Authored by Lance Roberts via RealInvestmentAdvice.com,

Could data centers and the power grid be America’s next “renaissance?” With the U.S. national debt exceeding $37 trillion and interest payments surpassing defense spending, many articles have been written about the “debt doomsday” event coming. Such was a point we made in “The Debt and Deficit Problem.”

“In recent months, much debate has been about rising debt and increasing deficit levels in the U.S. For example, here is a recent headline from CNBC:”

“The article’s author suggests that U.S. federal deficits are ballooning, with spending surging due to the combined impact of tax cuts, expansive stimulus, and entitlement expenditures. Of course, with institutions like Yale, Wharton, and the CBO warning that this trend has pushed interest costs to new heights, now exceeding defense outlays, concerns about domestic solvency are rising. Even prominent figures in the media, from Larry Summers to Ray Dalio, argue that drastic action is urgently needed, otherwise another “financial crisis” is imminent.”

As we discussed in that article, the “purveyors of doom” have been saying the same thing for the last two decades, yet the American growth engine continues chugging along. Notably, Ray Dalio and Larry Summers focus on only one solution: “cutting spending,” which has horrible economic consequences.

“Furthermore, investors must understand a critical accounting concept: that the government’s debt is the household’s asset. In accounting, for every debit there is a credit that must always equal zero. In this case, when the Government issues debt (a debit), it is sent into the economy for infrastructure, defense, social welfare, etc. That money is “credited” to the bank accounts of households and corporations. Therefore, when the deficit increases, that money winds up in economic activity, and vice versa. In other words, those shouting for sharp deficit reductions are also rooting for a deep economic recession.” – The Deficit Narrative

The other challenges with cutting spending are that it is politically toxic, and tax hikes drag on growth.

However, one solution that all the mainstream “doomsayers” overlook is raising productivity and GDP through private-sector capital investment. In other words, as the U.S. did following World War II, it is possible to “grow your way out of your debt problem.”

That’s where the AI data center boom and massive electricity demand come in.

The Economic Engine of Capex

The buildout of data centers and the power grid may offer the best opportunity to generate sustained growth. The scale of investment is large enough to matter, the economic multipliers are high, and the timeline aligns with when fiscal pressure will peak.

Data centers are the backbone of the digital economy. AI models, cloud platforms, and automation rely on them, and each large AI model requires thousands of GPUs housed in purpose-built facilities. These are not minor server rooms. They are $1 billion-plus industrial complexes. But, for the build-out of “data factories” to impact economic growth, a massive investment will be required to affect a $30 trillion (nominal) U.S. economy.

How much are we talking about? As noted in our previous article on data center demand, McKinsey projects that data center investment will reach $7 trillion globally by 2030. Over 40 percent of that will happen in the U.S. Alone. Moreover, Nvidia’s latest quarterly report forecasted data center capital expenditures by Apple, Meta, Microsoft, and Alphabet to reach $4 trillion by 2030, or roughly $1 trillion annually.

However, you can’t build a data center without power.

Data Centers Require Power

According to the Department of Energy, U.S. data center electricity consumption could double or triple by 2028. Deloitte expects a 30-fold increase in AI-related data center power usage by 2035, reaching 123 gigawatts. That’s more than the total residential demand in California. This means building new substations, transmission lines, and power plants. Therefore, as noted by Edison Electric Institute, investor-owned U.S. electric utilities will invest more than $1.1 trillion in the 2025-2029 period to meet that demand.

This infrastructure boom will not be optional. AI development needs low latency, which requires local capacity and reliable electricity. Since data centers are capital-intensive and mission-critical, the U.S. economy could see between $1.25 and $1.5 trillion in annual capex spending.

Why is that critical to our “debt to GDP” concerns? Large-scale capital spending is one of the few economic inputs reliably boosting long-term growth. Unlike stimulus checks or tax credits, infrastructure spending creates durable productivity improvements. We are already seeing this impact.

• The PwC study for the Data Center Coalition found that from 2017 to 2021, U.S. data centers added $2.1 trillion to GDP. That’s before the AI acceleration began.

• According to Reuters, in Q2 2025, AI-related capex accounted for over one-third of real GDP growth, which added roughly 0.4 percentage points to quarterly GDP.

The Multiplier Effect

But it isn’t just $1 trillion in CapEx. These projects create upstream demand for construction, power equipment, semiconductors, cooling systems, and skilled labor. They support engineering, real estate, logistics, and utility services. Most notably, they set the stage for sustained gains in productivity. Once operational, AI systems reduce costs, improve decision-making, and enable scale in industries from health care to manufacturing. In other words, there is a “multiplier effect” to these projects. The American Society of Civil Engineers (ASCE) estimates that every $1 billion in infrastructure investment creates 13,000 jobs and adds $3 billion to GDP over a decade.

Therefore, by 2030, if the $5 trillion in combined investment in AI data centers and power generation comes to fruition, the U.S. economy will see an additional $15 trillion in growth. The chart below shows the average 5-year growth rate in nominal GDP and projected growth.

The chart below assumes we will continue to issue debt at the average quarterly pace since 2021. However, instead of wasting money, we focus on productive investments while maintaining all current spending programs and obligations. Assuming some conservative growth estimates resulting from the investments, the “debt to GDP” ratio will begin declining in 2026 and revert to more sustainable levels by 2030.

However, this isn’t a guarantee, but it is certainly potentially more realistic than a “debt crisis” that sends the U.S. into an economic depression.

Risks and Constraints

The growth opportunity is significant, but not risk-free. While the bears constantly ring the alarm bell about the current level of debt and deficits, the more dire economic consequences they forecast may fail to come to fruition.

As noted by Goldman Sachs:

“Generative artificial intelligence has the potential to automate many work tasks and eventually boost global economic growth. AI will start having a measurable impact on US GDP in 2027 and begin affecting growth in other economies worldwide in the following years. The foundation of the forecast is the finding that AI could ultimately automate around 25% of labor tasks in advanced economies and 10-20% of work in emerging economies.”

They currently estimate a growth boost to GDP from AI of 0.4 percentage points in the US.

Increases in productivity, productive capital investment, and increased labor demand for the infrastructure buildout (which will also result in higher wages) should provide the economic boost needed.

