Authored by Michael Snyder via The End of The American Dream log,

Over the past few years, there has been a tremendous amount of buzz about an imminent “reset” of the global economy.  Well, what we are currently witnessing may not look like what they were anticipating, but a “reset” of the global economy is definitely here.  Trillions of dollars were invested to set up the global supply chains that we have today.  I have always argued that we should have never allowed ourselves to become so dependent on goods that are made elsewhere, and making more things in this country is a goal that every administration should pursue. Unfortunately, you can’t just reverse decades of investment and construct entirely new supply chains overnight.  For example, it costs approximately 10 billion dollars to build a manufacturing facility that makes computer chips, and construction time can run between 3 and 5 years. So anyone that thinks that we can just hit a “reset button” and magically make things better is simply being unrealistic.

We just witnessed the largest tariff increase in our history.  Many companies that invested enormous amounts of money into global supply chains that were carefully calculated to give them a competitive advantage have just had their businesses ruined.  At the end of last week, I wrote that the global economy “has already been moving in the wrong direction for quite some time, and now a massive amount of fuel is being poured on to that fire”.  I do not believe that the global economy is going to be able to handle a shock of this magnitude.

Wall Street was certainly not ready to have someone press the “reset” button.  At this point, investors are “selling first and asking questions later”…

The tariffs have sent shockwaves through global financial markets, raising fears of a worldwide economic downturn and sharp price hikes across sectors in the world’s biggest consumer market.

‘The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,’ Michael Arone, investment expert at State Street Global Advisors said.

‘Investors are selling first and asking questions later.’

Hopefully you were able to get out of the stock market before the carnage started.

Many are hoping that President Trump will reverse course after witnessing what has happened on Wall Street, but we are being told that there will be no turning back…

Trump administration officials messaged that the tariffs are to be implemented, and are not up for negotiation, across the Sunday political shows.

“The tariffs are coming. He announced it and he wasn’t kidding. The tariffs are coming, of course they are,” Commerce Secretary Howard Lutnick said on CBS’s “Face the Nation.”

So get ready to see some shocking price increases.

For example, an iPhone could soon cost several hundred dollars more…

Shoppers may find their favourite electronics, including iPhones, will soon become much pricier due to the tariffs if companies pass the price onto consumers.

Despite moves to expand its supply chain, Apple still makes the vast majority of its iPhones in China, where hardware exports will be hit with a tariff totaling 54 per cent from April 9.

The cheapest iPhone 16 model was launched in the US with a sticker price of $799, but could cost as much as $1,142, per calculations based on projections from analysts at Rosenblatt Securities, who say the cost could rise by 43 per cent.

This is going to be a devastating blow to our standard of living.

Sadly, instead of seeking to negotiate with President Trump, the Chinese have decided to retaliate by hiking tariffs on U.S. goods…

China announced Friday it will impose 34% tariffs on the U.S., just days after President Donald Trump unveiled the same amount against Beijing under his reciprocal tariff plan.

The new China tariffs against the U.S. will go into effect on April 10, according to The Wall Street Journal.

“China played it wrong, they panicked — the one thing they cannot afford to do,” Trump wrote Friday on Truth Social.

So now a full-fledged trade war is raging between the largest economic power on the planet and the second largest economic power on the planet.

What do you think that is going to do to the global economy?

It doesn’t take a degree in economics to figure that one out.

The European Union has also decided to dig in for a fight…

The European Union will likely approve a first set of targeted countermeasures on up to $28 billion of U.S. imports in the coming days, Reuters reported Sunday.

The European Commission, which coordinates EU trade policy, will propose to members late on Monday a list of U.S. products to hit with extra duties in response to Trump’s steel and aluminum tariffs rather than the broader reciprocal levies.

It is set to include U.S. meat, cereals, wine, wood and clothing as well as chewing gum, dental floss, vacuum cleaners and toilet paper.

Here we go.

This is it folks.

The days ahead will be filled with pain.

At this stage, analysts at JPMorgan are telling us that there is a 60 percent chance of a recession…

Jamie Dimon finally has his hurricane. JPMorgan’s economics team has just raised their recession probability to 60% following the aggressive tariff stance announced by U.S. President Donald Trump.

In a note entitled, “there will be blood,” chief economist Bruce Kasman and his team said this year’s 22-percentage tariff increase amounts to the largest tax hike since 1968.

Personally, I think that the analysts at JPMorgan are being wildly optimistic.

There is no way that we are getting out of this unscathed.

Earlier today, I read an excellent article about how these tariffs are going to affect the big shoe companies.  They have spent billions of dollars setting up their global supply chains, and they can’t just suddenly decide to start making shoes somewhere else…

The crux of the problem is that, since the 1990s, apparel and footwear has moved abroad. As Swartz explains, performance companies in particular invested billions of dollars into the roads, ports, factories, and rail lines that make up the complex supply chain feeding Vietnamese infrastructure.

It’s in everyone’s interest to keep these factories working. Vietnam relies on the business for their economy. Corporations rely on Vietnam to produce goods. Nike, for instance, doesn’t own a single one of its factories globally.

“You can’t just call a factory in India and say can you make 20 million of shoes for me, they don’t have the capacity,” says Swartz. Idle factories don’t exist globally. An unused factory is shut down, and its staff is fired. Furthermore, specialized production methods behind modern footwear don’t exist everywhere. Sewing is simple. But injection molded foam composites, polymer production, and complex fabric weaving are other topics. A modern sneaker may have as many as 100 parts produced in different factories, and if any one component doesn’t arrive in time, everything is slowed down. Building an infrastructure of factories with interdependent specialized production methods—and with workers skilled enough to operate them—can take years.

