Iran Targets Marine Barracks In Jordan, Sends Drones On Bahrain & Kuwait, After Trump's New Strikes

   This is an update of the on-going war with Iran but unfortunately this is more and more "background noise" compared with the "real" war which is entirely financial. 

   The Gulf is important, don't get me wrong, but in retrospect it will have been far less important that the rising interest rates which will soon run amok with the economy. Forget the 40 trillion dollars of US debt, what really counts is the 2 trillion rise in a year. This is unsustainable. But the US dollar remains the world currency so it can last for a while. Europe is in much worse shape. France is now paying more for its OAT bonds than Greece. This will not stop the EU from providing Ukraine with 90 billion Euros (Good luck receiving the money!) or accelerating its green transition. 

   Just like Trump, Europe cannot back down. So who will? Iran being bombed anyway? Russia? China? In the end, who's right and who's wrong will not matter much as we escalate further and the coming depression approaches which is why I believe looking at the issue from a different perspective is legitimate: Knowing all this, why not escalate if you're cooked anyway?  

   Democratic institutions or what's left of it, should protect us against such a drift, but of course they won't. On the one hand, people do not want war, but on the other hand they want their pensions paid. States must find the right answer. War is what happens when talks falter. There is no talk between the US and Iran. None either between Europe and Russia. China remains too big to be ignored for now but for how long?         

   I will be offline for some time in September while events accelerate but this blog is not a news site anyway. Often, I post within a week of important events knowing that two or even three weeks would be safer to understand the true meaning of what's going on. But the news cycle tends to crowd out old news quickly. So be it. Let's catch up later, with hopefully better news, although realistically we most probably will get a very hot autumn.   

Iran Targets Marine Barracks In Jordan, Sends Drones On Bahrain & Kuwait, After Trump's New Strikes

Summary

• Explosions in Jordan reported amid initial Iranian retaliation, drones on Bahrain.
• Reports of fresh US strike wave on southern Iran, oil soars
• Bessent Says Hormuz Will Be "Worthless Piece of Water" In Two Years
• Iran offers conditional ceasefire: Pezeshkian says Iran will return to talks if the US honors prior commitments, which Tehran says it has violated.
• Tankers hit in Strait of Hormuz: Two supertankers struck exiting Hormuz, escalating energy-market risks.
• Oil prices surge: Brent crude rose above $92/barrel.
• Diesel supply squeezed: Refinery disruptions are driving diesel prices and margins sharply higher.

Strait of Hormuz traffic returns to normal by October 31?
Yes 12% · No 89%
View full market & trade on Polymarket

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Iran Targets Marine Barracks in Jordan, Drones Sent on Bahrain, Kuwait

Iranian state media is saying that the military retaliation is ongoing, with the Islamic Revolutionary Guard Corps (IRGC) Aerospace Force announcing that it launched a heavy ballistic missile attack targeting the US Marine barracks at Camp Titin, located near the Gulf of Aqaba in Jordan - which is at a significant distance, in the country's far southwest corner. State media sources further detail:

According to the IRGC, the strike destroyed multiple military installations and attack helicopters, inflicting heavy casualties on U.S. forces. The operation was executed as the second wave of retaliatory actions under the code name “Ya Rasul Allah.”

And more via state WANA News Agency: "The IRGC stated that the action was carried out in retaliation for a U.S. strike on a residential home during a wedding ceremony in Sirik, which resulted in nearly 50 civilians killed or injured, including children." Iranian claims of US casualties will as usual be hard to verify, but CENTCOM has said no casualties have resulted, per news wires:

US officials says no US casualties from Iranian attack on facilities in Jordan so far

In the wake of the US CENTCOM campaign, which may still be ongoing, Iran's Hormozgan grid is under blackout. Further damage is likely to be assessed and publicized in the coming hours. Bahrain, Kuwait also targeted:

• Iran's army launched drone attacks on the US base in Bahrain, according to Fars News Agency
• Kuwait Army says air defenses are confronting attacks by hostile drones
• Jordan intercepts 10 ballistic missiles from Iran, three fell in remote areas: army

Initial unconfirmed footage now widely circulating of alleged IRGC attack on Jordan base...

Iranian Retaliation on regional Bases Begins

Iran is already hitting back, according to some early reports of what looks to be their latest retaliation, despite President Trump having earlier warned the Islamic Republic will be hit harder if it responds.

