'Betrayal Of Every American' - Barack Obama Now Squarely In Russiagate Crosshairs

   Are we at the very edge of the "real" war against the deep state? If that's the case it will be spectacular since everyone has something dirty on everyone else. It will be a fight to the finish with no truce in sight between the different tentacles of the octopus. 

   America could win in the long term if a true clean-up takes place although this is very, very unlikely.  

   What is certain is that confusion and mayhem at the top will continue and amplify. Then it could be the turn of Europe and finally, just like that we will have entered "interesting times!"

'Betrayal Of Every American' - Barack Obama Now Squarely In Russiagate Crosshairs

New disclosures from a Tulsi Gabbard-led working group point directly to the top, as the legacy of "Hope and Change" begins a plunge to the ocean floor...

As Matt Taibbi writes for Racket News, Barack Obama entered national politics with a smile that looked like Hope and Change. Amid rumors of family discord and disarray within the political party he once led, his face has hardened. He lately looks bitter, resentful, exhausted by the act.

In the wake of reports released by fellow Hawaiian and former Democrat Tulsi Gabbard, he also has a new problem. It once seemed a lock that Obama would be remembered as the winsome hero of Shepard Fairey’s portrait, but Gabbard’s documents place him at the center of an unprecedented act of political sabotage, committed in his last Oval Office days as a humiliated lame-duck in the winter of 2016-2017. The new Director of National Intelligence is targeting Obama’s legacy and maybe even his freedom, detailing a “treasonous conspiracy committed by officials at the highest level of our government,” announcing that everyone involved “must be investigated and prosecuted to the fullest extent of the law.”

Ten days ago, news broke that Donald Trump’s Justice Department opened criminal investigations into two of Obama’s top deputies, former FBI chief James Comey and former CIA head John Brennan. Last Sunday, Gabbard’s ODNI hosted an “urgent” meeting to discuss “new information on Russiagate” with members of the Justice Department and the President’s Intelligence Advisory Board.

All week, Washington buzzed with rumors about imminent document releases, but what came out wasn’t what many expected. Gabbard’s documents show the Obama White House overruling months of reports downplaying Russian interference and ordering subordinates to set a time bomb of manipulated intelligence, with the aim of trying to, as Gabbard described it, “usurp” an incoming president. No longer a tertiary character, Obama is now “center square” in the Russiagate scam, as one source put it.

Mainstream press outlets like the New York Times and Politico have already run pieces quoting Democratic Party mouthpieces shrugging off Gabbard’s reports as “baseless” and an attempt to “change the subject,” but coverage may not matter, as the investigation into the Trump-Russia hoax is no longer about trying to change hearts and minds. Multiple sources say Gabbard’s team is focused on “accountability” by gathering evidence for court-ready cases. The matter may soon need a special prosecutor, putting Obama in the same position Trump occupied in the first two years of his presidency, on the run from a high-profile fox hunt.

The information from Gabbard’s office was not the only news on the Russiagate front. This investigation is not just about “ten-year-old news,” as has been a common talking point, but may also involve never-reported Biden-era issues. A source close to the investigation said yesterday that the DOJ is focusing on conspiracy charges and looking at conduct “from 2016 to 2024.” Another with ties to the administration said “President Trump’s national security team is looking at evidence that members of his 2024 campaign were spied on as well.”

All of that is yet to be determined.

...

Not everyone in Trumpworld is thrilled with the new developments. The failure of senior intelligence officials who served in Trump’s last term to find and/or release these documents has a number of high profile figures upset. “So much corruption,” said one disgusted former Trump official. Another expressed skepticism that anything of significance would come of these investigations, and pointed to Special Counsel John Durham’s ill-fated probe: “It’s always something.” Thanks to the investigation kicked off by this ICA and the subsequent probe by Special Counsel Robert Mueller, there are people who went to jail, fell ill, went through family crises, and dealt with other serious problems. As a result, there are a lot of eyes on this investigation, and high expectations. Failure for Gabbard’s team to deliver real consequences would bring heavy criticism from both sides.

Gabbard’s team seems to understand they will be judged on the “accountability” question, and remain determined to continue. 

Subscribers can read Taibbi's full note here...

As we detailed earlier, Director of National Intelligence, Tulsi Gabbard, has declassified documents revealing "overwhelming evidence" showing how then-President Barack Obama and his national security team laid the groundwork for what would become the years-long Trump-Russia collusion investigation after President Trump won the 2016 election.

"This is surreal," says General Mike Flynn...

Via @DNIGabbard:

Americans will finally learn the truth about how in 2016, intelligence was politicized and weaponized by the most powerful people in the Obama Administration to lay the groundwork for what was essentially a years-long coup against President Trump, subverting the will of the American people and undermining our democratic republic.

Here’s how:

For months preceding the 2016 election, the Intelligence Community shared a consensus view: Russia lacked the intent and capability to hack U.S. elections.

But weeks after President Trump’s historic 2016 victory defeating Hillary Clinton, everything changed.

On Dec 8, 2016, IC officials prepared an assessment for the President's Daily Brief, finding that Russia "did not impact recent U.S. election results" by conducting cyber attacks on infrastructure.

Before it could reach the President, it was abruptly pulled “based on new guidance.” This key intelligence assessment was never published.

The next day, top national security officials including FBI Dir James Comey, CIA Dir John Brennan and DNI James Clapper gathered at the Obama White House to discuss Russia.

Obama directed the IC to create a new intelligence assessment that detailed Russian election meddling, even though it would contradict multiple intelligence assessments released over the previous several months.

Obama officials immediately leaned on their allies in the media to advance their falsehoods.

Anonymous IC sources leaked classified information to the Washington Post and others that Russia had intervened to hack the election in Trump's favor.

On January 6, 2017, just days before President Trump took office, DNI Clapper unveiled the Obama-directed politicized assessment, a gross weaponization of intelligence that laid the groundwork for a years-long coup intended to subvert President Trump’s entire presidency.

According to whistleblower emails shared with us today, we know Clapper and Brennan used the baseless discredited Steele Dossier as a source to push this false narrative in the intelligence assessment.

These documents detail a treasonous conspiracy by officials at the highest levels of the Obama White House to subvert the will of the American people and try to usurp the President from fulfilling his mandate. 

This betrayal concerns every American.

The integrity of our democratic republic demands that every person involved be investigated and brought to justice to prevent this from ever happening again. 

I am providing all documents to the Department of Justice to deliver the accountability that President Trump, his family, and the American people deserve.

You can read Tulsi's full press release (with links to all the supporting documents) here...

Distraction from Epstein or not... there's a lot here!

The AI killer robot - A New Fear Unlocked

  This article is a follow-up to the previous one on information where I explained that killer robots should NOT be our primary fear. But of course they will! 

  Killer robots are so much more "real" and understandable than stupidification that they are almost irresistible for journalists and everyone else. 

  Soon, they will be ubiquitous on the battlefield as autonomous drones and supply vehicles. Soldiers will take longer to arrive. The police surprisingly may be easier to replace. Just look at what's going on in China. 