These tariffs are going to produce winners and they are going to produce losers.

Many once thriving businesses will suddenly start going under, and we are being warned that “the next wave of corporate defaults” is right around the corner…

Donald Trump’s global trade war is already priming financial markets for the next wave of corporate defaults. A Bloomberg News measure of distressed debt worldwide swelled the most in at least 15 months this week, sending more than $43 billion of bonds and loans to levels that make it challenging to refinance.

The president had telegraphed well in advance his intention to raise tariffs ahead of the official April 2 announcement. But few had expected Washington to go after so many of its key trading partners with such high duties, especially considering the risk of upending global supply chains that entire US industries rely on.

Some Trump supporters are speculating that President Trump is disrupting the global economy and causing the financial markets to crash on purpose.

In fact, a video that discussed this theory was shared by Trump himself on Truth Social on Friday.  But now we are being told that crashing the financial markets is “not part of an intentional strategy”…

A crashing stock market is not part of an intentional strategy by President Donald Trump, White House National Economic Council director Kevin Hassett told ABC’s “This Week” on Sunday. This came after Trump shared a link to a video on his social media platform, Truth Social, which claimed the president was causing the markets to plummet on purpose as part of his broader economic plans.

The video, which initially appeared on TikTok in March, was shared by Trump on April 4, two days after his tariffs announcement.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose. … And it could make you rich” the video said. It continued by adding that such a move by Trump would help “push cash into treasuries, which forces the Fed to slash interest rates in May. … It also weakens the dollar and drops mortgage rates. Now it’s a wild chess move, but it’s working.”

It is going to be fascinating to see how everything plays out.

By dramatically hiking tariffs, the U.S., China and the European Union are essentially taxing the living daylights out of their citizens.

They will bring in more money, our standard of living will drop quite a bit, and economic activity will slow down significantly.

If we do not reverse course, this is a story that is not going to end well.

*  *  *

Michael’s new  book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

*  *  *

Best sellers at ZH Store last week:

• IQ Biologix Colostrum (25% IgG from first milking of grassfed cows)

• IQ Astaxanthin Ultimate Antioxidant (6,000x stronger than vitamin C)

• ZeroHedge Multitool (Extremely solid, very sharp, comes with ZH Logo belt pouch)

• Anza Red-Black Infinity Handle Knife (Made in the USA from carbon steel)

After two months of U.S. military surveillance flights targeting Mexican drug cartels—with the initial phase focused on gathering signals intelligence (SIGINT) over cartel-controlled territory—a new NBC News report hints at the second phase…

The report cites six current and former U.S. military, law enforcement, and intelligence officials with knowledge of the Trump administration are considering targeted drone strikes against Mexican drug cartels – now designated Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs).

Here’s more from NBC News:

Discussions among White House, Defense Department and intelligence officials, which are still at an early stage, have included possible drone strikes against cartel figures and their logistical networks in Mexico with the cooperation of Mexico’s government, the sources said.

Still, the administration has made no final decision and reached no definitive agreement about countering the cartels. And unilateral covert action, without Mexico’s consent, has not been ruled out and could be an option of last resort, the sources said. It is unclear whether American officials have floated the possibility of drone strikes to the Mexican government.

All six sources said SIGINT operations over Mexico have dramatically risen in recent months. A development readers have understood from the start of February:

• USAF Spy Plane Runs SIGINT Operation Near Cabo As U.S. Preps For Potential Cartel Fight

• USAF Spy Jet Flies Second SIGINT Operation On US Border With Focus On Narco Hub

• CIA Reportedly Flying MQ-9 Spy Drones Over Mexico As Cartel Fight Nears

• Border Czar “Expects” Kinetic Warfare Between U.S. Troops & Mexican Drug Cartels

• U.S. Designates Mexican Cartels As “Foreign Terrorists,” Signaling Financial Warfare Looms

• US P-3B Orion Spy Plane Spotted Over Mexico As SIGINT Ops Target Cartels

Sources noted that Trump officials had pivoted the military, intelligence, and law enforcement resources toward combating the cartels. 

Two guided-missile destroyers have recently been positioned in the region for a “southern border mission”… 

• NORTHCOM Deploys Guided-Missile Destroyer For “Southern Border Mission” As Hemispheric Defense Takes Shape

• NORTHCOM Deploys Second Guided-Missile Destroyer For US Southern Border Operations

Making sense of it all: Dismantling the command-and-control structures and networks of FTO-designated drug cartels in Mexico is part of a broader mission to secure hemispheric defense. We suspect Mexican banks could be targeted next—similar to the recent anti-money laundering penalty against TD Bank—as part of efforts to clean up the financial system across North America.

This will all come to an end under Trump. 

The main concern for CIA officers or special forces units—typically operating under Joint Special Operations Command (JSOC)—who would likely be tasked with carrying out drone strikes and other targeted operations against cartels, is the risk of creating a power vacuum when cartel leadership is dismantled. The question becomes whether drone warfare is the most effective solution or if hybrid warfare tactics—similar to those used in Syria and other Middle Eastern conflicts—could be utilized to pressure or provoke rival cartels into turning on each other (save AGM-114 Hellfires for somewhere else).

Authored by Jeff Louderbeck via The Epoch Times,

Health and Human Services Secretary Robert F. Kennedy Jr. announced on April 7 that he will tell the Centers for Disease Control and Prevention (CDC) to stop recommending fluoridation in municipal water nationwide.

