P 500 down -0.23%.

To the day ahead now, and data releases include the US weekly initial jobless claims, and Italian industrial production for May. Central bank speakers include the Fed’s Musalem and Daly, the ECB’s Cipollone, Escriva and Villeroy, and BoE Deputy Governor Breeden. Finally, there’s a 30yr Treasury auction taking place.

Tyler Durden Thu, 07/10/2025 - 08:30

Might Lower Rates Be The Cure For Higher Prices?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The Fed is resisting interest rate cuts to help soften inflation to its 2% target. Supporting their policy is the belief that high interest rates lead to lower inflation. Most investors assume that the Fed is all-knowing and that its theories are logical. Are they? Might they be wrong, and lower interest rates are what is needed to reduce inflation? 

To wit, economist John Maynard Keynes once said:

The difficulty lies not so much in developing new ideas as in escaping from old ones

Science, of which the field of economics is included, is about uncovering knowledge. In the process, truths are often discarded as falsehoods, and new truths become accepted as facts. Albeit, in most cases, they too prove temporary.

For example, these “facts” that were once highly regarded as truths:

• The Earth is flat and the center of the universe.

• Heavy objects fall faster than lighter ones.

• Housing prices always increase.

• Trickle-down economics works.

Let’s follow Keynes’s advice and “escape” Fed ideas that most people believe are truths and consider a counterintuitive theory on rates and inflation. Ironically, this exercise rests on a white paper written by the St. Louis Fed almost ten years ago.

Milton Friedman

To help us appreciate the predominant inflation logic used by the Fed and most economists, we need to consider the work of economist Milton Friedman. He may be best known by his statement:

“inflation is always and everywhere a monetary phenomenon.”

In other words, price changes are a function of the money supply. His theory was put into practice by the Fed and other central banks in the late 1970s when inflation was raging. Simply, central bankers managed the money supply in their attempts to control inflation.

The scatter plot below charts the annual changes in CPI and the money supply (M2) since 1970. We lag CPI by two years, as it provides the most robust statistical relationship, albeit one that is relatively weak, as indicated by its R-squared value. The reason for the poor correlation is that monetary velocity, a measure of how quickly money circulates throughout the economy, is also a key driver of inflation. 

Central bankers realized the relationship between the money supply and inflation is weak. Accordingly, many central banks started targeting interest rates instead of the money supply.

While the instrument used to steer inflation has changed, the impact is similar.

All money is lent into existence. Thus, if interest rates are higher, less money will be desired to be borrowed, and the growth in the money supply should slow. Conversely, with lower rates, borrowing becomes more incentivized, and the money supply is expected to grow faster.

Neo-Fisherism

While using the money supply or interest rates to control inflation may seem sensible, the practice has failed. We only need to look back at the post-financial crisis era for evidence.

Throughout much of the decade following the financial crisis, the Fed and many other central bankers struggled to achieve their target inflation rates. This was despite setting interest rates at or near zero, and in some cases, even at negative rates. In addition, QE was a regular mainstay during the period.

In 2016, Stephen Williamson of the St. Louis Fed wrote an article entitled Neo-Fisherism: A Radical Idea, or the Most Obvious Solution to the Low-Inflation Problem?

He sums up the central bankers’ problem as follows:

Now, in 2016, these central banks are typically experiencing inflation below their targets, and they seem powerless to correct the problem. Further unconventional monetary policy actions do not seem to help.

The article discusses the potential for a significant flaw in ZIRP (zero interest rate policy) and QE, the Fed’s tools for generating inflation.

Irving Fisher And The Neo-Fisherites

Williamson’s paper rests on the shoulders of economist Irving Fisher. Fisher provided tremendous insights into how interest rates, the money supply, and inflation expectations shape economic expectations.

In the mid-2010s, Williamson and other economists, known as Neo-Fisherites, presented a straightforward argument to central bankers.  Economist and journalist Noah Smith summed up their theory as follows:

But what if QE had the opposite of the intended effect? That is the claim of a small but well-credentialed group of macroeconomists that I once labeled the “Neo-Fisherites,” after the famous monetary economist Irving Fisher. These economists wonder if quantitative easing reduced inflation, instead of increasing it as many feared it would. The Neo-Fisherites go even further than that — they wonder if low interest rates, which we usually think of as being inflationary, are actually deflationary!

Neo-Fisherite Theory

The Neo-Fisherite theory that interest rates and inflation have a positive correlation, not a negative one, is based on the following Fisher formula:

R = r + π

R (Nominal interest rates) = r (real interest rates) + π (expected inflation)

 The following paragraph is from Stephen Williamson’s article.

Then, suppose that the central bank increases the nominal interest rate R by raising its nominal interest rate target by 1 percent and uses its tools (intervention in financial markets) to sustain this forever. What happens? Typically, we think of central bank policy as affecting real economic activity—employment, unemployment, gross domestic product, for example—through its effects on the real interest rate r. But, as is widely accepted by macroeconomists, these effects dissipate in the long run. So, after a long period of time, the increase in the nominal interest rate will have no effect on r and will be reflected only in a one-for-one increase in the inflation rate, π. In other words, in the long run, the only effect of the nominal interest rate on inflation comes through the Fisher effect; so, if the nominal interest rate went up by 1 percent, so should the inflation rate—in the long run.