  The next generation of factories will be without humans. Farm equipment will become autonomous. It is just a matter of how much and how fast we can invest. Accidents will happen. A world optimized for machines is not ideal for human beings. 

  Luddites will raise the specter of killer robots so thoroughly described in SF movies without realizing that the real war has already started but the battlefield and weapon of choice is not lead and steel but energy and electricity!    

A New Fear Unlocked.

We all understand that mass adoption of humanoid robots is still years out. But the timeline is accelerating—bipedal, autonomous robots and so-called "robo-dogs" are already reaching early adopters. While mass adoption may still be years away, the affordability inflection point could arrive by the early 2030s—perhaps bringing us closer to the kind of household companion seen in Bicentennial Man, the late-1990s film starring Robin Williams. 

But warning signs around AI and humanoid robotics are already flashing yellow, with a hint of red. First, a recent study from AI research firm Anthropic warned advanced AI bots could be willing to harm humans to avoid being shut down or replaced. Second, investing legend Paul Tudor Jones issued a stark, apocalyptic warning about AI back in May. And now, in China, humanoid robots have gained the ability to recharge autonomously. 

According to the South China Morning Post, Chinese firm UBTech Robotics rolled out the Walker S2, the world's first humanoid robot capable of autonomously swapping its own batteries, allowing it to operate 24/7 without human assistance. 

This development underscores China's rapid progress in robotics, drones, AI, smartphones, semiconductors, and electric vehicles—technologies that often share similar production ecosystems. The nation that controls the development and supply chains of these technologies will dominate the 2030s. 

The emerging fear isn't just that China is becoming a "robotics powerhouse," as Moody's noted last week—but that its robots are now gaining the ability to operate autonomously and recharge themselves, edging closer to full independence from human control. With a mind of their own, there's no telling what these robots will do if one of them becomes rogue. Remember this...

Artificial Intelligence Breeds Mindless Inhumanity

  AI among other things is debasing the value of information. I agree as my experience is very close to Bruce Abramson below. Worse;  "We are rapidly entering a world in which widespread access to voluminous information is producing worse—not better—decisions and actions at all levels."

  The AI horse is out of the barn. We now understand that we won't control something which is smarter than us and consequently we must adapt, and fast. 

  Education will have to change. Work and even the concept of work will need to be transformed. Human relations will be altered when your virtual girlfriend or boyfriend is so much nicer that the real version. But the ultimate challenge is information and our ability to use it skillfully. 

  Information is amazingly like money in certain aspects: When it's free, you do not need to be careful with it and consequently will invest your efforts poorly. It is unavoidable. When everything became available at your fingertip with Google, we ended up with a generation who knew nothing at all; why bother? But with AI, we are one step further; Why "think" when you can outsource the thinking process to an AI and expect a better result? 

  Most people are already using AI as an "oracle" which AI experts adamantly warn us "it is not!" Soon, most, then all decisions will be AI assisted then AI based. Think autopilot on a plane. Insurance will be voided if the AI is turned off. By then, there will be AI and slow-I which will quickly fade out of the picture. But with it, wisdom will be gone too. We're on the verge of outsourcing our brains and our humanity. This to me is a far more realistic and dangerous outcome than the rise of the killer robot!  

Authored by Bruce Abramson via RealClearWire,

I began studying AI in the mid-1980s. Unusually for a computer scientist of that era, my interest was entirely in information, not in machines. I became obsessed with understanding what it meant to live during the transition from the late Industrial Age to the early Information Age.

What I learned is that computers fundamentally alter the economics of information.

We now have inexpensive access to more information, and to higher quality information, than ever before.

In theory, that should help individuals reach better decisions, organizations devise improved strategies, and governments craft superior policies. But that’s just a theory. Does it?

The answer is “sometimes.” Unfortunately, the “sometimes not” part of the equation is now poised to unleash devastating consequences.

Consider the altered economics of information: Scarcity creates value. That’s been true in all times, in all cultures, and for all resources. If there’s not enough of a resource to meet demand, its value increases. If demand is met and a surplus remains, value plummets.

Historically, information was scarce. Spies, lawyers, doctors, priests, scientists, scholars, accountants, teachers, and others spent years acquiring knowledge, then commanded a premium for their services.

Today, information is overabundant. No one need know anything because the trusty phones that never leave our sides can answer any question that might come our way. Why waste your time learning, studying, or internalizing information when you can just look it up on demand?

Having spent the past couple of years working in higher education reform and in conversation with college students, I’ve come to appreciate the power—and the danger—of this question. Today’s students have weaker general backgrounds than we’ve seen for many generations because when information ceased being scarce, it lost all value.

It’s important to recall how recently this phenomenon began. In 2011, an estimated one-third of Americans, and one-quarter of American teenagers, had smartphones. From there, adoption among the young grew faster than among the general population. Current estimates are that over 90 percent of Americans, and over 95 percent of teenagers, have smartphone access.

Even rules limiting classroom use cannot overcome the cultural shift. Few of today’s college students or recent grads have ever operated without the ability to scout ahead or query a device for information on an as-needed basis. There’s thus no reason for them to have ever developed the discipline or the practices that form the basis for learning.

The deeper problem, however, is that while instant lookup may work well for facts, it’s deadly for comprehension and worse for moral thinking.

A quick lookup can list every battle of WWII, along with casualty statistics and outcome. It cannot reveal the strategic or ethical deliberations driving the belligerents as they entered that battle. Nor can it explain why Churchill fought for the side of good while Hitler fought for the side of evil—a question that our most popular interviewers and podcasters have recently brought to prominence.

At least, lookup couldn’t provide such answers until recently. New AI systems—still less than three years old—are rushing to fill that gap. They already offer explanations and projections, at times including the motives underlying given decisions. They are beginning to push into moral judgments.

Of course, like all search and pattern-matching tools, these systems can only extrapolate from what they find. They thus tend to magnify whatever is popular. They’re also easy prey for some of the most basic cognitive biases. They tend to overweight the recent, the easily available, the widely repeated, and anything that confirms pre-conceived models.

The recent reports of Grok regurgitating crude antisemitic stereotypes and slogans illustrate the technological half of the problem. The shocking wave of terror-supporting actions wracking college campuses and drawing recent grads in many of our cities illustrate the human half.

The abundance of information has destroyed its value. Because information—facts and data—are the building blocks upon which all understanding must rest, we’ve raised a generation incapable of deep understanding. Because complex moral judgments build upon comprehension, young Americans are also shorn of basic morality

We are rapidly entering a world in which widespread access to voluminous information is producing worse—not better—decisions and actions at all levels. We have outsourced knowledge, comprehension, and judgment to sterile devices easily biased to magnify popular opinion. We have bred a generation of exquisitely credentialed, deeply immoral, anti-intellectuals on the brink of entering leadership.

When the ubiquity of instant lookup evolves beyond basic facts and into moral judgments, banal slogans and mindless cruelty will come to rule our lives.