Kennedy also said the HHS will reconvene the Community Preventive Services Task Force, an independent panel composed of public health and prevention experts, “to study and make a new recommendation on fluoride.”

Kennedy disclosed the plans to the Associated Press on Monday during an event in Salt Lake City, where he was joined by Environmental Protection Agency (EPA) Administrator Lee Zeldin as part of a Make America Healthy Again (MAHA) tour.

The EPA said on April 7 that it is reviewing “new scientific information” on potential health risks of fluoride in drinking water. The agency has the authority to set the maximum level of fluoridation in public water systems.

Kennedy is an outspoken opponent of fluoride in water, calling it an “industrial waste” and “dangerous neurotoxin” on the presidential campaign trail last year.

Last month, Utah became the first state to prevent fluoride in public drinking water when Republican Gov. Spencer Cox signed the legislation. Water systems in communities across the state must stop adding the mineral by May 7.

Flanked by Utah legislators, Kennedy praised the state for emerging as “the leader in making America healthy again” on April 7.

“It makes no sense to have it in our water supply. And I’m very, very proud of this state for being the first state to ban it. And I hope many more will come,” Kennedy said.

Utah state Rep. Stephanie Gricius, a Republican and chief sponsor of the bill, said it allows pharmacists to prescribe fluoride for those wanting the mineral’s protection for their teeth.

“I believe in individual choice when it comes to what prescriptions we put into our bodies and fluoride is federally regulated as a prescription,” Gricius told Reuters last month. 

“Community water fluoridation and informed consent, which is foundational to good health care, cannot coexist.”

The American Dental Association (ADA), which supports widespread water fluoridation, wrote in a February letter to Cox that he should veto the bill because it is “in complete opposition” to the organization’s mission.

The ADA said the measure would “take away the most effective, efficient and equitable way for dental disease prevention.”

Lawmakers in Ohio, South Carolina, and Florida have also proposed restrictions on fluoridated water.

Though the CDC’s recommendations are generally followed, state and local governments determine if their communities will add fluoride to water. It cannot surpass the maximum number established by the EPA, which is currently 4 milligrams per liter.

In 2011, the EPA decreased the amount of allowable fluoride in water following a report from the National Academy of Sciences that discovered some thyroid and arthritic symptoms might occur under maximum limits at the time.

“As soon as I was nominated by President Trump as administrator of the EPA, the secretary instantly reached out to start talking about issues that he is so passionate about. And number one on that list was fluoride,” Zeldin said.

Lee Zeldin, then a New York congressman nominated for EPA chief, speaks during his Senate confirmation hearing on Capitol Hill on Jan. 16, 2025. Anna Moneymaker/Getty Images

Federal officials endorsed water fluoridation in 1950 to prevent tooth decay.

Drinking water is the main source of fluoride for Americans, the Associated Press reported. According to CDC data, around two-thirds of the U.S. population consumes fluoridated drinking water.

Zeldin noted that the EPA was exploring scientific studies regarding the potential health risks of fluoride in drinking water to “inform the agency’s future steps” on national standards.

“Secretary Kennedy has long been at the forefront of this issue. His advocacy was instrumental in our decision to review fluoride exposure risks, and we are committed to working alongside him, utilizing sound science as we advance our mission of protecting human health and the environment,” Zeldin said on April 7.

Days before the presidential election last November, Kennedy wrote in a post on X that one of Trump’s first acts in office would be to advise U.S. water systems to remove fluoride from public water.

Last week, the CDC’s Division of Oral Health was eliminated as part of widespread HHS staff cuts.

The division had been tasked with promoting what it deemed the safety and benefits of community water fluoridation.

Medical groups and public health experts have long claimed that fluoride can strengthen teeth and reduce cavities.

Over time, studies have documented potential problems.

A federal judge in California last year ordered the EPA to review the risks of adding fluoride to drinking water.

Since that ruling, several towns and cities have moved to end fluoridation.

Health and Human Services Secretary Robert F. Kennedy Jr., center, speaks during a press conference about Utah’s new fluoride ban, food additives, and SNAP funds legislation in Salt Lake City on April 7, 2025. Melissa Majchrzak/AP Photo

On April 7, Kennedy cited a study conducted last year by the federal National Toxicology Program, which found a link between higher fluoride exposure and lower IQ in children. The agency used studies involving fluoride levels at around twice the recommended limit for drinking water.

Kennedy warned that fluoride in water can also cause hyperthyroidism and osteoarthritis, among other conditions. Adding fluoride to water “clearly is doing harm” and is undermining freedom of choice, he added.

“We shouldn’t be demanding that parents accept something for their children and in their homes, that is essentially a medication,” Kennedy said.

Authored by Stephen Soukup via American Greatness,

Democrats don’t hate Trump… they want to be him, mimicking his style but failing to connect with voters, exposing their desperation and lack of authenticity…

By now, everyone and his brother is familiar with Trump Derangement Syndrome, that particular pathology that drives liberals and even many conservatives absolutely batty. Not only does Trump drive his opponents and detractors to fits of apoplexy, but he also compels them to make foolish statements and to embrace positions they would otherwise never even consider. During Trump’s first presidency, at the height of the COVID panic, the left openly and ardently dismissed a vaccine as partisan quackery. Joe Biden and Kamala Harris, then running against Trump, openly warned that “his” vaccine was not to be trusted, that they would be hesitant to take it, and that they were sure the experts would not recommend it. As soon as they hit 270 electoral votes, however, that vaccine was suddenly the greatest thing in the history of ever, and you better take it…or else! And while there are good and just reasons to support Ukraine in its war with Russia, it is almost inarguable that the American Left’s obsession with the war, with Ukraine, and with Ukrainian President Volodymyr Zelensky is a byproduct of its belief that Donald Trump is on Putin’s side and, therefore, they must do precisely the opposite. Whatever he likes, they hate. Whatever he supports, they oppose. Whatever he says, they say the opposite. And so it has been for roughly a decade now.