The gist of his argument is interest rate changes can directly impact the economy and inflation in the short run. However, in the long run, inflation expectations exert a greater influence on inflation.

His graph below shows that when the interest rate (blue) rises, the real rate (less inflation- red) increases one for one. But, over time, the real rate declines as expected inflation (green) increases.  

Have Rates Been Too High For Too Long?

The biggest problem with this graph is that it lacks dates or periods on the X-axis. Thus, we are left with the vexing question: over what period do inflation expectations have a bigger impact than the declining benefits from the change in rates?

There is no definitive answer to the question, as many variables impact inflation, most of which are challenging to account for. For instance, might monetary velocity become swayed by inflation expectations, causing inflation to be sticky?

Is it possible that the Fed, through its elongated high-interest rate policy, is causing inflation expectations to remain above pre-pandemic levels?

The graph below illustrates a notable shift in inflation expectations before and after the outbreak of inflation in 2021.

Summary

Williamson asks:

If the central bank wants inflation to go down, then it should decrease the nominal interest rate target.

We do not doubt that inflation expectations are contributing to inflation being higher than it otherwise would be. However, we also know that high interest rates are subduing economic activity, which weighs on demand and ultimately inflation. The housing market is a great example.

If the Fed were to follow Williamson’s advice and cut rates, it would potentially risk a short-term spurt in inflation due to the marginal positive economic benefit of lower interest rates. In the long run, however, inflation expectations could fall, and with it, inflation.

Our advice to Powell is to consider both sides of the argument. Furthermore, don’t give in to political expediency and act to lower inflation in the long term.

Tyler Durden Thu, 07/10/2025 - 08:05

Most US Law Enforcement Funds Are Going To Immigration & Border

Two thirds of all federal law enforcement funding in the United States for fiscal year 2025 is going to immigration and border enforcement, according to a CATO Institute analysis of data from the Congressional Budget Office (CBO).

Together, immigration and border enforcement will receive more than $33 billion.

This includes funding for U.S. Customs and Border Protection (CBP) at $19 billion, Immigration and Customs Enforcement (ICE) at $10 billion, U.S. Citizenship and Immigration Services (USCIS) at $281 million, the Department of Homeland Security's general offices at $3.2 billion and 20 percent of the Coast Guard's budget - approximately $2.2 billion.

However, as Statista's Anna Fleck reports, CATO notes that the actual value is even higher, as the Trump administration is “diverting thousands of agents from other federal law enforcement agencies and much of the military to enforcing immigration and border law.”

You will find more infographics at Statista

According to CATO analysts, the amount spent on immigration and border enforcement agencies is 36 times higher than spending on tax and financial crimes enforcement (IRS-Treasury), 21 times higher than funding for firearms enforcement (ATF), 13 times higher than on drug enforcement (DEA), 10 times higher than spending on the Secret Service and 8 times higher than the FBI budget.

These figures are based on current calculations and do not yet reflect the additional increases expected under H.R. 1 - the so-called One Big Beautiful Bill Act. The CBP projects that this will direct an extra $168 billion over the coming years to immigration and border enforcement agencies, along with more funding for agencies that indirectly support immigration law enforcement.

Unlike normal fiscal year appropriations, H.R. 1 makes these funds available over five years, though they can be accessed for up to 10 years, so long as they are committed by 2029.

Tyler Durden Thu, 07/10/2025 - 07:45

Climate Change: No. 1 Problem Of No Nation?

Despite the constant fearmongering about new records for global high temperatures being set every few years now, the topic of climate change has still not reached the top of the agenda for many people, as data from Statista Consumer Insights shows.

As Statista's Katharina Buchholz shows in the following chart, respondents in none of the 21 nations covered by the survey collectively rated climate change as the most important problem for their own country when asked to name the issues that were of the biggest significance to them.

You will find more infographics at Statista

Switzerland comes closest with climate change being named as a severe issue by the fifth-highest number of respondents, followed by China in rank 6.

Generally, this is more of an expression of the few problems of Swiss and Chinese people, as still only 29 percent and 24 percent, respectively, rated the climate change issue as severe.

Despite ranking only seventh in Italy, climate change was recognized as a big problem there by more people, 39 percent and 35 percent, respectively. Italy's percentage was the highest in the survey, while China's and Japan's were the lowest.

Likewise, developing nations like Mexico and South Africa might have a list of other problems that more people agree on.

Yet, recognition of climate change as a major issue was only slightly less widespread among the population than in developed countries at around 29-30 percent.

The United States was another outlier at just 28 percent naming climate change as a big issue (rank 10), a low among developed countries.

Tyler Durden Thu, 07/10/2025 - 04:15

The Floodgates Are Breaking In Germany's Welfare State

Submitted by Thomas Kolbe

Germany’s social insurance system is coming under increasing pressure from demographic shifts and a stagnating economy. Long-term care insurance is no exception. The political class attempts to sedate the symptoms.

It confirms what demographers and economists have warned about for years: Germany’s social security structure is not built to withstand demographic change or recession. It is a fair-weather construction—a luxury that prosperous societies afford themselves in times of surplus, only to pare it down in times of crisis. That crisis, anticipated by economists such as Stefan Fetzer and Christian Hagist, has now arrived. In a widely discussed study, they predicted that without fundamental reforms, the German welfare state would reach a tipping point by 2030. By then, the total contribution rate to social security would rise to 44.5% of gross wages—suffocating the private sector in the process.

