Zero Hedge

Chinese EV Makers Turn Abandoned Western Factories Into Global Launchpads

Chinese EV Makers Turn Abandoned Western Factories Into Global Launchpads

Chinese EV companies are rapidly expanding overseas by snapping up unused factory space from struggling Western automakers, many of whom are downsizing traditional gasoline-car production, according to Nikkei.

Stellantis recently opened plants in France and Spain to partnerships with Dongfeng and Leapmotor. At the same time, Geely is expected to restart an idle production line at a Spanish factory owned by Ford Motor Company. The trend reflects a broader shift in the auto industry: Chinese EV makers are expanding aggressively while many legacy manufacturers are cutting capacity.

UBS analysts predict Chinese brands could control 35% of the global auto market by 2030, up from 25% this year, helped by China’s low-cost battery supply chain. Their report warned that foreign automakers face “structural market share loss” as competition intensifies.

Nikkei writes that building cars locally has become a practical way for Chinese companies to avoid tariffs and satisfy governments pushing for domestic manufacturing. BNP Paribas analyst James Kan said the strategy helps local economies “feel that they’re getting a cut,” making expansion politically easier.

Europe has become a key battleground. After facing steep EU tariffs, Leapmotor said it would source many components within Europe for production at Stellantis facilities. The company also plans to begin manufacturing in Brazil, where tariffs on imported EVs are set to increase again this summer.

But owning overseas factories brings new complications. Citigroup analyst Harald Hendrikse joked he was “a little amused” watching Chinese firms buy European plants because they are about to learn “how difficult it is to do business” there. Labor costs, regulations, and local sourcing rules could significantly raise expenses.

BYD has already faced setbacks abroad. After renovating a former Ford plant in Brazil, the company became embroiled in controversy over alleged “slavery-like” labor conditions tied to construction work. Even so, BYD is still exploring additional factories in Latin America and Europe.

Many Chinese automakers prefer acquiring dormant facilities instead of building new plants from scratch, which one industry executive described as requiring “tons of extra preparation work.” Companies are carefully comparing costs, efficiency, and demand before making investments.

Meanwhile, European manufacturers are struggling with underused factories. Volkswagen plans to reduce global production capacity by millions of vehicles this decade. CEO Oliver Blume acknowledged the company still has too much unused capacity in Europe, though he later said there are “currently no plans or discussions” with Chinese manufacturers.

For some executives, these partnerships could solve problems on both sides: Chinese EV makers gain faster access to foreign markets, while Western automakers find new uses for factories that would otherwise sit idle.

Tyler Durden Fri, 05/22/2026 - 05:45

Elon Musk Offers To Fund Lawsuit Against UK Police In Henry Nowak Stabbing Tragedy

Elon Musk Offers To Fund Lawsuit Against UK Police In Henry Nowak Stabbing Tragedy

Authored by Steve Watson via Modernity.news,

Elon Musk has stepped forward to hold UK police accountable in what appears to be one of the most disturbing policing failures to emerge from Britain in years.

The tech mogul publicly offered to bankroll a wrongful death lawsuit against officers who allegedly prioritized an attacker's claims of "racism" over saving the life of 18-year-old Henry Nowak.

Musk's intervention comes as harrowing bodycam footage from the scene plays out in Southampton Crown Court during the ongoing murder trial of Vickrum Singh Digwa, the 23-year-old man of Indian Sikh heritage accused of stabbing Nowak four times with a 21cm blade.

He followed up with another pointed question: "Has any action been taken against the police officers who handcuffed this boy and made him bleed to death in the street? Who are they?"

In a further post, Musk declared: "Unconscionable. I am happy to fund a wrongful death lawsuit against these disgusting excuses for law enforcement. They damn well better have been fired."

Nowak, a first-year accountancy and finance student at the University of Southampton from Essex, was walking home from a night out with university football teammates when he was attacked. Prosecutors say Digwa stabbed him four times after Nowak tried to escape.

When police arrived, bodycam footage captured Nowak leaning against a wall, supported by Digwa's father. The father told officers: "He keeps dropping down, so I am just trying to keep him up."

Nowak repeatedly said "Can't breathe" and told them he had been stabbed. Instead of rushing medical aid, officers handcuffed the bleeding teenager while arresting him for suspected assault - based on claims from Digwa's family that Nowak had racially abused them. One officer responded to his desperate pleas about being stabbed with: "I don't think you have, mate."

Henry then passed out and died, drowned in his own blood.

Digwa's brother told the emergency call handler: "We just got attacked racially by some white person... Physically attacked my brother, we're Sikhs, we wear turbans, and he attacked my brother."

Videos shown to jurors captured Digwa and his brother accusing Nowak of a racial attack. Nowak denied it. Digwa was heard saying: "No one stabbed you bro, you're up. You're drunk." Digwa's father added: "He's pretending, a minute ago he was talking to you guys. Now he's trying to get up and going to leave."

Digwa openly carried the large 21cm shastar - a ceremonial Sikh blade - in public, along with the smaller religiously mandated kirpan. Prosecutors noted questions over why the larger weapon was present.

Digwa denies murder. His mother, Kiran Kaur, faces charges of assisting an offender by allegedly removing the knife from the scene.

Musk's offer has ignited fury over what critics call two-tier policing - where accusations of racism against a native Brit appear to override clear medical emergencies. No officers have been named or disciplined publicly. As of today, no action has been confirmed against those involved.

This case has drawn parallels to failures where authorities appear more concerned with perceived slights than protecting life. Nowak was a young British student simply walking home. Digwa's legal team argues self-defence in the "heat of the moment" following the alleged verbal exchange.

Yet the bodycam evidence, now public through court proceedings, paints a picture of a dying teen ignored while his attacker's narrative took precedence.

Musk's willingness to fund a civil suit underscores a growing frustration with institutional inaction. The trial continues at Southampton Crown Court. Digwa denies the charges.

Henry Nowak's death should force a reckoning. When police treat a stabbed British teen as the aggressor based on unverified claims from the attacker's family - while he bleeds out saying he can't breathe - something has gone fundamentally wrong with priorities in law enforcement.

Religious exemptions allowing large blades in public, combined with a policing culture that appears to elevate certain accusations above immediate life-saving duties, leave ordinary citizens vulnerable.

Musk's intervention shines a light where so-called mainstream coverage has lagged. Justice for Henry Nowak demands more than a trial verdict - it requires naming those officers, holding them accountable, and ending the failures that let a young man die in the street while pleading for help.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Fri, 05/22/2026 - 05:00

Shipping Turmoil Remains Largely Contained To Gulf, For Now

Shipping Turmoil Remains Largely Contained To Gulf, For Now

The world's most critical maritime energy chokepoint has now been closed for 12 weeks, leaving seaborne energy supply chains heavily disrupted. Still, one UBS analyst points out that the shock has yet to meaningfully spill over into broader global shipping outside the Gulf area, suggesting the disruption remains largely contained for now.

"It looks like non-energy related global shipping traffic is running just 4% below normal in May - a bit better than April," UBS analyst Arend Kapteyn wrote in a note to clients Thursday morning titled "The State Of Global Shipping Disruption."

Kapteyn continued:

Limited signs of spillovers to non-energy shipping (so far)

In our April 30 note, we showed how global oil/gas shipping traffic had fallen by 13% from pre-Middle East conflict levels—closely matching the disruption through the Strait of Hormuz—and how the various regions were trying to reroute ships to find alternative energy supplies. Today's chart examines whether that energy shock is spilling over into broader shipping activity. A key question is whether fuel shortages are beginning to weigh on overall trade flows, providing an additional transmission channel to global supply chains. PMI delivery times have already lengthened by around 1¾ standard deviations, but it remains unclear how much reflects product shortages versus shipping constraints.

The chart shows our "momentum" measure of global shipping traffic—defined as tonnes of cargo multiplied by nautical miles traveled per day. We've aggregated the daily data at a monthly frequency (May is the average of the daily data month-to-date), and standardize using z-score over the full sample. Oil and gas shipping has continued to deteriorate, now around 4 standard deviations below normal. By contrast, non-energy shipping weakened through April (-2 standard deviations) but has partially recovered in May (now around -0.7 standard deviations). In level terms, non-energy related shipping/cargo traffic fell 5% in March (vs the prior 12m average) and 13% in April but is now back to just 4% below normal. In Asia—where energy shortages appear most acute—non-energy volumes were 10% below normal in April but are now running slightly above normal. In the Gulf, however, non-energy shipping remains severely disrupted (around 83% below normal), reflecting the broader impact of the Strait of Hormuz bottleneck on both energy and non-energy flows.

Meanwhile, Maersk CEO Vincent Clerc recently warned on CNBC that a "new wake-up call" for global trade nears if the Hormuz chokepoint remains shuttered through June.

Then there was a note from UBS analyst Pierre Lafourcade last week that said, "Supply chain stress is rising at its fastest pace since the early pandemic."

The full note can be read by Professional subscribers here at our new Marketdesk.ai portal.

Signs that energy-flow disruptions are spreading into the broader shipping complex remain limited for now, with the stress still largely contained to the Gulf region.

Tyler Durden Fri, 05/22/2026 - 04:15

Authoritarianism Doesn't Arrive With A Coup... It Arrives With A Login

Authoritarianism Doesn't Arrive With A Coup... It Arrives With A Login

Authored by Sam Lowry via dailysceptic.org,

Authoritarianism doesn’t usually arrive with a coup. It arrives with a login, a compliance form, a penalty notice for keeping records in the wrong format. It comes with a quietly extended electoral term, a cancelled bank account, a prison sentence for a social media post. Each measure has a reasonable-sounding justification. The problem is the direction — and how far it has already travelled.

Power is migrating from the visible arena of democratic politics to the less visible world of systems — compliance regimes, regulators with elastic mandates and an expanding mesh of rules governing more of daily life than most people have yet registered. No single measure looks like tyranny. The problem is the cumulative direction and the speed at which it is moving.

None of what follows was in any manifesto. All of it is happening.

Regulating what you may own, burn and keep

Consider what it now means to own a home in Britain. From 2030, landlords will be prohibited from letting properties that fail to meet the government’s Energy Performance Certificate band C standard, with fines of up to £30,000 for non-compliance. These are not derelict or dangerous buildings. They are perfectly habitable properties rendered unlettable not by any structural failure but by the Government moving the regulatory goalposts around them. The Government is consulting on extending the same requirements to owner-occupied homes by 2035, at which point the state would decide whether you may sell or mortgage your own home without first spending thousands on ‘improvements’ it has specified.

The reach does not stop at the front door. In Smoke Control Areas covering much of urban England, a council officer can issue you a £1,000 fine for burning the wrong fuel in your own fireplace. Since October 2024, keeping a single backyard chicken requires formal registration with the Animal and Plant Health Agency — home address, species, numbers, declared purpose — on pain of a £2,500 fine. The state now maintains a database of hen keepers and their motivations. The Government does not confiscate your property. It makes non-compliance progressively unaffordable until the choice becomes theoretical.

Regulating what you may drive, eat, drink and smoke

The same logic has been applied with equal enthusiasm to how you move and what you consume. The Zero Emission Vehicle mandate requires 80% of new car sales to be electric by 2030, transferring the cost of Net Zero directly onto buyers.

For those who cannot yet afford an electric vehicle, Ulez zones, congestion charges and Vehicle Excise Duty rates designed to penalise older vehicles have quietly converted a private choice into a regulated privilege — with the bill adjusted according to how closely your car aligns with current Government policy.

Food and drink have followed. The sugar levy compelled manufacturers to reformulate products using artificial sweeteners — aspartame, sucralose, acesulfame K — whose population-wide, long-term effects remain a matter of active scientific debate, the Government compelling the switch without accepting any liability for unintended consequences.

Calorie counts are now mandatory on menus, multi-buy promotions on unhealthy foods are restricted, alcohol duty has been reformed and the tobacco generation ban makes it illegal to sell cigarettes to anyone born after 2009. Each measure has a plausible justification in isolation. Together, they describe a state that has decided your lifestyle is a policy variable to be optimised without your consent.

Regulating what you may say, think, and joke about

Britain has no formal censorship, but it has developed something nearly as effective. The Worker Protection Act 2023, in force since October 2024, places a duty on employers to prevent harassment by third parties, including customers, producing a wave of conduct policies across the hospitality sector that effectively outlaw the kind of informal, occasionally ribald conversation that has characterised the British pub for centuries. The landlord must now consider whether his regulars’ banter creates a legal liability.

The Online Safety Act hands an unelected regulator the power to remove content deemed ‘legal but harmful’ — a category whose boundaries are left to Ofcom, an organisation that cannot be voted out. The same regulator’s approach to broadcast media tells you something about how it exercises that discretion. Ofcom has opened more than a dozen investigations into GB News since the channel launched, fining it £100,000 and placing it “on notice” for repeated impartiality breaches — including, in one instance, for failing to sufficiently challenge a guest who called climate change a hoax.

The BBC, by contrast, broadcast a Panorama documentary one week before the 2024 US Presidential election that edited Donald Trump’s January 6th speech in a way its own former editorial adviser later described as “a blatant distortion” — giving a wholly misleading impression of what Trump had actually said. The BBC’s internal standards committee was alerted in January 2025 and took no decisive action for 10 months. The director general and head of news eventually resigned. The BBC Chair issued an apology, describing the edit as “an error of judgement”. Ofcom opened no investigation. The regulator that pursues GB News across a dozen probes for technicalities around impartiality found nothing in the BBC’s year-long concealment of a deliberately misleading edit worth examining.

The Metropolitan Police’s Live Facial Recognition programme scans faces on public streets in real time. The Investigatory Powers Act requires internet providers to retain every subscriber’s full browsing history for 12 months, available to government agencies without a judicial warrant. You are observed when you walk down the street and when you go online — and what you say about either is subject to a speech regime that Freedom House formally downgraded in 2025 for the “proliferation of criminal charges and convictions concerning online speech, including speech protected under international human rights standards”.