"If the failed Nation of Iran retaliates for this very justified attack, they will be hit again at a much harder and higher level, but it will not be the biggest attack of them all, that is waiting in the wings and, when it is over, there will be very little left of the Islamic Republic of Iran!" he stated earlier.

The White House indicated it is focused on taking out IRGC targets. But this has triggered the expected reaction:

• Fars: Some Arab sources report that an explosion was heard in Jordan; several explosions were heard from American bases in Jordan
• IRGC says US attacks will tighten the lock on the Strait of Hormuz
• Explosion heard in Erbil, Iraq, reports Fars

The last tit-for-tat instances also saw US bases in Jordan targeted.

One Atlantic Council analyst points out the obvious - today's action is yet another indication that the administration still does not understand how the Iranian government and leadership thinks (unless the intent is actual runaway escalation). Danny Citrinowicz writes:

Threatening Tehran with even more devastating strikes if it retaliates is unlikely to prevent an Iranian response. In fact, it may do the opposite. From Tehran’s perspective, failing to respond to a direct U.S. attack would undermine the very deterrence equation Iran has spent months trying to establish. The Iranian leadership believes it must demonstrate that American military action carries a price. That means Iran is likely to retaliate and it may even conclude that a broader or more painful response is necessary precisely to rebuild deterrence against future U.S. attacks.

This is the fundamental problem with Washington’s approach: it assumes that sufficiently strong threats will convince Iran to back down. But Tehran may draw exactly the opposite conclusion, meaning that backing down under threat would invite additional American strikes. Threats will not solve this problem. If Washington wants to prevent another cycle of retaliation and counter-retaliation, it needs a political strategy for ending the confrontation. Otherwise, each side will continue using force to restore deterrence after the previous round — creating an escalation cycle that becomes increasingly difficult to control.

The latest Pentagon leaks to the Washington Post happened days ago, and now this:

More latest via AJ:

• The United States military says it is striking targets in Iran over attempted attacks on shipping as Iranian media reports explosions in Asaluyeh, Jiroft, Bandar Abbas, Qeshm Island, Konarak, Chabahar, Jask, Sirik and Lavan.
• Iran’s army and IRGC promise the US will regret and face “severe punishment” for the aggression.
• US President Donald Trump says “if the failed Nation of Iran retaliates for this very justified attack, they will be hit again at a much harder and higher level”.

Trump: 'Large & Powerful Strikes' in 'Retaliation' For Mining Hormuz Strait

Confirmation from the President, describing these new airstrikes as ongoing and "large and powerful"... He added that this is retaliation for the Iranians mining the Strait of Hormuz. The full Truth Social post:

Notably he is warning the Iranians will get hit again "much harder" if they don't cooperate with Washington demands.

Early reports of US Strikes on Southern Iran Send Oil Soaring

Rare US strikes against Iran in the middle of US trading hours? Bold move if so. Some breaking headlines:

• REPORTS OF BLASTS ACROSS IRAN'S SOUTHERN REGIONS: STATE TV
• PENTAGON UNLEASHES FRESH ATTACKS On SOUTHERN IRAN
• Al Arabiya: ‘DEFENSIVE’ BOMBING — source to Faytuks
• EXPLOSIONS REPORTED IN KONARAK IN SOUTHEASTERN IRAN: FARS
  US FORCES BEGAN STRIKING IRGC TARGETS IN IRAN AT 12PM ET TODAY

And from Al Hadath: "Explosions heard east of Bandar Abbas and Qeshm Island; Five explosions heard in Qeshm and four near the Strait of Hormuz." CENTCOM has confirmed:

Today at 12 p.m. ET, U.S. forces began striking Islamic Revolutionary Guard Corps (IRGC) targets in Iran. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.

Confirmation of the attacks also from the Iranians:

The Deputy Governor for Security and Law Enforcement of Sistan and Baluchestan Province says four projectiles hit the counties of Chabahar and Konarak, Iranian news agency, IRNA, reports.

General Ali Khalil Abadi confirmed the attacks stating: “Expert investigations are underway to determine the details of the incident, potential damages, and further information.”

Oil prices shooting up on the new apparent 'shoot-up', which has been previewed in various reports this week. Trump is now pulling the trigger on Hegseth's plan, it seems:

WTI nears $90...

US attacks on Iran have almost always come in nighttime and overnight hours - and typically only after US market hours close, so a daytime attack is very rare indeed...