A String of Alarming Headlines

Germany is on a direct path toward that horror scenario, as confirmed by a recent series of alarming reports regarding the financial health of its social systems. Deficits are everywhere: the public pension system will require at least €123 billion in federal subsidies this year. The recently revealed shortfall in the long-term care fund stands at roughly €1.7 billion. Simultaneously, statutory health insurance faces a gap of €13.8 billion. Importantly, these numbers are based on projections that assume a stable economic environment. Meanwhile, the relentless waves of Germany’s prolonged recession continue to batter the increasingly fragile hull of the welfare state.

In long-term care insurance specifically, developments are accelerating. According to a report from the Federal Audit Office, the deficit will likely double next year to €3.5 billion. By 2029, the shortfall is projected to grow to €12.3 billion. The impression is growing that Germany has drastically overextended itself with its generous welfare model - Europe’s largest migration magnet.

The numbers speak for themselves: expenditures for long-term care insurance have exploded over the past decade—from €24 billion in 2014 to over €40 billion by 2019, and €57 billion in 2023. Last year, spending rose again to €63.2 billion. This spending avalanche is driven by an aging population, rising personnel costs, and an ever-expanding benefit catalog that now reads like a political wish list—our means are assumed to be limitless.

Course Correction Required

Thirty years after the launch of Germany’s public long-term care insurance, the system is financially cornered. Andreas Storm, CEO of the insurance group DAK, warned Monday—following a damning report by the Federal Audit Office—of an existential crisis: “The situation in long-term care is much more dramatic than previously admitted. Not only health insurance, but also care insurance is an emergency patient in need of intensive care.”

These are alarming words, echoed by the Federal Audit Office, which criticizes the federal government for delaying necessary reforms. Emergency loans, it warns, don’t solve the problem—they merely postpone it. Without structural reforms, contribution hikes or benefit cuts are inevitable—and coming soon. Costly add-on benefits must be reexamined, as should the politically motivated limits on co-payments for patients. What’s missing is the political will to bolster the system through personal responsibility and private capital. Reforms bring pain—and pain is the death of polling numbers. Thus unfolds the looming debt drama of the German republic.

Left Pocket, Right Pocket

Reforms will be unavoidable. The number of people needing long-term care currently stands at about 5.2 million—and is expected to surge to 6.8 million by 2050. At the same time, the number of working people expected to fund the system continues to shrink. The demographic scissors are opening wider.

The situation is increasingly dire, and these multibillion-euro holes are carving deep furrows into the financial plans of the finance ministry. Yet it remains doubtful whether Berlin grasps the severity of the problem. The politics of endless generosity are etched deep into the German governing psyche. But in a shrinking, native-born population—amid deliberate deindustrialization and mass low-income immigration—medical care, pensions, and social benefits can no longer be managed solely through the state.

Health Minister Nina Warken is currently trying to patch the funding hole using household funds. “To keep contribution rates stable, we need short-term budget support,” she told public broadcaster ZDF. Otherwise, a contribution hike is expected in January 2026—something she says she “would like to prevent.” This year, the government plans a €500 million interest-free loan, with an additional €1.5 billion slated for 2026.

Left pocket, right pocket—it always ends with the taxpayer footing the bill for political mismanagement.

A New Approach

To be blunt: the welfare machine lives off systemic subsidization. Money can always be found—so long as the middle class remains a reliable payer. And what’s the government's proposed solution? A federal-state commission. Under the working title “Future Pact for Care,” a new master plan is to be drafted—“without taboos,” says Warken. But will it amount to anything?

“We must ask ourselves what benefits we can still afford,” she says. Even incentives for private provision—or obligations—are being considered. That’s a start. But will her coalition partner, the SPD, immediately slam on the brakes?

Germany’s long-term care insurance is a product of a deeply ingrained illusion of total state responsibility. Expanding the benefit catalog has long been bipartisan campaign strategy—just like the early retirement scheme at 63. All part of the endless list of political giveaways that lulled voters into a false sense of security.

The long-term care crisis demands cuts in core benefits—and marks the moment to build up private provision. The winds are shifting: toward austerity, toward efficiency, toward a rollback of the state. The instinct to grab deeper into taxpayers' pockets must be broken if citizens are to be empowered to save on their own. Economic sovereignty is built on the principle of a minimal state—a message so dangerous that the Berlin political bubble orbits it like a pin ready to pop the illusion.

And those serious about sustainable funding must speak plainly: without ending illegal migration, any reform is cosmetic. A pay-as-you-go system used by a growing number of people who haven’t contributed will collapse.

For those unable to provide for themselves, a slim, state-guaranteed safety net remains—no full-coverage entitlement, but a basic emergency provision. Help for the needy, not equality for all.

* * * 

About the author: Thomas Kolbe 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. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Thu, 07/10/2025 - 03:30

Cocoa Supply Crunch Shown In One Chart

The chocolate industry is facing a new era of chronic shortages and record-high prices across cocoa beans, butter, powder, and paste, sparking structural supply disruptions across North America and Europe. At the heart of the crisis is West Africa, where countries such as Côte d’Ivoire, Ghana, Nigeria, and Cameroon—responsible for 75% of global cocoa production—have been severely impacted by years of adverse weather and crop diseases. 