Is there a way out of this morass? Perhaps the only one that the ancients discovered back when information, understanding, and morality all retained immense value: faith in a higher power. Because the path we’ve set on our own is heading into some very dark places.

Governmental Self-Preservation: Why We’ll Never See The Real Epstein List

   Here's a profound and relatively balanced analysis of the Epstein debacle below. Trump is at war with the woke crowds and the Globalists and making some gains on a number of battlefronts. We get it, fair enough. He also cannot fight everybody at once less his administration is once again mired in bogs like the first one eight years ago. Again, understood. 

  But the Epstein affair has nothing to do with pedophilia and everything to do with global elites being remotely controlled by money, pressure and blackmail. Worse, Epstein is little more than the tip of the iceberg. From satanic rituals (not because these people believe in the occult but because of the leverage it gives you on "elected" officials.) pedophilia and other forbidden activities, a rather dark network of control is hovering over almost all Western institutions, placing only compromised men and women in position of power. This is the structure that 80 years of peace has given us.  

  The people get what they want: The illusion of getting back from the system more than they contribute while inflation is eating away their purchasing power and deficits accumulate robbing their children of future wealth (We have reached this point in Japan.) Meanwhile, a cabal of connected Globalists and deep state technocrats are forever in position of power and influence while guarantying that their children will inherit their position in a perfect system of nepotism. The exact opposite to what democracy was supposed to achieve. Let's not ask Barron Trump, or anybody else really, how they plan to reform such a society! Anyone co-opted to the elite will automatically adjust their behavior to belong. Such is human nature. It is the institutions that need to be rot resistant, not foible individuals.   

Authored by Brandon Smith via Alt-Market.us

If there’s one characteristic that defines Donald Trump it’s his habit of switching his positions on a dime – Leaving many a critic looking rather foolish when they establish an argument against him today, only to discover he mostly agrees with them tomorrow. I’ve learned it’s best to wait a little while before commenting on the man’s policy decisions and allow time for the debate to ferment. After months of deflection and now retraction, the Jeffery Epstein controversy has turned especially ripe.

To understand the chaos surrounding the Epstein issue we have to first recognize that it’s the product of an inherent division within the MAGA movement that needs to be addressed. The campaign to support Trump is built on two groups that intersect but don’t always agree:

1) Average Republicans (and some moderates) who are most concerned with defeating the agenda of leftists and keeping woke activists out of government power.

2) Hardcore conservatives and libertarians from the “conspiracy” end of the movement who are most concerned with defeating the globalist cabal.

I find myself in rooted in both camps and I see both as essential, though it’s clear to me that the goals of the second group are ultimately more important.

To be clear, leftist saboteurs are a legitimate enemy that has been employed as a weapon against the rest of the populace. I’m growing especially tired of the laziness of libertarians who cry “False left/right paradigm!” while forgetting the living hell we all experienced under the reign of Joe Biden and Democrats. The differences between conservatives and leftists cannot be denied.

The country has at least been tolerable under Trump – No more “transing” or grooming of children in schools. No more pride month. No more pandering to DEI. No more open borders. No more federal accusations of conservatives being “terrorists” and a “danger to democracy”. If you can’t at least give some credit for these changes then you’re not a serious person and I have no time for you.

That said, in the end the threat of the political left pales in comparison to the threat presented by the globalists. These are people with a luciferian ideology of self worship and moral relativism and they are in positions of immense power (at least in financial terms). Though their political reputation in the US is faltering, they still have near total control of the narratives in Europe, Australia and Canada, not to mention invasive financial influence throughout most of the world.

Look at it this way: Have you ever heard of a globalist being punished or arrested for their attempts to manipulate and corrupt the social and governmental institutions of any given nation? How many globalist NGOs have been shut down in recent memory? Isn’t the US still pouring tax dollars into globalist institutions like the IMF, BIS (through the Federal Reserve), World Bank, etc.?

Political factions may battle for the minds of the masses and many times these fights are very real, but the globalists always remain in the background watching and waiting for another chance to push civilization further towards their dystopian vision. They don’t care what happens politically as long as their money and influence remain intact. No one ever aims their cannons at the whispering men lurking behind the curtain.

For conservative patriots, dealing with the evils of the political left serves the immediate purpose of treating symptoms, but not the disease. Globalists are a parasitic organism that feeds on humanity, spawning more and more decline and despair as they grow. They must be eliminated from the equation if our future is to ever improve.

Trump has openly admonished the globalists on many occasions and he ran his 2016 and 2024 campaigns on reversing the economic damage they have done. Defeating globalism was a big part of his election platform, it’s undeniable. The problem is, he has consistently backed away from any direct prosecution or punishment of said devils.

Trump stated succinctly in 2024 that he would release the Epstein list, and he now refuses. The haphazard dismissal of the Epstein files despite the embarrassing controversy is a reality check for the conspiracy subset. For the anti-globalist portion of MAGA, especially libertarians and conservative Christians, you have been given notice; Trump is not your gladiator or your savior. He’s not going to fulfill your dreams of government reform, nor is he going to bring the hammer down on the elites.

I warned back in May in my article ‘The Trump Administration’s Biggest Wins And Biggest Fails So Far’ that his handling of the Epstein case was an epic blunder. I noted:

“All we want is a concise list of who engaged with Epstein and his “services”. These people need to be called out and brought to justice NOW. If they are in government they need to be removed ASAP. There is no room for pedos in American leadership anymore.

I can understand certain obstacles, such as keeping victims protected. An outright dump of info would be reckless, not to mention illegal. That said, the feds have had years to go over this evidence. I suspect that the White House is stalling because the client list could destroy a large portion of the government. The number of leaders exposed must be extensive enough that a release of the list would cripple the system. It’s the only explanation that makes sense for why they continue to keep the American people waiting…”

For those seeking answers as to why Trump is running away from the Epstein client list like it’s a nuclear bomb, it’s because it IS a nuclear bomb. I continue to hold that the list is pure poison for the existing government and that its release would be so detrimental it would trigger the collapse of the US system and create a cataclysmic domino effect around the world.

It’s so dangerous, in fact, that Trump is now asserting it “doesn’t exist” or that it’s a “Democrat conspiracy” with files manipulated by Democrats before Biden left office. There’s no explanation as to what Trump means by this other than he seems to be saying the existing evidence is fabricated.

Epstein was arrested for child trafficking. He conveniently died “by suicide” before going to trial (psychopathic personalities like Epstein rarely kill themselves) nullifying any court discovery and public release of his files. Numerous victims have come forward, but we’re supposed to believe that there were no clients?  Or, that Epstein never kept a list of those clients? It’s pure stupidity.

The Trump Administration admits to obtaining an endless array of videos featuring minor victims. The question is simple: WHO is in those videos abusing those young girls (or boys)? It’s not that difficult to understand – WE WANT THE NAMES, and we’re never going to stop demanding those names.