According to Freedom of Information data from 39 of 45 police forces, cited by the Times in April 2025, police were making roughly 30 arrests a day for offensive online messages. Those arrested are not, for the most part, dangerous extremists — they are childminders, pensioners and tradesmen whose posts, in any previous decade, would have been considered unremarkable expressions of frustration. Some received prison sentences. Others were investigated for months before charges were quietly dropped, a process that served as its own punishment. As MPs noted in Parliament last November, Britain is now more willing to imprison someone for a social media post than for a rape — a remark that lands rather differently when you recall that the Prime Minister overseeing all this was, as director of public prosecutions, the man who declined to pursue the grooming gang cases later documented by the Independent Inquiry into Child Sexual Abuse.

This selective enforcement extends to political opponents with a consistency that is difficult to attribute to coincidence. Nigel Farage — leader of a party that received four million votes at the last election and has since topped every national opinion poll — was simultaneously debanked by Coutts and subjected to smears about foreign state funding made under Parliamentary privilege, beyond the reach of defamation law. An independent investigation found he had been treated unfairly.

This week, the Commons standards watchdog opened a formal investigation into a £5 million personal gift he says he received to fund private security — security he required because the Home Office, under the previous government, had cut his state protection by 75%, leaving the leader of a major political party to fund his own safety. Reform UK argues the payment, made before Farage became an MP and intended solely for personal protection, falls under the Parliamentary exemption for purely personal gifts. Both Labour and the Conservatives, whose own MPs and peers have faced a quiet succession of expenses investigations and misconduct probes that have attracted a fraction of this scrutiny, are pressing the investigation.

The pattern — exhaustive pursuit of the opposition leader, institutional indulgence of the establishment — is by now entirely familiar.

Meanwhile, a recent survey found one in five British teenagers avoids sharing political opinions for fear of being cancelled, and nearly a quarter said they had been asked to stop voicing their views at school. A democracy that teaches its young that silence is the safest course is not building citizens. It is building subjects.

The anti-democratic march goes on

Sitting beneath all of this is a surveillance infrastructure that no one was asked to approve. This week’s King’s Speech confirmed the Government is pressing ahead with legislation to support digital ID, with the stated intention of making it available to those who want it by 2029. This formulation papers over the fact that, as a condition of employment, it will in practice be unavoidable.

The scheme — a single Government database linking your right to work, immigration status, tax record, health data and right to rent — was opposed by Big Brother Watch and three million petitioners, and promoted most energetically by the Tony Blair Institute, whose principal backer, Oracle, holds over £1 billion in UK Government contracts and is considered the frontrunner for the infrastructure work itself.

The King’s Speech also confirmed the European Partnership Bill — legislation to realign parts of British law with EU standards across food regulation, energy trading and carbon emissions. The mechanism is ‘dynamic alignment’: the UK must transpose and implement EU law in relevant areas, while having no vote on that law and no seat in the legislative process that produces it. In other words, the Government intends to bind this country to rules made in Brussels by people we did not elect, in pursuit of a relationship the British public voted to leave. It was not in Labour’s manifesto, it has not been put to the country, it is simply being done.

When ministers then announced in May 2025 that they intended to postpone elections in around 30 councils — extending their own terms without a public vote — and were forced to reverse course only after a judicial review by Reform UK and legal advice that the plan would likely be ruled unlawful, the instinct being revealed felt consistent with everything else: that democratic constraints are inconveniences to be managed rather than principles to be upheld.

It would be tempting to lay all of this at Labour’s door, but that would be too easy and not entirely honest. The Investigatory Powers Act was Theresa May’s. Rishi Sunak introduced the Online Safety Act. Making Tax Digital, the ZEV mandate, minimum EPC standards, the sugar levy and the Covid surveillance infrastructure, including vaccine passports, were all Conservative creations. The party that styled itself as the guardian of British liberty spent 14 years building much of the machinery that a Left-wing Government is now operating at full throttle.

The lesson is not that the Tories were secret socialists. It is that expanding state power has become the default response of any government seeking to appear purposeful — and the machinery, once built, does not ask about the politics of whomever operates it next.

The collapse of institutional trust

This Government has proved itself neither cautious nor neutral. It has used lawfare against dissidents and opponents with a brazenness unthinkable under any previous administration, directing the apparatus of state — police, prosecutors, regulators, quangos — consistently against those who dissent from the approved programme. Trust in the institutions that were supposed to remain above politics — the courts, the civil service, the BBC, the police — has collapsed accordingly, and not without reason.

A foreign power has not captured them; they have been captured from within, by a professional class that regards the management of public behaviour as its primary function and the instincts of ordinary citizens as a problem to be corrected.

Systems outlast governments. The toolkit remains when the party changes — which is what makes the question of succession so consequential. Angela Rayner, widely regarded as a leading contender should a Labour leadership contest emerge, has spent her career to the Left of Starmer on every question that bears on the relationship between citizen and state. Starmer, for all his Government’s record, may yet prove to have been the restraining hand. The Conservatives built much of this machinery. Labour is operating it at full throttle. Whoever comes next may remove the restraints entirely.

Recovery looks a long way off. Whether it is possible at all depends on whether enough people recognise what is being lost before the machinery becomes too entrenched to reverse. Free societies are not lost in a single dramatic moment. They are lost in the accumulated weight of a thousand reasonable-sounding justifications for why, just this once, the state knows better than you do.

We are well past the thousandth.

Tyler Durden Fri, 05/22/2026 - 03:30

From ISIS To Finance Bro: Syria's Sharaa To Attend G7 Summit In France

From ISIS To Finance Bro: Syria's Sharaa To Attend G7 Summit In France

Syria continues stepping out of the geopolitical wilderness, now apparently onto the highest-stakes stage in international finance. Or rather, the reality is that Washington's post-Assad Al Qaeda in suits makeover of 'former' terror leader Ahmed al-Sharaa has reached its peak.

According to a Reuters report on Thursday, self-appointed Syrian President Ahmed al-Sharaa (Jolani) is set to lead a national delegation to the G7 summit in France next month.

HTS leader Ahmed Al-Sharaa, now self-declared President, also known as Abu Mohammed al-Jolani

The invitation marks the country's first-ever participation in the summit since the elite forum was founded back in 1975.

Citing three sources familiar with the matter, the agency confirmed that an invitation was officially hand-delivered to Syrian Finance Minister Mohammed Yisr Barnieh while he was attending the group's preparatory financial talks in Paris earlier this week. The main G7 summit is set to run mid-June, from the 15th through 17th in Évian-les-Bains, southeastern France.

A Syrian official speaking Reuters described that Damascus plans to heavily pitch its geography to the G7. This will likely center on leveraging the country's role as a "potential strategic hub for supply chains" amid the Iran war and Hormuz Strait crisis. 

"After the closure of the Hormuz Strait, pretty much all the neighboring countries in the region knocked on our door to get access to our Syrian ports," stated Mazen Alloush, the director of local and international relations for Syria's borders and customs authority. "They are making Plan B's in case the crisis goes on longer."

The over decade-long proxy war to oust Assad, which heavily involved the CIA and Gulf states, as well as Israel, has long been discussed as part of the 'pipeline wars' theme, and has for years been an open secret.

President Trump, who helped put Sharaa in power, and vouched for him when they first met in Saudi Arabia, is expected to attend the G7 summit.

But despite Damascus under Sharaa now being a willing puppet of Washington, economic relief for the war-ravaged Syrian population has remained illusory, as one Middle East outlet underscores:

Because Syria had been under crushing sanctions since the start of the 14-year war that began in 2011, many expected the economic situation to improve after Sharaa toppled former Syrian president Bashar al-Assad's government and western nations began easing sanctions.

However, “attracting foreign investment and restoring normal banking ties ⁠have ​proven slower and more difficult than ​many officials had hoped,” Reuters noted. More than 90 percent of Syrians live below the poverty line and have suffered from major increases in the price of fuel, electricity, and food in recent months.

Gas prices have risen by nearly 50 percent in the past month, while the value of the Syrian currency has fallen against the dollar amid volatile price swings. In the past week, the Syrian pound depreciated from 13,400 liras per dollar to more than 14,700 liras per dollar, before ending at 14,000 liras per dollar.

All the while, looming large in the background is the fact that the Syrian government is now full of Sunni extremists, who have repeatedly targeted Alawites, Druze, and Christians for being "unbelievers". 

Thousands have died at the hands of ISIS-style Syrian government-linked military members, who have sought to cleanse the country of its ancient Christian and Alawite communities. 

Tyler Durden Fri, 05/22/2026 - 02:45

Irrelevant Europe

Irrelevant Europe

Authored by J.B. Shurk via American Thinker,

Europe is the ‘jungle’ now. No garden left to speak of.

Josep Borrell is a Spanish socialist who held several high-ranking positions in the European Union.  Until 2024, he was a vice-president of the European Commission and the high representative of the European Union for foreign affairs and security policy.  In that capacity, he ran Europe’s External Action Service, which is the diplomatic body that executes Europe’s foreign policy decisions around the world.  He remains a man with a great deal of influence over European perspectives.

In 2022, Borrell created a bit of an international incident when he described Europe as a “garden” and the rest of the world as a “jungle.”  

“We have built a garden,” he told aspiring European diplomats in Bruges, Belgium.  “Most of the rest of the world is a jungle.  The jungle could invade the garden.  The gardeners should take care of it.”

As the head of the European Defense Agency, Borrell’s comments made strategic sense.  As he said in that same speech, “The jungle has a strong growth capacity…Walls will never be high enough to protect the garden.  The gardeners have to go to the jungle, Europeans have to be much more engaged with the rest of the world.  Otherwise, the rest of the world will invade us, by different ways and means.”

Borrell’s speech came seven years after German Chancellor Angela Merkel’s decision to open her country’s borders to millions of Islamic immigrants.  Originally touted as a humanitarian policy designed to temporarily shelter refugees from war-torn Syria, Germany’s generous welfare programs quickly became a magnet for young men across the Middle East and North Africa.  When Merkel declared on August 31, 2015, “We can do this,” she initiated an all-of-society “welcome culture” that quickly produced a full-blown migrant crisis for the whole continent.  Over ten years later, the influx of millions of Muslims into Europe has transformed school demographics and local politics, unleashed an explosion in sex crimes and anti-European violence, strained Europe’s hospital services and social safety nets, and exacerbated government debt.

Speaking after the “jungle” had already successfully invaded Europe’s “garden,” Borrell knew there was no way to put the genie back in the bottle.  Merkel’s fateful decision to “welcome” Middle Easterners to Europe transformed cities and towns across Europe into the Middle East.  Borrell also knew that the European Union’s patchwork defense agency did not have the requisite military and espionage assets to effectively protect the continent.  So he tried to fashion his corps of young diplomats into a network of information and persuasion agents who could do Europe’s bidding around the world.

Borrell’s message got lost in the ensuing international kerfuffle over his “garden” / “jungle” division of the world.  From Russia to Canada, Africa to Southeast Asia, every self-described “foreign policy expert” took umbrage at Borrell’s bluntness.  Perpetually offended virtue-signalers hadn’t gotten so worked-up since President Trump had called Haiti a “shithole country” four years earlier.  Just as Conan O’Brien felt compelled to white-knight for Haiti’s dystopian, cannibal gangland by visiting a heavily guarded resort in the Caribbean country and recklessly encouraging vacationers to join him, legions of politically correct snobs from around the planet recorded social media videos from their country estates in which they turned tsk-tsk-ing into a veritable lingua franca for the vicariously aggrieved.

All the “very best people” denounced Borrell for promoting a scarcely disguised restoration of European imperialism, colonialism, fascism, and genocide.  Young international students enjoying university scholarships and living in Europe for free made sure to remind Borrell that “diversity is our strength.”  Borrell’s socialist comrades beat him over the head with Europe’s prime directive: multiculturalism über alles.  Mohammadbagher Forough, a random research fellow at the German Institute for Global and Area Studies, publicly reprimanded Europe’s foreign minister thusly: “This kind of comment puts a serious dent in the enterprise of European strategic autonomy.  It upsets, at the most profound level, countries in the rest of the world, because of the history of colonialism.”

In other words, Europe’s “ruling class” and auxiliary straphangers condemned Borrell for daring to defend the beneficiaries of Western civilization.  He was encouraged by threat of high-culture social banishment to follow Chancellor Merkel’s example in supplicating before the migrant hordes.  The message was clear: Europe’s minister of defense cannot properly “defend” Europe unless he allows non-Europeans to take over the continent.  It was further proof that Europe is irreparably lost.

Since his departure from the European Union’s foreign policy perch at the end of 2024, Borrell has spent most of his time in public lambasting President Trump’s global leadership.  A staunch supporter of Ukraine who once threatened to “annihilate” the Russian army, Borrell has frequently defended the honor of Volodymyr Zelenskyy by claiming that Ukraine’s holdover president is leading “the resistance” and “deserves respect.”  After President Trump described Zelenskyy as a “dictator without elections,” Borrell called the “accusation” the “height of dishonesty.”  When President Trump and Vice President Vance took offense to Zelenskyy’s sense of entitlement and disregard for American taxpayers who have paid the salaries and pensions of Ukraine’s government workforce, Borrell screamed on X, “Trump and Vance have put on a disgraceful show.  I am ashamed of that behavior.”

In response to Vance’s speech at the Munich Security Conference last year during which the vice president excoriated Europe’s crackdown on free speech and political dissent, Borrell lectured his erstwhile colleagues: “This is a declaration of political war against the European Union.”  Going further, Europe’s former defense minister declared, “Europe must stop pretending that Trump is not an adversary and assert its technological, security, and political sovereignty with clarity and strength.”