Bessent Says Hormuz Will Be "Worthless Piece of Water" In Two Years

Treasury Secretary Scott Bessent told the audience at the Group of 20 finance ministers' meeting in Asheville, North Carolina, that Iran's ability to weaponize the Strait of Hormuz will be reduced to zero because "oil will be going through pipelines across the land."

"Iranians are trying to use the Strait of Hormuz as a chokepoint. It's not a chokepoint for the US, but it is for many other countries. That will be bypassed in 2 years. In 2 years, the Strait of Hormuz will be a worthless piece of water. The oil will be going through pipelines across the land," Bessent said.

Bessent's comments this morning should come as no surprise to readers, since we've detailed the existing pipelines that bypass Hormuz and the new pipeline projects planned by allied Gulf producers.

However, these new 'alternative energy route' initiatives are wrought with an array of unknowns - especially in terms of security and infrastructure/construction protection in an obviously volatile region, cooperation among transit states (in overland routes), as well as immense cost notwithstanding. For but one recent headline example:

Iraq-Syria Pipeline To 'Bypass' Hormuz Likely To Take Four Years, $15BN To Build

And with both these named countries coming out of recent decades-long 'forever wars', and with especially Syria still being largely destroyed and fragmented, efforts to bring to fruition Bessent's anticipated bypass system "across the land" - as he says - will more likely be something that drags on far longer than the Trump administration itself is in power. 

Read the full note here.

Also read Goldman's latest energy flow data through the Hormuz (here).  

Pezeshkian: We'll Return to Ceasefire if US Does

Iranian President Masoud Pezeshkian on Tuesday reiterated his country's willingness to return to talks with the US, but made clear that Washington must return to its prior commitments made.

"I state explicitly that if the United States returns to its commitments under the ... memorandum of understanding, the Islamic Republic of Iran will immediately take reciprocal action," Pezeshkian said on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Bishkek, Kyrgyzstan. 

It is significant that he's there at the Kyrgyzstan-hosted summit in person, receiving a welcome from the likes of Putin, Xi, Erdogan, the UN's Guterres, and others.

Pezeshkian still blasted the US for "reneging on its commitments" under the agreement, which unraveled in June - leading to various weeks of sporadic tit-for-tat attacks - the latest which occurred just at the start of this week.

President Trump yesterday told reporters in the Oval Office that there will be a "response" to the Iranian attacks, but also cautioned that this would not mean a return to full-scale war.

US officials have talked about "mowing the grass" with a series of indefinite strikes, while ironically having an aversion to anyone applying the label "forever war". 

Two Supertankers Hit

Two oil supertankers were struck by unknown projectiles while transiting the Strait of Hormuz early Tuesday, signaling yet another sharp escalation in hostilities along the world's most critical energy chokepoint.

The attacks follow President Trump's warning Monday that additional strikes against Iran remain possible. Traders are pricing in a further war risk premium, pushing Brent crude futures above $92 a barrel, while US diesel crack spreads have breached the critical $100-a-barrel threshold.

Maritime security consultant Marisks reports that Saudi shipping giant Bahri's VLCC Sidr was hit northeast of Khasab, Oman. The Sinokor-operated Senegal Prosperity was reportedly struck by three projectiles farther east. Both tankers were exiting the maritime chokepoint. 

UK Maritime Trade Operations separately confirmed that a tanker completing an outbound transit of Hormuz reported three projectile strikes but did not identify the vessel.

Brent crude futures ripped higher during Asian and European trading on the news, with the benchmark firmly above $92 as of 0600 ET.

More US Strikes on Table, Trump Warns

"President Donald Trump warned Monday that further strikes are possible, pushing Brent back above $91/bbl and driving another bear-steepening move across global bond markets," UBS analyst George Redman wrote earlier. 

US diesel crack spreads were above $100 as of 0600 ET.

As we've extensively detailed, the energy crisis is not necessarily in crude itself but in refined products. Gulf diesel and gasoline shipments have declined amid disruptions in the Strait of Hormuz, while damage to Russian energy infrastructure from Ukrainian one-way attack drones has created a perfect storm in global refining markets in late summer.

'Diesel at Epicenter of Supply Squeeze'

Goldman's energy expert Daan Struyven warned in his most recent note that "diesel is at the epicenter of the supply squeeze."

"Rising strikes on refineries in the Middle East and Russia have further constrained already-stretched global refining capacity, pushing refined-products margins to new highs," Struyven and Yulia Zhestkova Grigsby wrote in the note, adding, "Diesel remains at the epicenter of the rally."