Cocoa bean prices in New York remain near record highs—trading around $8,000 a ton on Tuesday—after skyrocketing over 450% from late 2022 to December 2024, when prices briefly topped $12,000. This surge has driven a 16% increase in key input costs for chocolate makers so far this year, putting additional upward pressure on candy prices at the supermarket. 

One of the most striking visualizations of the multi-year cocoa shortage, courtesy of Bloomberg, is the decline in U.S. cocoa imports, which have seen supplies plummet in just a few short years.

In response, major food companies, such as Mars and Hershey, have reduced the sizes of candy bars, added cheaper ingredients e.g., nuts, wheat), or entirely shifted to non-chocolate offerings. Artisan producers like Raaka have reported paying a whopping triple the price for cocoa powder. 

This has only kicked off a rise in substitutes for food companies, introducing cocoa powder alternatives, such as:

• Carob blends (Doehler Group, Germany),

• Wheat-based powder (Ardent Mills, U.S.), replacing up to 50% of cocoa powder in some products

• Flavor and color substitutes like vanilla, caramel, coffee, and food coloring are also gaining traction.

“We are in an era where chocolate indulgence will no longer rely solely on cocoa,” Ina Dawer, the global insight manager for ingredients at Euromonitor International, told Bloomberg.

The global cocoa shortage is expected to persist: Cocoa processing in Europe, the largest international market, declined 3.7% in 1Q25 to its lowest level since 2017, while a similar trend has been observed in North America. Coca bean prices are expected to remain elevated through the second half of the year.

Tyler Durden Thu, 07/10/2025 - 02:45

Spain Sees 650% Surge In Residency Permits Through Family Ties Since 2020

Authored by Thomas Brooke via Remix News,

The number of immigrants living in Spain under family reunification permits has surged by more than 650 percent in the past five years, according to data from the Ministry of Inclusion, Social Security, and Migration, obtained by The Objective through Spain’s Transparency Portal.

The figures show that such permits rose from 43,848 in March 2020 to 328,841 by March this year.

The ministry clarified that the data refers solely to permits granted, not applications or rejections. These permits are granted to foreigners with close family ties to Spanish citizens or legal residents and typically allow for temporary residence that can be renewed.

The growth has been continuous over the period. In 2020, permits remained around 43,000 throughout the year. By December 2021, the figure had increased to 73,625. In 2022, the number rose sharply, ending the year at 148,938. The upward trend continued in 2023, with the total reaching 238,991 by December. In 2024, they reached 312,995 at the end of the year, and by March 2025, there were 328,841 such permits in effect.

The rapid growth of family-based permits comes as Spain’s left-wing government moves forward with even more liberal immigration reform.

In November 2024, the government approved a plan to regularize the status of 900,000 illegal immigrants over three years, with a target of 300,000 regularizations per year.

The reform aims to simplify immigration procedures and promote integration into Spanish society and the labor market. It was described by Migration Minister Elma Saiz Delgado as the most comprehensive revision of Spain’s immigration law since 2011.

This move comes despite growing anti-mass migration sentiment across the country. A poll conducted by the 40dB Institute for El País and Cadena SER last autumn found that 57 percent of Spaniards believe there are “too many immigrants” in the country.

The same survey showed that 75 percent of respondents now associate immigration with negative issues such as crime, insecurity, and pressure on public services. Public concern has risen by 16 percentage points over the past year and a half, coinciding with a surge in migrant arrivals.

With the recent corruption scandals at the highest echelons of Prime Minister Pedro Sánchez’s government, such practices have also been found within the immigration process. In February, police uncovered a criminal network arranging sham marriages between Spanish women and foreign men seeking residency.

Three people, including a lawyer, were arrested for their involvement in the scheme, and authorities seized documentation that prevented 13 fake marriages.

Investigators reported that the ringleader charged around €10,000 per client and registered the men at addresses in northern Spain.

Read more here...

Tyler Durden Thu, 07/10/2025 - 02:00

Older Adults Outnumber Children In More US States, Median Age Hits New High

Authored by Mary Prenon via The Epoch Times,

A new report from the Census Bureau indicates older adults now outnumber children in 11 states and almost half of the counties in the United States.

The census data shows that the U.S. population continues to age, with the share of the 65-year-plus group steadily increasing from 12.4 percent in 2004 to 18 percent in 2024, while the share of the under-18 population has decreased from 25 percent to 21.5 percent during the same period.

In 2024, the population aged 65 and older increased by 3.1 percent, to 61.2 million, from 2023, while those under the age of 18 decreased by 0.2 percent, to 73.1 million, during the same time frame.

“Children still outnumber older adults in the United States, despite a decline in births this decade,” Lauren Bowers, chief of the Census Bureau’s Population Estimates Branch, said in the report.

“However, the gap is narrowing as baby boomers continue to age into their retirement years. In fact, the number of states and counties where older adults outnumber children is on the rise, especially in sparsely populated areas.”

According to the report, from 2020 to 2024, the older population grew by 13 percent, significantly outpacing the 1.4 percent growth of working-age adults (18 to 64), while the number of children declined by 1.7 percent.