Lately, however, a new Trump-related syndrome has begun to manifest among his opponents, one that is equally potent, equally idiocy-inducing, and equally self-defeating. This new syndrome has been prevalent among Democrats for the last several months at least, but only recently has it clearly distinguished itself from all the Democrats’ other pathologies. The key moment in the diagnosis of this syndrome came just the other night, when Congresswoman Jasmine Crockett (D, TX) spoke at a banquet in Los Angeles and referred to her state’s Governor Greg Abbott as “Governor Hot Wheels.” Abbott, of course, is wheelchair-bound after a freak accident 41 years ago left him paralyzed. Crockett insisted that she meant no offense and adamantly refused to apologize.

In the several days since the incident, critics have pilloried the Congresswoman, who had already been in the news for her brash, combative, and tacky approach to dealing with the second Trump team. Some have said that she deserves to be censured. Others have chalked her stupidity up to the above-mentioned Trump Derangement Syndrome. Still others cheer her on and hope that she remains the face of the Democratic Party for a long time to come, laughing at how terribly her antics play with ordinary voters. All of these folks have valid cases, to some degree or another, yet all seem to have missed the larger point here. Jasmine Crockett isn’t acting like this because she’s mad at Trump or because he’s driven her crazy. She’s acting this way because she admires him, at last subconsciously, and she wants to be like him, to capture some of his winning lightning in Democrats’ losing bottle. 

This isn’t a case of Trump Derangement Syndrome. It’s a case of Trump Wannabe Syndrome (TWS™).

It isn’t just Crockett. Ever since Trump and Vance won last November, Democrats have been swearing, snarling, and trying to be as crude as possible. A few weeks back, in a premeditated publicity stunt, Arizona Senator (and former astronaut) Mark Kelly (D) filmed himself with his Tesla and whined about how he could no longer stand to drive the car. Once upon a time, he said, it felt like a “rocket” to him, but now he didn’t want it around because it was “built and designed by an a**hole,” meaning DOGE boss Elon Musk. “Wow,” he assumed we’d all say, “such tough talk from an otherwise staid and cautious guy. He must be really fed up!” No one actually cared, of course, but Kelly likely didn’t realize that. He’s a Democrat, after all, which is to say that he doesn’t have a whole lot of contact with actual rank-and-file voters.

Therein lies the rub for Democrats. They see Trump out there swearing and using vulgar vernacular and maybe, once in a while, even making fun of disabled people. And then they see him winning, winning big, and winning among their erstwhile constituencies. And they think to themselves, “I can do that too, you know! In fact, I can do it better than he does it!” So, they try. And they fail. And the voters cringe.

What the Democrats don’t understand is that Trump’s appeal has nothing to do with being crass. There is no doubt that he is crass sometimes, but that’s a function of his personality. It just flows from him, and while it may make the cocktail-party set wince a bit, it nevertheless fits him and seems perfectly natural.

Like all supremely successful politicians, Trump has a gift, an uncanny ability to connect with people in a way that transcends politics and ideology. Ronald Reagan had the gift. Bill Clinton had it too. Even Barack Obama, the Condescender-in-Chief, showed flashes of the gift on occasion. 

It’s worth noting that the gift is not something one can fake, learn, or imitate. You either have it or you don’t.

Jasmine Crockett doesn’t have it. 

Mark Kelly doesn’t have it. 

Alexandria Ocasio-Cortez doesn’t have it.

Nancy Pelosi and Chuck Schumer sure as heck don’t have it. 

And the more they try to fake it, the more grotesque and cringeworthy they appear.

Love him or hate him, Donald Trump represents something extraordinary in American politics. His connection to average voters, in spite of his vast fortune and privileged life, is as remarkable as it is inexplicable. His Democratic opponents have lost their ability to connect to average folks through policy and rhetoric, and they want desperately to recapture what they once had. Rather than put in the hard work of listening to voters and resisting special interest groups, however, they seek a quick fix. 

They seek what Donald Trump has. They don’t hate him. They want to be him when they grow up.

Authored by George Ford Smith via The Mises Institute,

On February 18, 2025 President Trump issued an executive order titled, “Ensuring Accountability for all Agencies,” in which he says,

…previous administrations have allowed so-called “independent regulatory agencies” to operate with minimal Presidential supervision. These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people.

This is a good idea. As Americans, ruled by an elite in Washington, we would really like to know who’s doing what to whom, why, and for how long they’ve been doing it. Most importantly, where they’re getting the money to do it. Money—however thieving means the bureaucrats can get it—is their god, without which they wouldn’t exist.

The problems are enormous for such an undertaking, the biggest one being the issue of trust. Who are you going to believe? Even if the appointees in Trump’s administration are trustworthy individuals, by virtue of their appointments they’ve been coaxed into a corrupt social apparatus. It is corrupt because it is funded entirely on stolen wealth, with the theft not merely getting a pass but hailed far and wide as the bedrock of civilization.