Struyven and his team estimate that global refinery runs are down 7 million barrels per day from last year and have averaged nearly 6 million barrels per day below seasonal norms since March, around the time the US launched Operation Epic Fury and Ukraine ramped up one-way drone attacks against Russia's energy infrastructure.

Meanwhile, there may be some diplomatic traction in the Gulf area, with Iranian President Masoud Pezeshkian saying on state TV: "I state unequivocally that should the US return to its commitments under the aforementioned Memorandum of Understanding, the Islamic Republic of Iran will also take reciprocal action immediately."

Treasury Secretary Scott Bessent's "Operation Economic Outcast" is also ramping up as the Trump administration deploys sanctions to pressure Tehran into submission.

More Latest Developments

via Newsquawk...

• Iran's Foreign Ministry spokesperson Baghaei said Europe cannot claim strategic autonomy while following Washington's orders, stressing that true autonomy means making independent decisions.
• Pakistan's Deputy PM and Foreign Minister met with Iran's Foreign Minister Araghchi in an informal manner in Bishek at the holding room of the SCO Council of Head of States, according to journalist Anas Mallick.
• Gulf Corporation Council condemned Iran's attacks on Jordan, saying they pose a direct threat to the security and stability of the region, according to Al Jazeera.
• Yemeni armed forces targeted early on Tuesday the bases of Saudi and Emirati mercenaries in Al Makha and Al Khuwakh located in the southwest of the country, according to IRIB.
• Hapag-Lloyd's (HLAG GY) CEO said it is reasonable to expect the Strait of Hormuz will remain blocked for the foreseeable future.

The Rise And Fall Of "Climate Crisis" Info War

    Remember the 2000s? It started with terrorism following the 9/11 World Trade Center attack, swiftly moved on to Global Warming, then the Pandemic in 2020, the war in Ukraine in 2022, the war against Gaza in 2023, and finally against Iran today.  The subjects each rise to the front pages, polarize people and are just as quickly relegated to the back pages of our limited focus as seemingly more important subjects emerge. 

   The case of Global Warming is especially telling as it is a complex subject difficult to grasp and easy to misrepresent. Global Warming has been going on for the last 200 years, conveniently starting a little earlier than our scientific measurements and following the Little Ice Age of the 16th and 17th centuries when the weather was exceptionally cold. The warming has been regular with decades of slight warming following decades of no change whatsoever. Nobody can explain why but conversely, it is relatively easy to build climate models which show similar patters. 

   The reason is that we are dealing with many interlocked variables which we can grasp one by one but not globally as a system. And it is of course in this chasm that propaganda found a fertile ground by linking these temperature trends to CO2 and human activity. 

   I you have the chance to talk to climate scientists personally, you will first understand that our knowledge is fragmentary and that the linear relationship between CO2 and temperatures is nonsensical as it is not how a complex system like the atmosphere behaves. 

   In nature, every system follows complex rules which interfere with each other generating waves. Long, middle and short term cycles which we see in the 11 year solar cycles but also in human activities with our financial, economic and secular cycles. Understanding these cycles is technically one of the most complex science possible with multiple contradictory explanations often jostling for prime time while only in retrospect do we understand exactly what happened. 

   Among all these natural systems, the atmosphere is by far one of the most complex because it is not isolated but significantly impacted by the far more important but slower oceanic cycles with currents transporting huge quantities of heat, the even slower but gigantic geologic cycles with erosion and sedimentation adding and subtracting minerals, especially carbonates, the solar ans space climates which directly influence cloud cover but not only. And then catastrophic events like volcanic eruptions which can significantly alter the climate over years or even decades. 

   But all this complexity is of limited interest to governments. All they are asking scientists is: Can we or can we not link human activities to Global Warming? The simple answer is that, yes, industrial activity does produce CO2, the gas is absorbing light and radiating infrared so theoretically, yes, more CO2 should generate more warming. We know for certain that without CO2 the Earth would be cooler and conversely that with more CO2 it would probably be much hotter. Just look at Venus. But realistically what is true globally is not in detail. The rise of CO2 over the last 150 years of measurements has been exponential while the rise of temperature has hardly changed at all. The relationship if any is definitively not linear. 