But lets not fool ourselves, we’re not going to get our hands on the real, unredacted list. Why? Because some of the most powerful people in the world are on that register and pedophilia is still an unforgivable sin in the eyes of the west. Proof of a mass conspiracy of wealthy pedos and political diddlers is one of the few things that would inspire the public to actually pick up torches and pitchforks and burn Washington DC to the ground.

It’s not a coincidence that woke activists and NGOs have sought to normalize pedophilia through trans propaganda. Globalists eventually want to turn the crime into a social issue; labeling it a matter of “sexual preference” protected by inclusion ideology so they can pursue their disgusting fetish with impunity.

Though leftists have intricate arguments as to why children should be allowed to legally “consent”, the act of pedophilia is still considered worthy of long term imprisonment, castration and even death. No normal person is convinced by the “consent” theory.

Meaning, if a sweeping list is produced that includes the names of government officials, those officials would be dealt with by someone even if they never face prosecution. Trust in government would plummet. The normal functions of American institutions would cease. The country would collapse.

Could this calamity be managed? Possibly, but I don’t think any political leader including Trump wants to to take responsibility for the repercussions. Some say that Trump is on the list – Obviously he knew Epstein as did most people in the upper echelons of society. Epstein made a point to slither into every wealthy circle he could find.

Trump did reportedly kick the guy out of Mar-a-Lago after finding out he made a pass at the underage daughter of an associate. If Trump is on the list then there must be extensive blackmail evidence – So, why didn’t Democrats ever release it?  Democrats had four years to flood the media with information (real or fake) on the Epstein case and they did absolutely nothing. No, I think Trump is withholding the list because it’s a weapon of mass destruction, not because he’s on it.

Everyone expected the Dems to suppress the list. No one expected them to do the right thing. People are fuming about Trump because they had high hopes.  They expected him to damn the torpedoes and release the files regardless of the aftermath.

I’m here to tell you, government will ALWAYS protect itself first. It’s not an excuse, it’s just a fact.

You’re probably familiar with the concept of the “thin blue line”; the assertion that police act as the only barrier between order and mayhem in American society. The notion has been criticized as elitist and fundamentally untrue. Cops rarely stop crimes in progress and only clean up the mess afterwards, leaving most Americans to protect themselves.

But one could argue that the mere existence of law enforcement as an institution acts as a deterrent to societal decay. And, in the past this idea of the “greater good” has led LEOs to protect each other from prosecution rather than pursue the ugly truth about their brothers in arms.

I think that many people within government also see themselves as a “thin line” of protection; a morally gray barrier between civilization and annihilation. A line between order and anarchy. I think they view their mandate as sacrosanct and that the ends always justify the means.

There’s a large percentage of the normal population that is also willing to overlook the Epstein debacle if it means defeating the chaos of the woke revolution. Recent polls show Trump’s overall approval rating among Republicans actually INCREASED after his handling of the Epstein issue, even though a majority of people in polls also believe the case is being covered up.  There’s a lot of us that will continue to call attention to the client list, but don’t doubt for a second that many other people will forget and move on within weeks.

Again, the anti-globalists need to accept the reality that they have limited influence within MAGA. Plenty of people care about libertarian economic theory, the Bildergberg Group, Davos, CBDCs, foreign aid to Israel and cults of ultra-rich luciferian pedos, but not enough people to make any of these things a popular priority. The deeper agenda of globalist control is barely on their peripheral radar, or they don’t take it seriously enough to worry about it over their morning coffee.

Could Trump suddenly change his stance and unleash a torrent of files tomorrow?  Like I said in the beginning, he switches positions on a dime, but it will be hard for him to go back on his claims that the client list represents a "hoax".  I am doubtful we'll see an uncensored version of the list and even more doubtful that anyone will be prosecuted.

Trump is certainly pulling America back from leftist extremism (that’s a good thing), but he has no intention of going to war with the globalists (that’s a bad thing). As I have noted over and over again, if liberty proponents want to get rid of the cabal they will have to stop waiting for political solutions that will never materialize. The war to unseat the globalists will not be fought by MAGA. The eternal mandate of the political edifice is self preservation, and Trump is part of that edifice.

China's Economic Demise And Its Impact On The US

   Kyle Bass has always been extremely pessimistic about China. He does make good points but it is often only half the story. Still, the real estate bubble is real and the problem gigantic. 

   I remember 10 years ago when I was visiting China regularly, I was stunned to see the amazing number of new constructions around Shanghai. Who was going to live in these luxury apartments? 500.000 dollars sounded like a lot of money at the time. Certainly more than what the engineers I was working with could afford. But I was wrong they explained. By leveraging their salaries skillfully, putting 10% upfront on a property and reselling it within a few years at twice the acquisition price, they all were convinced that soon enough a nice penthouse with a view of the river in Pudong would be theirs. Really? 

   Then there was the countryside. Typical little villages along a canal with dense rows of two story houses, a few paddy fields and suddenly in the background, 20 blocks of 30 floors apartment buildings. Who for? Speculation mostly they explained. No need for anyone to live there. You buy a flat then resell it with a profit. It was actually a bad idea to move in since the value could fall by as much as half instead of going up. Really?   

   I was busy doing my job, the Chinese were busy making money, nobody was asking the hard questions: Who was going to buy these hot potatoes in the end? The answer to that question of course ended up being "nobody" and this is how the whole Middle Class in China is now the unhappy owner of two or sometimes more "nice" apartments which value is anybody's guess and most certainly less than the original price because there is no demand whatsoever. 

   So what's next? The prices must return to earth so that some (non speculative) demand can be generated. For this to happen, millions of people will have to pay back the banks for what is called negative equity and likewise the banks will need to lend more money to developers so that they can pretend to at least pay back the interest on the loans although everyone understands that the principal can never be paid back. This is the unavoidable consequence of a bubble. The alternative is hyperinflation and the destruction of the currency. The one thing that China doesn't want. 

   So as far as the analysis is concerned, we mostly agree with Kyle Bass. But then comes his conclusion that consequently, everybody will invest in the dollar market because it is so much more liquid and secure. Really? As far a liquidity is concerned, it is certain that Congress is doing it's very best to increase it by opening the floodgates of budget deficit but will this reassure foreign investors? As for security, well, that too is looking a little more shaky with endless restrictions on trade and cross border transactions for whoever doesn't get along nice with the White House current bully. 

Authored by Lance Roberts via RealInvestmentAdvice.com,

Few are as candid and historically accurate as hedge fund manager Kyle Bass when identifying structural breaks in the global economy. In a recent interview, Bass painted a grim but telling picture of China’s economic condition, warning:

“We are witnessing the largest macroeconomic imbalances the world has ever seen, and they are all coming to a head in China.”

While China has long been touted as the next great economic superpower, its recent trajectory reveals a far different story, one marked by policy missteps, systemic financial rot, and a rapidly eroding growth engine.

Bass didn’t mince words either:

“China’s economy is spiraling with no end in sight.”