Arguments over taxation almost always center on rates and who should pay, never on taxes as such. But what are they exactly? Taxes are “a sum of money demanded by a government . . .” (infoplease.com). At least they’re honest; taxes are demands. But then we find this: Taxes are “a contribution for the support of a government . . .” (ahdictionary.com). A contribution. As the former Third Reich minister of propaganda once remarked, “A lie told once remains a lie but a lie told a thousand times becomes the truth.”

The bigger lie is the one not told—the inflation tax—because it is still largely a mystery to the public.

As it stands, by an implicit moral code of Western Civilization found in the Bible and in the works of Aquinas, Locke, Adam Smith, Paine, Rothbard, and many others, government, by its nature, is and always has been inimical to human well-being.

Thus, in ensuring accountability, Trump’s team is doing the best it can in an environment hostile not only to him personally but to the principles of good faith and trust. In reading the executive order we find that,

…all executive departments and agencies, including so-called independent agencies, shall submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register.

Superficially, it sounds good but wait—it said “all.” Does he mean it? “This order shall not apply to the Board of Governors of the Federal Reserve System or to the Federal Open Market Committee in its conduct of monetary policy.” We think of the president as the Chief Executive, but a hands-off-the-Fed approach tells us otherwise.

For the moment the Fed might be untouchable. But its creator was the state, and all it takes is courage to do away with it, which is why it’s been wreaking havoc for over a century.

According to a March 6, 2025 article in International Banker, Trump’s allies have devised a plan that would oust current Fed chair Jerome Powell before his term is up in 2026 and,

…give the US president a role in monetary-policy making. The new chair would regularly seek Trump’s views on interest-rate policy and then negotiate with the FOMC to steer policy on the president’s behalf. This would be a radical change from the current practice whereby the US president is not involved in monetary policy and is not even expected to comment on the decisions made by the FOMC.

Given Trump’s personality—variously described as impulsive, charismatic, and resilient—it’s almost a given that a plan such as this would effectively make him the Chairman of the FOMC. Trump wants lower interest rates to go “hand-in-hand” with his tariffs, whether the free market wants them or not.

As of late February, “Interest-rate futures contracts are now pricing in a more than 70% chance that the Fed will reduce its policy rate by a quarter of a percentage point at its June meeting, to a range of 4.00%-4.25%, and cut it again as soon as September.” In his address to Congress on March 4, 2025 Trump was happy about the current trend, saying, “And today, interest rates took a beautiful drop. Big, beautiful drop. It’s about time.”

Apparently, Trump is unaware of the Austrian School position that “easy money” causes booms that inevitably show up in busts, such as the two major disasters (1930s and 2008), and that no learned bureaucracy such as the FOMC or even Trump personally can know what the interest rate should be, which is why it should be left to market forces exclusively.

Meanwhile, two Republican politicians—Utah Sen. Mike Lee and Kentucky Rep. Thomas Massie—are introducing legislation on March 6, 2025 to “dissolve the Board of Governors of the Federal Reserve System and each Federal Reserve bank with a one-year timeframe,” and repeal the Federal Reserve Act of 1913. Said Mike Lee:

The Federal Reserve has not only failed to achieve its mandate, it has become an economic manipulator, directly contributing to the financial instability many Americans face today. We need to protect our economic future, end the monetization of federal debt that fuels unchecked federal spending, and put American money on solid ground. We need to end the Fed.

At this point, it sounds like Trump wants to be a one-man FOMC while significant others who supported him want to do away with the Fed altogether. Is it a fight between tariffs/low interest rates versus free markets? Or is Trump clever enough to get one now and the other later?

In 1962, Mises wrote Planning for Freedom—a collection of 12 essays and addresses demonstrating the futility of government interference with the market. Let’s hope someone sends a copy to Trump.

Israeli Prime Minister Benjamin Netanyahu said Tuesday that if US ‘indirect’ talks with Iran over its nuclear program fail, then a military attack becomes ‘inevitable’. He issued the warning fresh off his Monday Oval Office visit with President Trump, wherein the US leader announced for the first time that Saturday talks with the Iranians will be hosted in Oman. 

Netanyahu said in the new video statement, ““We agree that Iran will not have nuclear weapons. This can be done in an agreement, but only if… they go in, blow up (Iran’s) facilities, dismantle all the equipment, under American supervision.” And he added: “If talks drag on, then the military option becomes inevitable.” Watch the Tuesday video message below:

Netanyahu, fresh off meeting with Trump, says the upcoming Iran “negotiations” will be based on the Libyan model, which would require Iran to “blow up” its own nuclear facilities under US supervision. Of course, the “Libyan model” resulted in Gadaffi getting regime-changed anyway pic.twitter.com/R57QTfodvw

— Michael Tracey (@mtracey) April 8, 2025

Trump himself appeared to allude to this either/or scenario, or ultimatum to Tehran, when he said Monday, “I think everybody agrees that doing a deal would be preferable to doing the obvious. And the obvious is not something that I want to be involved with, or frankly that Israel wants to be involved with, if they can avoid it.”

Trump then admitted, “But it’s getting to be very dangerous territory, and hopefully those talks will be successful.”

And after alluding to the worst case scenario, he offered a bright spot: “We’re having direct talks with Iran and they’ve started, it’ll go on Saturday. We have a very big meeting and we’ll see what can happen.”

Netanyahu’s interesting description of blowing up or exploding Iran’s nuclear sites appears akin to what the US under George W. Bush offered Libya’s Muammar Gaddafi. The strongman had famously ‘come in from the cold’ and gave up all WMD programs in return for an end to global isolation and Western sanctions.