Conclusion

Will it solve all of the current socio-economic ills facing the U.S.? No. However, it may provide the growth boost necessary to revitalize economic growth and prosperity in the U.S., which we have not seen since the 1970s. But there are risks to this outlook.

1. The scale of spending may lift electricity prices. A study from NC State found national prices could rise 8 percent by 2030, with some localities seeing 20–25 percent jumps. If not managed, this could erode industrial competitiveness.

2. Jobs per dollar of investment are low. Data centers are automated. Once built, they require few workers. A $1 billion facility may employ only 100 people full-time.

3. There is a local backlash. Projects require land, water, and energy. Communities are resisting tax incentives and environmental costs. Several counties have imposed moratoriums.

4. Permitting delays and regulatory hurdles remain high. The average interconnection wait for new power projects is over 3 years. Without reform, many AI investments will be delayed or redirected.

The government will need to be involved to unlock the full economic benefit.

1. Public policy must streamline permitting, including environmental review, grid interconnection, and land use.

2. Given that infrastructure and national security are at stake, a public/private partnership should be involved.

3. Tax policy should avoid distortion. Many subsidies go to projects that were already economically viable.

4. The focus should be on shared infrastructure, such as transmission lines, regional data hubs, and reliability upgrades.

5. Utilities need regulatory clarity. Traditional cost-of-service models may not align with the fast pace of AI demand, so performance-based rates or return-on-equity mechanisms may be required.

6. Energy policy must support generation diversity. Solar and wind are inefficient, and AI demands require firm natural gas, nuclear, and advanced storage capacity.

The goal should be energy abundance. High reliability, low prices, and scalable infrastructure will attract private AI investment and increase growth.

It may also just be enough to keep the demise of the U.S. from occurring any time soon.

Federal prosecutors revealed that Nicholas Roske, the California man who pleaded guilty to attempting to assassinate Justice Brett Kavanaugh in 2022, had planned to kill up to three Supreme Court justices to “single-handedly alter the constitutional order” over Roe v. Wade. The motive appears political and leftist in nature, and other court documents obtained by The Daily Wire revealed that the would-be assassin identifies as transgender.

🚨BREAKING: The WANNA-BE ASSASSIN who almost killed Justice Brett Kavanaugh just CAME OUT as TRANS 🚨

Nicholas Roske now “IDENTIFIES” as Sophie Roske pic.twitter.com/hWL5ndpO4u

— Jesse Watters (@JesseBWatters) September 20, 2025

Roske, who now identifies as female and uses the name “Sophie Roske,” is set to be sentenced on October 3. Federal prosecutors are seeking 30 years to life in prison, citing the defendant’s premeditated plot to kill three justices in an attempt to change the Court’s balance.

“The severity and potential devastating impact of the defendant’s criminal conduct is immeasurable and staggering. By targeting and planning to kill “at least one,” but “shooting for 3” justices of the Supreme Court, the defendant sought single-handedly and irrevocably to alter an entire branch of the United States government through violence,” the Department of Justice’s sentencing memo stated. 

The memo continued, “The defendant’s conduct falls within the quintessential definition of terrorism: the use of violence or threats of violence to achieve a political goal. The defendant, by committing this crime, sought to achieve some level of significance by striking at the heart of our democracy — to alter the trajectory of the judicial branch for decades to come.” 

In a separate filing from the transgender’s defense attorneys, first obtained by The Daily Wire, Nicholas, who now goes by “Sophie Roske”… 

“The case is captioned as United States v. Nicholas John Roske,” lawyers for Roske state. “That name remains Ms. Roske’s legal name, and she has not asked to recaption the case. Out of respect for Ms. Roske, the balance of this pleading and counsel’s in-court argument will refer to her as Sophie and use female pronouns.”

Daily Wire noted, “A source familiar with the legal proceedings in the case told The Daily Wire that Roske was using female identities online before the attempted murder, and now goes by the female name reflected in the defense filings.” 

Attorney General Pam Bondi told the outlet, “This Department of Justice condemns political violence and our prosecutors will ensure that this disturbed individual faces severe consequences for his deranged actions.”

Roske was likely radicalized in the years leading up to the 2022 assassination plot of the justices, but perhaps what activated the deeply mentally ill man was the permanent protest industrial complex, funded by allies of the Democratic Party dark-money NGO network, which unleashed psychological operations through protests to influence emotions and trigger responses by their far-left fringe.

The Democratic Party has employed this type of operation for years, labeling and targeting their enemies as “fascists” and “Nazis.”

Where did Charlie Kirk’s murderer learn to call conservatives “fascists”?

“Do you think Donald Trump is a fascist?”

Kamala Harris: “Yes, I do. YES, I DO!” pic.twitter.com/RxDjgOYjKY

— RNC Research (@RNCResearch) September 12, 2025

Leftist corporate media conducted massive PsyOps against the American people. 

And fast forward to last week, the suspected Charlie Kirk assassin was a radical leftist who had a relationship with a transgender. One of the shell casings from the Kirk assassination was etched with the words: “Hey, fascist. Catch!”

Political violence is being fueled by the Democratic Party’s permanent protest industrial complex, activating its fringe leftists…

… with at least one group boasting thousands of members “planning war against fascists.”

Hmm.

I think if ODNI were to declassify all records and files of how the US government worked with Antifa and Trantifa groups around the world for the past 10 years, the results would absolutely shock you. pic.twitter.com/O2BI3H3iLp

— Mike Benz (@MikeBenzCyber) September 18, 2025

. . . 

Authored by Susan Crabtree via RealClearPolitics,

Amid a fiery national debate over political violence and free speech, the Secret Service faces one of its biggest tests yet in securing Charlie Kirk’s massive funeral in Arizona this weekend.  

President Trump, Vice President JD Vance, and numerous dignitaries, conservative figures, prominent reporters, television anchors, and up to 100,000 members of the public are expected to attend the tribute to Kirk’s life this Sunday at State Farm Stadium, home of the Arizona Cardinals, in Glendale.

The Secret Service has been under serious scrutiny since multiple failures provided an opening for two near-miss assassination attempts against Trump last year, the first of which resulted in the death of rallygoer Corey Comperatore and the serious injury of two other attendees. 