   Obviously this short and ambiguous explanation is already too long for the elevator pitch politicians require from scientists. But is the end, as explained bellow, it doesn't really matter. Politics creates constraints and necessities. If you can explain restrictions and inflation with Global Warming, so much the better. The people, not the politicians are responsible. A kind of original sin, since you cannot stop breathing, almost ideal. If it doesn't work, so be it. Second options, like wars, are always available. Who can oppose a necessary fight against a dangerous enemy? 

   And what about people who remind everyone else of past priorities? Well, burning witches in the 21th century is definitively passé. We just don't do it anymore. And asking how much CO2 war actually produces is bordering on treason. "You" and you alone produce taxable CO2.              

Rise And Fall Of "Climate Crisis" Info War As Dems Urge Politicians To Avoid Global Warming Talk

The "climate crisis" headlines forced down the throats of the American people only began to emerge when socialist Rep. Alexandria Ocasio-Cortez and unhinged leftist Sen. Ed Markey introduced the Green New Deal in early 2019. That was the moment when global-warming headlines spiked and the NGO complex ramped up activist networks through protests and an informational war in the press, tricking the public into supporting climate bills intended to solve a made-up crisis.

Fake News

By March 2019, those climate-crisis headlines had intensified as Democrats desperately tried but failed to pass the Green New Deal.

More Fake News

Then, in 2022, those same headlines spiked again as Sen. Joe Manchin and Senate Majority Leader Chuck Schumer unexpectedly announced the Inflation Reduction Act, reviving much of the climate agenda.

It was all a lie. 

By August 2022, the IRA had passed and President Biden had signed it into law, flooding the Democratic Party's pet projects with $369 billion.

But those headlines subsequently peaked in late 2022. Democrats moved on after securing their massive funding package, and climate was no longer the party's main focus. This suggests that the earlier propaganda push was merely an informational war against taxpayers designed to hustle them.

Climate-crisis headlines remain out of fashion in 2026 as Democrats pivot toward socialism, thirdworldism, protect criminal illegal aliens, and quadruple down on all things woke.

Even AP's new reporting makes the case for the retreat clear: Climate ranks poorly among voters' priorities, suggesting that the public has increasingly rejected the party's climate-grift narrative as bullshit.

The retreat in climate propaganda has become so pronounced that researchers have coined the term "climate hushing." The Democratic-aligned Searchlight Institute has urged candidates this election season to stop emphasizing climate change because it ranks poorly among voters' priorities.

The shift in talking points is playing out in Massachusetts, where Markey, a leading sponsor of the Green New Deal, is placing less emphasis on climate policy as he faces a primary challenge from Rep. Seth Moulton.

All of this demonstrates that the entire climate-crisis propaganda campaign was about pushing legislation through Congress to fund NGOs and climate projects, not actually about the climate.

Life Under China’s Social Credit System: A Dystopian Reality? (Video - 52mn)

   When I presented the new Chinese Social Credit System 7 years ago, just before the Covid Pandemic, I thought people in the West would react and say: "Not in our backyard!". 

   I was wrong. The Chinese have made much progress since, adapting the system to make it more acceptable and less absurd. Punishing dissension was the objective not people chewing gum in the wrong place. And in the end, China was successful. They overdid it during the Covid pandemic, softened the system later and now they are done. It works.  

   And guess what? The whole world is following suit. Everywhere huge database centers are being built to provide AI to everyone (of course) and monitor their every move at the same time. The one being especially compatible with the other. In fact complementary almost like banana and chocolate! 

   This means practically that the democratic experiment is over as you can now monitor your population in real time. (It doesn't mater if it's now, tomorrow or next year. The implementation will arrive just as day follows night.)      

   Having built database for the last 25 years, my mind is blown by the new possibilities of AI in this field. The sky is literally the limit and the people will see absolutely nothing. When you see a divergence towards an unwelcome outcome, you will be able to intervene immediately and see the results of what you do instantaneously so that you can increase of modify your action to adjust the outcome. True magic. 

   The real trick is that you are acting individually thanks to the AIs on each person but do not care whatsoever about each individual outcome since the statistical result is the only one you monitor. This imbalance between individual action and global outcome will give an extraordinary weapon to governments around the world which you can be certain they will use and abuse. 

   Already most governments and large companies know that by managing "influencers" you can manage a population but this remains relatively broad as a tool. Tomorrow, which means as the new data centers slowly come on-line the ones after the others, they will become more granular. Large influencers, medium ones, smaller ones and eventually absolutely everybody. In fact in the end you do not have anything to do. The AI does both the monitoring and the managing, "back on tracks", job. 

