By Peter Tchir of Academy Securities

Fighting While Talking, Horses, and Security

Some quick updates on recent themes. The latest on Iran is front and center, and if you missed this week’s Around the World, it is worth a look. Not just an Iran update, but we also cover Cuba, Russia/Ukraine, the China Summit, and Nigeria (I certainly need to get more up to speed on Africa). We will examine Universal Basic Income and the Job Market in the section we have decided to label Horses. While it feels like we’ve been talking about ProSec in one shape or form for well over a year (because we have), rather than getting “long in the tooth” it is just starting to get traction.

Fighting While Talking

The definition of “ceasefire” is what both sides make of it. It is easy to think of a “ceasefire” as being as simple as both sides “cease firing” at each other, but that is not how it works in the real world.

The concept of continuing attacks (typically but not always limited in scope) while discussing agreements has gone on since people first started picking up rocks and throwing them at each other. From a U.S. perspective, it was an explicit policy of Nixon and Kissinger when dealing with North Vietnam. Negotiate in Paris. Bomb away in Vietnam.

As the much anticipated announcement after Friday’s “situation room” meeting failed to materialize, we are reading of reports of Iran attacking U.S. bases in Kuwait. This, of course, from an Iranian perspective, is in response to some U.S. attacks last week in Bandar Abbas and in the Strait of Hormuz.

We can only assume negotiations are ongoing, as neither side seems prepared to go back to a higher level of military activity, so this is merely both sides reminding the other that they could go that way, if they wanted to.

Also, from our GIG, it has become very clear that the U.S. blockade of the Strait surprised Iran and created leverage that the initial military attacks had not.

The only thing I can say about the negotiations is that I think most people have become, at best, tired of the endless stream of “we are close” announcements. We’ve lost track of how many times markets have rallied on such announcements (often, but not always in the form of social media posts). At worst, there is a cynicism growing that the announcements are merely political attention-seeking moments, coupled with an “opportunity” to trade. The number of people who immediately search the prediction market sites, or look for large trades in oil or stock futures to see if there is some sort of “confirmation” that the headline is new and real, is almost staggering.

While the front end of the crude oil futures market (which is not the same contract as when this war started) responds very well to peace deal announcements, the longer end of the curve is not as responsive. I’ve been picking the January 2027 WTI contract because it is WTI (so it benefits from U.S. energy independence and it is 2027). It is still $77. Below its high of $83, but not much below. It didn’t get above $77 for the first time until late March. This was below $60 prior to the war. I guess this is a long-winded way of saying Higher For Longer On Energy Prices.

The consensus is that we will not see serious re-escalation, but both the U.S. and Iran seem to be having difficulty in framing a deal as a victory (Iran, because it has been hit hard, and the U.S. because we seem to have moved a long way from “unconditional surrender”).

The one thing that I think is starting to sink in is that higher for longer on energy is real, even with a deal, and that is problematic for a world struggling with affordability.

Horses

What the heck are we talking about horses for? What do horses have to do with anything, let alone AI? We have seen commencement speeches where college graduates have booed the mention of AI. We had the rather unfortunate (in my opinion) term “lower value human capital” enter the lexicon. My editors cringe at some of the things I write and say, but wow!

Not surprisingly, we have seen many in the industry downplay the risks to jobs. Even some leaders who until recently had predicted job losses, especially for white-collar employees, reversed course and are now predicting hiring based on increased efficiencies.

I think the jury is still out on this. There are some examples that I’ve seen that seem to indicate the potential for employment growth.

• One story I’ve seen, but didn’t track down for the report is “AI’s ability to analyze X-rays has led to more radiologists.” Seems plausible and certainly fits the efficiency story (though there may be other reasons we have more radiologists).
• Another report that was circulated, and that I found on social media, discussed how the number of tellers in the U.S. rose even with the introduction of ATMs. You can find the post on Twitter by searching for AI ATM Tellers. This was passed around as an example of how people (tellers in this case) adapt to new technology and become more efficient. The reason I did not include a link to this idea is because I think it is quite flawed and did not feel like starting a fight. It did not normalize for a large growth in the number of people working in the U.S. during the phase that ATMs were rolled out, presumably creating greater need for banking. It didn’t discuss that during the first 20 years of the ATM, the GDP of the U.S. quintupled. It was also a period where suburbia grew. I would argue that if you controlled for the number of people who needed accounts, the increasing complexity of personal finances, and the shift in population, this probably more than accounts for why tellers didn’t fare as badly as initially feared with the introduction of ATMs. Anyway, I’ve ranted too much on this subject, but I think it is important that we think critically about what various technologies have or have not done for employment.