As much as I find Borrell’s socialist-globalist politics abhorrent, I respect his impulse to defend his fellow Europeans.  The problem is that the European Union is a governmental monstrosity — bureaucratically lethargic, ideologically suffocating, foolishly regulatory, unmoored from its stated principles, opposed to public debate, enamored with its empires’ past glories, and increasingly oppressive.  Eurocrats such as Borrell believed they could reconstitute European centrality in the world by constructing a “rules-based international order” and forcing every other nation in the world to bend to Europe’s will.  Brussels has long desired to rule the world through rule-making.

It turns out that depending on the United States for security, the Russian Federation for energy, and communist China for critical imports is not a blueprint for European strength.  To his credit, Borrell understands Europe’s dilemma.  He knows that the European Union “was not designed for the world in which we live today.”  Forced to watch President Trump remake the world without showing any deference to Europe’s globalist prerogatives, Borrell openly laments, “We are not very relevant to international politics.”

Can you imagine how difficult of an admission that is for Borrell to make?  He has been weaned on the notion of European superiority all his life.  Even as parts of the European continent careen toward civil war, Borrell still believes that Europe is the world’s idyllic “garden” and everywhere else remains wild “jungle.”  From Borrell’s perspective, not only is Haiti a “shithole country” but also the United States is, too.

Borrell finally realizes, however, that Europe survives only because the rest of the world permits it to endure.  When you depend upon the United States, Japan, India, China, Russia, and the Middle East to produce everything that Europe’s dying empire needs, then you have no leverage or real power in the world.  European imperialism is dead because Europe has no armies or navies to enforce its “rules-based” edicts.  European imperialism is dead because sane nations refuse to impoverish themselves in the name of carbon credit tyranny.  European imperialism is dead because Europe opened its doors to an Islamic invasion.

Europe is the “jungle.”  The “garden” is gone.  European hubris sealed its fate.

Tyler Durden Fri, 05/22/2026 - 02:00

Fake Wars & Higher Prices: What A "Multipolar World Order" Really Means

Fake Wars & Higher Prices: What A "Multipolar World Order" Really Means

Authored by Kit Knightly via Off-Guardian.org,

The world is changing. The once dominant imperial power of the United States is faltering, hollowed out by corruption, over-extended by hubris, eaten away by the cancers of hatred, nationalism and greed.

Even according to its own propaganda outlets, America has “become the villain”, is “Officially an Empire in Decline”, and we are witnessing its “final act”.

And, as we await the titan’s inevitable fall, the world is considering the future. Everyone is talking about the “multipolar world order” just over the horizon.

From “Pax Americana to Pax Multipolaris”.

This “Multipolar World” has been a political talking point for a long time, but it has been building momentum over the last few years, and noticeably accelerating since the beginning of Donald Trump’s second term.

Russian President Vladimir Putin has been calling for this multipolar order for years, and did so again last week. China’s Xi Jinping regularly does the same, most recently during his trip to South America in February. North Korea’s Kim Jung Il echoed these sentiments in April.

Xi and Putin signed a joint declaration on “building a multipolar world” this morning.

Two weeks ago, in a talk at Harvard University’s Kennedy School of Government, former German Chancellor Olaf Scholz called for “a post-imperial world [and] a resilient rules-based order in a new era of multipolarity”.

In a speech during his trip to China last month, Spanish Prime Minister Pedro Sanchez called for “embracing a multipolar world order”:

“What is happening today is not a transfer of hegemony, but an increase in multipolarity — in both power and prosperity,”

Outside of politicians speechifying, the multipolar world order has become the main focus of the international think-tank circuit as well.

“Multipolarization” was the main topic of the Munich Security Conference Report in February 2025.

In December, the Tony Blair Institute partnered with the JPMorgan Chase International Council to publish a report called “World Rewired: Navigating a Multi-Speed, Multipolar Order”, which concludes in the foreword (written by Blair himself and Jamie Dimon of JPMC):

The world still offers enormous potential for those willing to engage constructively—to build coalitions, invest in innovation, and help shape the rules of the next era rather than simply react to them.

And then in March, the World Economic Forum published an (exceedingly dull) report titled “The Future of Materials Systems: Cooperation Opportunities in a Multipolar World”, which uses sentences like this…

In a multipolar world, agile interest-based cooperation will be decisive in shaping resilient, productive and sustainable materials systems.

That’s the traditional circle in which “multipolarity” is most discussed. Reports for alphabet agencies and non-profits, market predictions and risk assessments. Academic language that camouflages meaning in layers of surplus verbiage.

But multipolarity is not just the pet subject of presidents and thinktanks, it is a regular talking point across the media landscape.

America Can’t Escape the Multipolar Order

…said Council on Foreign Relations publication Foreign Affairs, in December.

The European Times headlines “From unipolarity to multipolar reality – A new world order is fast emerging”, and is rather more measured:

Multipolarity itself is neither inherently dangerous nor inherently beneficial. Its ultimate impact will depend on how nations choose to exercise power, uphold international law, and cooperate in addressing common challenges.

In an interview with Politico titled “What the next world order looks like”, British author Rana Dasgupta says:

If we’re entering a multipolar world, that’s not very unusual. That’s the normal state of the world.

As you can see, the potential fall of our modern Rome isn’t terrifying to many of those who owe their money and position to that Empire, rather it is energizing or maybe “the normal state of the world”.

The US/Israeli war with Iran has been blamed for and/or credited with accelerating this long-awaited Imperial decline.

Two weeks ago, The Tehran Times headlines:

How the Iran conflict is catalyzing a multipolar world order

A report from The Middle East Council on Global Affairs frames the war in Iran as the US trying to stop the multipolar world from breaking free:

What is unfolding in Iran is not simply a war over the regional balance of power or nuclear containment. It is an attempt to rupture the geographic core of an emerging multipolar order designed to bypass Western dominance

The Carnegie Endowment for International Peace published this…

The Iran War Shows the Limits of U.S. Power – If Washington cannot adapt to the ongoing transformations of a multipolar world, its superiority will become a liability.

In many parts of the independent media there is an almost feverish anticipation.

America’s Empire will fall, and a shiny multipolar new world order will rise in its place, and it’s definitely going to be A Good Thing.

That’s the story.

But that’s all it is, a story.

What is the “multipolar world order”, really?

What multipolarity really means

The cultivated image of a multipolar world – minus the quotes – is that of global cooperation between free-and-equal sovereign nations, each pursuing the interests of their people without living under the cloud of Imperial hegemony.

“Equal and orderly […] inclusive, universally beneficial economic globalisation”, as Xi Jinping said in a February speech.

This was echoed, in greater depth, by Professor Wang Yiwei, who wrote a briefing titled “The Chinese Philosophy of an Equal and Orderly Multipolar World Order”, and describing how different the world would be under Chinese leadership – or rather, non-leadership:

China advocates an equal and orderly multipolar world and inclusive economic globalization. Among these, the core of an equal and orderly multipolar world is to adhere to the equality of all countries, big and small, oppose hegemonism and power politics, and effectively promote the democratization of international relations.

A less utopian view predicts a multipolar world districted into blocs or spheres of influence, but still more dynamic and potentially fair for being out of the Empire’s shadow. That was the original meaning of the phrase when it was first floated in the late 90s.

But neither of these reflect the looming reality, or the true intentions of the powerful people feeding the word to their talking heads.

That might be multipolarity, but it’s not “multipolarity”.

It’s amazing the difference a pair of quotation marks can make, isn’t it?

The powers-that-shouldn’t-be and their soulless meat puppets in the corporate, academic and political spheres have created an entirely euphemistic linguistic phraseology defined by the need for quotation marks.

Words and phrases that don’t mean what they pretend to mean.

“Climate change”, “hate speech”, “public health”.

“Terrorism”, “misinformation” and “sustainability”.

In our political landscape, these have ceased to be words with meanings and become both camouflage and conditioning.

A dishonest cross-breed of programming language and hypnotic suggestion; phrases designed to obfuscate reality on the one hand, and either mechanically call pre-programmed responses or elicit powerful conditioned emotional reactions on the other.

“Multipolarity” is one of those words. And it should always be put in quotes.

The truth behind the word is simple: A global franchise for an old system of control.

Party Politics Goes Global

Defenders of the “multipolar world order” narrative will often argue along the lines “surely a multipolar world is better than US Imperialism? Shouldn’t we welcome resistance to hegemony?”

That same argument has been deployed by climate change supporters, who claim “even if the climate isn’t changing, protecting the environment is still a good thing, isn’t it?”

The flaw in this argument is a failure to question the underlying assumptions and official definitions of these phrases.

Just because something adopts a nice-sounding name doesn’t mean that thing is nice.

Labour don’t support workers. The Democrats hate democracy.

State-backed corporate “environmentalism” is not about planting trees or saving animals, and globalist-backed corporate “multipolarity” is nothing to do with increasing national sovereignty or offering independence from a global authority.

The reality of a “multipolar world” will be a system of intertwining corporate and state institutions implementing authoritarian, anti-human policies and disguising an ideologically monolithic power structure behind an illusory veneer of “choice”.

We in the collective West are more than familiar with this model – it is the way our “democracies” function.

Two major teams, with near identical ideologies and taking orders from the same unelected powers, fiercely battling it out over the tiniest sliver of uncommon ground.

They pitch electoral battles over differences of iconography, phraseology or fractions of percentage points to distract from the fact they agree about everything that really matters, have no real power at all, and are at best replaceable widgets in a vast influence machine.

The point of these battles is to convince people that democracy exists, that they have a choice, and can affect change.

This lie works, and has done for decades.

“Mutlipolarity” is an expansion of that model – the control mechanism of fake binary left-right, red-blue, Coke-Pepsi partisan politics rolling out world-wide.

It’s the same exact method employed to the same exact end: Tribalism as a path to cognitive dissonance, thought termination and the death of objectivity.

Why This? Why now?

It’s worth remembering this faux-antagonistic version of “multipolarity” was not part of the long term plan.

It was obvious, almost from the very start, that the Covid “pandemic” was intended to be a great global unifying moment.

We were all supposed to realise how silly these disagreements across ethnic, national or religious lines were, and come together to beat back the common enemy. A threat to the world that untied the world, like in Independence Day.

We were meant to be using digital currency under a globally implemented social credit system by now. Owning nothing and being happy.

But it didn’t work.

The moment they attempted to remove the horizontal divisions created to control society, they only drew attention to the much greater vertical divisions. People suddenly became more aware of the centralized, unified nature of global power structures.

The grand plan to get Global Government through the gates inside the Covid trojan horse not only failed, but backfired spectacularly.

There was a need for a re-adjustment. A new approach.

International unity didn’t work and doesn’t sell, but an international binary might.

That’s the “multipolar world order”.

The Momentum of Real Division

None of this is to deny the existence of real divisions, or whitewash historic crimes. Obviously there are deeply felt, and entirely justified, anti-Imperial sentiments across the developing world, and within the dissenting circles of the developed world.

The USA has been an Imperial power for the best part of two centuries, and a global hegemon for almost forty years, and in that time it has carried out monstrous acts of colonial aggression, and destroyed millions of lives. We have covered many of them.

In pursuit of oil and gold they cut a bloody swathe across the Middle East, and churned South and Central America into political chaos over and over again.

Israel likewise – whether you consider them the power behind the US throne, or Washington’s catspaw in the Middle East – is a brutal apartheid state, that has torn up and spat out international law a thousand times over.

These are all true facts, and the multipolar narrative finds utility in them.

Just as domestic party politics parlays very real economic issues into shallow class-based resentments, or understandable concerns over uncontrolled immigration into reactionary xenophobia – so too does the “multipolar world” narrative prey on historical trauma and the desire for vengeance to embed partisan thought that erodes critical thinking.

The narrative harnesses the momentum of historical hatred to push itself forward.

Indeed, as I have previously said in interviews, the enthusiasm for this new model from the political classes in Russia, China et al. is entirely understandable. It is far better, from their point of view, to have a seat at the globalist table than be living with Uncle Sam’s nuclear gun at their temple.

It’s possible many of the people involved truly believe that a fake “multipolar world order” really does prevent a nuclear war, and is for the best.

Ironically, in their minds, “war” really does mean peace.

The Role of War

War is vital to the development of this multipolar model, in two main ways:

  1. It disguises, discredits and/or distracts from, the revelation of globalist cooperation highlighted by the Pandemic.
  2. It furthers, by other means, the “great reset” agenda.

It has other supplementary functions as well.

If “Multipolarity” is the global franchise of fake democracy, then war can be seen as a replacement for the ballot box.. We don’t have global elections (yet); so their role in the system is assumed by geopolitical struggles; trade deals or staged/limited “wars”.

Global unity government was and is a very unpopular idea, so its creeping implementation has to be disguised. Nothing disguises unity of purpose so well as armed conflict.

The sheer number of people who repeat some variant of the argument “how can they be on the same side, they’re shooting at each other!” is testament to the effectiveness of this strategy.

Nothing brings a populous together so well as a perceived external threat. History is replete with rulers who, faced with discontent at home, started a war to garner support. A state of being at war tends to unite people behind the government.

It’s the natural extension of this known tactic that two governments would agree to go to war in order to mutually benefit from this group-think dynamic.

This is international geo-political game theory, as explained in A Beautiful Mind. They both win if they agree not to truly compete.

Both sides have corrupt political classes, both sides have arms manufacturers keen to profit from chaos, both sides crave “emergency war-time powers” to crack down on domestic dissent.

So, we can see how the “war” individually benefits the rulers of each side in the short term. But, more importantly, the supra-national powers have a larger, longer-term agenda (see below) that is also served by the war.

War drives up prices, consumes resources, lowers the standard of living, justifies shortages and manufacturers scarcity.