Bush had at the time reportedly warned Gaddafi that “either you get rid of your weapons of mass destruction or [the United States] will personally destroy them and destroy everything with no discussion.” In the end Gaddafi did just that, which didn’t get him too far.

This seems to be the rhetoric that Netanyahu is echoing now. It should be remembered, however, that Gaddafi was still toppled due to US-NATO military intervention in 2011. Again, this after he gave up his advanced weapons program, leaving Libya more vulnerable to West-sponsored regime change.

Meanwhile journalist Ken Klippenstein has pointed out that the Pentagon has prepared for Trump to go berserk on Iran if he gives the order…

In the largest single deployment of stealth bombers in U.S. history, the Pentagon has sent six B-2 “Spirit” aircraft to Diego Garcia in the Indian Ocean.

The long-range bombers, which are uniquely suited to evade Iranian air defenses and can carry America’s most potent bunker busting weapons, flew in from Missouri last week in a little noticed operation.

The B-2s carry not just bombs, but a message for Iran: “do you see our sword?,” as one retired general told Newsmax this week.

If this happens it would likely be a highly unpopular move among the American people and Trump voters, given he is supposed to he the peace president, and starting another ‘war of choice’ in the Middle East is the last thing Americans want.

Over the last few days, we have noted some cracks/leaks (choose your analogy) appearing in the plumbing of the market.

Cross-currency basis swap spreads started to blow out…

…suggesting a huge and sudden demand for US dollars.

Additionally, SOFR swap spreads hit record wides…

…suggesting some credit risk fears building in the markets.

These two events stabilized a little today as markets rallied, but it got us thinking if there is something else going on, and that is where Robert McCauley comes in, wirting an op-ed for The Financial Times explaining why doubts over the Fed’s dollar swap lines are such a big deal.

Kindleberger’s Trap is the danger that a fading hegemon lacks the ability but the ascendant one lacks the will to supply the world economy with vital public goods — such as a reserve currency. In the 1930s, the Bank of England lacked the ability to continue to serve as international lender of last resort, and the ascendant Federal Reserve lacked the will to do so. 

As a result, crisis spread from Austria to Germany and Britain and ultimately reached the US, turning the post-1929 slump into an era-defining economic collapse. The Kindleberger Trap led to “the world in depression”, as Charles Kindleberger titled his seminal book. 

This is why worries over whether the Federal Reserve will continue to supply dollars to overseas central banks at times of financial strife are such a big deal. As Reuters reported last month: 

Some European central banking and supervisory officials are questioning whether they can still rely on the U.S. Federal Reserve to provide dollar funding in times of market stress, six people familiar with the matter said, casting some doubt over what has been a bedrock of financial stability. 

The sources told Reuters they consider it highly unlikely the Fed would not honour its funding backstops — and the U.S. central bank itself has given no signals to suggest that. 

But the European officials have held informal discussions about this possibility — which Reuters is reporting for the first time — because their trust in the United States government has been shaken by some of the Trump administration’s policies. 

These concerns are warranted, both in light of the Trump administration’s distaste for America’s traditional alliances and the centrality of the Fed’s swap lines to global financial stability. 

As Deutsche Bank’s chief FX strategist George Saravelos highlighted in a recent report on the topic, doubts over the Fed’s willingness or ability to step up when needed on is a “nuclear button” for the dollar’s future: 

Ultimately, a withdrawal of the Fed as the international lender of last resort is equivalent to a suspension of the dollar’s role as the safest of global currencies. Doubts about a commitment from the Fed to maintain dollar liquidity — especially against major allies — would accelerate efforts by other countries to reduce their dependence on the US financial system. It would ultimately lead to lower foreign ownership of US assets and a broad-based weakening of the dollar’s role in the global financial system.

In the 2008 and 2020 dollar panics, the Fed wisely told 14 central banks that the buck starts here. Through official swap lines the Fed could extend its credit to each central bank against domestic currency as collateral. 

Each central bank could in turn lend the dollars to banks in its market against domestic collateral.

Reaching outstandings as high as $598bn in 2008 and $449bn in 2020, the swaps succeeded in stabilising global dollar markets. The amounts were not small, but offshore dollar lending — both on- and off-balance sheet — is measured in the tens of trillions of dollars. Thus, with pennies on the dollar lent and repaid with interest, co-operating central banks calmed these potentially destructive dollar panics. 

The US also won from the Fed’s international provision of dollars. Crucially, the swaps reversed market-driven interest rate hikes on Libor-priced US corporate loans and mortgages, which in turn would have hammered US jobs and consumption. As Saravelos pointed out: 

Had the Fed not stepped in during the 2008/9 financial crisis and Covid pandemic, the reserves of foreign central banks and international lenders like the IMF would unlikely have been sufficient to meet global dollar demand, leading to an even greater surge in dollar borrowing costs than occurred at the time, defaults, and potentially systemic implications for the global financial system. 

What if a crisis like 2008 or 2020 happens and the Fed does not swap dollars? Central bankers would not be doing their jobs if they weren’t asking this question. 

If it came to such a scenario of “politicise[d] . . . recourse to the dollar swap lines,“ the Fed would have the ability but not the will, as in 1931. Any other single central bank might have the will but not the ability. 

However, central bankers could form a dollar coalition of the willing. 

The central fact is that the 14 central banks that had standing and temporary Fed swaps in 2008 and 2020 collectively hold lots of dollars. Their collective holdings of US safe assets amounted to an estimated $1.9tn at the end of 2021. (Their total foreign exchange reserves at the end of 2024 were about double that sum.) That $1.9tn is big money. It’s triple the previous maximum drawing on the Fed swap lines in 2008, and four times larger than the peak 2020 usage. 