China’s GDP deflator, the broadest measure of prices across goods and services, continues to decline as economic activity erodes.

For investors around the globe, this isn’t just a regional concern; it’s a seismic macroeconomic event that will ripple through capital markets. The implications are significant for U.S. investors because when global economies falter, especially one as large and interconnected as China’s, capital doesn’t just vanish. It moves. That movement will significantly impact U.S. assets as flows transfer back into U.S. dollars and Treasury bonds. This global repositioning of capital isn’t merely a symptom of market volatility; it reflects a profound reevaluation of risk in the face of deteriorating confidence in China’s financial system.

China’s Backstory

We must examine what’s breaking in China to understand why this matters so profoundly. Bass emphasized that the issue’s core lies in the real estate sector, which accounts for roughly 30% of China’s GDP. This massive share of economic activity is under severe strain, with property developers defaulting, sales volumes collapsing, and home prices declining across major cities. However, this should be unsurprising as, after the financial crisis, we wrote many times about the mass overbuilding of “ghost cities” that were responsible for China’s growth at the time. However, the “bullwhip” effect of that massive overbuilding was inevitable.

“They’re sitting on 60 to 70 million vacant homes. It’s a Ponzi scheme that is finally collapsing.” – Kyle Bass

This particular real estate bubble, which is unprecedented in magnitude, is bursting. This creates deflationary pressures and undermines the value of collateral supporting large portions of China’s shadow banking system.

Adding to the concern is the Chinese Communist Party’s refusal to implement reforms that would bring greater transparency, capital discipline, and market-based corrections. Rather than allow markets to clear, Beijing is opting for control through capital restrictions, state intervention, and increased surveillance of financial activity.

“China is experiencing a slow-motion banking crisis, and capital is doing everything it can to escape.” – Kyle Bass.

That capital flight is inevitable and, as noted, will significantly impact the U.S. economy and financial markets.

Capital in Search of Safety

This exodus of domestic and foreign capital will reshape the global macro landscape. We recently discussed that the “Death of the Dollar” narrative was vastly exaggerated. While that post goes into more detail, there are five primary reasons why the dollar will remain the reserve currency of the world:

1. Lack of a viable alternative currency

2. Strength of the U.S. economy

3. Network effects and global financial inertia

4. Limited scope of de-dollarization efforts

5. Resilience amid policy changes.

Most importantly, the dollar dominates the composition of global currency transactions.

China’s economic collapse only exacerbates the world’s dependence on the U.S. dollar for trade and storing reserve assets to support that trade.

In times of crisis, investors don’t seek yield; they seek safety. Despite the U.S. running its fiscal imbalances and maintaining high levels of debt, the U.S. dollar and Treasury bonds remain the world’s premier safe havens. There is no alternative with the same depth, liquidity, and perceived security.

The Dollar Is Set To Rise

As capital flees China and other riskier markets, the U.S. dollar strengthens. This is not just a theoretical concept; it’s an observable pattern in every major crisis over the last several decades. The Global Financial Crisis, the Eurozone debt crisis, the COVID-19 pandemic, and the Russia/Ukraine conflict all prompted a sharp rally in the dollar as investors sought the perceived stability of the U.S. financial system.

The mechanics of this are straightforward. When global capital flows into dollars, it often flows directly into U.S. Treasuries. Treasury securities remain the world’s deepest and most liquid sovereign debt market. As discussed in that same article, global Central Banks are cutting rates at one of the fastest paces on record. To wit:

“The ECB has been aggressively cutting rates, eight times in this recent cycle, while the U.S. Federal Reserve remains on hold. The result is a divergence that is developing between U.S. Treasury bond yields and, for example, the German Bund.”

It is crucial to understand why this is so vital for investors.

1. Higher yields attract capital inflows.

2. Treasuries remain the preferred store of foreign reserves, and:

3. Yield differentials drive dollar appreciation.

In other words, as the demand for Treasuries increases, bond prices push up and yields decline. Even when the U.S. is running record deficits and issuing vast amounts of new debt to fund government spending, foreign demand can offset the downward pressure this supply might otherwise have on prices.

In a stable global environment, one would expect rising Treasury issuance to push yields higher. But in a world where the second-largest economy is in decline and trust in its financial system is evaporating, Treasury bonds find buyers not because they offer high returns, but because they provide a guaranteed return of capital. That distinction is critical. Investors are not allocating capital for growth but reallocating it for preservation. That behavioral shift has enormous implications for markets.

China’s Deflationary Impact on the U.S.

It also has consequences for the U.S. economy. The United States has benefited tremendously from China’s rise over the last 20 years. During that period, the U.S., through its corporations, could “export inflation” and “import deflation” via China’s cheap labor, rising middle class, and voracious demand for commodities and goods. From industrial machinery to high-end consumer brands, China was a reliable marginal buyer for U.S. exports and a production partner for U.S. supply chains. As that engine falters, U.S. multinational earnings will increasingly come under pressure.

A structurally weakened China means less global trade, less demand for U.S. goods and services, and slower investment flows from international corporations. The knock-on effect will be lower nominal GDP growth in the U.S., even if domestic consumption remains resilient. As such, markets will begin to price in a lower terminal growth rate for the U.S. economy, particularly in sectors exposed to international demand.

Moreover, China’s descent into deflation could export disinflationary pressures globally. That risk will likely exacerbate the risk that the Fed is making a “Transitory Mistake.”

“This link between the economy and inflation is evident from the Economic Composite Index, which comprises nearly 100 hard and soft data points. Following the spike in economic activity post-pandemic, economic growth continues to decline. Given that inflation is solely a function of economic supply and demand, it is unsurprising that it continues to cool.”

Understanding that the U.S. imports deflation from China, the risk of a sharper disinflationary impact from China on the U.S. will become evident in the economic data. As Bass noted:

“They’re not just dealing with a cyclical downturn. This is a permanent shift toward zero or negative real growth.”

That assessment has profound consequences for China and how policymakers and investors think about global growth in the decade ahead.

Conclusion

In this environment, the traditional drivers of market performance, earnings growth, productivity gains, and capital investment, will take a back seat to macro stability and risk management. Investors should shift their analysis from “Where can I grow my capital?” to “Where can I protect it?”

For now, the answer appears to be the U.S. Treasury market. Ironically, even with sticky fiscal deficits and political gridlock, capital prefers the U.S. over every alternative. That should tell us something.

As we’ve written many times before:

“Capital doesn’t care about ideology—it cares about trust, liquidity, and rule of law.”

When trust in a significant economic power like China evaporates, the resulting capital flows don’t walk, they run.

Investors would be wise to pay attention. The shift underway isn’t temporary. It reflects a deeper reordering of global economic leadership and risk tolerance. While the U.S. faces plenty of its structural challenges, it is still, for now, the cleanest shirt in a very dirty laundry pile.

France's Budget Battle Exposes EU's Centralist Overreach

   The fight between unelected bureaucrats in Brussels and Governments with impossible budgets conundrums is heading to a clash. 