These factors combine to a make a state of being – or appearing to be – at war vital to the planned breakdown and reconstruction of society.

This is not a new idea, the state has used the framing of war, or at least the threat of war, to boost national unity and increase state powers for centuries.

The new twist is that these “wars” are not real, they are – to one extent or another – staged.

All the wars a stage

We are living in the age of the unreal – The Perfidious Unreality of the New Normal – as we discussed with all those quotation marks.

We regularly live through “terrorism” that is no such thing, we hold “elections” where the voting is irrelevant, and we just had a worldwide “pandemic” without a disease.

It is only natural that warfare should be folded into a propaganda control system that increasingly relies on simply making stuff up.

Just as Western domestic “democracies” need “elections” to maintain the illusion of the system, so too does a “multipolar world” need “wars” to create the appearance of conflict.

These wars are not real.

Or perhaps “real” is not the best word to use – if you want we could say these wars are not honest, not true, not sincere.

But what does staged war mean?

Does it mean no bombs are being dropped or people killed?

No, as we have said many times: Be it in Ukraine or Gaza or Iran, there likely is death and destruction taking place – but that does not necessarily mean war.

As Catte says in her 2024 article:

Death isn’t the definition of war. Conflict is the definition of war.

Do a few air strikes or a thousand dead civilians mean the US and Iran are really enemies locked in an ideological struggle for survival? No. Of course not.

We know these governments and agencies do not care about their own people, let alone each other’s.

People were disposable when they were being nailed inside their houses, given illegal DNR orders or injected with toxic Pfizer goo, and they’re just as disposable when they’re being blown up.

It’s like a psychopathic, murderous sport. The players are real – maybe they’re playing to win or maybe paid to lose – but it doesn’t really matter, since the struggle is controlled by a league which sets the terms.

Numbers, times, places, rules and limitations are all agreed on beforehand.

And, just like sport, the fans cheering hate each other far more than the players playing do, everyone gets paid no matter who wins, and the whole thing is owned by a handful of billionaires who all go to the same parties.

What would a staged war look like?

Well, that’s a more complicated question.

The simple answer is “coordination”. Any kind of coordination – especially of scale or scope – means we can infer a certain amount of fakeness. After all, if the two sides can agree to have a limited war, they can agree not have a war at all.

There are a few more specific signs to look out for.

For example, both sides calling ahead to tell each other where they plan to bomb (or not bomb), so that people can be evacuated accordingly.

Or one army making it to the enemy capital inside a month, then turning around and leaving again for unknown reasons.

Or maybe pausing hostilities to carry out a polio vaccination drive.

Or perhaps vague or ever-changing victory conditions.

Or a pattern of airstrikes hitting empty or condemned buildings in such a way that aligns with pre-existing renovation plans.

Or repeated self-defeating or self-sabotaging behavior that seems to artificially halt progress or extend the conflict.

Or sudden, contradictory developments in the narrative that don’t logically follow.

Or apparent collaboration from combatants on strategies that further a globalist agenda.

…that kind of thing.

This is the logical extension of pre-existing modus operandi. The inevitable intersection of the war-for-profit model that is centuries old, and the age of simulacra described by Baudrillard in the 1980s.

What is the benefit of staged war?

The benefit of a staged war vs a real war is much the same as a fake pandemic vs a real pandemic – control.

A coordinated “war” can last as long as it needs to, pause or resume on command, kill as few or as many as necessary, and can’t ever accidentally result in nuclear annihilation.

George Orwell described it almost perfectly eighty years ago. Super-continents locked in eternal, and maybe even fictional, conflict. Warfare becoming “a purely internal affair”, not meant to be won but meant to be continuous.

An endless game and permanent chaos is how they win.

That’s our state of play, grumbling wars with vague victory conditions that neither army ever loses but both sides constantly claim to be winning.

Meanwhile, the price of energy is only going up, we’re being warned of fertilizer crises and food shortages and higher taxes.

Different Paths, Same Destination

Just as in domestic party politics, vociferous or violent disagreements between the parties belie a shared agenda pushed by the power that controls both sides of every apparent divide.

Even as their mutually-beneficial “wars” play out, reports and think-tanks talk up the need for “limited cooperation” or “regional multilateral projects”.

As they bash their soldiers together on one side of the world, they share technology, cooperate on environmental issues or buy gas and oil from each other.

And agree on major policy documents.

The whole world (minus the US, currently) has signed the Pandemic Treaty, or signed up to the United Nations “Pact for the Future”.

The BRICS nations all have globalist ties – recall BRICs was a term coined in a Goldman Sachs report in 2001 – and they all signed the Kazan Declaration in 2024. Supporting, among other things, the IMF, the WHO, Agenda 2030 and “sustainable development goals”. (Read Riley Waggaman’s great break down here)

The Kyoto Protocols, the Paris Climate Agreements, the UN’s Sustainable Development Goals are all backed by every one of our multiple poles.

Everyone on any of the supposed sides believes in the same things and shills the same foundational globalist lies such as climate change and Covid.

And, quirks of implementation or nomenclature aside, they all want the same things and push the same familiar shopping list of policies:

  • Programmable Digital currency
  • biometric Digital ID
  • ending online anonymity
  • Cashless society
  • Censorship
  • “Sustainable development goals”

The unspoken endgame of this collective horror show is easy to summarize: Techno-authoritarianism.

Hrvoje Moric has written about how multipolarity, as a model, is a form of global government.

A dystopian society where the state and mega corporations merge into a Thing-like monstrosity that has constant, real-time access to any and all data for pretty much everyone on the planet. That has the ability and facility to monitor – or control – every transaction, every journey, every message or phone call.

“Multipolarity” disguises this truth, and uses partisan thinking and ideology to draw fake or surface-level distinctions.

BRICS vs NATO, the US vs China, Israel vs Iran, Europe vs Russia, Belt and Road Initiative vs the India-Middle East-Europe Trade Corridor.

Pick a flag and wave it. Fake Wars & Higher Prices, all in the service of The Great Reset.

That is its purpose, and that is what “multipolarity” really means.

Tyler Durden Thu, 05/21/2026 - 23:25

Pentagon Delegation's Beijing Visit Held Up Over Gargantuan US Arms Package For Taiwan

Pentagon Delegation's Beijing Visit Held Up Over Gargantuan US Arms Package For Taiwan

China is using a Pentagon itinerary as structural leverage, and Taiwan remains front and center as the key geopolitical snag in bettering communications and relations between Beijing and Washington.

According to a Financial Times report published Thursday, China is actively holding up a proposed visit by Elbridge Colby, the Pentagon's under-secretary of defense for policy. The move is a transparent effort to pressure President Trump over a looming $14 billion weapons package for Taiwan.

Elbridge Colby, left.

While Colby had been actively discussing a summer trip to Beijing with Chinese officials, China has effectively frozen the process and logistics. Sources familiar with the talks report that Beijing has signaled it "cannot approve a visit until Trump decides how he will proceed with the arms package."

Trump admin officials have been quick to point out that Trump has approved "the sale of more weapons to Taiwan than any other US president." And so it appears that such bravado should come with a cost, in Beijing's apparent thinking.

And yet, Trump has repeatedly publicly touted his personal relationship with Chinese President Xi Jinping as "amazing" - though his recent Beijing trip did nothing to ultimately produce a breakthrough.

Trump, upon returning from his trip earlier this month, stated that he "has not decided whether to proceed with the major weapons sale," injecting a fresh wave of strategic ambiguity over US support for the self-ruled island.

He also in an interview with Fox News' Bret Baier had stated that he doesn't want "to travel 9,500 miles to fight a war" over Taiwan.

"I'm not looking to have somebody to go independent and, you know, we're supposed to travel 9,500 miles to fight a war," Trump told Baier. "I'm not looking for that. I want them to cool down. I want China to cool down."

Taiwan remains critically important to Washington because it is not only a semiconductor production supernode, but also a geopolitical fortress against China and a potential flashpoint in US-China relations. But China hawks have questioned Trump's resolve and where he stands, related to the scenario of potential direct Chinse aggression against Taiwan.

Trump's rhetoric on Taiwan before and after his summit with President Xi has raised eyebrows in Washington...

Geopolitical risk analyst Ian Bremmer has also lately weighed in. He has speculated: "This is Trump's perspective: the only thing that matters about Taiwan is the chips. Very different from the view of U.S. allies in the region: Japan, South Korea, and Australia."

Tyler Durden Thu, 05/21/2026 - 23:00

Trump Admin Targets States' Medicaid Fraud Units

Trump Admin Targets States' Medicaid Fraud Units

Authored by Tom Gantert via The Epoch Times,

Vice President JD Vance said during a recent press conference that he was intensifying attempts to counter Medicaid fraud by investigating state-level units responsible for oversight.

States such as California and Hawaii seemed to lag behind others in combatting fraud, said Vance, whom the president picked in March to lead an anti-fraud task force.

“Now, we have red states and blue states that go after fraud aggressively, but we also unfortunately have some states, mostly blue states, unfortunately, that do not take Medicaid fraud very seriously,” he said.

In response, Vance said the administration would withhold $1.3 billion in Medicaid-related payments to California and also consider withholding from other states.

The administration put each of the 50 states on notice with recent letters signed by Health and Human Services Inspector General Thomas “March” Bell. It focused on state-level Medicaid Fraud Control Units (MFCUs), which receive federal funding.

Letters also went to the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

Here’s what to know about the units and Vance’s efforts.

Federal Grants at Stake

The letters threatened to take away all federal grants provided to a state’s Medicaid program if the state was not fulfilling its duties.

“It has become clear ... that many MFCUs have been happy to rake in taxpayer dollars without fighting fraud,” Bell stated in the letter. “And for too long, there has been a lack of leadership at HHS that has allowed billions of our fellow Americans’ dollars to flow out to State capitals to fund MFCUs to supposedly fight Medicaid fraud without any real oversight.”

He said that the units must comply with certain requirements to receive funding. Federal law requires the units to investigate and prosecute fraud, investigate patient abuse and neglect in Medicaid-funded facilities, and recover overpayments.

The units must operate statewide, employ investigators, auditors, and attorneys, and remain separate from the state agency that administers Medicaid. The law requires the units to either possess prosecutorial authority or formally coordinate with prosecutors.

Bell told the attorneys general that “your failure to do your job as head of the MFCU has put all of your State’s Medicaid funds in jeopardy.”

Michigan Attorney General Dana Nessel’s office told The Epoch Times that the administration wrongly accused the state.

“That the new HHS-[Office of Inspector General] would send such a letter to all 53 MFCU’s in the nation, writing that ‘your failure to do your job as head of the MFCU has put all of your State’s Medicaid funds in jeopardy,’ is inconceivable and completely disconnected from the performance record of Michigan’s MFCU and the tremendous reporting our office makes in compliance with the federal government’s oversight,” Danny Wimmer, Nessel’s press secretary, told The Epoch Times.

“While some states have been, over the last year, singled out by the federal government for purported performance issues, Michigan has never been among them."

The federal government covers most of the costs for MFCUs for each state.

For example, the attorney general’s unit for Michigan received a $5.5 million federal grant from the U.S. Department of Health and Human Services that covers 75 percent of its funding. The state picks up the remaining 25 percent, or $1.8 million.

In 2024, the total cost of all these state-based units was $396 million, of which $297 million was picked up by the federal government.

Wimmer said Michigan’s MFCU went through a “rigorous” recertification process every year in which the HHS’s Office of Inspector General determined whether it was in compliance with regulations.

How Do Fraud Control Units Work?

The Social Security Act requires each state to operate an MFCU.

Cases usually start as referrals from other organizations, third parties, or from MFCU staff members who detect potential fraud from data mining.

MFCU staff review referrals to determine the potential for criminal prosecution and civil action. Besides fraud, abuse and neglect are also investigated.

In 2025, about 1 in 5 cases investigated by MFCUs nationwide were for abuse and neglect. There were 3,019 investigations nationwide into abuse and neglect compared with the 12,902 investigations into fraud.

For example, Pennsylvania’s MFCU this year investigated a case involving a 50-year-old woman who was convicted of failure to renew a resident’s medications, which led to a fatal seizure in 2021.

About 4 in 10 fraud convictions from 2015 to 2024 involved Personal Care Attendants, nonmedical professionals who provide daily living assistance to people with disabilities or chronic illnesses.

Wimmer said Michigan’s unit “submits extensive questionnaires and produces significant accountings and reports on various aspects of their operations, such as investigative efforts and fiscal operations.”

He added that HHS “conducts very thorough weeklong on-site audits every 5-7 years on state MFCUs, including ours, wherein they send a team of approximately 10 inspectors to audit the fraud control unit.”

Ed Haislmaier, an expert in health care policy at The Heritage Foundation, said that although licensed providers were involved in fraud cases, fraud on an “industrial scale” appeared to occur more often in non-specialized areas of health care where professional licensing is not required.

Those sectors often included providers who could receive approval for government funding without undergoing background checks.

“The lower the barrier to entry for a type of provider, the more likely you are to see this kind of fraud,” Haislmaier said.

Targeted States

While the administration reached out to every state, Vance highlighted three—Hawaii, California, and New York—that he said were not taking fraud seriously.

During his press conference, he noted how Indiana had many more prosecutions than New York.

Vance said it was “absurd” to think that the people of Indiana were just more likely to commit Medicaid fraud than the people of New York.

“What is happening is that the leadership in New York are just not taking the fraud issue seriously,” Vance said. “They are not using these antifraud control units to actually investigate and indict the fraud.”

New York Gov. Kathy Hochul’s office didn’t respond to an email seeking comment.

HHS data revealed that Indiana had 951 investigations in fiscal year 2025 with 42 indictments and 32 convictions.

California, a top target for the Trump administration, had 1,052 investigations with 83 indictments and 43 convictions.