© Deutsche Bank 

Leadership could arise among the Fed’s standing swap partners, the European Central Bank, Bank of Japan, Swiss National Bank, Bank of England, and Bank of Canada. The ECB and BoJ were the largest users of the Fed swap lines in 2008 and 2020, respectively. During the 2023 run on Credit Suisse, the SNB acquired unique experience in tapping the New York Fed for $60bn against US Treasury collateral under the FIMA (foreign and international monetary authorities) repo facility.

The coalition could enlist the Bank for International Settlements for technical support as agent as European central banks did in 1973-95. Or the BIS could serve as intermediary, as it did when the New York Fed lent dollars through the BIS to offshore banks in the 1960s to prevent funding crunches. 

However, there is a major wrinkle: the $1.9tn is invested, and a crisis calls for cash dollars. In a world where the Federal Reserve refuses to allow access to its swap lines, would the New York Fed continue to provide same-day FIMA repo funding against Treasuries held in custody? 

If it did, the coalition could arrange to access hundreds of billions of dollars in same-day funds. If the Fed did not, then it would end up providing ad hoc funding. 

Without the FIMA backstop, heavy central bank sales of US Treasuries would rock the US bond market. Such selling could prod the Fed into the market as buyer of last resort — as in March 2020, before the FIMA repo was introduced. 

Without the FIMA backstop, the Fed similarly would have to cap market repo rates if central banks sought to repo Treasuries for cash in size. However, the recent benchmark rate shift from dollar Libor to repo-based Sofer means that the Fed’s own domestic monetary transmission requires well-behaved repo rates. 

One way or another, the coalition would need to work with the Fed to manage any “dash for cash.” Even a large pool of dollar reserves would not stack up to “whatever it takes” Fed swaps. Limits excite. It may be, as Eurosystem sources grimly noted to Reuters, that “there is no good substitute to the Fed.”  

Nonetheless, a dollar coalition of the willing could pool trillions of dollars to backstop global dollar funding with no more than self-interested Fed help. An inferior lender of last resort beats no lender of last resort.

Authored by Lauren Boyer via The College Fix,

A research team is on the cusp of releasing a new study that may contribute to the discussion about whether standardized test scores should have a place in the college admissions process.

An abstract for the working paper, published on the National Bureau of Economic Research website, states the researchers analyzed the relationship between students’ standardized test scores, their grades in high school, and grades in college.

“Standardized test scores predict academic outcomes with a normalized slope four times greater than that from high school GPA, all conditional on students’ race, gender, and socioeconomic status,” the researchers wrote.

Some universities recently began requiring SAT or ACT scores from applicants after dropping the requirement during the COVID-19 pandemic. Some scholars advocated for the testing requirement to be removed permanently – bringing up issues like systemic bias and racial inequality.

But the new research indicates that standardized tests are not biased and may even have the opposite effect.

Lead author Professor John Friedman, who teaches economics at Brown University, shared with The College Fix some of the details of his team’s work.

Regarding the research sample, Friedman said the team used data from first-year students at “multiple Ivy-plus colleges.”

“The choice to look at first year scores was entirely driven by data, in that we were able to collect comparable data on first year grades from our partner institutions but not for longer-term grades,” Friedman explained to The Fix in a recent interview. “We’ve looked at grades in later years of college within individual schools, and the broad pattern (test scores are predictive, high school GPA is not) remains.”

“In a separate paper, I have also shown that test scores but not high school GPA predict students’ post-college outcomes, including earning higher incomes, attending elite graduate schools, and working at prestigious firms,” the professor said.

“So while this is a limitation for this specific paper, I’m not concerned that the effects would be very different if we looked at longer-term outcomes,” he said.

As for the study’s findings on “race, gender, and socioeconomic status,” Friedman told The Fix:

“We are measuring the predictive power of both test scores and GPA among students with the same race, gender, and socioeconomic status … Importantly, this is not about comparing test scores and grades between students from different racial group groups, genders, or classes.”

Adam Kissel, a visiting fellow in education policy at the Heritage Foundation and former U.S. Department of Education official, also spoke with The Fix about the implications of Friedman’s team’s findings.

“Standardized tests designed to test college aptitude actually do predict college success—without bias,” Kissel wrote recently on X, linking to the working study.

In a recent interview with The Fix, Kissel elaborated, “This study shows that standardized tests are highly predictive of college success at more selective colleges. Selective colleges that went test-optional have been learning that they have done a worse job at admitting students who are likely to succeed, and this study helps show why.”

Concerning colleges, Kissel advised, “Highly selective colleges that want their students to succeed should heavily rely on standardized test scores as a first approximation of scholastic aptitude, regardless of group identity.”

With respect to prospective students, Kissel’s advice was specific to the selectivity of the school.

“This study notes other literature suggesting that test scores are less predictive of success at less-selective colleges,” he said. “Going test-optional is unwise for selective universities but not as big a mistake for other ones.

“Students should share their test scores, especially when applying to selective colleges, unless the scores are very low compared with published test score ranges or with the student’s GPA,” Kissel said.

It will be a little while yet before the full results of the research will be published.

As Friedman told The Fix, “Our paper (or, to be precise, a slightly shorter version of it given space constraints in the publication) will be published in the AEA Papers and Proceedings for the 2025 Annual Conference, which (I think) will come out in May.”