Buggy whip manufacturers. If you take an introductory business school class you will likely hear about the “plight” of buggy whip manufacturers.

A great business until the advent of the automobile. The automobile, over a relatively short period of time, destroyed this business. But the automobile was great! The automobile companies did spectacularly well! (Though many of the early, even well-known ones failed, but that is a concept for another day). The country did well as the automobile (and trucking) reshaped the economy for the better! Isn’t this the perfect example of how a new, efficient technology drives growth and jobs as a whole, even if some sectors lose?

• But what about the horses? According to Grok, there were over 25 million horses and mules in the U.S. around 1920. The “horses” were “employed” on farms and for urban transport. Recent estimates put the horse population at under 7 million today. Now, the horses that are alive today are mostly for recreation, sport, and breeding, rather than working. Far fewer horses today, but those horses that are around live the life of Riley compared to what their ancestors lived.
  • If AI is like what automobiles were to humans, we are in for a great ride!
  • If AI is like what automobiles were to horses, we could be in some trouble, though those left working should be in great shape!
    • I’m probably more in the first camp, but this technology seems very different (or maybe it just seems very different as it is applied directly in areas I know and deal with?). I don’t want to think that we might be the first population that is “creating our own extinction event,” but I have read too much sci-fi to keep that thought completely at bay.

In any case, if anyone reading this can even entertain these thoughts, you know that politicians will try to find ways to capture that animosity. My assumption is that the “control group” of people reading the T-Report are all exploring AI. All trying to figure out how to use it. Many, including myself and Academy Securities, are benefiting from the growth of AI. Data centers, AI, and chips are a core part of ProSec but I can see the rising angst playing out in real time.

Politicians interfering with the industry may become a risk to growth and profitability. It isn’t there yet (this admin is extremely supportive of not just the AI growth, but also the electricity generation and transmission to power the industry). Which might be the perfect time to bring up this little section, that doesn’t quite fit into this theme directly, but seems relevant.

• Keep an eye on South Korea. We are seeing a wave of “AI bonuses” being paid. This is being paid to employees of companies who are doing well because of the boom in AI and data centers (chips, memory etc.). That is the “norm” in the U.S. but sounds like it is unusual in South Korea. The stories probably wouldn’t have attracted my attention at all, since it is so logical from a U.S. perspective, but this is a country that just a couple of weeks ago had started to see political figures discuss paying the citizens from the profits/tax revenues generated by the AI success story – which seems like a potential “slippery slope” way of introducing Universal Basic Income (UBI). Or I guess if you are an advocate of UBI, the potential launching point for a much-needed wealth redistribution.

I recently spoke at a conference for risk management (primarily for large financial institutions). I discussed with the conference organizer the number of AI, cyber, and agentic AI presentations. It seemed like about half the conference was focused on those subjects. The organizer confirmed that was correct and was about the same as the prior year, when they really made a big effort to steer the conference in that direction. What was interesting though was that in 2025, the audience was enthusiastic to learn so much. That it was a relatively new area and the topic resonated. While they have yet to receive final feedback from this year’s conference, the initial feedback was that people wanted case studies and examples, not just high-level perspectives. Everyone knows and is trying to use these technologies (at work and at home). No one needs to be told how important they are. How rapidly they are growing. Just take one look at the stock market and you know that. What people wanted to know this year is how the heck are people using them and what is their experience! I found that interesting and it resonates with me, as I’m probably in that same camp. Some successes mixed with sometimes wondering why I bothered trying AI in the first place. I don’t know what this shift means, but it is interesting (and may explain why AI trainers are getting paid boatloads of money ).

If this seems a little more like thinking out loud than having a strong opinion, that’s because it probably is. But thinking out loud seems like a good way to get our hands around this amazing evolution.

Going Production for Security

We finished a great week of meetings in London this past week. I heard a little bit too much about “defense” bonds and a little too little about ProSec bonds for my tastes (Mike Rodriguez, Academy’s Head of Sustainable Finance, has a great deck on the concept). I’m just kidding about that (not the deck, which is great, but that I heard too much about defense bonds).