The Secret Service successfully protected the inauguration of President Trump in January without a hitch, even though the agency moved the swearing-in ceremony indoors and canceled the traditional outdoor parade, purportedly because of low temperatures in D.C.

But the massive Arizona memorial service honoring Kirk, the assassinated conservative activist and organizer known for his influence with young people across the country and the world, poses a serious challenge for law enforcement and the Secret Service, an agency already facing manpower strains and pressure as it strives to repair its reputation to execute a zero-fail mission.

The stadium in Glendale can seat 63,400, and the local police department is planning for a crowd of up to 100,000 people to descend on the area, with at least one overflow location designated at the Desert Diamond Arena where the event will livestream on jumbotrons.

Kirk’s memorial comes during tumultuous times for the nation. His supporters mourn his brutal killing amid a national debate over gun violence and what types of limits, if any, private and government entities can place on free speech. Conservative and liberal politicians and political commentators are facing off over ABC’s Wednesday decision to abruptly fire late-night talk show host Jimmy Kimmel after he misrepresented the assassin’s likely motives for murdering Kirk. And Trump on Wednesday designated the far-left Antifa group a “terrorist organization” and said he was strongly recommending that those funding the movement be thoroughly investigated “in accordance with the highest legal standards and practices.”

It’s also a difficult moment for the Secret Service, which has faced serious retention issues since the assassination attempts, with a recent Department of Homeland Security Department Office of the Inspector General’s report exposing the agency as seriously understaffed when it comes to counter snipers – 73% below mission requirements.

A large contingent of top-flight Secret Service agents traveled to the United Kingdom with Trump and first lady Melania this week for an official state visit. And the United Nations General Assembly will be in full swing next week in New York City, where the Secret Service is charged with securing more than 100 visiting foreign dignitaries at hotels and events around Manhattan. Meanwhile, the agency must also maintain security teams around all Cabinet secretaries and former presidents.

“Where are they getting all these assets?” Rich Staropoli, former Secret Service agent and former Department of Homeland Security undersecretary, asked in an interview with RealClearPolitics.

“It’s going to be very difficult to find the manpower, given the UN is in session and then you probably have a couple of hundred guys on their way back from London right now that won’t get back until the day after the president,” he added. “And then you’ve got this event, this huge event out in Arizona. It’s not like we got a couple of hundred agents out there on a normal basis.”

Other sources in the Secret Service community argue that the agency is well prepared to handle both UNGA and the Kirk memorial service, especially since Trump and Vance will be there with their USSS details, some of the most highly trained agents, and elite units designed for high-risk scenarios.

Back in New York City, the Secret Service has a high trust in the New York Police Department’s robust team of counter snipers in their Emergency Services Unit, with which the agency partners for protection. Not all foreign dignitaries show up at once; they arrive and participate in the summit on a rolling basis, former Secret Service agent Charles Marino explains.

“The fact that we’ve got a great deal of confidence in the NYPD, that does free up some resources for the USSS to use for this memorial,” Marino tells RCP.

The Department of Homeland Security has designated the Kirk funeral as a Special Event Assessment Rating (SEAR) 1 event with the same level of security as the Super Bowl or the Boston Marathon. The designation is different than a National Special Security Event, a category for events that could affect the nation and the world. In SEAR events, state and local authorities make the assessments and DHS provides the assets.

The Secret Service agent in charge of the Phoenix Field Office will serve as the federal coordinator for the service, working side by side with local partners.

Those Secret Service and local law enforcement partnerships broke down during the assassination attempt against Trump in Butler, Pennsylvania, when the agency and local police maintained siloed communications and even two separate command posts.

On the one-year anniversary of the Butler event, Secret Service Director Sean Curran issued a statement declaring that the agency is “laser-focused on ensuring that those we are sworn to protect, the public, and the dedicated men and women of the Secret Service are never let down again.”

Curran said the agency has implemented changes to the Secret Service’s protective operations policies “to ensure clear lines of accountability and improved information sharing with local law enforcement partners.”

In the wake of Kirk’s assassination, House Republicans this week also included $88 million in a stop-gap funding bill to bolster security for federal officials. The funds would include $30 million for congressional security, $30 million for the executive branch, and $28 million for the judiciary.

“[Kirk’s killing] initiated a number of uncomfortable but necessary conversations about important issues like the safety and security of our members and the responsibility of public service, and the need for political leaders to turn down the temperature and the violent rhetoric in America,” House Speaker Mike Johnson said.

Despite these efforts, the Secret Service was fumbling again just days before Kirk’s killing in ways that funding boosts may not fix.

RCP reported last week that Secret Service screeners missed a Glock in the bag of someone who had entered Trump National Golf Course in Sterling, Virginia, while Trump was golfing over Labor Day weekend. Thankfully, the individual posed no harm to the president and self-reported the security breach.

Last Thursday, the night before Kirk’s assassination, anti-Israel Code Pink protesters ambushed Trump, Vance, Secretary of State Marco Rubio, and Defense Secretary Pete Hegseth as they were dining out in D.C. just a short walk from the White House. The protesters unfurled pro-Palestinian flags and banners and yelled epithets at Trump from just a few feet away.

After Kirk’s murder, RCP reported that a Secret Service agent named Anthony Pough posted on Facebook that the conservative activist was a “racist” and essentially deserved to be killed because of “karma.” The Secret Service placed the agent on administrative leave late last week.

The Secret Service defended its response to the protesters who verbally accosted Trump at the restaurant last week, arguing that agents escorted them out quickly. An agency spokesperson also said that the Secret Service had screened everyone in the establishment for weapons and explained that the protesters had made reservations to dine at the restaurant along with all the other patrons.

But Staropoli and other former agents argued that the Code Pink incident was another embarrassing breach – that the Secret Service should have acted more quickly to remove the protesters or should have screened restaurant patrons more thoroughly to prevent such a menacing display.

With the Kirk assassination consuming the following day’s news cycle, the press never asked the White House whether the Secret Service should have prevented the Code Pink confrontation from occurring.