In 2020, the Census Bureau named just three states—Maine, Vermont, and Florida—where older adults outnumbered children. In 2024, the list was expanded to include eight more states with a majority of adults aged 65 and older: Delaware, Hawaii, New Hampshire, Oregon, Pennsylvania, Rhode Island, and West Virginia.

In addition, the number of U.S. metro areas with a majority of older adults increased from 58 to 112 from 2020 to 2024.

“This represents nearly 30 percent of the nation’s 387 metro areas,” the report states.

In 2024, three metropolitan areas with at least 1 million people—Cleveland, Ohio; Providence–Warwick, Rhode Island–Massachusetts; and Hartford, Connecticut—recorded more older adults than younger people for the first time ever.

On the county level, 31.3 percent of America’s 3,144 counties had more older adults than children in 2020. In 2024, that level rose to 45 percent.

Trend Expected to Continue

Glen Hedrick, financial advisor at Old North State Wealth Management in Wilmington, North Carolina, believes the aging population trend will continue into the 2030s.

“This will be a pivotal time for entitlement reform and healthcare infrastructure reform,” Hedrick told The Epoch Times.

“For Social Security, the trend is in the direction of more beneficiaries and fewer contributors.”

He mentioned disparities in states such as Maine and Florida, which he noted may feel even more of a strain.

“As an advisor, I would recommend, based on these findings, to not depend solely on entitlements,” he said.

“Build a diversified income stream, maybe even delaying Social Security as people live longer to maximize benefits.”

The U.S. Census Bureau

The Census Bureau also reported that the U.S. median age reached a new record high of 39.1 years in 2024, up from 38.5 in 2020. Regionally, the Northeast had the highest median age at 40.6, with Maine having the oldest median population in the nation at 44.8.

The Midwest was a close second with a 39.3 median age, while the West and South held the lowest median ages at 38.4 and 38.8, respectively.

Birth Rates Declining Since 1990

According to a recent Statista report, the U.S. birth rate has been declining steadily since 1990. In 2023, there were 10.7 births per 1,000 of the population, compared with 16.7 births per 1,000 in 1990.

The research also shows that the fertility rate among women of childbearing age dropped to 1.62 in 2023, the lowest rate ever recorded.

“The reasons behind the declining birth and fertility rates in the U.S. are complex but include personal factors such as changing priorities among women and the high cost of living, including student loan debt, housing costs, and the cost of child care,” the report states.

Aaron Cirksena, founder and CEO of MDRN Capital based in Annapolis, Maryland, told The Epoch Times that the rising age population is a concern for the entire nation.

“The country as a whole is getting older, while the younger population is decreasing. That’s going to put an extra strain not only on Social Security, but Medicare, and filling jobs for the future,” he said.

Cirksena noted that as this imbalance grows, there will be a lot less people in the workforce paying taxes.

“There’s only so many ways you can get tax revenues out of retirees on a fixed income, so this shrinking base of taxpayers means there are less people supporting the older population,” he said.

In the long term, he noted, the United States could experience slower economic growth.

“There could be a problem filling vacant jobs and then there’s the question of what will happen when the next generation begins to retire,” he said.

In 2024, the Internal Revenue Service allowed a tax credit of $2,000 per child under age 17 for individuals earning less than $200,000 or $400,000 per couple.  This year, the amount is expected to increase to $2,500 per child.

“Still, changing the country’s demographics is not something you can easily turn around in just a couple of years,” Cirksena noted.

He believes the full retirement age will be extended from the current 67 in the near future.

“People are living longer and in order to keep the system going, they’ll probably have to work longer as well,” Cirksena said.

Tyler Durden Wed, 07/09/2025 - 22:35

Half Of Americans Who Think They're "Middle Class" Really Aren't: Pew

The term “middle class” is widely used in American discourse, but few people can clearly define it or know if they truly belong to it, , according to Pew Research and Yahoo Finance.

According to the Pew Research Center, just over half of U.S. households—51% as of 2023—qualify as middle income, a noticeable drop from 61% in 1971. This decline suggests that nearly half of Americans no longer fit within what’s traditionally considered the middle class.

Pew defines middle-income households as those earning between two-thirds and double the national median income, which translates to a range of about $56,600 to $169,800, based on 2022 government data. Even among those within that range, many feel financially stretched.

A survey by the National Foundation for Credit Counseling revealed that more than half of U.S. adults say they are unable to make financial progress, while nearly half report that they are constantly just treading water.

Yahoo writes that for households trying to maintain their middle-class status or move up, one critical step is reducing consumer debt. High-interest obligations can quickly become unmanageable, and rising bankruptcy rates reflect that risk—there were over 494,000 personal bankruptcy filings in the U.S. in 2024, more than 60,000 higher than the year before.

Paying down debt can ease monthly financial burdens and provide more stability. Another key safeguard is having an emergency fund. Setting aside enough savings to cover at least six months of living expenses can protect a family from sudden income loss or job disruption, giving them time to adjust without sacrificing their standard of living.

Increasing income is also an important strategy. Picking up a side hustle or creating a passive income stream could help a household reach or exceed the upper threshold of the middle-income range. Earning more doesn’t just improve lifestyle—it also offers a financial buffer against downturns and rising costs.