California Gov. Gavin Newsom’s office criticized Vance on social media.

Newsom’s office said in-home support services have grown because California is keeping seniors and people with disabilities out of the more expensive nursing homes—the cost of a nursing home was $137,000 a year compared with $30,000 a year for in-home support services.

Newsom said the approach saved taxpayers money.

Hawaii’s Medicaid investigative unit had 484 total investigations in fiscal year 2025 but not a single indictment or conviction, according to federal data.

Hawaii’s state data showed that from 2021 through 2025, the state conducted a total of 2,779 investigations into fraud and abuse that resulted in just five convictions. All were reported in 2021. That would mean Hawaii has conducted 2,104 fraud and abuse investigations from 2022 through 2025 without a single conviction.

Hawaii Attorney General Anne Lopez rejected Vance’s characterization of her state as not taking fraud seriously.

“Our Medicaid Fraud Control Unit has secured or helped secure more than $14 million in judgments, settlements and recoveries since 2021, filed recent criminal charges—and is actively working with federal and state partners to strengthen investigations and prosecutions,” Lopez said in a press release.

“We welcome accountability, but we will not allow the work of this unit to be mischaracterized as doing nothing.” 

Tyler Durden Thu, 05/21/2026 - 22:35

"Marylanders Are Voting With Their Feet": Johns Hopkins Finds Blue State Exodus To Persist For Years

"Marylanders Are Voting With Their Feet": Johns Hopkins Finds Blue State Exodus To Persist For Years

A new Johns Hopkins University survey shows that more than half of Baltimore respondents expect to move out of their current neighborhoods within three years, as the one-party-ruled state of Democratic Party queens and kings has failed taxpayers on affordability, law and order, and other basic issues commonly standard in red states.

The Hopkins survey, conducted from September to November 2024, found that 42% of Baltimore City residents want to leave the city entirely. Of those, 27% expect to stay somewhere else in Maryland, while 15% expect to leave the state, according to the Baltimore Sun.

Among the 58% of city residents who plan to remain in Baltimore, only 36% expect to stay in their current neighborhood, while 22% expect to move to another part of the city.

In Baltimore County, the urgency to relocate is also high, but most residents who want to move expect to remain in the county: 66% say they plan to stay.

Vice Chair of the Maryland Freedom Caucus, Republican Delegate Kathy Szeliga, explained the dire situation in Maryland, where a very real exodus is underway:

Every day, I hear from friends, neighbors, and constituents that they are considering or they are actually moving out of Maryland. It's not just the crushing taxes, unaffordable energy bills, and concerns about public safety; it's also the failing education system.

Governor Wes Moore is unable to deliver results or give people confidence that he can turn this state around, and so people are voting with their feet and leaving Maryland.

How bad is this exodus in Baltimore?

Well, the population of Baltimore City alone has collapsed 40% from its 1950s level, and deindustrialization, blended with half a century or more of toxic left-wing politics, has transformed parts of the city into an utter economic wasteland.

"There is no question that Governor Moore's policies on crime, affordability, and government competence make Marylanders want to flee the state," said Republican Delegate Robin Grammer, a founding member of the Maryland Freedom Caucus from Baltimore County.

Grammer added, "The Maryland Freedom Caucus has put affordability at the center of every fight in Annapolis, from electric bills to the increase in car registration fees. Marylanders are voting with their feet."

Related:

Maryland is likely on track to become the California of the East Coast, as progressive policies over the last half century have epically backfired, unleashing crime and chaos, unaffordability, high taxes, and a deteriorating quality of life.

The end result of this left-wing experiment is a massive population collapse in Baltimore City and negative net domestic migration for the state. The city was once the beating heart of American industrialization, but it has now transformed into an economic wasteland run by unhinged left-wing politicians.

However, there is good news. The remaining residents who are sticking out the looming financial crisis, as well as a worsening power bill crisis, in the state and city are beginning to see these politicians for what they really are: left-wing activists. They are also beginning to understand that the pillaging and corruption must end. Hence, the rise of the Maryland Freedom Caucus.

Notably, Hopkins is considered a left-leaning institution, which makes the survey even more concerning for Maryland's Democratic leadership. Additionally, the state's top media outlet, The Baltimore Sun, is leaning more center-right under new ownership, suggesting that left-wing propaganda in print and on the airwaves no longer works. This shift may usher in new, common-sense ideas and welcome a new era of politicians unlike anything the city or central part of the state has seen in generations.

Tyler Durden Thu, 05/21/2026 - 22:10

Toyota To Import Taiwan-Built Minivans To Japan Amid Factory Strain

Toyota To Import Taiwan-Built Minivans To Japan Amid Factory Strain

Toyota will start shipping Taiwan-built Noah and Voxy minivans to Japan later this year, marking a rare shift in the company’s production strategy as mounting pressures strain the country’s auto manufacturing sector, according to Nikkei.

Production for the Japanese market is set to begin in October on a dedicated line at Toyota’s plant in northern Taiwan, according to Nikkei. While Japanese automakers have long sold foreign-built vehicles at home, those models were typically intended for overseas markets first. Toyota’s decision to create an offshore production line specifically for Japanese consumers is highly uncommon, particularly for two of its key domestic models.

The move comes as Toyota faces increasing difficulty expanding output inside Japan. Factory utilization is already near its limits, while labor shortages, higher material costs, and tighter compliance requirements have made domestic manufacturing more expensive and less flexible. Delivery delays for popular vehicles have stretched for months — and in some cases more than a year — forcing the automaker to suspend orders periodically as demand outpaces supply.

Nikkei writes that Toyota has committed to maintaining annual domestic production above 3 million vehicles to support employment and preserve Japan’s industrial base. At the same time, however, the company is increasingly relying on overseas operations to ease bottlenecks and reduce operational risk.

The Noah and Voxy are among Toyota’s strongest-selling minivans in Japan, with annual sales typically ranging between 70,000 and 80,000 units. To help meet demand, Toyota plans to build roughly 100,000 vehicles per year in Taiwan, focusing mainly on lower-cost variants. Production in Japan will continue in parallel.

The Taiwan facility already assembles models including the Corolla sedan and Yaris Cross through a local joint venture. For the fiscal year ending March 2026, the plant produced around 120,000 vehicles. Expanding output for Japan-bound minivans is expected to significantly increase overall production volumes.

Building a new automotive production line with annual capacity of 100,000 vehicles can require investments worth tens of billions of yen. Even so, Toyota appears willing to absorb those costs as domestic factories struggle to accommodate additional output. The company currently produces about 14,000 vehicles per day across Japan, leaving little spare capacity.

Pressure on the production system intensified after certification issues uncovered in 2024 prompted Toyota to tighten testing and regulatory oversight procedures, further constraining manufacturing flexibility.

Producing vehicles in Taiwan also introduces new challenges. The yen recently fell to its weakest level against the New Taiwan dollar in more than three decades, raising labor and operating costs for Japanese manufacturers there. Still, Toyota sees offshore production as necessary to stabilize supply and reduce delivery times.

Toyota president Kenta Kon has warned that persistent shortages are unsustainable, calling the situation “abnormal and critical.” The company fears prolonged waits could eventually push customers toward rival automakers.

Toyota is not alone in turning to reverse imports. Industry data shows sales of Japanese-brand vehicles built overseas and sold domestically climbed 19% last year to more than 111,000 units — the highest level in three decades. Honda is also preparing to bring an India-made EV into the Japanese market by fiscal 2028 as automakers increasingly seek lower-cost production bases abroad.

Tyler Durden Thu, 05/21/2026 - 22:10

Can Progressivism Be Overthrown?

Can Progressivism Be Overthrown?

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

For the last year and a half, Americans have been slammed with politics to the point that it has made vast numbers of people nearly crazy. Following the news, the blow-by-blow is not easy, and it is worse seeing coalitions form, collapse, reconstitute, form again, and be witness nonstop to what seem to be subversions, betrayals, duplicates, and disappointments.

U.S. Supreme Court Associate Justice Clarence Thomas speaks at the University of Texas at Austin, in Austin, Texas, on April 15, 2026. AP Photo/Eric Gay

We follow the polls, donate to candidates, listen to podcasts, cheer our friends and boo the bad guys, all in this exciting spectator sport. I'm told it's not really this way in Europe. Americans have a distinct sense of investment in the way our public life operates and we believe we can and should do something about it.

Do we really have a clear conception of the larger forces at work? I sense that what is lacking is a clear-headed theory about what is actually going on, that is the thematics of the larger struggle going on here.

Oh sure, there are plenty of people who will tell you that this is about stopping the attempt of Donald Trump to be like a king. My neighborhood was filled with "No Kings" yard signs, until the same households quietly took them down as they cheered the visit of King Charles of Britain.

Others say this is really a struggle between the two political parties, an argument about U.S. foreign policy interests, wrangling over personnel, and so on. I'm not going to discount other theories entirely but what they all lack is a bigger philosophical way to understand our times.

A Supreme Court Justice recently gave a spectacular speech, one of the most important - probably THE most important - in a century or more. I've rarely read anything so clear, concise, accurate, and incredibly truth-telling.

Those who understand the speech and its message are going to be better positioned to understand what is really going on in our times. Those who ignore this speech will continue to be mystified by the day-to-day headlines and roiling political news.

The author and speaker is Justice Clarence Thomas, one of the most impactful voices of our times. It was delivered at the University of Texas, Austin, on April 15, 2026.

The core underlying message: Progressivism is falling apart or already is gone because it is contrary to the American idea. The remaining argument today that matters is what will replace it.

To understand the implications, we need to understand what Progressivism is, the role it played in remaking this country, its theory of power and expertise, why it was never consistent with American ideals, and why it is destined for the dust bin of history.

He begins with the historical context and the centrality of the Declaration of Independence. It "did not establish a form of government - that was the job of the Constitution that followed - but it stated the purpose of government. The Declaration made clear in unmistakable prose that the purpose of government is to protect our God-given inalienable rights, rights that all individuals equally possess."

"The ideas of the Declaration," he says, "were so powerful that our nation could not coexist with the contradiction created by the great evil of slavery. Those principles were so powerful that hundreds of thousands of Americans fought and died in the Civil War to make men free. Those ideas have been so powerful that they convinced our nation to finally end segregation. They continue to be so powerful today that they have inspired people throughout the world to throw off the shackles of their oppressors."

As he says, the Founders were willing to commit everything with great courage to the cause of individual rights to life, liberty, and the pursuit of happiness. It was not mere philosophy but life purpose, something for which they were willing to fight with courage and enormous risk and sacrifice. That decision shaped the American experience.

It is about a third of the way through where the speech gets hot and revealing of a history that very few students or adults today understand. He explained how the advent of Progressivism in the early teens of the 20th century effectively attacked and overthrew the vision of the Founders and the Declaration.

"At the beginning of the 20th century, a new set of first principles of government was introduced into the American mainstream," he says. "The proponents of this new set of first principles, most prominently among them the 28th President, Woodrow Wilson, called it Progressivism. Since Wilson's presidency, Progressivism has made many inroads in our system of government and our way of life. It has coexisted uneasily with the principles of the Declaration. Because it is opposed to those principles, it is not possible for the two to coexist forever."

"Progressivism was not native to America," he continues in ways that are consistent with everything I've read about this period. Indeed, some of the most influential intellectuals that emerged on the U.S. scene in that time had in fact done their graduate work in Germany, schooled in the dreams of technocracy and centralized social and economic management.

"Wilson and the progressives candidly admitted that they took it from Otto von Bismarck's Germany, whose state-centric society they admired. Progressives like Wilson argued that America needed to leave behind the principles of the Founding and catch up with the more advanced and sophisticated people of Europe. Wilson called Germany's system of relatively unimpeded state power 'nearly perfected.'"

To Wilson, the inalienable rights of the individual were "a lot of nonsense." Wilson redefined "liberty" not as a natural right antecedent to the government. Instead he saw liberty as "the right of those who are governed to adjust government to their own needs and interests." The government, as Wilson said, would be "beneficent and indispensable."

Progressivism, says Thomas, "requires of the people a subservience and weakness incompatible with a Constitution premised on the transcendent origin of our rights."

It was this period in history when the original design of the Constitution was mangled with a 16th Amendment that authorized the income tax and the 17th Amendment that turned the bicameral Congress into a unitary majoritarian body, thus empowering large cities over states. The central bank came along at the same time. The federal agencies grew and grew, with ever more power and invasions of rights.

Central to the Progressive vision was the exaltation of science, as understood by credentialed experts, at the expense of liberty. They believed that Darwin had demonstrated the dangers of unchecked procreation and sought to replace freedom with race theory, segregation, and eugenics. This wicked vision of the purpose of government mutated further in Europe with the rise of Nazism, fascism, communism, and the administrative state that effectively deleted people's government.

Justice Thomas explains all of this in bracingly brief form. It is an extremely satisfying read because he compresses hundreds of books into a short address. I frankly doubt that any Supreme Court Justice has dropped so many truth bombs in such a short space in the history of our country.

The central point: the entire vision failed. It did not give us a better managed society but social and economic stagnation, an overweening government ruled by supposed experts, invasions of our communities and families, and a crushing of individual liberty.

Make no mistake: all of this flowed from a philosophy of government that had nothing to do with the Founders' vision.

The system that displaced the Founders' structure is under pressure as never before today. Indeed, Progressivism is unraveling in our times because it has failed to live up to its promise, it breeds corporate corruption, it impoverishes people, and it is contrary to all our moral intuitions as a people.

"As we are gathered to celebrate this 250th anniversary of the Declaration," he concludes, "it may be tempting to do so as if we are passive spectators. It may be tempting to ... treat the Declaration like a shiny object or a keepsake, and listen to the sound of our own voices. ... What we must turn our attention to today is finding in ourselves the same level of courage that the signers of the Declaration had, so that we can do for our future what they did for theirs."