   You cannot get out from a debt bubble by adding more debt on top of it, hoping that somehow growth will appear magically. 

   Because the US is in charge of the world currency, it can afford, for a while, a level of profligacy that Europe cannot. The continent cannot pay for green energies or to rearm and still maintains health care and pensions. Something will break soon. And like Japan, the signal that we have reached the limit will come from the bond market when yields start rising vertically. (whatever the Central banks do.)

   And so, what Russia is doing in Ukraine, beyond destroying the Ukrainian armed forces is indirectly bankrupting Europe (with the connivance of the US!)

   Likewise China is now mired in a gigantic real estate bubble from which the country struggles to find an exit. There is none as Japan proved 30 years ago. A bubble by definition is necessarily larger than whatever special budget a country can muster. All the money will go to pay back the debt, new investments will starve, and still it will not be enough. 

   And neither is the US economy out of the woods. re-industrialization is a pipe dream. It will happen under the form of localization but it won't have the expected effects on the economy. As for reducing the US deficit, if it really did happen as Trump expects, it would starve the rest of the world of dollars and therefore financing accelerating the fall of the currency as a share of market transactions.

    The economy and especially budgeting is a complex balance of contradictory factors which you must all keep in check at all times like a plate balancing act. Deficits and trade imbalances tend to make the act more difficult, and then the plates start falling...   

France's Budget Battle Exposes EU's Centralist Overreach

In an effort to relieve pressure from France’s ballooning debt crisis, Marine Le Pen, leader of the Rassemblement National, has called for a reduction in the country’s contribution to the European Union. On the very same day, Brussels unveiled its colossal €2 trillion mega-budget. A tale of chronological dissonance.

It was only a post on “X” - a fleeting tweet from Marine Le Pen responding to the heated French budget debate. A few lines that would normally disappear in the fast-moving timeline and social media noise without ever imprinting themselves on public consciousness.

Le Pen tweeted on July 16:

“François Bayrou wants to implement a ‘white year’ - in other words, a draconian fiscal and social austerity program - to save seven billion euros. That’s exactly the amount by which France’s contribution to the European Union has increased. How can such waste be tolerated, when the French voted overwhelmingly in the EU elections to freeze this spending by supporting Jordan Bardella’s list?”

Brussels as Fiscal Pressure Valve?

France will contribute a net €14 billion to the EU budget this year. But what matters here is the timing of Le Pen’s tweet. Her long-standing disputes with Brussels are well known - especially since her suspension from upcoming French elections.

Her call for budget cuts isn’t new. But the renewed demand gains weight by coinciding with the unveiling of the EU Commission’s new budget under President Ursula von der Leyen.

Reality vs. Ambition

The Brussels central apparatus has drafted a budget of €2 trillion for the years 2028 to 2034 - a staggering display of fiscal gigantism. It's an anachronism, considering the financial catastrophe looming over many EU member states, not least France, which is headed for a deficit exceeding six percent.

Given the debt situation in Southern Europe, it's increasingly difficult to reconcile Brussels’ fiscal ambitions with economic realities on the ground.

Strikingly, the reaction to Le Pen’s criticism was muted. Both Brussels and the French government coalition remained silent - arguably a smart media strategy. A public budget debate at this point would only stir a hornet’s nest better left undisturbed.

Populism Included

Le Pen’s assault on Brussels’ budgetary authority carries deep-seated resentment. As the EU’s second-largest net contributor, France is a structural pillar of the Union’s financial framework. Should a heavyweight like France or Germany step out of line and reject the official narrative, the fragile EU edifice would begin to crumble.

We are already witnessing a resurgence of national-conservative parties - Fidesz in Hungary, SMER in Slovakia, the governing coalition in Italy, and Geert Wilders in the Netherlands - all forming a serious opposition to Brussels-style centralism. Le Pen’s laconic tweet could pack explosive potential. Could these parties define a shared vector of attack? Have they identified the bloated EU budget as a weak spot?

It’s high time to recalibrate the power dynamics between Brussels and the legitimate national interests of member states. The fiscal gigantism unleashed under von der Leyen’s leadership is steering the EU into dangerous waters. Centralized overreach, grotesque climate policies, and open-border radicalism are fraying Europe’s internal cohesion.

Brussels Seeks Autonomy

The EU Commission is playing high-stakes poker. The €2 trillion budget - about 1.26 percent of EU GDP - reflects a jaw-dropping 58 percent increase, or €750 billion. That raises urgent questions about financing. Brussels is morphing into a Leviathan - growing unchecked, with gaping democratic deficits, and a leadership ambition that now breaches into the sovereign spheres of nations and their citizens.

The truth is: most EU member states simply cannot afford this fiscal expansion. This appears to be Brussels’ attempt to coerce financial and tax sovereignty - a political extortion play: "If you don’t open the door to Eurobonds, you’ll foot the bill yourselves!"

The recurring debate around Eurobonds - possibly repackaged as war bonds to finance the Ukraine conflict - as well as new revenue tools like taxes on multinational corporations or expanded CO₂ trading, offer a clear glimpse into what Brussels has in store.

Expect two developments: the consolidation of national debt under the EU Commission’s umbrella and the continued monetization of new debt via the European Central Bank. Alongside Brussels’ fiscal power grab, we are likely to see the introduction of a digital euro - the perfect capital control mechanism, an optimized surveillance currency enabling central Brussels to tighten its grip over European economic life.

Fuel For The Opposition

Here’s a prediction: this political strategy will only strengthen opposition forces across Europe. Given the brewing budgetary crises in many states, the EU is headed for major internal battles over its financial direction. A coordinated payment boycott would be the ideal rallying cry for national conservatives - a public relations slam dunk if the debt spiral accelerates.

It is entirely possible that Le Pen’s tweet was designed — in coordination with Brussels’ critics - to set the tone for what’s coming. And a storm may be gathering on the horizon for Ursula von der Leyen and her allies. The myriad unresolved crises stirred up by Brussels’ migration policies and destructive climate agenda have created the ideal conditions for high-impact political counteroffensives - especially against a Commission whose arrogance is wearing thin with a growing share of the European electorate.

Caffeine May Slow Cellular Aging By Activating A Protective Stress Response

   How extraordinary is it when science confirms what we have always known?

   Here's the 5 ingredients to good health;

  Vitamin C, 

  Vitamin D, which we produce naturally from sunshine.

  Green tea,

  Coffee (as explained below)

  Olive Oil,

And then all the rest like (naturally) colored food, red fruits for their polyphenols or orange food for its carotenoids. 

And of course red wine (source of the French paradox) for its resveratrol, Anthocyanins (the color purple) and the tanins. 

Most of these are or contain antioxidants, including Flavonoids. 

To resume: Eat Japanese or Mediterranean cuisine.

More simple? Eat (natural) colors and you will avoid quite a few diseases.  

PS: Don't forget some dark chocolate with your coffee. (Full of Antioxidants and Minerals.) 