At the same time, managing spending is essential, especially in a climate of economic uncertainty. Many Americans have turned to "doom spending," making impulsive purchases as a response to stress, which only deepens financial insecurity.

Careful budgeting and expense tracking can help people identify where their money is going and highlight areas where they might cut back. Insurance costs are a common area of overspending. The average American pays over $2,400 annually for full-coverage auto insurance and more than $2,300 for homeowners insurance, and both are projected to rise further in 2025.

Comparing rates and switching providers can lead to significant savings—some drivers have reported reducing their monthly premiums by doing just that.

Ultimately, whether or not you fall within the middle-class income range, financial stability depends on more than earnings. Controlling debt, building savings, growing income, and being intentional with spending are all crucial steps to maintaining or improving your economic position in today’s shifting landscape.

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

Obama Wants The Power To Define 'Facts'

Authored by J.B. Shurk via AmericanThinker.com,

The Connecticut Forum hosted Barack Obama a few weeks ago to discuss current events, and the former president took the opportunity to support government regulatory constraints for online speech.  “We want diversity of opinion.  We don’t want diversity of facts,” Obama opined in his nonchalant way of attacking the First Amendment while pretending to support it.  “There is a difference between these platforms letting all voices be heard,” he continued, “versus a business model that elevates the most hateful voices, or the most polarizing voices, or the most dangerous in the sense of inciting violence.”  Obama has always been a tyrant wearing a smiling celebrity’s mask.

Just who shall be empowered to determine the “facts” that will constrain public speech? 

Barack Obama and his fellow Marxist travelers expect to have that job.  Did you know that men can have babies and that women are at risk for prostate cancer?  That’s right!  Those are “facts”!  Did you know that Hamas terrorists who chop off Jewish babies’ heads practice a “religion of peace”?  That’s a “fact,” too, and anybody who disagrees is spreading “hate”!  Did you know that the Clinton-Obama-Steele Dossier confirmed President Trump’s “collusion” with Russia and that Vladimir Putin now rules from the White House?  That’s a “fact”!  Disgraced CIA director John Brennan and disgraced FBI director Jim Comey both said so!  Did you know that we’re all going to die from global cooling…er, global warming…er, I mean, extreme weather, unless we pay more in taxes and allow powerful corporations and governments to monitor our economic transactions?  That’s a scientific “fact,” man!  Anybody who disagrees is a “dangerous” idiot!

The truth is that if we really followed Obama’s proposed regulatory rule in constraining online speech, most of the nonsense that Democrats and their leftist cohorts around the world believe would be banned as fake science and fake news!  It takes a tremendous amount of “diversity of facts” to conclude that strange men should be allowed to share restrooms with little girls and compete in women’s sports.  Yet, according to Obama, the delusional should be entitled to determine what is “true,” and the sane should be punished for objecting!

Consider delusional leftists’ unhealthy obsession with the weather.  “Global warming” is a pseudo-scientific cult religion used to concentrate economic and political power into the hands of a small number of global elites.  Earth is worshiped as a goddess.  Hydrocarbons are forbidden fruits.  And humans who choose natural energy sources, such as oil and gas, over Paleolithic standards of living are condemned as sinners who must repent by handing over their material possessions to the State.  

The “green energy” scam is bastardized Christianity dressed in Marxism and packaged to ignorant yet self-important lost souls who crave meaning in their lives.  It is both fake science and a fake religion for those who are desperate to feel that they are smarter and more virtuous than everyone else.  It is a dogma for bullies that provides those who idolize rocks an opportunity to inflict great human suffering while pretending to do the opposite.  It is a lie told by elites, swallowed whole by brainwashed minions who know nothing of real science, and used to transfer income and savings from the poorest to the wealthiest.  It is a boogeyman story that those with power tell to those without power.  It is pure evil.  And it is the settled “scientific” consensus of the Democrat Party, European Union bureaucrats, and their corporate allies throughout the West.

It makes perfect sense why Swedish teenager Greta Thunberg (now twenty-two years old) became the global face for fighting “climate change.”  Economic and political elites always prey on the young when they need to push fanciful and costly public policies.  (After all, there’s a reason why politicians send eighteen-year-old boys to cross barbed-wire battlefields saturated with mines and dead bodies: thirty-year-old soldiers have seen enough to know that their governments use them as cannon fodder.)  What makes someone as young as Greta an ideal mascot for elites’ shadowy agenda is not her incomplete education or scientific illiteracy; it is her youthful inexperience in recognizing how persistently governments lie.

As far as I can tell, Greta believes that man-made “climate change” and capitalism, more generally, are killing the planet.  Meanwhile, she doesn’t seem very curious as to why colossal multinational investment firms — including BlackRock, Vanguard, and State Street — have heavily invested in the World Economic Forum’s “Great Reset,” the U.S.-E.U.’s “Green New Deal,” and so-called “environmental, social, and governance” (ESG) standards of investing.  If the biggest players in capitalism and the wealthiest financial dynasties on the planet are all hyping the “climate change” apocalypse, a staunch critic of capitalism with a few functioning neural synapses might wonder why “save the planet” foot soldiers are working for the moneyed elite.  