Just hours before that incident, White House press secretary Karoline Leavitt on Tuesday evening told RCP that the Secret Service has opened an investigation into the missed Glock incident “to figure out exactly how the gun made it onto the property.”

“As for the president, in the past he has said he trusts USSS and the job they do to protect him,” Leavitt added.

Leavitt did not say whether Trump’s trust in the Secret Service remains – or whether magnetometers would be required at his golf clubs in the future, a question RCP posed to her. 

Some Secret Service agents chock up the recent breaches to either a lowering of standards as the agency tries to beef up its numbers during a severe manpower shortage or fatigue because existing agents and Uniformed Division officers used for screening are continuing to be stretched too thin.

“The backdrop here is the Service has got to move quickly in building up these numbers as quickly as possible because these types of big competing security events are not going away – they’re just not,” Marino remarked.

After this summer’s unprecedented Alaska summit between Presidents Trump and Putin, the Kremlin is signaling that the Russian leader could return to American soil once again.

Putin could accept an invitation from Trump to visit the 2026 FIFA World Cup in the United State next summer, Moscow’s ambassador to the UK, Andrey Kelin, has said – as cited in state media sources. The ambassador told a British broadcaster that Putin could really attend the World Cup as he seeks to foster “closer links” with Trump.

This next World Cup will mark the first ever time the tournament will be played in three different countries, with the US, Canada and Mexico all hosting games – with the host venue for the final being MetLife Stadium in East Rutherford, New Jersey (typically used for NY Giants and Jets games).

Sixteen host cities were announced by FIFA as Seattle, San Francisco, Los Angeles, Vancouver, Guadalajara, Kansas City, Dallas, Houston, Atlanta, Monterrey, Mexico City, Toronto, Boston, New York/New Jersey, Philadelphia, and Miami.

Trump in a press conference last month programed that Putin “very badly” wants to attend the World Cup. It’s unclear whether that may have been directly expressed by Putin during the August 15 Alaska summit.

“That is a man named Vladimir Putin who I believe will be coming depending on what happens. He may be coming and he may not,” the US president said while displaying a photo of himself and Putin from the prior summit.

As for Russian ambassador Kelin, in his fresh interview he said: “There are different ideas. Earlier… they [Putin and Trump] talked about the possibility of an ice hockey match between US and Russia… and football game as I understand is also at work.”

He was asked by the interviewer to confirm that this was in reference to the FIFA “football tournament” scheduled between June 11 and July 19, 2026 – to which the ambassador replied, “Yes, football tournament. I hope that in the coming contacts we are going to discuss that.”

Pundits on the Left have reacted fiercely to the prospect of Putin attending World Cup play in the US:

Crowd goes crazy for Trump at FIFA World club title soccer match in New Jersey. Other than the WNBA all star game, I’m not sure there’s an American sporting event Trump could attend and get booed. pic.twitter.com/T1rmAdEZ9C

— Clay Travis (@ClayTravis) July 13, 2025

It would be somewhat of a ‘shock’ for many Americans, especially Democrats, to look up at the VIP boxes of a large stadium as a World Cup match was underway in a US city to see Presidents Putin and Trump being chummy and enjoying the biggest soccer tournament in the world.

Authored by Liz Heflin via Remix News,

A shop owner in the city of Flensburg, Germany, near the Danish border, decided to put up an anti-Semitic sign in his window, effectively banning Jews from his store.

The 60-year-old owner of the shop, Hans Velten-Reisch, admitted to putting up the A4-sized paper himself, which read: “Jews not allowed!!!” 

Below that clear ban, in smaller letters, the owner wrote: “Nothing personal, not anti-Semitism, I just can’t stand you.”

“Jews have house ban here” — a sign displayed in Flensburg, Germany today.Shocking. This is not “criticism of Israel.” It is blatant, unapologetic antisemitism.

More than 80 years after Nazi Germany posted signs excluding Jews from public life, we are seeing the same vile hatred… pic.twitter.com/BejTCT0g2N

— StandWithUs (@StandWithUs) September 18, 2025

In a statement to the Schleswig-Holsteinische Zeitungsverlag, reported on by Magyar Nemzet, the owner denied the accusation of anti-Semitism and justified his actions with Israel’s attacks on Gaza.

“There are Jews living in Israel, and I can’t tell who supports the attacks and who doesn’t,” R. said, in an attempt to justify his action. He also called Israeli attacks in Gaza “hypocritical.”

“They always say that history shouldn’t repeat itself, but then they do it themselves,” the shopowner added, comparing Israeli actions in Gaza to the Holocaust.

Posts with photos of the shop window have gone viral on social media. 

Felix Klein, the German federal government’s commissioner against anti-Semitism, has spoken out on the matter. 

“This is pure anti-Semitism, and of course a direct reference to the Nazi era, when Jews were boycotted and many such signs were visible.”

“This should not be tolerated in any form,” Klein emphasized.

Local politicians were also quick to react, with the Flensburg branch of the Greens condemning the anti-Semitic poster most strongly. Simone Lange, the former mayor of Flensburg, personally filed a police report.

Federal Minister of Education Karin Prien, who also has Jewish ancestry, said: “Anyone who expresses and justifies anti-Semitism goes against everything that our democratic coexistence represents.”

Police have received several reports regarding the sign, and the prosecutor’s office is investigating whether a crime was committed.

“We must show that we will not tolerate anti-Semitism,” Klein stated. 

The Israeli ambassador to Germany, Ron Prosor, also spoke up. “In Flensburg, in 2025, signs saying ‘Jews not allowed’ are once again hanging in shop windows. Just like then, in the streets, cafes and stores of the 1930s,” The Independent reports him as saying.

“This is exactly how it began – step by step, sign by sign. It is the same old hatred, only in a different font. After the signs came shards of glass, fire and destruction. And today, people behave as if it were ‘nothing personal.’”

“It was never about Zionism. It was always about Jewish life. And it has never ended harmlessly,” Ambassador Prosor added.

Read more here…

Many cities are seeing a widening gap between wages and home prices, making them “impossibly unaffordable.”

Not only that, U.S. home prices are more unaffordable than the run up to the 2008 global financial crisis. Driving this affordability crunch is the combination of elevated interest rates and soaring home prices in the post-pandemic boom, although some markets have seen slowing growth in recent months.