His final message to students: "Each of you will have opportunities to be courageous every day, whether your calling in life is as a day laborer, a stay-at-home mom, a small business owner, an educator, an office worker, a judge, or a Senator. It may mean speaking up in class tomorrow when everyone around you expects you to live by lies. ... It may mean turning down a job offer that requires you to make moral compromises. One thing I know to be true: It will mean waking up every day with the resolve to withstand unfair criticism and attacks. These are the choices that will confront you, and you must decide whether to respond with timidity or with courage, as the signers of the Declaration did."

Hear, hear! This is a mighty and glorious speech in all its essentials, worthy of deep study and wide readership. Once you internalize the meaning of it all, and consider how the Founders confronted a system they too had to overthrow in order to realize the blessings of liberty, our task becomes very clear.

Tyler Durden Thu, 05/21/2026 - 21:45

“We Must Leap Forward Into New Energy” - Canaccord’s Inaugural Nuclear Nexus Conference 

“We Must Leap Forward Into New Energy” - Canaccord’s Inaugural Nuclear Nexus Conference 

A new report from Canaccord Genuity captures the main threads from the firm’s first Nuclear Nexus conference, where fission and fusion developers, academics, and investors gathered to confront the practical barriers to scaling nuclear power. 

The event highlighted a shared recognition that surging electricity demand from AI data centers “finds itself bottle-necked by the physical reality of the grid”, forcing a hard look at fuel supply chains, regulatory timelines, and technology choices that can actually deliver power this decade.

The forum set out to connect the established track record of fission with the still-developing promise of fusion. Participants framed the two paths as complementary: one centered on controlled separation to release energy at scale, the other on forcing materials together under extreme conditions to achieve the same goal. 

Canaccord’s summary presents this tension as more than rhetoric, noting that Western nuclear deployment has lagged for decades, while Asia and Russia have moved ahead, driving up costs and exposing fuel vulnerabilities.

Oklo CEO Jacob DeWitte outlined the company’s Aurora Powerhouse, a liquid sodium-cooled fast reactor drawing on proven EBR-II technology and a build-own-operate model. He stressed the importance of securing a domestic HALEU supply chain through Idaho National Laboratory and Centrus, with longer-term options that include spent fuel reprocessing and access to government plutonium reserves suited to fast reactor designs. 

The discussion tied directly into broader concerns about Western dependence on foreign enriched uranium sources.

MIT professor Jacopo Buongiorno highlighted how the lack of recent construction experience in the West has roughly doubled nuclear build costs compared with earlier decades. He noted that small modular reactors are more likely to provide financing flexibility than dramatically lower electricity costs, and that HALEU supply remains a critical chokepoint. 

The contrast with rapid expansion in Asia and continued Russian export dominance was presented as a structural challenge rather than a temporary setback.

On the fusion side, UK Atomic Energy Authority’s Mike Gorley described the technology as fundamentally a large-scale thermal engineering problem rather than pure physics. A key constraint he flagged is the global shortage of Lithium-6, essential for tritium breeding and reactor performance. 

Several companies presented deployment timelines. Terra Innovatum’s SOLO microreactor is designed to run on either LEU or HALEU and incorporates inherent safety features that eliminate meltdown and explosion risks. The company is targeting a first-of-a-kind demonstration in 2027 and commercial units in 2028 under the NRC’s proposed Part 57 microreactor framework. 

Inertia is pursuing inertial confinement fusion and plans to begin construction of a 1.5 GW grid-scale plant in 2030 after solving manufacturing challenges for high-efficiency lasers and fuel targets. 

Newcleo is advancing lead-cooled fast reactors with MOX fuel and has partnered with Oklo to establish a U.S. MOX fabrication capability, addressing the domestic prohibition on commercial plutonium reprocessing.

MIT professors Dennis Whyte and Andrew Lo described their new Rutherford Energy Ventures vehicle as a diversified portfolio approach across the fusion value chain. They cited easier regulatory pathways for fusion compared with fission and immediate revenue potential from spin-off technologies as reasons the sector could reach system-level integration within the next decade, aided by hyperscaler demand.

TerraPower, backed by Bill Gates, received a landmark NRC construction permit in March 2026 for its Natrium sodium-cooled fast reactor in Wyoming. The company is on track for a 2030 startup and has signed a major agreement with Meta to develop up to eight additional Natrium units capable of supplying 4 GW of dispatchable power to data centers. 

Zap Energy is running a dual-track program that pairs a Z-pinch fusion reactor with a simpler sodium-cooled fission microreactor, planning to deploy the lower-risk fission technology in the early 2030s before scaling fusion later in the decade.

Panels on critical materials and isotopes pointed to persistent supply constraints for both medical isotopes and nuclear fuel components that are expected to last through the 2020s due to underinvestment and lengthy permitting. ASP Isotopes is commercializing laser-based enrichment, SHINE Technologies is generating near-term revenue from isotope production and fusion-fission hybrids, and Uranium Energy Corp is positioning its U.S.-focused uranium assets against a projected 1.9-billion-pound market deficit.

NuScale and its development partner ENTRA1 are advancing a six-plant deployment across the Tennessee Valley Authority territory, with four sites already identified. 

Participants noted that while evolutionary light-water designs are likely to lead near-term deployments, Generation IV reactors should play a larger role through the 2030s. Elementl framed itself as a technology-agnostic integrator focused on scaling proven light-water reactor projects to 100 GW by 2040 while hyperscalers such as Google provide early demand signals.

The report leaves the impression that the nuclear sector is entering a more dynamic period, but one still defined by practical constraints on fuel, regulation, and execution speed rather than by any single breakthrough technology.

Tyler Durden Thu, 05/21/2026 - 21:20

It's Not Iran Trapping Ships In The Hormuz, It's The Insurance Risk

It's Not Iran Trapping Ships In The Hormuz, It's The Insurance Risk

Is the Iranian regime the immediate barrier to oil tankers seeking to exit the Strait of Hormuz, or is it fear of liability that's keeping shipping companies at bay?

The damage actually done to Iran's military and weaponry by US strikes is a matter of hot debate, but one aspect of the strikes that is relatively easy to confirm is the destruction to Iran's navy.  US Central Command indicates that around 92% of Iran's naval capacity has been sunk to the bottom of the ocean including at least 10 small submarines.  So far, the regimes ability to actually hit and destroy US ships is next to nil.

The much vaunted "mosquito fleet" of small and fast attack boats has proven to be ineffective against US operations in the Strait, with some naval ships traveling directly through the Hormuz without much trouble.  At bottom, Iran has no ability to enforce an effective "blockade" on the strait. 

The regime's containment is mostly restricted to the use of drones, which can be countered with US technology (jamming and counter-drone operations).  But Iran also understands that the volatility of the cargo and the insurance risk is the greater element working in their favor. 

In other words, no matter how effective US forces have been in destroying Iran's assets in the strait, the financial risk to oil shippers remains.  Insurance companies are the Trump Administration's biggest obstacle, not Iran's military.  Tankers will not budge because there are too many coverage gaps, including the dreaded environmental coverage gap.

Pre-conflict, the insurance premium baseline for the Hormuz was extremely low (0.25% of a ships total value).  Today, those premiums have spiked from 2% to 10%.  Major insurers including P&I clubs like Gard, Skuld, NorthStandard and London P&I issued cancellation notices for war-risk coverage in the Persian Gulf area, effective in March. Reinsurers pulled back, forcing repricing.  The costs are far too high and the risk outweighs the reward. 

Traffic in the strait dropped by 80% almost immediately because of the loss of insurance.  This created a self-reinforcing problem: Even with limited US naval guidance ("Project Freedom") or occasional Iranian-coordinated passages, commercial operators avoid the risk without affordable coverage.

Industry brokers and shipping executives assert that the costs cannot be managed, and they have decided to adopt a "wait and see" approach on negotiations. Marcus Baker, Global Head of Marine, Cargo & Logistics at Marsh notes that tankers remain “insurable, if you’re prepared to take the risk...” but he emphasized the massive cost barrier for most operators.  

Interestingly, Iran's latest negotiation salvo on the strait focuses on their own crypto-based insurance scheme.  It effectively amounts to a "protection racket", forcing companies to buy insurance from the regime in exchange for safe passage.  However, there have been few takers; most shippers don't trust Iran to ensure the safety of their vessels.   

The obvious first solution would be for the Trump Administration to offer US backed coverage for tankers traversing the Hormuz.  This already happened in March.

Early in the war President Trump directed the U.S. International Development Finance Corporation (DFC) to provide political risk insurance and financial guarantees for maritime trade in the Gulf region.  A maritime reinsurance facility was established offering up to $40 billion for hull & machinery, cargo, and in some expansions, liability risks. It partners with major insurers like Chubb and AIG.

The alternative coverage is reasonable, but there are some problems.  The US is not offering full coverage which includes environmental damages should an oil spill take place, along with other gaps which prevent shippers from taking the deal.  It also does not yet guarantee full escort protection for tankers traversing the strait, a factor which has been up in the air due to negotiations. 

Analysts at Moody's note that US government-backed coverage will not fully restart flows without broader liability protections.

In other words, if the Trump Administration wants to get ships moving out of the strait anytime soon, they will have to amend their insurance to cover all gaps including environmental risk.  And, they will have to provide a reliable escort system.  This can be easily accomplished with Littoral combat ships with anti-mine and anti-air capability and anti-drone tech that are able to operate in shallow and narrow waters.  These ships have some of the most advanced automated anti-drone systems in the world.  

Accurate details on negotiations with the Iranian regime are sparse.  Iran's propaganda operations on social media often contradict their own diplomatic statements.  It's important to keep in mind that the regime is concerned with looking weak to their own population, and the constant posturing online is often designed to keep their citizenry in line rather than frighten the US.

There are also questions as to who is actually in charge.  Iran's new "supreme leader" has not been seen alive since the decapitation strikes.  Theories suggest the IRGC has reanimated the corpse of Ayatollah Mojtaba Khamenei through propaganda as a means to maintain a semblance of government authority. 

It may be that no one is really at the wheel in Iran and that current negotiations are nothing more than a stalling tactic while the remaining officials vie for power.  A deal may be close, but alternatives need to be considered.  All other factors aside (including Iran's stockpile of nearly 1000 pounds of 60% enriched Uranium which they openly admit to having), the Strait of Hormuz may require solutions outside of a deal with Iran.  And, those ships simply will not move without some impressive financial guarantees from the US.        

Tyler Durden Thu, 05/21/2026 - 20:30

US Deploys Aircraft Carrier To Caribbean As Trump Admin Pressures Cuba

US Deploys Aircraft Carrier To Caribbean As Trump Admin Pressures Cuba Authored by Jack Phillips via The Epoch Times (emphasis ours),

The U.S. military command operating in the Western Hemisphere said on May 20 that an aircraft carrier strike group entered the Caribbean Sea, as the Trump administration heaps pressure on the Cuban communist regime.

In a post on X, U.S. Southern Command said that the USS Nimitz is now in the Caribbean and released video footage of the carrier group. Southern Command did not provide more details about why the carrier group traveled to the region.

The Nimitz, it said, "has proven its combat prowess across the globe, ensuring stability and defending democracy from the Taiwan Strait to the Arabian Gulf."

The Nimitz, commissioned in 1975, carried out joint naval exercises with the Brazilian Navy off the coast of Rio de Janeiro last week, the U.S. Embassy in Brazil said in a May 14 statement.

On May 20, the Department of Justice (DOJ) unsealed a criminal indictment against former Cuban leader Raul Castro, and U.S. Secretary of State Marco Rubio released a video in Spanish urging Cubans to reject the country's communist leadership.

According to the DOJ indictment, Castro was indicted in connection with the 1996 downing of civilian planes operated by Miami-based exiles. Castro, now 94, was Cuba's defense minister when the planes were shot down, killing four people.

The charges against Castro, the brother of former Cuban leader Fidel Castro, drew pushback from the country's current leader, Miguel Diaz-Canel, in a post on X.

"This is a political maneuver, devoid of any legal foundation, aimed solely at padding the fabricated dossier they use to justify the folly of a military aggression against Cuba," Diaz-Canel wrote.

This year, U.S. President Donald Trump has been ratcheting up talk of regime change in Cuba and said he would potentially initiate a "friendly takeover" of the country if its leadership did not open up its economy to American investment and kick out U.S. adversaries.

When asked what will happen next for the U.S. embargo on Cuba on Wednesday, Trump said, "We're going to see." He added that the U.S. government is ready to provide humanitarian assistance to what he described as a failing country.

Trump said that "there won't be escalation" between the United States and Cuba, adding, "I don't think there needs to be."

"Look, the place is falling apart. It's a mess," Trump added. "They've really lost control of Cuba."

In Cuba, there is no food, electricity, or energy, Trump said, adding that the U.S. government will have to act to assist the country.

Earlier this month, CIA Director John Ratcliffe traveled to Cuba to meet with the country's top officials, a visit that came as the country's energy minister said the island has completely run out of fuel and that its power grid is in a critical state.

In January, the U.S. military launched an operation in Venezuela that captured its president, Nicolas Maduro, an ally of the Cuban regime, and took him to the United States to face drug-trafficking charges.

Since September 2025, the U.S. military has been launching strikes against suspected drug-smuggling boats in the Caribbean and eastern Pacific Ocean in what the military calls Operation Southern Spear.

Nimitz-class aircraft carrier USS George H.W. Bush (CVN 77) sails in the Arabian Sea, on May 3, 2026. Courtesy of the U.S. Navy Tyler Durden Thu, 05/21/2026 - 17:00

Exit Taxes Won't Save Failing States

Exit Taxes Won't Save Failing States

Authored by Vance Ginn via TheDailyEconomy.org,

When a state starts floating an exit tax, it is telling you something more important than any campaign slogan: the people running the place know their model is not working. 