Europe is shifting towards security and resiliency rapidly

We could drone on and on about how much things have changed in Europe’s positioning on ESG and how quickly they are moving to something that aligns itself with ProSec but it is the end of a short, but tricky week in markets, so we won’t belabor you with details.
What we will do, instead, is present what Treasury Secretary Bessent (@SecScottBessent) put out in a tweet on Friday (the bold is my handiwork):

• For too long, our political class treated efficiency as a substitute for resilience, and consumption as a measure of prosperity.
• Trade policy, industrial capacity, and national security are inseparable. And to allow foreign dependencies to degrade any one of those domains is to allow them to define America’s future. Under @POTUS’ leadership, we are rebuilding domestic production to restore American sovereignty.

I admit there is a lot of politics in his statement, more than I would like, but it does highlight and encapsulate more of what we have been saying and writing about on ProSec.

I do think there is a LOT MORE ROOM to work with close allies and neighbors than this statement hints at, but that will evolve over time, even with the current administration.

In a fireside chat with the CEO of a player in the energy industry, I latched on to the concept that Canada of all places, might be given one of the rare opportunities for a “do over.” Say 15 years ago, both the U.S. and Canada were well positioned to grow their LNG business. The U.S. did so and is reaping the dividends from that! Canada got mired in regulation and has been pretty much left in the starting blocks. But now, with the world looking for alternatives to the Middle East, Canada has been given another chance to get out of the gate and try to take advantage of the shifting needs.

While I already chafe, a little, at the U.S. admin’s rhetoric that comes across as America Only, that is not how Europe sees it. In part Europe doesn’t have an abundance of all the natural resources they might need, so they will be forced to work with trusted partners. The U.S. can and will be a part of that, but semantics and talking points do matter over time. New alliances will be formed or solidified and there is a great opportunity, across the globe, to join in the ProSec theme (I almost said movement, because that is a bit political, but…)

• Here is a link to ProSec 2026 if you haven’t seen it or want a refresh.
• If you have interest in seeing our thoughts on the framework for a ProSec Bond, feel free to reach out to your coverage officer at Academy.

We are in the early stages of shifting from one stable order (rules-based with China flaunting the rules, to another, with more (but not total) independence). See Molotov Cocktails.

Bottom Line

This coming week we should:

• Learn more about the status between the U.S. and Iran. In either case, I think the higher for longer theme for energy prices will sink in and start to price itself into markets even more than it already has.
• Get some more clarity on the job market (within the kind of insanely large margins for error that we just somehow learn to deal with).

I’m sticking with the view that we have a tale of two economies: the AI, data center, and chip economy vs the Affordability economy. They are intertwined, with some degree of overlap.

• The AI/Data Center/Chip economy is okay for jobs for now (the building of data centers and the infrastructure to support them creates a lot of jobs). It has been GREAT for stock market indices.
• The affordability economy is a drag on some consumption and confidence. This part of the economy is sucking more households into it, here and abroad, and that is not good.

Bond yields have dropped in the past week, which has been good and in no small part has been helped by the ongoing barrage of “open the Strait” headlines.

I expect that to reverse course as we are near the bottom end of the range on 10s and I am now fully in the camp that 10s hit 5% before they hit 4%. Any effort to cut rates by the Fed, given the current state of economic data, would likely end up in higher long-end bond yields, because it is increasingly difficult to come up with a narrative to support a cut. That is a very different view than I had before the war started (and some big headline NFP job numbers were released).

It would be nice to get some resolution with Iran so we can move back to all the usual uncertainties like spending, jobs, AI, inflation, the Fed, etc.

In a meandering essay name dropping every dress-to-impress academic figure from Voltaire to Alexis de Tocqueville to Howard Zinn, The New Yorker has set out on a quest to explain how the progressive left can essentially despise the country they live in the name of social justice, while also adopting the perks of “patriotism” so they can own the Chuds.