This graphic, via Visual Capitalist’s Dorothy Neufeld, shows housing market affordability in North America, based on data from the Globe and Mail via Hanif Bayat.

The Housing Affordability Crunch in 2025

Below, we compare benchmark home prices as of July 2025 to gross median household income across major metro areas in North America:

Gross median household income as of 2023, the latest data available.

With a home price-to-income ratio of 13.5, Vancouver, Canada’s housing market is extremely out of reach for most residents.

Today, it surpasses all other major American cities, where the average price for a detached home often exceeds $1.4 million–up from around $250,000 in 2000. Similarly, home prices in Toronto are more than 10 times higher than the median household income.

Meanwhile, the West Coast metros of Los Angeles, San Diego, and San Francisco are the most unaffordable in the U.S. given high demand, supply shortages, and for the latter, proximity to Silicon Valley.

Falling near the middle of the pack is Miami, where home prices are 6.4 times the median household income. While home prices have fallen moderately over the past year, they have jumped 61% higher since July 2020—increasing affordability concerns.

To learn more about this topic, check out this graphic on the world’s most unaffordable housing markets.

Authored by Mike Shedlock via MishTalk.com,

Macron has had 3 prime ministers this year. How long with this one last?

Background

The crisis revolves around Eurozone fiscal rules. The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. But now it wants to.

French President Emmanuel Macron is struggling to find a Prime Minister who can lead a three-way fractured political environment in which no group has a majority.

In France, the prime minister is appointed by the president and is responsible for leading domestic legislation including the budget.

On September 8, I noted French Government Collapses in No-Confidence Vote, What’s Next?

Bye Bye Bayrou [Macron’s last Prime Minister]. An amusing “Let’s block everything movement” takes hold.

On September 9, Macron appointed Prime Minister Sébastien Lecornu as his third prime minister in a year.

It’s not going well.

Strikes Roil France

The AP reports Strikes and protests roil France, pitting the streets against Macron and his new prime minister

The day of upheaval for the European Union’s second-largest economy aimed to turn up the heat on new Prime Minister Sébastien Lecornu and his boss, Macron. They’re engaged in an intensifying battle both in parliament and on the streets about how to plug holes in France’s finances, with opponents fighting proposals to cut spending on public services that underpin the French way of life.

Protesters’ anger at budget cuts

Macron’s opponents complain that taxpayer-funded public services — free schools and public hospitals, subsidized health care, unemployment benefits and other safety nets that are cherished in France — are being eroded by his governments that have lurched from crisis to crisis since he dissolved parliament in 2024, triggering a legislative election that stacked Parliament’s lower house with critics of the president.

Placards at the Paris demonstration read: “Tax the rich.”

“We need to find money where there’s money,” said Pierre Courois, a 65-year-old retired civil servant. “France’s deficit is an issue, but it’s not by cutting on public services that you fix it.”

“Our pay is stuck, colleagues are leaving, and wards are closing beds,” said 34-year-old public hospital nurse Stephane Lambert. “For us it’s the same story: less money in our pockets, fewer hands to help, more pressure every day.”

Lecornu’s baptism of fire

As he seeks support for belt-tightening, Lecornu has trimmed lifetime benefits for former government ministers — a largely symbolic first step that won’t generate huge savings — and scrapped wildly unpopular proposals to eliminate two public holidays, a measure intended to spur revenue. He has been meeting opposition leaders and labor unions to try to build consensus for a budget, but his close relationship with Macron puts him in the firing line, too.

“Bringing in Lecornu doesn’t change anything — he’s just another man in a suit who will follow Macron’s line,” said 22-year-old student Juliette Martin.

On his first day in office last week, anti-government protests saw streets choked with smoke, barricades in flames and volleys of tear gas as demonstrators denounced budget cuts and political turmoil. That “Block Everything” campaign became a prelude for Thursday’s even larger demonstrations.

Scattered violence

The first whiffs of police tear gas came before daybreak, with scuffles between riot officers and protesters in Paris. The collapse of successive governments — brought down by votes in parliament — that sought to push through savings has given Macron’s critics a sense of momentum. The “Block Everything” campaign that developed online before taking to the streets also added to the climate of crisis.

As it did last week, the government said it was again deploying police in exceptionally large numbers — about 80,000 in all — to keep order on Thursday. Police were ordered to break up blockades and other efforts to prevent people who weren’t protesting from going about their business.

The Interior Ministry reported 181 arrests nationwide as the afternoon ended and more than 450,000 demonstrators outside Paris, with protests in big cities and small towns. Paris police said that another 55,000 people marched in the capital. Participation estimates from the CGT, among unions that called the strikes and demonstrations, were double those of police, reporting more than 1 million strikers and protesters nationwide.

French Unions Pressure Macron

Reuters reports French unions strike against austerity, pressuring Macron

Hundreds of thousands took part in anti-austerity protests across France on Thursday, urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to acknowledge their anger and scrap looming budget cuts.
Teachers, train drivers, pharmacists and hospital staff were among those who went on strike as part of the day of protests, while teenagers blocked dozens of high schools for hours.

“The anger is immense, and so is the determination. My message to Mr. Lecornu today is this: it’s the streets that must decide the budget,” said Sophie Binet, head of the CGT union.

Lecornu and Macron are under pressure on one side from protesters and left-wing parties opposed to budget cuts and, on the other, from investors concerned about the deficit in the euro zone’s second-largest economy. Parliament is deeply divided and none of its three main groups has a majority.

Budget Compliance Rules

1. Deficit rule: a country is compliant if (i) the budget balance of general government is equal or larger than -3% of GDP or, (ii) in case the -3% of GDP threshold is breached, the deviation remains small (max 0.5% of GDP) and limited to one year.

2. Debt rule: a country is compliant if the general government debt-to-GDP ratio is below 60% of GDP or if the excess above 60% of GDP has been declining by 1/20 on average over the past three years.

France’s general government gross debt is projected to reach approximately 116.0% of its GDP in 2025.