They may not say it that way. They will call it fairness, responsibility, or making the wealthy “pay what they owe.” But the meaning is the same. 

If families, entrepreneurs, and investors are leaving, the state can either ask why its policies are pushing them out, or it can try to tax them for escaping. An exit tax chooses punishment over reform. 

I understand why these proposals resonate with some people. If you are watching wealthy residents relocate while governments still face bills for schools, roads, pensions, and other commitments, it is easy to feel like the people with the most mobility are ducking the tab. 

That frustration is real. It deserves a serious answer. But an exit tax is not a serious answer. It is a confession that lawmakers would rather cling to a failing fiscal model than fix the spending, regulation, and tax policies that made people want to leave in the first place. 

That is why the current trend is so revealing.

In California, proposals have centered on taxing billionaire net worth, including wealth that often exists on paper rather than in cash. In New York, the push has extended to a new surcharge on high-value second homes in New York City.

In Washington, lawmakers have already enacted a “millionaires’ tax.” These policies differ in form, but not in spirit. They all send the same message: if government has made your state too expensive, too hostile, or too unpredictable, it may still try to claim part of your future anyway. 

The economics are worse than the politics. Supporters talk as if wealth is a pile of idle cash sitting in a vault, just waiting to be skimmed. It is not. Wealth is usually tied up in businesses, shares, property, and future earnings. 

Taxing net worth or unrealized gains means taxing value that often has not been sold, realized, or converted into cash. That can force asset sales, dilute business ownership, weaken investment, and change behavior long before the tax collector ever gets a check.

 A Hoover Institution analysis of California’s proposal found that once likely migration responses are considered, the measure could leave the state with a negative net present value of about $25 billion. That is the real lesson: politicians score the tax statically, but the economy does not sit still. 

And that is before you get to the broader evidence. The OECD has noted that recurring net wealth taxes have become much less common across advanced economies because they tend to raise less revenue than promised while creating large compliance costs, avoidance incentives, and economic distortions. Countries tried them. Many backed away. 

A recent NBER study on Scandinavian wealth taxation found that higher top wealth-tax rates reduced the number of wealthy taxpayers and that many of those taxpayers were business owners whose departure reduced investment, employment, and value-added. 

That is the part too often ignored in political talking points. When a state drives out a founder, investor, or employer, it is not just losing one tax return. It is losing future jobs, future capital formation, and future opportunity for everybody else too. 

Defenders of exit taxes still fall back on one argument that sounds morally satisfying: these taxpayers benefited from state infrastructure, legal protections, and markets while they lived there, so the state deserves one final cut

But that argument quietly rewrites the relationship between citizen and government. It turns moving into a taxable offense. It says the state retains a lingering claim on your success because you once lived under its jurisdiction. That is a dangerous principle in a federal system built on mobility and competition.

 Even in the international arena, exit taxes are controversial, complex, and tied to specific movements of assets or functions across borders. Importing that logic into state tax policy is not modernization. It is escalation. 

The problem is not just that these taxes are bad economics. It is that they usually do not stay narrow. Politicians sell them as a tool aimed only at billionaires or luxury homeowners — policy aimed at an applause line. But when the revenue falls short, the scope expands. 

One-time wealth taxes become annual property surcharges. “Billionaire” thresholds are expanded to target millionaires and eventually the middle class. “Temporary” taxes become permanent fiscal architecture. New York’s pied-à-terre proposal is a good example of how quickly the logic expands once the principle is accepted. 

Frédéric Bastiat warned us to look not just at what is seen, but at what is unseen. We see the tax revenues. That’s a small, visible victory compared to the investment that never happens, the entrepreneur who builds elsewhere, jobs that never arrive — the unseen costs compound. 

Exit taxes are built on ignoring all of that. 

Claiming an exit tax frames mobility as theft, when it is often a rational response to bad governance. They do not restore prosperity. They steal the opportunity to prosper by doubling down on the very policies that made growth harder in the first place. 

If lawmakers want to deter departures, the answer is not a fiscal trap door. It is better policy: lower taxes, lighter regulation, spending restraint, and a serious effort to make their states places where productive people want to stay.

Real economic renewal is more difficult than yet more taxation, but it is also the only approach that works. Exit taxes will not save failing states. They only confirm why people wanted to leave. 

Tyler Durden Thu, 05/21/2026 - 16:20

No Deal Reached, Amid 'Fabricated' Mideast Media Reports; Trump Presses Nuclear Issue & Iran President Says 'Won't Back Down'

No Deal Reached, Amid 'Fabricated' Mideast Media Reports; Trump Presses Nuclear Issue & Iran President Says 'Won't Back Down' Summary
  • Al Arabiya issues dramatic retraction on prior 'deal reached' reporting.
  • Iranian president vows to not back down, as Trump still vows to get nuclear material.
  • AI Arabiya TV obtains what it describes as final draft of US-lran agreement, 
  • Reuters reported that Ayatollah ordered that stockpile of uranium enriched to 60% remain strictly inside Iranian territory. Some Iranian officials then denied report to Al Jazeera.
  • WH says make a deal or else... "they can face a punishment from our military the likes of which has not been seen in modern history."
  • US Intelligence says Iran has reconstitute drone program, defense industrial base, "faster than expected" (CNN).
//--> //--> //--> Will the Iran ceasefire continue through June 15?
Yes 51% · No 50%
View full market & trade on Polymarket

*  *  *

No Deal Reached: Prior Reports 'Fabricated'

After something like eight hours - which unleashed significant moves in oil and markets - complete retractions are being issued, with words like 'fabrication' used, after which oil swings higher...

Iranian President: Won't Back Down

Iranian President Masoud Pezeshkian has stated, "We will not bow our heads, our ministers and experts are working day and night, without a single day off." He added, per state sources: "We are willing to sacrifice as much as possible for the honor and pride of Iran, and we are not afraid of martyrdom."

And just like that...

Markets reversed earlier gains as Iran's President said on state TV that they won't back down in talks. The momentum then picked up when a "high-level source" told Al-Arabiya that the Pakistani Army Chief will not head to Tehran tonight.

The Pakistani were supposed to head to Iran only when the reach of an agreement was in sight, so this kind of denies the earlier reports of a US and Iran draft agreement.

US stock indices erased more than half of earlier gains. We've seen the same reaction in oil, FX and bond markets but now they are consolidating.

Still, Al Jazeera is reporting that "negotiators are very close to reaching a deal, and are currently working on a draft text. At the same time, another source told Al Jazeera that it is too early to judge whether a serious, final agreement is within reach."

IRNA has cited a Pakistani official who says the talks are "moving in the right direct" - though it's anyone's guess at this point. The prior reported draft did not take up the nuclear issue. Trump continues to press the nuclear issue:

US President Donald Trump has again pledged to seize Iran’s stockpile of highly enriched uranium as part of any agreement over Tehran’s nuclear program.

“Look, we’re going to make sure they don’t have a nuclear weapon or we’re going to have to do something very drastic. I believe when it’s put to the people of our country, they will all agree we cannot let Iran get a nuclear weapon,” Trump told reporters at the White House.

Asked whether Iran could retain its enriched uranium, Trump replied: “No, we will get it. We don’t need it, we don’t want it, we’ll probably destroy it after we get it. But we’re not going to let them have it.”

Oil Plunges on Final Draft of US-Iran Agreement Reached

Is this the one? While we've seen this rodeo before, oil is plunging on a Saudi media report which is positive for peace. Crude hits low of day...

Traders Circulate AI Arabiya TV obtaining what it describes as final draft of US-lran agreement: (CLICK TO SEE KEY PROVISIONS) - UNCONFIRMED

Key provisions include:

1) An immediate, comprehensive, and unconditional ceasefire on all fronts (land, sea, air)

2) Mutual commitment not to target military, civilian, or economic infrastructure

3) Cessation of military operations and instigating media warfare

4) Respect for sovereignty, territorial integrity, and non-interference in internal affairs

5) Guaranteed freedom of navigation in the Gulf, Strait of Hormuz, and Sea of Oman

6) Establishment of a joint monitoring and dispute resolution mechanism

7) Launch of negotiations on outstanding issues within seven days

8) Gradual lifting of U.S. sanctions in exchange for Iran's adherence to the terms

9) Affirmation of compliance with international law and the UN Charter

Importantly, there's no mention of the nuclear issue.

"The agreement is stated to enter into force immediately upon formal announcement by both parties," the Al Arabiya report says.

Drones, Military Industrial Base Being Rapidly Restored Amid Extended Ceasefire

The Iranians have reportedly rebuilt damaged and destroyed defense industrial sites much faster than expected. That's according to US intelligence assessments cited in CNN, and based on anonymous officials. The Pakistan-mediated talks have been stalled, and each of the last several weeks has seen Washington issue updated peace conditions, only for Tehran to in return counter-issue its own demands. And round and round the indirect negotiation has gone, yet with no breakthrough, or not so much as a step forward.

But perhaps this was all a tactic to simply prolong the ceasefire? It allowed for Iran to rearm and regroup, after the prior 38-days of US-Israeli bombing. "Iran has already restarted some of its drone production during the six-week ceasefire that began in early April, one sign it is rapidly rebuilding certain military capabilities degraded by US-Israeli strikes, according to two sources familiar with US intelligence assessments," CNN reports Thursday. "Four sources told CNN that US intelligence indicates Iran’s military is reconstituting much faster than initially estimated."

One US official cited in the report has gone so far as to say "The Iranians have exceeded all timelines the IC had for reconstitution." In the recent past, White House officials themselves have admitted that the Islamic Republic is probably reconstituting. Trump in the meantime keeps saying he's 'days' away from reordering strikes amid Tehran's intransigence. According to more on Iranian efforts to prepare for the next potential round of fighting:

The rebuilding of military capabilities, including replacing missile sites, launchers and production capacity for key weapons systems destroyed during the current conflict, means that Iran remains a significant threat to regional allies should President Donald Trump restart the bombing campaign, according to the four sources familiar with the intelligence. It also calls into question claims about the extent to which US-Israeli strikes have degraded Iran’s military in the long term.

While the time to restart production of different weapons components varies, some US intelligence estimates indicate Iran could fully reconstitute its drone attack capability in as soon as six months, one of the sources, a US official, told CNN.

Iranian Denials

Throughout the morning, and since the Reuters report was first issued, various unnamed Iranian officials are saying the Ayatollah gave no such order regarding taking enriched uranium removal off the table when it comes to potential negotiations. According to an Al Jazeera correspondent: 

A senior Iranian official denied to me reports that Supreme Leader Mujtaba Khamenei has issued a new order requiring enriched uranium to remain inside Iran, saying they are “propaganda by the enemies of the deal” The official added there are “no new order has been issued,” and that Tehran’s position has been consistent: Iran would downblend the material itself. “That is the subject of talks in the next stage,” the official said.

This will likely only fuel speculation of deep division within Iranian leadership ranks. Traditionally the IRGC reports directly to the Ayatollah, and is seen as the more hardline faction, ready to resist compromise and opt for a military response to US pressure.

Oil snaps lower on the denials... per Newsquawk:

In an immediate reaction, crude fell to the detriment of the USD and the benefit of equity and fixed benchmarks. Specifically:

• WTI Jul'26 fell from USD 102/bbl to USD 100.56/bbl.
• UST Jun'26 lifted from 109-00 to 109-04+.
• ES Jun'26 lifted from 7418 to 7433.

Ayatollah Orders Enriched Uranium To Say On Iranian Soil: RTRS

The illusion of a grand diplomatic breakthrough in the Middle East is once again colliding with reality. The White House has been busy trying to paint a picture of a total capitulation by Tehran, which hasn't been demonstrated given its consistent position defying Washington's demands on the nuclear issue.

According to two senior Iranian officials speaking to Reuters, Iranian Supreme Leader Mojtaba Khamenei has drawn a hard line in the sand, ordering that Iran's stockpile of uranium enriched to 60% remain strictly inside Iranian territory.

Office of the Supreme Leader, via Reuters

Reuters underscores that "Ayatollah Mojtaba Khamenei's order could further frustrate U.S. President Donald Trump and complicate talks on ending the U.S.-Israeli war on Iran."

"Israeli officials have told Reuters that ‌Trump has assured Israel that Iran's stockpile of highly enriched uranium, needed to make an atomic weapon, will be sent out of Iran and that any peace deal must include a clause on this," the report continues.

The officials noted that within Tehran, there is deep suspicion that the ceasefire is in fact "a tactical deception by the US," designed to lull Iran into a "false sense of security... before the fighting resumes."

The fresh directive from from the supreme leader flies directly in the face of the narrative being spun by Washington and Tel Aviv, given Israeli officials maintain that President Trump explicitly promised Israel that Iran's highly enriched stockpile would be completely removed from the country as part of any negotiated settlement.

Trump has also recently proclaimed this publicly, for example in a phone interview with CBS News last month, wherein he confidently proclaimed that Iran "agreed to everything" and would cooperate fully to ship its enriched uranium out of the country.

Extraction of nuclear material would of course rely heavily on the assumption of total Iranian compliance, given Trump has also lately appeared to rule out out a hostile invasion force, stating, "No. No troops."

There seems to be widespread agreement among national security officials at this point that some kind of special forces op to covertly go in and take it would be tantamount to a 'suicide mission'.

According to more of what Trump (prematurely) proclaimed in the prior CBS interview: "Our people, together with the Iranians, are going to work together to go get it. And then we'll take it to the United States."

The reality is all along the two sides' positions have been very far apart, and largely unbending:

And on a potential deal: "We'll be getting it together because by that time, we'll have an agreement and there's no need for fighting when there's an agreement. Nice right? That's better. We would have done it the other way if we had to" - he sought to explain.