The publication throws around some curious stats and asserts that patriotism is on the decline because, as they argue, patriotism today requires people to be blind to the injustices of the past.  They note:

“…We seem to be in a down moment. A Gallup poll found that, in the past dozen years, the percentage of people in the U.S. who say that they’re “extremely proud to be American” has plunged by sixteen points. A recent Harris poll noted that roughly four in ten Americans have considered relocating outside the country, with younger Americans even more inclined…”

“Last May, Newsweek published an article with the melancholy headline “Why Dual Citizenship Is the New American Dream.” Some commentators ascribe this to financial prudence, but the trend dates back at least to 2016 and the election of Donald Trump…”

Trump, the ever present and useful bogeyman, is obviously to blame.  The New Yorker, of course, glosses over the fact that the majority of the people who feel “less patriotic” in that Gallup poll are Democrats who are highly indoctrinated by establishment media to obsess over “historical injustices.”  The outlet applauds the decline, in a way.  It’s rooted in the same old DEI and 1619 Project talking points that the woke media has been peddling for over a decade. 

“Patriotism just isn’t cool anymore. Wokeness, having rightly called attention to racial and gender injustices long endemic to American life, helped chill the left’s admiration for the nation…”    

“Ours is a complicated history, made more tortuous by race. Some five hundred Indigenous nations lived here before the first enslaved Africans arrived, in 1619 – a year before the first Pilgrims. That, too, is American history, along with Reconstruction, Jim Crow, segregation, the Great Migration, Black anger, Black humor, and Black culture. This isn’t wokeness; it’s fact. 

Trump’s America has the virtue of simplicity: no initial divisions; no loyalists and patriots, or Native peoples and settlers, or Federalists and Anti-Federalists. He’s not bothered by labor unrest, unfair imprisonment, white-nationalist undercurrents…”

Yes, it is wokeness, and The New Yorker cites some “facts” but as usual they don’t tell the whole truth.  It’s an approximation of history (using cherry-picked facts) based on the political left’s own convenient narratives.  For example, they make no mention of the fact that some of the very first slave owners in US history were black.  Nor do they mention that there were at least 3775 black slave owners in the American South in 1830 and up to 6000 black slave owners by the time the Civil War kicked off. 

They don’t mention that the vast majority of the African slaves present in the American colonies were captured and sold by other Africans.  No, leftists can’t handle that kind of truth, or they deny it, which is why they can never be patriots.

And why not talk about the uglier side of the indigenous tribes, many of which brutalized and enslaved each other long before the first white man ever set foot on the continent?  Why not mention the rape, genocide and cannibalism common among these groups?  Why not mention that when white settlers arrived, many American Indian tribes sought the protection of Europeans from other indians?

Well, The New Yorker doesn’t talk about that because these facts undermine the entire foundation of far-left propaganda:  That the white man is the cause of all the world’s problems. 

In reality, every group of people and every race around the globe has committed brutal acts of conquest and slavery.  No one is innocent.  Everyone is guilty.  White people were just the first group to put and end to it all.      

But what is patriotism?  That is the question The New Yorker seems to ponder, though what they are really asking is:  “Who gets to define patriotism?”  This is the only thing leftists care about, because the power to define is the power to control.  And they want to control everything.  

For example, the publication harps on once again about the “horrors” of January 6th, and labels it a criminal attack masquerading as an act of patriotism.  Again, no mention of the numerous federal agents planted in the crowd to lead protesters into the building, and no mention of the Capitol Police using tear gas and rubber bullets to anger the crowd into violence. 

“What to my mind isn’t patriotism, though it was sometimes couched as such, was the behavior of the assembled throng that, on January 6, 2021, stormed the U.S. Capitol to prevent Congress from certifying the 2020 election. Awful as it was, it felt less like an insurrection than like an ugly mob bent on destruction and self-display…”

It’s interesting that The New Yorker has such a distaste for the J6 “mob” while lavishing BLM with praise and defending the riots as a a proud display of righteous rebellion.  Those mobs were far more destructive and killed numerous people.  All the J6 crowd did was break some windows, walk into the Capitol Building and leave an hour later.      

The New Yorker’s examination is not nuanced or complex at all.  It pretends to be, but it is incredibly simplistic:  If you are a hardcore conservative, a traditionalist, a nationalist, an advocate for controlled immigration, an opponent of DEI, or a MAGA voter, you are “not a patriot.”  Why?  Because the left says so.  Because they want to dictate the terms of patriotism and if they can’t, then patriotism has to go.        