France Budget Deficit and Debt-to-GDP 2024

Debt-to-GDP courtesy of Trading Economics, Deficit insert from https://countryeconomy.com/deficit/france

France and Italy Noncompliance

• France Debt-to-GDP: 113% vs target 60%

• France Budget Deficit: 5.8% vs target 3%

• Italy Debt-to-GDP: 135.3% vs target 60%

• Italy Budget Deficit: 3.4% vs target 3%

France is Ungovernable

There is no chance of any political party addressing the debt and deficit rules.

So, why would anyone want to govern?

The only answer is arrogance, but arrogance will not fix any problems.

The EU Has a Big Problem With Military Spending and Trump’s Definition

In case you missed it, please see my September 4, 2025 post The EU Has a Big Problem With Military Spending and Trump’s Definition

France currently spends 2.1 percent of GDP on defense. Italy spends 1.5 percent.

Trump demands 3.5 percent. See above link for details.

Currency Crisis Awaits

Nothing has been solved because nothing can be solved. It’s politically impossible.

I keep repeating the idea “a currency crisis awaits”.

However, things are so screwed up globally that a crisis can start anywhere. The EU, US, China, and Japan are all possibilities.

There is no fiscal sanity anywhere.

Submitted by Thomas Kolbe

The Bundestag on Thursday passed the 2025 budget with the votes of the CDU, CSU, and SPD. The bottom line: record-breaking debt, serving only one purpose—patching the ever-widening fiscal holes.

With historic delay—blame the fractured “traffic light” chaos coalition—the Bundestag on Thursday passed the budget for the current year, now valid for little more than three months. Business had been running on autopilot until now. Yet this does not change the fact that with a spending volume of €503 billion, a new record has been set. The federal government is spending freely, cushioned by (still) growing tax revenues and ever-new debt.

Looking Ahead to Next Year’s Finances

Chancellor Friedrich Merz and Finance Minister Lars Klingbeil of the Social Democrats give the impression that they intend to further accelerate the spending pace next year. After a roughly four percent increase in this year’s budget, next year’s growth rate is expected to be even higher: around €530 billion in planned spending. At the same time, additional transfers to social funds are likely to rise due to weak economic growth—the state is already deep in a debt spiral.

Against the backdrop of this dramatic growth in public-sector spending, which increasingly crowds out the private sector and has expanded the state’s share of the economy from 45 to 50 percent over the past five years, one must speak of total political failure. Since the lockdowns, federal spending has risen by over 41 percent, while the overall economy stagnated. This enormous imbalance shows that the ratio between productive forces and purely consumptive forces in the country has reached an irresponsible disequilibrium.
The state is expanding—elbowing its way forward. We are witnessing the accelerated construction of a socialist collective.

Uncontrolled New Debt

Chancellor Merz—who, some will recall, campaigned on fiscal discipline—will go down in history as the chancellor who fiscally ruined Germany. This year, cleverly hidden from public view in so-called special funds, new debt of €140 billion is planned. Germany thus violates all Maastricht criteria with new borrowing of around 3.3 percent and a final total debt of over 65 percent.

In doing so, Germany is gradually losing its role as a credit anchor for its equally indebted Eurozone partners.

And this concerns only federal debt. States and municipalities are facing their own Waterloo: with the economy still weak, municipal budgets could see a combined deficit of €36 billion this year—the crisis hits hard.

Yet reform is nowhere in sight. The chancellor’s ambitious „citizen income“ (Bürgergeld/ social assistance) initiative was abandoned by the Social Democrats, and naturally, there will be no structural reforms. Debates about immigration into the German social system are simply covered with new credit, citing the temporary slowdown in illegal immigration—a clear seasonal fluctuation.

This government has built its entire policy on a house of cards of lies and self-deception. In fiscal policy, this is reflected in special funds: here, new federal loans hide, either to finance a wartime economy or to plug social fund gaps. Ultimately, the taxpayer pays the price—through higher taxes or later through inflation when the central bank monetizes the added debt.

The debate about tax increases has long entered the public sphere—in the form of envy-driven discussions over higher inheritance taxes. That is where this journey is heading.

Reforms Are Torpedoed

The reason why fiscal policy has become a symbol of Germany’s economic and societal failure is evident in two striking phenomena. First, the iron silence of the economic elites when it comes to the causes of Germany’s decline. High energy costs, grotesque regulation, and crushing taxation are acknowledged, yet no one dares tackle the ideological green transformation at its root.

The same applies to necessary social reforms: even the smallest attempt, such as introducing strict sanctions for work refusal under citizen income, is immediately torpedoed by numerous left-wing parties in the Bundestag and societal actors like the German Trade Union Confederation.

Spending Spree and Big Government

The union opposed stricter sanctions for citizen income and immediately positioned itself in fundamental opposition. Naturally, CDU attempts at social reform are little more than media shadowboxing.

It is clear: since the ideological restructuring under Merkel, the Union has long been converted into another party within the left spectrum of Germany’s political landscape. The internal coalition climate is likely more harmonious than it appears. Essentially, there is agreement: they want the big state—convinced that only massive state activity, supported by a European Commission also indulging in a spending spree, can lead Germany out of its misery.

Looking Ahead

Where does this lead? Take a brief look at neighboring France. With a public debt of 114 percent and a state share of 57 percent, France is years ahead in the evolution of this drama. Reform-incompetent and politically stuck, it cannot enact necessary changes. A collision with market reality is inevitable.

Broadly speaking, EU member states suffer from the same disease: deep-rooted statism, the belief in a big state, ultimately intended to solve society’s problems as a welfare entity and economic actor. History shows this is a fatal misconception. Germany’s economic collapse is already a product of an overextended state apparatus that not only paralyzes productive forces but actively destroys them with agenda-driven politics.

Fiscal indiscipline inevitably leads to collision with an iceberg in bond markets—no matter how much a central bank tries to cushion the blow. The moment a state—regardless of its debt ratio—can no longer roll over existing debt is the moment of truth.

Then either a politician steps in with fiscal chainsaws, or the political structure freezes into a command state, where even basic societal problems—like the migration crisis or emerging socialism—cannot be criticized.

Julia Ruhs sends her regards.