At the moment, Iranian officials are reportedly reviewing the latest updated US proposals for peace, having reportedly asked Pakistan for time to assess and study the American points for negotiations."

However, Khamenei locking down the 60% enriched uranium inside Iranian borders, and amid suspicion that the US ceasefire offer is but a Trojan horse to get the Islamic Republic to simply given up its potential last line of defense, doesn't bode well for the chances of a breakthrough anytime soon.

//--> //--> //--> Iran agrees to surrender enriched uranium stockpile by June 30, 2026?
Yes 18% · No 83%
View full market & trade on Polymarket

For the latest warning from the White House, via Stephen Miller: "Iran has a choice to make: they can either agree to a piece of paper that is satisfactory to the United States, or they can face a punishment from our military the likes of which has not been seen in modern history. That's the choice they face" - he told Fox News.

Tyler Durden Thu, 05/21/2026 - 16:15

Trump Posts Article Laying Out: "Here's How To Crush Tehran In Three Moves"

Trump Posts Article Laying Out: "Here's How To Crush Tehran In Three Moves"

President Trump on Thursday posted to Truth Social a New York Post article which was first published over two weeks ago, on May 1st, with the headline "Here's how to crush Tehran in three moves."

Trump's new social media post, issued without additional comment, comes just after news of Iranian Supreme Leader Mojtaba Khamenei having drawn a hard line in the sand, ordering that Iran's stockpile of uranium enriched to 60% remain strictly inside Iranian territory. So now the world awaits what's next at a moment the White House has renewed threats of massive military strikes if Iran doesn't quickly come to the table and conform.

The NY Post article had straight-faced and without a hint of intended irony proclaimed: "President Trump has the upper hand." That statement was issued on day 63 of Trump's Iran war. Today is day 83.

What did the interim look like as the world's most powerful military force has been unable to reopen the Strait of Hormuz, amid constant threats to take new, bigger military action - but which never actually materializes (at least not yet) no matter how many times the Iranians reject Washington's terms?

The below timeline and outline, stretching from last week into this one, basically illustrates the weekly Trump pattern that's been on display going back many weeks at this point: 

  • Wed: Iran wants a deal. They called us 
  • Thu: We are looking at proposals
  • Fri: We might be close. Very close
  • Sat: Iran knows what to do
  • Sun: OBLITERATION. TOTAL. COMPLETE. They have 24 hrs. 
  • Mon: The storm is coming 
  • Tue: I'm giving it more time

This is what 'winning' looks like according to the NY Post, apparently. The publication also feels itself in a position to give 'advice' and guidance to the White House on executing a war. "His best path forward is to pursue three lines of effort in parallel," author Richard Goldberg (of Foundation for Defense of Democracies) wrote. It must be remembered that very recently a former senior official from FDD Action, the think tank's lobbying arm, joined Trump's Iran negotiating team - his name is Nick Stewart.

Here are the three:

  1. Sustain the blockade and accompanying economic warfare to destabilize the regime’s hold on the state;
  2. Remake the world in America's energy dominance image to mitigate long-term price impacts while undermining China's global ambition to defeat the United States;
  3. Order the US military to forge a path through the Strait of Hormuz to restore freedom of navigation on our terms not Tehran’s.

...if only simply ordering a military "path through" was that easy!

NurPhoto via Getty Images

"You might call the latter Operation Epic Passage — a combined naval and air mission of self-defense that offers escort to tankers and restores freedom of navigation, all while making clear to Tehran the devastating consequences of breaking cease-fire," Goldberg, who openly boasts of his close ties to the Israeli government, also wrote. He further offered the mission name of "Blockade Plus".

After the opening days and weeks of Operation Epic Fury, when it became clear that the large-scale US and Israeli bombardment would not produced regime change in Iran, pundits widely questioned whether the Trump White House actually had a plan, or long-term strategic vision for the military mission. 

And now, after more than 80 days in, the public gets Trump posting a NY Post article by a hawkish FDD writer, which seems more focused merely on ways to mitigate the blowback and 'make the best' of a failed regime change operation, in the wake of the administration's constantly evolving stated goals.

Tyler Durden Thu, 05/21/2026 - 15:50

Rickards: Investing In A World In Turmoil

Rickards: Investing In A World In Turmoil

Authored by James Rickards via DailyReckoning.com,

To say that the world is in turmoil to an extent not seen since the 1960s is an understatement.

The war in Ukraine is now in its fifth year. The war in Iran continues with no end in sight, despite Trump’s optimistic talk. NATO may be nearing the break-up stage as Trump pulls U.S. troops out of Germany.

Energy prices are soaring, inflation has accelerated sharply again, consumer confidence has fallen sharply, debt is at an all-time high and supply chains are breaking down.

Yet the major U.S. stock indices are at or near all-time highs.

What accounts for record stock prices amid almost unprecedented turmoil?

There are a number of key factors supporting stocks. The most obvious is the AI frenzy. This has two aspects. The first is that AI applications can improve productivity. The second is that the build-out of data centers with the most advanced semiconductors has led to a $1 trillion capital investment tsunami as Microsoft, Amazon, Google, Meta, OpenAI, Anthropic and other AI providers build their server farms.

The next factor is related to the first and is often called the picks-and-shovels trade. The idea is that those who benefit in a gold rush are not the gold miners but the merchants who sell tools, clothes, supplies and other goods the miners need.

In the AI gold rush, the winners are electricity suppliers, builders, hardware manufacturers (semiconductors and servers) and small towns where the server farms are located. These suppliers will do well today whether AI lives up to its promise or not.

Passive Aggression

Another major factor is passive investing. An enormous amount of U.S. wealth is held in 401(k)s, IRAs and assets under management by wealth managers.

Relatively few of the account holders (or, for that matter, wealth managers) really understand active stock investing or risk management. Instead, they buy index funds, ETFs or other equity basket products that track the stock market itself or a specified segment.

When money is put into these index funds, the manager buys the stocks in the index. That buying pushes stock prices higher. That attracts more money, more buying and more gains in a positive feedback loop that drives stocks even higher. No Ph.D. is required. You just buy the index, sit back and enjoy the ride.

FOMO and TINA

Two other factors related to the passive investing feedback loop are fear of missing out (FOMO) and the idea that there is no alternative (TINA). It’s difficult to show up at a cocktail party or the country club when all of your friends are touting their stock gains and you’re not in the market.

It’s also difficult to put money in 4% cash equivalents or assets like gold when stocks seem set to deliver 10% returns as far as the eye can see.

FOMO and TINA have nothing to do with fundamental stock analysis. But they are real and powerful drivers of human behavior.

It’s not all fairy dust, however. There are actual fundamental drivers behind stock gains. Corporate profits are coming in strong (despite some high-profile missed estimates). U.S. energy self-sufficiency will keep the lights on in the U.S. and help prevent 1970s-style gas lines — even if we are not immune to the impact of higher prices.

That’s the argument for higher stock prices despite global problems. What could possibly go wrong?

Unrecognized Risks

The greatest threat to higher stock prices is that the market has not fully discounted the impact of the war in Iran and the unprecedented disruption in the supply of oil, liquid natural gas, nitrates for fertilizer, helium, sulphur, aluminum and other critical inputs.

The reality of these shortages has not hit home (with the exception of higher prices for gasoline and oil), but that does not mean the coast is clear.

An enormous amount of oil supply was already on vessels that left the Strait of Hormuz before the war began. That “floating supply chain” took weeks to be delivered to end users. That process has now been completed; the last deliveries have been made. There is nothing else on the way.

Major manufacturing nations like South Korea, Japan, Taiwan and China are now using up reserves. These may last another month or so. The critical point at which reserves are gone, no resupply is on the way and the Strait of Hormuz remains closed grows nearer by the day.

Even if the strait reopens tomorrow, the current shortages will raise prices, disrupt supply chains and possibly lead to a global recession. Markets seem to be ignoring this possibility in favor of a narrative that says the strait will reopen soon and all will be well.

Great Expectations (for AI)

Eventually, it may also occur to markets that AI is not producing any revenue. It’s consuming $1 trillion in capital and promising untold riches, but those riches have yet to materialize. AI is a powerful technology and it’s here to stay. But that does not mean it will be particularly profitable. It may even hurt growth if hundreds of thousands of skilled workers are laid off.

There are serious reasons to believe that AI will not be that productive at all. Output errors (called “slop”) not only cast doubt on the reliability of AI, but are also populating the internet, which AI itself uses as a training set for new applications.

More slop in the training set means even less reliable output than earlier versions. The dream of superintelligence (artificial general intelligence, AGI) is out of reach because of the inability of engineers to code abductive logic.

If the AI bubble bursts (which I expect), it will not only hurt the Mag 7 stocks but also the picks-and-shovels plays around it.

The Private Credit Canary

A separate trigger for a market meltdown is the crisis in private credit. Funds sponsored by top managers like Apollo, BlackRock, Blackstone, KKR, Morgan Stanley and others are severely limiting investor withdrawals.

Complicating matters further, if fund managers try to sell assets quickly, there may be very few buyers unless the seller agrees to slash the price dramatically — sometimes by half or more compared with the stated “book value.”

Supporters of private credit say that this private market is only worth about $4 trillion and that even 20% write-offs will not jeopardize the system. But this calculation ignores the impact of leverage and the effects of contagion. Losses in private credit can trigger runs on mid-tier banks, which then spread to funds that hold those mid-tier bank stocks and so on.

The Dark Side of Passive

But the greatest threat to the stock market may be the dominance of passive investing.

The same buying dynamic that drives stock prices higher can work in reverse. A market drawdown can cause investors to sell their index funds. This causes fund managers to sell the underlying stocks, which takes down the indices, causing more selling by investors and so on.

While passive investing can push markets higher gradually, it can also drive them lower with startling speed and violence.

What’s an investor to do? The positive story for stocks is real, but the downside potential is equally real. The solution is to hedge by diversifying your portfolio. Keep some stocks, but also maintain a slice of cash, a slice of gold and medium-term U.S. Treasury notes.

Gold is the everything hedge. Treasury notes are secure and will rally when the recession goes into high gear. Cash will give you the option to go shopping for bargains when everyone else is dumping stocks.

TINA and FOMO are not your friends. Diversification is.

Tyler Durden Thu, 05/21/2026 - 15:40

Rubio: Diplomacy Will Be Rendered 'Impossible' If Iran Enacts Hormuz Toll System

Rubio: Diplomacy Will Be Rendered 'Impossible' If Iran Enacts Hormuz Toll System

Iran has been seeking to significantly expand the area around the Strait of Hormuz over which it claims military control by this week advancing the newly-created government agency of the "Persian Gulf Strait Authority".

The agency quickly published a map proclaiming "Iranian armed forces oversight" across more than 22,000 sq km (8,800 sq miles) of the Hormuz waterway. Now, all transit through the strait "requires coordination with and authorization from the Persian Gulf Strait Authority" - the new entity announced.

Of course, Washington has made clear that international vessels must not comply with Iran's rules. Yet Tehran is Wednesday into Thursday claiming some 'victories' in this regard. 

The Iranians say they are in active discussions with Oman to establish a permanent toll system for maritime traffic passing through the strait, according to Iran’s ambassador to France, Mohammad Amin-Nejad.

"Iran and Oman must mobilize all their resources both to provide security services and to manage navigation in the most appropriate manner, prevent pollution, and simply strive to establish an order so that global trade is not subject to disruptions. This will entail costs, and it goes without saying that those who wish to benefit from this traffic must also pay their share," Amin-Nejad said, as cited in Bloomberg.

Amin-Nejad further asserted the potential costs would be "clear, transparent, reasonable, and logical" - though the system is not yet in place. An initial toll proposal, which some companies may have already paid in order to get their stranded vessels out, was reportedly up to $2 million per tanker.

Iran is also touting that China and and South Korea have been in direct communication to arrange passage of their ships:

Iran continues to control the flow of tankers through the Strait of Hormuz for political and propaganda gains as the war of words continues over the peace negotiations. The Islamic Revolutionary Guard Corps (IRGC) Navy is claiming to have increased the flow with Chinese tankers and the first South Korean tanker permitted to make the transit, while many other vessels continue to wait.

...The IRGC Navy released a statement claiming that in the past 24 hours, a total of 26 vessels safely transited the Strait of Hormuz. It said this included tankers as well as containerships and other vessels. It asserted, however, that they were all “under the coordination and security support” of the IRGC Navy. They said all the ships making the transit had obtained prior authorization and required close coordination with the IRGC. 

...South Korea’s Ministry of Foreign Affairs announced May 20 that its first tanker had been able to make the transit carrying about two million barrels of crude bound for Ulsan. It said there are 25 other South Korean-flagged vessels still caught in the Persian Gulf, but it was significant after Iran refused transit a month ago to another South Korean tanker that was reportedly bound for Pakistan.

If Tehran can attract each country to make separate deals for the passage of their ships, this will be hailed as a 'win' for Iran and its Hormuz protocols. 

But the US and its regional allies are not buying into Iran's narrative, with the UAE having described Iran's claims of control as "nothing but fragments of dreams."

And importantly, on Thursday US Secretary of State Marco Rubio stated that a tolling system in the Strait of Hormuz would render a diplomatic deal unfeasible and that the US remains "very upset with NATO" their response to the Iran crisis. He said: 

"A toll collection system in the Strait of Hormuz will make a diplomatic deal impossible."

"We are very disappointed with NATO allies, we will discuss the issue of troop deployment at the upcoming meeting."

But at this point, Tehran doesn't look to be in a rush to complete a deal. Trump could be ready to indefinitely withhold new military strikes, and Iran is busy rearming and regrouping. Also, as enough time passes with the stalemated situation in place, Tehran is likely to convince more countries that they have no choice but to deal with the Islamic Republic directly.

Tyler Durden Thu, 05/21/2026 - 15:20

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