   Listen once again to the Architect at the end of the Matrix movie. It's all there, 25 years ago. The technology was just not ready then so it was visionary. Now it is.     

   If you do not care much about "freedom" this is not quite a dystopia... yet. But it can turn into one on short notice. Imagine that the EU suddenly becomes serious about their 15mn cities. Well, good luck escaping! 

   Remember the old British series from the 1960s: "The Prisoner"? A nice little village, actually located in Wales from which you cannot escape. (although "The Prisoner" doesn't know where he is).   

   Well, welcome to the village!  

   7 years ago I thought the Chinese were on the wrong tracks. I was wrong, they were pioneers.  

Life Under China’s Social Credit System: A Dystopian Reality?

   Now to be fair, let's present the Chinese way of looking at it: 

"All the above is mostly Western propaganda! What was done in China is little more than a modern Credit Bureau kind of index for people to know who they are dealing with."  

OK, let's accept this for a second because, well, this explanation is indeed true. BUT that is only part of the truth. As the bellow video highlight: Not as bad as what was presented in the West but still rather bad. With a low score you can't get a plane ticket, can't get on high speed trains, can't get a job or book a hotel. So is this totalitarian? Well, you decide. I think it is. Will Europe go in this direction? Of course they will. It gives a veneer of legitimacy to unacceptable measures. Should you have to pay your bills or fines when a court of law says so? Yes of course. Should you be blocked from planes or hotels for that reason? The answer to that question depends entirely on how you approach politics.  

So in the end, did the West misunderstood the Chinese Social Credit System? In it's application, partly but in its potential, not at all. There's really loads of cameras all over China and that is frightening on its own with or without a Social credit System. And yes, likewise the cameras are now blooming all over the place in other countries too. I wonder where they should go to learn how to use them efficiently?  

How The West Misunderstands The Social Credit System 

The Economic Tsar Who Built Modern China-And Whose Reforms The CCP Is Dismantling

    One major difference between the West and China is that although in the West we see different epochs as the rise and fall of different civilizations, in China, the idea is that the same Chinese civilization has been rising and falling rhythmically with periods of prosperity and others of decline. 

   It can be argued that this is an illusion as in Europe the Roman civilization never completely disappear. Today we still live mostly with Roman law, as for the Vatican, it is still at the center of the christian "world" and very much a Roman entity. In the end, the main difference is that in China, the Chinese language remained over the centuries whereas in Europe, Latin was slowly replace by local vernacular languages and cultures so that over time the older "Greco-Roman" culture faded in the background, although it never truly disappeared. 

   Ask the French about their origin and they will proudly tell you a story concocted in the 19th Century of local "Gaulois" conquered by Jules Cesar in the 1st Century BCE to become Gallo-romans and later invaded by the Germans and other tribes. Mostly the Franks whence the name of the country, the famous "barbarians". This is a myth. The local populations had already been replaced by the Celts in the 7th Century BCE before the Roman conquest and what the Latins called "Gaul" was two distinct areas, Gaul Cisalpine, the North of Italy and Gaul Transalpine, the South of France which had been trading heavily with Rome long before Jules Cesar and were consequently peacefully annexed unlike the North of France and the South of Belgium which were indeed conquered and mostly destroyed. Let's not mention the Vikings who were later given "Normandy" (from their original name: The "Nord-man".)   

   If you look at China's history closely, you will find similar patterns, with an older "core" and later Mongol invaders who over time became "Chinese", just as Clovis became a christian and Charlemagne considered himself a Roman Emperor in 800 CE. So the interesting question is: Why such a fundamental difference of perception for similar realities? 

   My personal interpretation after traveling all over Europe and China is that this is mostly due to the unification power of the rivers! China has always been centered on the Yangtze, The giant river at the core of the country whereas Europe is locally centered on much smaller rivers like the Rhine, the Danube, the Seine, the Loire, the Rhone, the Po and the Guadalquivir. Historically, the power of the Yangtze and the culture it gave rise to was overwhelming, when China was strong, the culture shined over East Asia, when it was weaker, the empire fell and broke up to be reunified later. The other rivers, mainly the Huang Ho and the Mekong were never important enough to resist the centrifugal pull of the center. (中国, China, means Central country!) 

   And this brings us to modern China and modern Europe and their amazing similarities. In both case, you have a bureaucracy which challenge is to unify to increase its control over the largest possible territory and population for self aggrandizement and sheer power without realizing that in doing so you actually weaken the system as fewer ideas are tested and implemented. 