* * * 

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

Authored by Tilak Doshi via Substack,

The recent Shanghai Cooperation Organisation summit in Tianjin, China, offered vivid optics of a shifting global order. Images of Indian Prime Minister Narendra Modi, Russian President Vladimir Putin and Chinese President Xi Jinping sharing smiles and warm embraces spoke volumes about a realignment that few could have predicted at the start of 2025. Against the backdrop of a “binding memorandum” for the Power of Siberia 2 (POS-2) pipeline supplying Russian natural gas to China, this summit was no mere public relations exercise.

The summit marks a profound shift in global energy geopolitics, one that underscores Europe’s slide into irrelevance, the competitive headwinds facing US LNG exports and the spectacular failure of former National Security Advisor Zbigniew Brzezinski’s vision of US strategic supremacy over Russia largely constructed during the tumultuous 1990s. The United States, in its pursuit of Eurasian hegemony, has alienated a critical ally in India, pushed Russia and China closer together, and left Germany — once an industrial powerhouse — prostrate. This is a tale of hubris, miscalculation and unintended consequences.

The Tianjin Summit: A New Energy Axis

The Tianjin summit crystallised a new geopolitical reality. The warm camaraderie among the leaders of India, Russia, and China —three of the world’s five largest economies — signalled a growing alignment, not just in rhetoric and optics but in tangible energy partnerships. The “binding memorandum” for POS-2, a 50 billion cubic meter pipeline to deliver gas from Russia’s Yamal fields to China via Mongolia, is a cornerstone of this realignment.

Unlike the existing Power of Siberia 1, which draws gas from Irkutsk (north of Mongolia), POS-2 taps into the same Arctic reserves in Yamal that once fuelled Germany’s industrial might for half a century. For decades, German prosperity rested on a bargain: cheap Russian gas in exchange for high-value German manufactured exports. This was the essence of Willy Brandt’s Ostpolitik and the foundation of Germany’s rise as Europe’s economic powerhouse.

Russia’s pivot to Asia – accelerated by Western sanctions since 2014 (after the annexation of Crimea) and intensified after the 2022 Ukraine invasion – is now consolidating. With POS-2 and the expansion of existing pipelines, Russia could supply China with up to 100 billion cubic metres (bcm) of gas annually after 2030 when the new pipeline would be up and running.

This is significantly less than the 150 bcm Russia once exported to Europe at its peak. Furthermore, the price for Russia’s natural gas sold to a price-sensitive China will be materially less than what it received from its European customers. But this re-orientation, while costing Russia lost revenues from lower prices and volumes, significantly alleviates Russia’s economic security after the Nordstream pipeline sabotage.

It also reduces China’s reliance on seaborne LNG, which is typically two to four times as expensive as piped gas. Critically, this reduces China’s vulnerability to US naval dominance in chokepoints like the Strait of Hormuz and Straits of Malacca through which all Middle East gas exports to China must pass through.

For India, the Tianjin summit was a stage to assert its defiance. Reeling from the Trump administration’s decision to double trade tariffs from 25% to 50% — a punitive measure targeting India’s purchase of Russian crude oil — Prime Minister Modi has signalled a shift. Reports of Modi repeatedly refusing phone calls from President Trump are unprecedented. Few global leaders turn down a call from the president of the US.

India, the world’s fourth-largest economy in nominal GDP terms, has not only deepened diplomatic ties with Russia and China but is set to increase its imports of Russian oil this month in defiance of the US secondary sanctions. This underscores India’s refusal to be cowed by what its Foreign Minister S. Jaishankar called hypocritical US policy during his recent visit to Moscow. The Minister pointed out that China imports significantly more Russian oil and Europe remains the largest buyer of Russian gas, yet India alone faces such draconian tariffs. Three years into the Ukraine war, the US and European Union still import billions of dollars’ worth of Russian energy and commodities ranging from liquefied natural gas to enriched uranium.

The results of the sanctions regime have been contrary to what was predicted. In 2022, European Commission President Ursula Von Der Leyen said that the “Russian industry was in tatters” and it was “taking chips from dishwashers and refrigerators to fix their military hardware”. Von Der Leyen is eating crow now as Germany, France and the UK teeter on the edge of economic and political collapse while Russian shows little sign of being in “tatters”.

Russia has pivoted East to forge energy and trade ties with China and India as well as other countries such as Turkey and Brazil. The POS-2 deal, though not yet a finalised sales and purchase contract between buyer and seller, signals Russia’s success in finding alternative markets for its gas. The “binding memo” still lacks details on price, ‘take or pay’ terms, tenor of the long-term contract and relative contributions to capital costs. Nevertheless, the POS-2 memorandum signed in Tianjin shows that China is now willing to overcome its longstanding reservations over greater dependence on Russia’s energy resources. The gas that powered German factories and made the country the world’s manufacturing export powerhouse will now underpin China’s ambitions for continued economic dominance.

The US has gained a vassal in Germany, but at what cost? A deindustrialising Germany lacks the economic and diplomatic heft to bolster its own interests, let alone those of the US effectively. Meanwhile, the Tianjin summit showcased an alternative constellation of interests. China, India and Russia, despite their historical rivalries, are finding common cause. Border tensions between India and China persist, as do Russia’s fears of being dominated by China’s economic might.

Yet, the West’s aggressive posture — sanctions on Russia, tariffs on India and hostility towards China — has pushed these powers toward cooperation. Fuelled by the West’s own missteps, the BRICS grouping is gaining momentum with its focus on reducing dependence on the US dollar and the US-dominated SWIFT inter-bank payments system.

India: The Diplomatic Blunder of the Century

Perhaps the most egregious error in this saga is the U.S. treatment of India. For two decades, U.S.-India relations had been warming, driven by shared interests in countering China’s rise and India’s growing economic clout. During Modi’s visit to the U.S. during Trump’s first term, the prospect of a closer strategic partnership seemed bright. Since 2014, strategic cooperation between the two nations has deepenedand India was declared a “Major Defense Partner” of the United States in 2016. India and the United States had also stepped up their cooperation among multilateral groups such as the Quad.

India, with its deep defence ties to Russia, was seen by the US as a potential strategic partner to the West, weaning it away from Moscow’s orbit. President Trump’s decision to add an additional 25% tariff rate on Indian exports to the U.S. for buying Russian oil—a move not applied to China or Europe, despite their larger imports from Russia—is difficult to understand. And if Indo-American relations are not salvaged soon, it may backfire spectacularly.