Ukrainian President Volodymyr Zelensky on Tuesday announced that two Chinese nationals fighting in the Russian army have been taken prisoner from the battlefield in eastern Ukraine.

Zelensky touted proof of their capture, saying that Ukraine’s military in the Donetsk region has obtained the captured Chinese nationals’ documents, bank cards and personal data.

“We have information that there are many more Chinese citizens in the occupier’s units than just two. We are now finding out all the facts,” Zelensky said in a statement posted to Telegram. “I have instructed the Minister of Foreign Affairs of Ukraine to immediately contact Beijing and find out how China is going to react to this.”

Subsequently, Ukraine’s Foreign Minister Andrii Sybiha summoned the Chinese government’s chargé d’affaires in Ukraine “to condemn this fact and demand an explanation.”

Zelensky continued in his statement, “Russia’s involvement of China in this war in Europe, directly or indirectly, is a clear signal that Putin is going to do anything except end the war. He is looking for ways to continue fighting.”

Kiev has been arguing that Trump’s ongoing efforts to bring both sides to the negotiating table are futile so long as Moscow keeps expanding the fighting. Zelensky urged the United States and Europe to strongly protest the presence of Chinese fighters in Ukraine.

It is as yet unclear whether the alleged captured Chinese nationals are volunteers, mercenaries, or else have actually been integrated into the regular Russian army.

China’s President Xi had around the start of the Ukraine war declared a ‘no limits’ partnership with Putin; however, there’s been no evidence to suggest that Beijing has directly facilitated the movement of Chinese troops to Russia or Ukraine.

Instead, China has long supplied Russia’s military-industrial sector with ‘dual purpose’ goods which are crucial in the production of military equipment. For this reason Zelensky has in the recent past suggested there’s an ‘axis’ conspiring against Ukraine, turning the conflict into a global war. He’s also named Iran and North Korea.

The past six months has seen many headlines focused on the presence of North Korean soldiers within the Russian military’s ranks, and some have been killed or captured, but the question of Chinese participation remains an open one.

BREAKING: UKRAINIAN FORCES CAPTURE CHINESE SOLDIERS

Zelensky says Chinese troops were caught fighting with Russia, declaring China has now entered the war.

He calls on the US to respond, pushing for WWIII.
pic.twitter.com/vOVKfkiZhE

— ADAM (@AdameMedia) April 8, 2025

President Zelensky posted the above video while also explaining, “This definitely requires a response. A response from the United States, Europe, and all those around the world who want peace. The captured Chinese citizens are now in the custody of the Security Service of Ukraine.”

There has been some evidence over the past year suggesting there are indeed at least small numbers Chinese nationals fighting on behalf of Russia. But now it seems Zelensky is touting ‘proof’ in the form of Chinese POWs. Beijing is unlikely to confirm or deny.

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The U.S. Supreme Court on Tuesday rejected a move to bring back federal workers who were fired by the Trump administration, handing a win to President Donald Trump as he works to downsize the government.

Trump asked the high court to intervene after a lower court judge ordered the administration to reinstate thousands of probationary workers to their jobs after they were terminated earlier this year.

Tuesday’s emergency ruling by the Supreme Court, presented to Justice Elena Kagan, is not final and is stayed pending the disposition of an appeal in the U.S. Court of Appeals for the 9th Circuit.

“Should certiorari be denied, this stay shall terminate automatically,” the unsigned order said. “In the event certiorari is granted, the stay shall terminate upon the sending down of the judgment of this Court.”

The lower court “injunction was based solely on the allegations of the nine non-profit-organization plaintiffs in this case,” it continued. “But under established law, those allegations are presently insufficient to support the organizations’ standing.”

The high court’s order will keep employees in six federal agencies on paid administrative leave for now.

Supreme Court Justices Ketanji Brown Jackson and Sonia Sotomayor wrote that they would have denied the Trump administration’s petition to deny the lower court order.

Although Sotomayor did not explain why she would deny the petition, Jackson wrote that the Trump administration did not provide arguments showing urgency to compel the Supreme Court to intervene.

A group of unions that are challenging the Trump administration’s move to fire the workers argued that other courts have allowed federal employees to be reinstated or blocked related decisions, according to court papers submitted to the Supreme Court earlier this month.

“The Government illegally fired tens of thousands of public servants, significantly degrading crucial services on which the public and members of Respondent organizations rely,” the petition said. “The Government makes no showing of any irreparable harm and just told the district court that it has already substantially complied with the preliminary injunction.”

They also contended that the administration was incorrect in arguing “that no one can challenge the illegal mass firing of federal employees” by the Office of Personnel Management (OPM), which effectively is the federal government’s human resources arm, and attempted to refute claims that “the only way to challenge termination of federal employees is by individual employee claims” before the Merit Systems Protection Board.

Trump administration lawyers submitted their appeal to the Supreme Court after a San Francisco-based 9th Circuit Court judge granted the unions’ request to have the government take back thousands of probationary workers in the departments of Veterans Affairs, Agriculture, Defense, Energy, Interior, and Treasury.

In part, the Trump administration argued that courts lack the authority to block “federal workplace reforms at the behest of anyone who wishes to retain particular levels of general government services.”

The administration has said that the agencies themselves directed the firings and they “have since decided to stand by those terminations,” Solicitor General D. John Sauer told the court on behalf of the administration.

A second lawsuit, filed in Maryland, also resulted in an order blocking the firings at those same six agencies, plus roughly a dozen more. That order only applies in the 19 states and the District of Columbia that sued the administration.

The Justice Department is separately appealing the Maryland order.

The Associated Press contributed to this report.