   The best example of this principle is multi-polar Renaissance Europe vs centralized Ming China. China already had the printing press, paper money, trade and complex organization when Europe remained relatively backward. But within a couple of centuries, the same elements tested diversely in Europe created the potent mix of the industrial revolution whereas in more centralized China, nothing much happened. 

   What does this tell us about the future? Likely that neither China nor unified Europe will lead the next revolution towards the future. Not because these countries will lack the ability to innovate, but because the central authorities will make choices, sometimes the right ones, often the wrong ones and whenever a bad choice is made, moving back will mostly be impossible due to the weight of the central bureaucracy.  

   The article below fits perfectly in this framework. Deng Xiaoping understood that China needed to be modernized and launched the process. But it is Zhu Rongji after him who developed the ideas and helped China diversify away from the tyrannical Mao Zedong principles. To finally fall back with the current leadership of Xi Jinping who believes that centralization is more important than diversification. (Which as we demonstrated above is historically incorrect.) 

   Of course, a country like China is an exceptionally complex entity so the brief sketch above can only present some elements. It can be argued that the current real estate bubble in China from which the country is finding no exit for the time being, just like Japan earlier, is partly due to local governments over-speculating on land and investment. (Although I believe this valid argument can be countered by the fact that other investment vehicles were not available and that consequently the Chinese chose the best option left which was to put all their eggs in the same real estate basket.)        

   But these centralized systems both in Europe and in China show the same failure mode: The inability to reverse course as discussed earlier. In Europe, it is the suicidal Green Agenda, well intentioned but wrong headed which will kill the European economy long before it saves the planet. In China, it is the impossibility to discuss the Communist Party's diktat which was recently displayed during the Covid Crisis when the over-reaction of the authorities ended up damaging Chinese society even deeper than in Europe with extreme and completely unnecessary measures like barricading whole cities and worse, damaging trust in the system and long term growth to this day.          

   Finally, this lesson from China can be generalized to all empires. While they strive to unify, they prosper and as soon as the unification has succeeded, the seeds of the decline are planted by a rigid system which ultimately bankrupts itself trying to sustain a paradigm less and less adapted to the new circumstances. Japan over the last 30 years. Europe today, China tomorrow?    

by Heng He via The Epoch Times,

Former Chinese Premier Zhu Rongji, the hard-edged reformer who engineered China's rise from planned-economy backwater to global manufacturing giant, died this month at the age of 97.

Chinese Premier Zhu Rongji poses during a working session at the Europe-Asia summit in Copenhagen, Denmark, on Sept. 22, 2002. Gerard Cerles/AFP via Getty Images

His legacy-tax centralization, mass layoffs, China's accession to the World Trade Organization (WTO), and a brief, forgotten moment of tolerance toward Falun Gong-now stands as both the foundation of modern China's wealth and a stark reminder of how easily that progress can be reversed.

Zhu's Legacy of Economic Reform

After the decade-long Cultural Revolution pushed the regime to the brink, then-Chinese Communist Party (CCP) leader Deng Xiaoping pivoted China toward market reforms. He relied on pragmatic trial and error rather than a rigid master plan, describing his step-by-step approach as "crossing the river by feeling the stones."

Zhu executed that vision. As vice premier and premier from 1991 to 2003, China's "economic tsar" used iron-fisted reforms to engineer the country's rise, including restructuring fiscal policy, dismantling inefficient state-owned enterprises, and securing China's entry into the WTO.

Zhu was officially credited with advancing China's landmark tax-sharing reform in the 1990s, which centralized much of the country's tax revenue in Beijing. That reform undeniably strengthened the central government.

However, it stripped local governments of steady tax income, forcing them to rely on selling land to fund local budgets. Paired with state ownership of land, this shift created a "land-finance" model that drove housing prices sky-high and triggered today's ongoing property crisis.

It isn't the tax reform alone that is to blame. China's system of state and collective land ownership is what enabled large-scale land sales in the first place.

Former Chinese Premier Zhu Rongji at a meeting in Beijing in July 2011. Feng Li/Getty Images

The obituary also praises Zhu for safeguarding Hong Kong's status as a global financial center. Ironically, Hong Kong's diminished standing today stems largely from policies adopted under CCP leader Xi Jinping-making praise for Zhu an implicit rebuke of China's current leadership.

WTO Entry-and Its Costs

One of Zhu's most consequential achievements was leading China to join the WTO in 2001.