Authored by Rachel Ann T. Melegrito via The Epoch Times (emphasis ours),

That jolt you feel from your morning coffee isn’t just hitting your brain—it’s reaching deep into your cells and flipping biological switches that could help you age more slowly.

Researchers have found that caffeine helps yeast cells live longer by switching on a cellular pathway. Stefania Pelfini, La Waziya Photography/Getty Images

Recent research suggests caffeine acts like a personal trainer for our cells, stressing them just enough to activate the same longevity pathways triggered by hitting the gym or cutting calories.

“In a sense, a bit of stress is beneficial,” John-Patrick Alao, a postdoctoral research scientist and the lead author of the study, told The Epoch Times.

The Cellular Machinery Behind Longevity

The study, published in Microbial Cell, discovered that caffeine induces a stress-like response in cells, activating a longevity pathway called AMP-activated protein kinase (AMPK).

AMPK functions like a cellular fuel gauge. When energy runs low or during times of stress, AMPK activates, forcing cells to conserve resources, repair damage, and clean up faulty components by recycling parts of themselves.

In biology, too much stress harms cells, but small amounts can actually help them adapt and repair, preventing damage from piling up. Over time, this helps tissues stay healthier, which supports a longer lifespan.

“Our research, at least in terms of caffeine, suggests that AMPK gets turned on because caffeine is exerting some sort of stress on the cells,” Alao said.

Alao noted that the little stress exerted by caffeine on yeast cells switches on protective genes and keeps cells in repair mode, preventing damage from building up and extending their lifespan. He likened it to having a mechanic with you at all times to catch problems early.

“Caffeine’s natural activation of this pathway suggests it could be a valuable nutritional tool... Something as common as your morning coffee could eventually play a role in how we design diets or treatments to improve long-term health and potentially support cancer therapies,” said Dr. Thomas M. Holland, a physician scientist and assistant professor at the Rush Institute for Healthy Aging, who isn’t part of the study.

The researchers used fission yeast cells for their experiments. While the findings cannot be directly applied to humans, yeast have similar cellular pathways that work similarly to human cells.

Holland noted that while the study used yeast and didn’t provide specific intake recommendations for humans, other research supports moderate caffeine consumption.

Potential Risks of Caffeine-Induced Stress

While caffeine’s mild stress on cells helps trigger processes tied to a longer lifespan—like making them divide earlier and at smaller sizes—this same response can also make cells more vulnerable to DNA damage because it gives them less time to catch and fix problems before multiplying, allowing damage to slip through more easily.

This poses particular risks for people with genetic conditions such as ataxia telangiectasia (ATM), who have difficulty repairing DNA damage.

“If you have ATM mutations, caffeine is probably not good for you,“ Alao said. ”But if you are healthy and you don’t have these mutations, then it is because you are turning on the stress… and your DNA repair machinery is then being turned on.”

However, Alao noted that significant questions remain about how caffeine’s effects translate from yeast cells to humans. In people, AMPK is more complex, with different forms found in different tissues like the heart and skeletal muscle.

Alao said that the AMPK system, while protective in healthy cells, may also help cancer cells survive under metabolic stress.

How Much Caffeine Is Best for Longevity?

Multiple large-scale studies have linked coffee consumption to longer, healthier lives. A recent study of nearly 50,000 women over 30 years found that those who drank about 315 milligrams of caffeine daily—roughly one and a half large cups of coffee—were more likely to age healthily, free from major chronic diseases.

Another study published in The Journal of Nutrition found that people who drink one to three cups of coffee daily have a 15 percent lower risk of death compared to noncoffee drinkers. The study also showed that coffee’s health benefits diminish when it is paired with sugar and saturated fats, such as those in many dairy-based creamers.

“Typically around 200 to 400 milligrams per day, or roughly two to four cups of coffee, [have been shown in studies to be] both safe and potentially beneficial for most adults,” Holland said.

Holland emphasized that caffeine is most beneficial when included as part of a balanced lifestyle—particularly one that combines a mostly plant-based diet and regular physical activity. He noted that natural sources of caffeine, such as coffee and tea, also provide polyphenols and antioxidants, which may help reduce inflammation, improve metabolism, and lower oxidative stress—factors linked to reduced cancer risk.

Like Holland, Melissa Mitri, a registered dietitian and nutrition writer, recommends people stay away from supplements and energy drinks. “Some energy drinks and supplements contain a more concentrated form of caffeine, such as caffeine anhydrous, which can provide a significantly larger and more potent dose of caffeine than what is found in a cup of coffee.”

Mitri also noted that while more research is needed, a moderate amount of caffeine may help protect healthy cells during cancer treatment by reducing the potential damage caused by therapies like chemotherapy.

“Caffeine turns on AMPK, and AMPK is a really important target because it gets turned on by calorie restriction and exercise, and we know that calorie restriction and exercise are proven to extend lifespan,” Alao said.

Other Longevity Solutions

Caffeine isn’t the only compound linked to a longer lifespan through these cellular pathways. Other substances and diets are already known to target the same longevity-enhancing systems.

Rapamycin, for example, directly inhibits Target of Rapamycin Complex 1 (TORC1), a protein complex that helps control how cells grow and respond to nutrients, slowing down the cell’s growth machinery.

Metformin, a widely used diabetes drug that improves insulin sensitivity, doesn’t act directly on TORC1 but instead lowers the cell’s energy state, which in turn activates AMPK.

Chronic overnutrition—particularly diets high in sugar, refined starches, and ultra-processed foods—deactivates AMPK, activating a pathway called TORC1, which promotes growth and accelerates aging.

“If you eat a lot of sugar, a high-fat Western diet, the TOR [Target of Rapamycin] is always on. And this leads to aging,” Alao said.

In contrast, dietary restrictions like low-protein diets and intermittent fasting activate AMPK, promoting the cellular cleanup processes that appear crucial for longevity. “Basically the body starts to eat itself, which seems to be important for cleaning all the damaged proteins and so on.”

 

The Stripper Index

   Whatever the concocted numbers may tell us, Europe is in a recession, Japan also is most certainly in one, as for the US, it is teetering on the edge.

   Just as for China, where you need to look at electricity usage in order to follow "real" growth, in the US where this number tends to be less of an indirect indicator, we have to be more subtle in choosing what to follow: Sex!   

Guest Post by Martin Armstrong

One company has been looking to one of the world’s oldest professions to gauge the state of the economy—sex work. “The ‘stripper index’ is an unconventional economic indicator that correlates changes in sex work revenue, such as escort pricing, strip club tips, and related search interest, with broader economic cycles,” Erobella states on its website. “It operates on the premise that sex work, being a discretionary luxury, is among the first sectors to feel the pinch during economic downturns.”

Now this is a bit tongue-in-cheek, but everything does, in fact, operate on a cyclical basis. We have those who look at the pizza index for signs of geopolitical turmoil in Washington, and lo and behold, there is some form of a correlation.