Traditionally in America it has always been the real patriots that get to define what patriotism is.  It’s about the people who want to preserve America’s founding principles, not rewrite them or erase them in the name of “modernity.”  The people who understand that some values are eternal and remain relevant regardless of technological progress or the tides of political correctness. 

It’s about loving one’s country, not merely tolerating it until you can tear it down in the name of building something you think is better.     

Compared to America’s overall accomplishments, the perceived historical “missteps” are meaningless.  They do not matter.  Slavery is irrelevant.  The wars against the native tribes and the “stolen land” are irrelevant.  Jim Crow is irrelevant. Leftists can stew in these past events all they like, but that’s not going to win them any points in determining America’s future path.    

And this is a reality that woke adherents will never accept, because they are not patriots, they are deconstructionists.  Their goal is the dismantle the western world, and America by extension.  Which means, they conveniently turn a microscope on the portions of US history that are considered oppressive by today’s standards and harness those examples as a weapon to attack and dismantle the country as it exists now.  The US is a country increasingly looking to pull back from the brink of progressive revisionism, and they don’t like that.

So, activist entities like The New Yorker turn to gaslighting.  For them, history is nothing more than a Molotov Cocktail.  They burn down the past in order to dictate the present.  They clamor to co-opt the American ideal, but they don’t actually care about it.  They want to wear it as a skin suit while they dismantle it.  True patriotism is beyond their comprehension.  

Summary

• NYT on Sunday: President Trump has toughened the terms of a potential framework for a deal to end the war in Iran.
• Washington seeks to ratchet pressure, but Tehran still not budging on issue of remaining nuclear material.
• Bessent describes the “big mistake” Iran made to Fox – attacking its neighbors & losing friends; also says of the Iranians “they’re going to have to start taking down the wells.“
• Israeli PM Netanyahu says he has “instructed the Israeli military to expand the maneuver in Lebanon” after the occupation of the strategic Beaufort Castle, which he says marks “a dramatic change” in Israel’s operations.

*  *  *

Trump Toughens the Terms of Potential Deal

Fresh Sunday reporting in the NY Times says President Trump has responded to Iran’s refusal to budge on giving up its nuclear material by tightening US conditions as part of a Memorandum of Understanding to get back to the peace negotiating table.

“President Donald Trump has toughened the terms of a potential framework for a deal to end the war in Iran, and has sent those proposed changes back to Iran for consideration, according to three officials,” NY Times writes, but didn’t disclose what the precise changes are.

The report then speculates on where these changes likely focus: “Trump has been concerned about parts of the potential deal that would include unfreezing funds for the Iranians, two officials said.”

Iran’s Tasnim:

If Trump proposes changes to the draft agreement, Iran will make its own revisions as well.

Nothing is finalized. Iran says it will only accept terms it agrees with and is also prepared for the possibility of no deal. pic.twitter.com/KzWnxlWG8G

— Clash Report (@clashreport) May 31, 2026

Citing frustration at the slow pace of Iran’s response to the proposals, it adds, “He has been harshly critical of President Barack Obama for doing the same in the more than decade-old agreement that was signed to curtail Iran’s nuclear program.”

Tightening the proposals is meant to ratchet up the pressure and ‘force’ the Islamic Republic to respond quicker and agree to a deal. However, the Iranians have time and again rejected being ‘dictated to’ by Washington, as its top negotiator Ghalibaf spelled out days ago.

Meanwhile there’s been a recent change in tone when talking about Iran’s military, from Trump himself:

“We’ve actually left their military alone — people would be surprised to hear that.”

President Trump says Iran’s military hasn’t been hit as aggressively because it’s “somewhat moderate” compared to other elements of the regime.

He argues that wiping out “everybody” could cause… pic.twitter.com/gG84lDSrlD

— Fox News (@FoxNews) May 31, 2026

Iran Still Not Budging on Nuclear File

This also comes after a two-hour Friday Situation Room meeting Friday wherein it became clear there was no deal yet to be finalized. According to more from the Times:

The official added that Trump’s changes — a new, tougher proposal — were potentially intended to speed up the process by putting pressure on Iran to accept the framework already sent to Iran’s supreme leader, Mojtaba Khamenei, for approval.

Reaching the supreme leader has been difficult, so any changes to the document, known as the memorandum of understanding, could mean additional delays.