Nine times out of ten, innocent useful idiots who do the bidding of Big Business and Big Government simply can’t fathom that powerful interests would advance outrageous lies as the “truth.”  Apocalyptic “global warming,” Greta surely tells herself, must be true because if it is not, then global leaders, “scientific” organizations, and countless “philanthropic” groups have conspired to pull the wool over the eyes of the world.  

The lies that powerful people and institutions spread are so brazen that sometimes painful experience is required to break the spell of popular consensus.  Whether that experience is the government’s official narrative regarding President Kennedy’s assassination, the government’s evidence for weapons of mass destruction in the lead-up to the Iraq War, the government’s assertion that Russia stole the 2016 presidential election from Hillary Clinton, the government’s directed censorship of scientific corroboration that COVID was engineered in a Wuhan laboratory, or the government’s repeated promises that COVID “vaccines” are “safe and effective,” a large number of people require a Eureka! moment before they finally realize that governments and corporations specialize in Big Lies. 

Until that time, the same people who push endless wars, mass migration, and higher taxes that pay off Big Bank losses wave their rainbow flags and suck fifteen-dollar drinks from paper straws.  And too many young, useful idiots play “follow the leader” and believe that “transgenderism” and “global warming” are real.

As is true of leftist political parties throughout the West, the Democrat Party in the United States is now just an assortment of foreigners who broke into the country and a menagerie of “woke,” America-hating communists obsessed with their genitals and skin color.  The tenets of its professed ideology are contradictory, stale, and stupid.  Democrat voters have become the programmable parrots for an elite aristocratic class.  They believe and do what they are told and repeat what they hear.  If they must support “transgenderism,” “global warming,” or Hamas terrorists to remain in good standing with Barack Obama’s “fact” checkers, they will.  To be a member of the modern Democrat Party is to hand your brain over to your master while putting on a cosplay uniform that allows naïve people to playact at being revolutionaries.

If Barack Obama and his Marxist legions are allowed to determine the “facts,” then the world will continue its descent toward a future where the delusional rule over the sane.  Lying politicians will continue to criminalize free speech.  Lying spies from the various large intestines of the Intelligence Community will continue to invent “narratives” that justify war.  Lying central bankers will continue to suck up wealth from the middle class while forcing everyone to use paper confetti as currency.  Lying “scientists” will continue to promote “climate change” or COVID fearmongering in return for government grant money.  Greta Thunberg might even win Nobel Prizes for both peace and chemistry. 

Only truth can beat back the foolish wickedness of this world.

Tyler Durden Wed, 07/09/2025 - 21:45

Is Gen Z The Useful Idiot Generation

A sizable proportion of young Americans lean heavily to the left, often with limited understanding of history, moral grounding, or the foundations of Western civilization. Whether it's the result of leftist indoctrination on college campuses or the intellectual decay sparked by endless hours on social media, the effect is apparent: radicalism is here to stay.

Mark Penn, a pollster and adviser to Bill and Hillary Clinton in the 1990s, and Andrew Stein, who served as New York City Council President from 1986 to 1993, penned a Wall Street Journal opinion piece calling Gen Z "the Useful Idiot Generation."

Their concerns about youngsters stem from the Democratic mayoral nomination of Marxist Zohran Mamdani, who has proudly and explicitly stated he wants to seize "the means of production." It seems some New Yorkers have forgotten the history of communism—an economic system that has never worked and, in fact, has led to the deaths of tens of millions.

Yet Mamdani's promises of free bus rides and government-run grocery stores, among other initiatives, have been enough to attract some New Yorkers burdened with student loans and no savings.

Penn and Stein drilled into why a growing number of youngsters aren't outgrowing leftist radicalism, which usually occurs after marriage and having a family...

• 53% of 18- to 24-year-olds have attended at least some college, where left-wing ideology dominates.

• Colleges often portray socialism as "free stuff" and teach students to blame capitalism for racism, inequality, and climate change.

• Gen Z lacks historical memory of Cold War-era socialist atrocities (e.g., Soviet Union, Maoist China).

• Adulthood is delayed: median age of first marriage is now 30, nearly five years later than in 1985.

• Nearly half of Gen Z adults are not in committed relationships and often live communally or work from home.

• They spend over four hours daily on their phones, mostly consuming content from TikTok and Facebook, which reinforce existing beliefs.

• Religion has declined: over one-third report no affiliation, and 60% didn't grow up attending services—contributing to moral disconnection.

Penn and Stein noted:

Put all this together, and it's little wonder that about half of 18- to 24-year-olds tell pollsters they support Hamas over Israel. By and large these young adults aren't hard-core ideologues; they're merely ignorant. About half of young Hamas supporters say they don't want to wipe out Israel and prefer a two-state solution. Call them the Useful Idiot generation, mouthing slogans and causes they don't understand and from which they would recoil if they did.

The two said the older generations are to blame here:

We created the environment that produced this unmoored generation. Socialism and antisemitism will continue to fester and grow if we don't stand up and reform our universities, reinforce our basic values, and balance our social media.

Our take—one Penn and Stein didn't mention—is that leftist radicalism didn't begin with Gen Z. Gen X led the political correctness movement, while Millennials served as foot soldiers in the woke crusade. Blaming Gen Z alone for their views misses the broader picture. This has been a long socialist march through institutions—academia, corporations, and government—spreading progressive ideology at every level and shaping younger generations into radicals.