Oddly, the creators believe that “economic confidence” is directly tied to the price men are willing to pay for these services. They claim that there was a downturn in searches for sex work ahead of the 2022 downturn, and yet another downturn in searches for “escort” around New York City ahead of the 2008 crash. “Sex work is the ultimate discretionary spend,” it notes. They also stated that cash payments are the primary driver of this industry, causing the industry to be particularly sensitive to downturns ahead of the headlines.

The creators of this unconventional gauge believe that June’s data indicates signs of trouble ahead, with all sex worker-related metrics declining. They found that escort pricing across the UK has declined, and Google searches for “escort” are notably down. Sadly, there is an increase in new hires in the industry as well.

The New York Post also noted that websites such as OnlyFans experienced a decline in revenue during 2022 at the height of inflation.

I would not use this index as a gauge for the economy; it’s more of an interesting concept. Indeed, discretionary spending is the first item to decline ahead of economic downturns. This is one of countless signs that confidence is declining, and consumers are not willing to spend frivolously on extracurricular items to say the least.

Consciousness and Emergence (Joke)

   This was a joke 10 years ago but will it become reality soon? 

   The truth is that we do not understand exactly what's going on with the transformers. A recurring loop going around a billion times is more efficient that a million times. But why? Why does intelligence emerge so flawlessly from transformers? This is the fundamental phenomenon of emergence which our team is currently working on. Nothing has gone wrong yet but what are the odd? 

 

Tariff-ic! Core Consumer Price Inflation Cooler Than Expected In June

    So who is right? Will there be inflation or deflation in the US?

   To understand how this mighty fight between the two opposing force of the market will play, it is once again to Japan that you should go. 

    Japan for the obvious reason of having had a gigantic bubble before everybody else, is probably the best example of what will happen both in China, concerning its real estate bubble, as we have discussed countless times on this channel and in the US now concerning inflation or rather the lack of it. 

   So what happens to inflation in a deflationary environment? To have inflation, you need two factors, excess demand and rising salaries to feed this demand. As simple as that. If you have no demand, then prices cannot rise or products do not sell and soon enough disappear from shelves. Japan has been in a deflationary environment for most of the last 3 decades so both salaries and prices didn't rise. 

   But not quite. In fact during the same period, the Japanese Yen has been losing ground against foreign currencies so inevitable Japan ended up with imported inflation. This gave rise to two consequences: The price of imported products did rise but since people could not afford them, they slowly disappeared from the shelves. Problem solved; no inflation. But the price of some raw commodities also did rise sharply and for those the answer mechanism could no be so easy. (Japan imports 60% of its food and most of its energy and raw materials.) Here inflation did trickle down to domestic prices and in the end started having a significant effect on actual retail prices.

   And this is where the magic of complex compound indexes do their magic. Add rice 50% with computer ships -20%, subtract some hedonistic adjustment every year and you arrive to the 3% +/- something that end up being the official inflation rate of Japan. Quite acceptable? Except that after years of this regimen the average Japanese is now half as rich as he was 20 years ago. A painful and dramatic lowering of the standard of living with few equivalent in the world outside wars, major crisis and natural catastrophes. 

   This is very likely what will happen in the US in the coming months. The recession which already started earlier this year will create the necessary deflationary environment, which month after month will be announced to the great relief of Wall Street while indispensable products and services, especially food will see double digit inflation. "Sure enough but these indexes tend to vary a lot anyway so they should not be included in the official numbers." And they won't be so inflation will creep up but still stay relatively low while the middle class will melt like snow in a hot Summer day.   

Tariff-ic! Core Consumer Price Inflation Cooler Than Expected In June

Will the dreaded tariff-flation show up this time? Or will the excuse factory be required to spin the Trump-policy-driven price hike expectations as coming next time?

Expectations were for a modest acceleration in prices in June and headline Consumer Prices did just that rising 0.3% MoM (as expected) and +2.7% YoY (up from +2.4% prior and hotter than the +2.6% YoY expected)...

Source: Bloomberg

The MoM acceleration was driven by a flip from deflation to inflation for Energy prices...

Source: Bloomberg

New and Used Car prices are dropping!!!

That's not supposed to happen...

CPI Highlights: the index for shelter rose 0.2% in June and was the primary factor in the all items monthly increase. The energy index rose 0.9% in June as the gasoline index increased 1.0% over the month. The index for food increased 0.3% as the index for food at home rose 0.3% and the index for food away from home rose 0.4% in June.

The index for all items less food and energy rose 0.2% in June, following a 0.1% increase in May. Indexes that increased over the month include household furnishings and operations, medical care, recreation, apparel, and personal care. The indexes for used cars and trucks, new vehicles, and airline fares were among the major indexes that decreased in June.

The headline CPI YoY is the hottest since February but Core CPI printed cooler than expected (+0.1% MoM vs +0.2% MoM exp) with the YoY rise higher at +2.9% (as expected)...

Source: Bloomberg

Core Goods prices are accelerating on a YoY basis...

Source: Bloomberg

More details on Core CPI which rose 0.2%, below the 0.3% 3 estimate:

• The shelter index increased 0.2% over the month. The index for owners’ equivalent rent rose 0.3% in June and the index for rent increased 0.2%.

  • Conversely, the lodging away from home index fell 2.9% in June.

• The household furnishings and operations index rose 1.0% in June, after rising 0.3% in May.

• The index for recreation increased 0.4% over the month.

• The apparel index increased 0.4% in June and the personal care index rose 0.3%.

• In contrast, the index for used cars and trucks fell 0.7% in June after declining 0.5 percent in May.

  • The new vehicles index fell 0.3 percent over the month, and the airline fares index declined 0.1 percent.

• The medical care index increased 0.5% over the month, following a 0.3-percent increase in May.

  • The index for hospital and related services increased 0.4 percent in June as did the index for prescription drugs.

  • The physicians’ services index rose 0.2 percent over the month.

The index for all items less food and energy rose 2.9% over the past 12 months. The shelter index increased 3.8% over the last year. Other indexes with notable increases over the last year include medical care (+2.8%), motor vehicle insurance (+6.1%), household furnishings and operations (+3.3%), and recreation (+2.1%).

This is the 5th monthly 'miss' for Core CPI in a row - the sky is falling analyst crowd continues to be wrong...

Source: Bloomberg

Rent/Shelter inflation slowed in June...

• Rent inflation June 3.77% YoY, down from 3.80% in May and the lowest since Jan 2022

• Shelter inflation June 3.80% YoY, down from 3.86% in May and the lowest since Oct 2021

SuperCore CPI (Services ex-shelter) rose 0.36% MoM, lifting prices 3.34% YoY - highest since feb but well off the YTD highs

Source: Bloomberg

Medical Care Services costs are also starting to accelerate (not exactly tariff-driven)...

Source: Bloomberg

On a 3m- and 6m- annualized basis, there are no signs of the tariff-driven price hikes as yet...

Source: Bloomberg

Not exactly the damning evidence of terrifying tariff-flation that the establishment wants us to believe is coming...