To prepare the country for global trade, Zhu aggressively restructured inefficient state-owned enterprises. While this boosted efficiency, it triggered mass layoffs, displacing tens of millions of workers.

Unlike post-Cold War America, China's nascent private sector was too weak to absorb the surge of unemployed labor.

U.S. President Bill Clinton (R) responds to a question as Chinese Premier Zhu Rongji looks on during a joint news conference in the Old Executive Office Building in Washington, on April 8, 1999. Tim Sloan/AFP via Getty Images

The aggressive restructuring stripped millions of workers of their livelihoods, leaving them with virtually no safety net. While the reforms eventually sparked massive economic growth, the workers who bore the cost were largely left behind without fair compensation.

The Premier Who Called Out Shoddy Construction

When the Yangtze River dikes failed during the 1998 summer floods, Zhu inspected the breach in Jiujiang, Jiangxi Province, and discovered that the construction had cut corners and used shoddy materials. Furious, he publicly denounced the dam as a "bastard project" and dubbed it a "tofu-dregs project"-comparing the crumbling concrete to the brittle, worthless pulp residue left over from making soy curd.

As long as corruption remains a recurring public concern in China, the term "tofu-dreg project" will likely remain part of the country's political vocabulary and a defining mark of Zhu's legacy.

The Premier Who Listened-Meeting With Falun Gong

One episode stands apart from Zhu's economic legacy. In the late 1990s, Zhu and the entire Politburo Standing Committee opposed then-CCP leader Jiang Zemin's decision to suppress Falun Gong, according to insider accounts.

More than 10,000 Falun Gong practitioners gather on Fuyou Street in Beijing on April 25, 1999. Courtesy of Minghui.org

On April 25, 1999, roughly 10,000 Falun Gong practitioners gathered peacefully near Zhongnanhai, the CCP's headquarters, in Beijing to petition the authorities for freedom of belief. Earlier in the month, dozens of practitioners in Tianjin had been detained by local police for their faith.

In a bold move for an official, Zhu met directly with representatives, listened to their grievances, and ordered the release of the detained practitioners, along with an assurance that practitioners would have a lawful environment in which to pursue their practice.

The spiritual discipline was introduced to the Chinese public in 1992 and gained widespread popularity, attracting at least 70 million practitioners by the late 1990s.

At an internal leadership meeting the following day, according to insider accounts, Zhu suggested that suppression would harm the country's image and that the regime should leave Falun Gong practitioners alone. Jiang, afraid of the practice's growing popularity, responded that doing so would bring down the Party.

Months later, Jiang launched a sweeping, nationwide campaign against Falun Gong-initiating a persecution that continues today.

Reform Can Be Reversed Overnight

Zhu's death cast an unexpected shadow over Xi's plans to commemorate Jiang with unusually high political honors, an effort intended to elevate Jiang alongside the CCP's founding generation. Instead of highlighting Jiang's legacy, Zhu's passing reminded the public that the reforms of China's most prosperous era owed far more to Zhu.

It was Zhu who was behind Deng and the CCP in launching the Shanghai Stock Exchange in December 1990-now a global financial powerhouse that hosts major state-owned enterprise listings.

Although Zhu was the official most responsible for driving China's reform era, Xi's policies have now largely dismantled that work. That contrast reveals the ultimate lesson of Zhu's legacy: under totalitarian rule, no amount of reform is secure-it can all be undone overnight.

Europe’s Economic Strip-Mining: Can Its Businesses Recover? by Martin Armstrong (Video - 39mn)

   Filling up governments and private companies with debt. Redenomination and start anew. In between you need a war to justify both the debt and the new start. 

   When you look at reality through this prism, you see history repeating itself again and again right into the present. You see Russia framed as "the enemy" since you need an enemy to rally the population against. 

   This may sound strange to non Europeans but I can confirm that it works. The frenzy created in Europe is extreme and conversely, the understanding almost nil. 

   This is why both the elites and the governments are strangely unconcerned with the dark clouds gathering. Yes Europe is not competitive anymore and yes the continent is going bankrupt, but it doesn't matter. "They" have a plan. A plan which is as old as civilizations are: Reset the currency and start again. Clean the balance sheets and the debt so that once again you can accumulate new debt and start the whole charade one more time. We never learn but they do!    

 Europe’s Economic Strip-Mining: Can Its Businesses Recover? by Martin Armstrong