The good news? The Trump administration is now taking steps to roll back DEI and begin reversing the damage.

Tyler Durden Wed, 07/09/2025 - 21:20

Oregon Faces Title IX Lawsuit Over Males In Girls' High School Sports

Authored by Scottie Barnes via The Epoch Times,

A conservative nonprofit filed a federal lawsuit July 8 on behalf of three Oregon high school girls alleging that the state’s education and athletic authorities violated federal anti-discrimination protections by allowing biological males to compete in girls’ track and field events.

The America First Policy Institute’s (AFPI) suit follows a formal complaint that it filed with the U.S. Department of Education’s (DOE) Office for Civil Rights earlier this year, alleging systemic violations of Title IX.

In a separate action, AFPI has also asked the office to expand the scope of an ongoing Title IX review to include alleged First Amendment rights violations of student athletes. 

‘That’s Not Equality’

The lawsuit, filed in the U.S. District Court for the District of Oregon, details the challenges that the plaintiffs encountered when being forced to race against or give up their spot to male athletes identifying as female—including during high-profile events such as the Oregon state track and field championships.

Madelyn Eischen, a recent high school graduate, claims she withdrew from a major meet in protest after learning she would be competing against a male athlete in girls’ high jump. 

“We work too hard for our achievements to be erased like this,” she said through counsel.

Another plaintiff, whose name is being withheld as she is a minor, has competed in track and field since the fifth grade. As a sophomore, she broke the state record for the fastest 400-meter time ever run by a sophomore girl.

The lawsuit alleges that she went on to lose three times to the same male runner, including at the state championships. 

The girl also says she was harassed by supporters of the male athlete for declining to celebrate his victory over her in the girls’ 400-meter event at the 2024 state championships.

At one point, the athlete claims she was called into the principal’s office for a mental health checkup. 

The lawsuit also alleges that fights broke out among students, “placing the girl at the center of a volatile and harmful environment.”

“Title IX was passed to protect equal opportunity for females, not to take them away,” said Jessica Steinmann, executive general counsel at AFPI. “Girls in Oregon are being robbed of podium spots, scholarship chances, and the belief that their effort matters. That’s not equality—it’s discrimination.”

A Silent Statement

In a separate action, AFPI has asked the DOE to investigate whether the treatment of two female athletes during a May 31 track meet constitutes an additional violation of the rights guaranteed under Title IX and the First Amendment and to incorporate this incident into its ongoing investigation.

During the 2025 Oregon high school track and field state championships, high jumpers Alexa Anderson and Reese Eckard declined to stand on the podium alongside a male competitor. 

Instead, they stood in front of the podium, intending to make a silent statement about fairness in girls’ sports, wrote Steinmann and Leigh Ann O’Neill in a June 12 letter to DOE’s Office for Civil Rights. 

“Rather than respecting their constitutionally protected expression, an event official admonished the girls and instructed them to move off to the side and get out of the photos,” their letter says.

“This intervention was not prompted by any disruption, nor was there any violation of event rules. 

“The message was unmistakable: These young women were being punished for expressing dissent,” wrote Steinmann and O’Neill. 

Anderson said she was “confused” by the official’s actions and she didn’t understand “why we were being treated rudely since everything we did was peaceful.”

“Most of the other girls on the podium agreed with us and had planned to step down in protest,” she told The Epoch Times. But when the time came “and all eyes were on us, their plans changed.”

Turning the Tide

The Title IX lawsuit names the Oregon Department of Education, Gov. Tina Kotek (in her capacity as superintendent of public instruction), the Oregon School Activities Association (OSAA), and three school districts as defendants.

The defendants have yet to respond to the lawsuit, however, OSAA defended its policies in 2024 when Executive Director Peter Weber explained to state lawmakers that OSAA’s policies follow federal and state laws, including those against discrimination. Weber wrote in a letter that Oregon law prohibits discrimination based on sexual orientation and that the state legislature included gender identity as part of the definition of sexual orientation.

The Oregon case was filed just after the U.S. Supreme Court announced July 3 that it will hear two landmark challenges to state laws in West Virginia and Idaho that restrict male athletes from competing on teams that do not align with their biological sex. Those laws were previously struck down by the Fourth and Ninth Circuits, respectively, with rulings that extended the logic of Bostock v. Clayton County to Title IX. In that 2020 case, justices ruled that firing someone for being gay or identifying as transgender violates Title VII of the Civil Rights Act.

It also follows a historic settlement between the U.S. Department of Education’s Office of Civil Rights and the University of Pennsylvania in the case of swimmer Lia Thomas, who identifies as transgender and was stripped of all program records.

These actions are in the context of President Donald Trump’s executive order to prohibit transgender-identifying males from participating in girls’ and women’s sports or using female locker rooms.

Schools allowing males to participate in girls’ sports risk losing their federal funding under the order.

Earlier this year, Republican members of Congress tried and failed to pass a national ban on transgender participation in girls sports. 

Currently, 27 states have such a prohibition.

“At the heart of these cases is a simple question,” Steinmann said in a press release.

“Does Title IX mean what Congress intended—equal opportunity based on biological sex—or does it mean something else entirely? The court’s answer will shape the future of girls’ sports in America.”

Tyler Durden Wed, 07/09/2025 - 20:55