Jaishankar’s pointed remarks in Moscow highlight the absurdity of this policy. Why single out India, a critical ally, when others engage in larger energy trade volumes with Russia? The tariffs, perceived as bereft of logic, have alienated India at a time when its geopolitical weight is growing. Modi’s presence at Tianjin, alongside Putin and Xi, was a deliberate signal: India will not be bullied.

By increasing Russian oil imports, India is not only defying U.S. sanctions but also aligning closer with the BRICS framework which potentially offers an alternative to Western-dominated financial and trade systems. The US risks pushing India—a democracy of 1.4 billion people and a rising economic power—into the arms of Russia and China. The U.S. may thus squander a strategic opportunity, turning a potential ally into a wary partner. As David Blackmon notes in his Substack, India’s geopolitical choice may already be made, driven by the West’s own miscalculations.

Europe’s Self-Inflicted Wound

Europe’s plight is equally instructive. The EU, in its zeal to punish Russia, has “managed to pull off one of the greatest self-owns you could ever imagine”, as veteran journalist Brian MacDonald puts it. By severing ties with Russian gas — available at its doorstep at competitive prices — Europe has condemned itself to expensive LNG imports. Western sanctions intended to cripple Russia have instead crippled Europe’s economic vitality. The POS-2 deal exacerbates this.

Germany, once the engine of European growth, now faces deindustrialisation and rising unemployment. The loss of cheap Russian gas has forced reliance on costly US and Qatari LNG, driving up energy costs and eroding competitiveness. German standards of living are declining, burdened by debt and an overstretched welfare state. Western sanctions on Russia have boomeranged, creating an energy and food crisis that has hit Europe hardest. While the end of cheap Russian gas is not the only factor in the economic malaise and social divisions facing Europe, it’s certainly a major contributor.

By redirecting Yamal gas to China, Russia not only secures a new market but also undermines US LNG exports. China’s reduced reliance on seaborne LNG — estimated at up to 40 million tons per annum (mtpa) once POS-2 is operational in the 2030s — deals a blow to US energy export ambitions. For context, 40 mtpa represent just over half of China’s total imports of LNG in 2024. US tariff threats against China and talk of future military confrontation have only accelerated Beijing’s pivot to Russian gas, which is cheaper and secure from Western sanctions.

In a further twist, US Energy Secretary Chris Wright told the Financial Times in an interview published on Monday that the European countries must halt imports of Russian oil and gas if they expect Washington to escalate sanctions against Moscow. He said that the Trump administration is prepared to invoke more sanctions on Putin and Russia, but it is contingent on EU countries halting their ongoing purchases of Russian oil and gas. Furthermore, the EU would also need to commit similar secondary sanctions as the US.

Whether the EU – with Germany, France and the UK teetering on the edge of economic and political crises – is capable of imposing secondary sanctions on large countries such as China, India, Brazil etc., without bringing even more harm on itself, is doubtful. Under current EU plans, the bloc will phase out Russian oil fully by 2028. It is also important to note that not all EU member states are on board in cutting energy links with Russia.

However, it would be ironic to blame Putin for German deindustrialisation, even though much of what passes for analysis in the mainstream media these days are variations of ‘Putin did it’. Germany was on the ‘green’ road to reducing the use of fossil fuels well before the Ukraine war. Cutting back on fossil fuels was a top priority of Energiewende (energy transition) policies adopted in 2010. German deindustrialisation is a process of economic suicide at which the German ruling class was already hard at work towards achieving since the Green party became a political force in the 1980s and 1990s.

The Unravelling of Brzezinski’s Legacy

At the heart of the geopolitical shifts signified in the Tianjin summit lies the failure of Zbigniew Brzezinski’s vision articulated in his 1997 book The Grand Chessboard. This vision became a central tenet of America’s neocon movement which straddled both Democrat and Republican administrations.

Brzezinski – National Security Advisor in the Carter administration – argued that US hegemony over the Eurasian landmass required severing the natural economic complementarity between Germany and Russia. The former provided manufacturing prowess in exchange for the latter’s cheap energy and other natural resources. By disrupting this relationship, the US aimed to prevent the emergence of a Eurasian Berlin-Moscow axis that would challenge its dominance.

The sanctions on Russia, escalated since 2014 (after the annexation of Crimea) and intensified after 2022 (after the invasion of Ukraine), were designed to cripple Russia’s economy, isolate it diplomatically, and pave the way for confronting China. The sanctions regime hasn’t worked, and the Russian economy is neither crippled nor isolated. There also seems to be no let-up in Russian advances on the Ukrainian battlefront.

Brzezinski’s strategy has unravelled. By weaponising the US dollar and SWIFT, the West incentivised Russia, China, India and others in the Global South to diversify their financial systems as much as possible. By targeting Russia’s energy exports to Europe, the US handed Moscow the impetus to forge closer ties with Asia. And by alienating India with hypocritical tariffs, the US has pushed a key ally toward its adversaries.

It is not as if the historical and political differences among the three great Eurasian powers – China, India and Russia – will all be resolved quickly under the pressure of US and EU sanctions policies. Fundamental bilateral tensions among them will remain as limits to potential cooperation. But now, in the face of EU and US provocations on trade and political relations, the level of converging national interests among the three giant neighbours in Eurasia has created a new energy terrain on the ground.

The Tianjin summit and the POS-2 memorandum are not the end but the beginning of a realignment in energy flows in Eurasia. The permanent deflection of Russia’s Yamal gas supply – which was meant for Western Europe under Ostpolitik – to China reflects Brussels’s decline into geopolitical irrelevance and Germany’s vassalage to US interests. For the US, POS-2 puts a big hole on its LNG exports outlook as it loses a major market in China to Russian pipeline gas.

Brzezinski’s vision of US dominance in Eurasia – long the tenet of the US foreign policy establishment – has given way to a resilient Russia, a defiant India and a China poised for growing dominance in global manufacturing. The West’s hubris has sown the seeds of its own marginalisation, and the global energy map has changed irrevocably.