But for pressure to work, there has to be signs Iranian leaders are getting nervous or desperate – and so far they’ve not urged Washington or Pakistani mediators for some kind of grand compromise. Instead they’ve repeatedly sworn that Iran’s highly enriched uranium will never be transferred to the possession of the United States.

Iran Decries Constant False ‘Speculation’

The Sunday latest from Iran’s Foreign Ministry:

Iran’s Foreign Minister, Abbas Araghchi, says “dialogue and an exchange of messages are ongoing” with the United States amid stalled negotiations.

He told Iranian news agency IRNA that “it is not possible to judge until a clear conclusion is reached; everything that is being said now is speculation and should not be taken seriously until it is certain”.

Bessent: Iran’s ‘Big Mistake’

Still, US Treasury Secretary Scott Bessent is busy on the Sunday news shows talking tough. He told Fox in a new interview that Iran made a “big mistake” by attacking its neighbors in the Persian Gulf, within the past week. A US base in Kuwait was also reportedly just attacked by a ballistic missile, which was reportedly intercepted – but falling debris injured five US personnel.

“We had many very good allies who maybe weren’t completely transparent with us on the money — Iranian money that was in their banking systems — all of a sudden became very compliant in terms of being willing to turn over accounts or help us freeze block accounts,” Bessent told Fox News.

“And then the third part was the incredible blockade. I really think it’s the economic blockade of funds and the physical blockade of the ships not going in or out of the Iranian ports,” he added. “Kharg Island is shut down. That’s their big oil loading facilities, and that means that they’re going to have to start taking down the wells,” Bessent said. And yet, there’s nothing officially disclosed to show this is actually happening – though the Iranians have no incentive to publicize it. But time will tell.

Bessent:

A big mistake that the Iranians made was attacking their GCC neighbors, their neighbors in the Gulf, because we had many very good allies who maybe weren’t completely transparent with us on the money, Iranian money that was in their banking systems, all of a sudden… pic.twitter.com/trfonLETXI

— Clash Report (@clashreport) May 31, 2026

IDF Plunges Deep into Lebanon, Captures Crusader Castle

Some Lebanon war latest, via Al Jazeera, as ceasefire unravels:

• Israeli Prime Minister Benjamin Netanyahu says he has “instructed the Israeli military to expand the maneuver in Lebanon” after the occupation of the strategic Beaufort Castle, which he says marks “a dramatic change” in Israel’s operations.

• The Israeli military claims to have killed 900 Hezbollah “terrorists” since the start of the “ceasefire” on April 16. It added that the army had struck dozens of Hezbollah sites since this morning.

• Lebanese Prime Minister Nawaf Salam has accused Israel of pursuing a “scorched-earth policy” as Israeli forces expand their ground invasion.

The U.S. committed nearly its entire stockpile of stealthy JASSM-ER cruise missiles to the military campaign against Iran and has fired at least 1,000 of these long-range, stealthy, precision cruise missiles to hit high-value IRGC targets.

One of the unavoidable risks of deploying advanced weapons, such as the JASSM-ER, is that unexploded or partially intact systems can fall into enemy hands, allowing adversaries to study U.S. technology, refine countermeasures, and accelerate the development of copycat versions.

A new report from Army Recognition, citing defense journalist Babak Taghvaee, claims Iran has recovered wreckage from a JASSM-ER near Arak, potentially giving Tehran access to fragments of the missile.

“The recovered debris reportedly includes composite airframe sections, structural components, propulsion fragments, and possible avionics elements that could reveal insights into stealth construction, fuel-efficient propulsion, and survivability design,” according to the military blog.

Army Recognition cited images posted on X by Taghvaee showing what is described as badly damaged JASSM-ER wreckage recovered in Iran. The missile appears largely intact and possibly unexploded, which, if confirmed, would give Tehran higher-value intelligence on the advanced missile.

The number of AGM-158B JASSM-ER stand-off weapons (stealth cruise missiles) employed by the U.S. Air Force and U.S. Navy during the recent war in Iran was enormous. These missiles were used so extensively that debris and remains of them can now be found across various parts of… pic.twitter.com/NKzhR453mK

— Babak Taghvaee – The Crisis Watch (@BabakTaghvaee1) May 27, 2026

This incident is reminiscent of a similar one in 2011, when Iran captured a U.S. RQ-170 Sentinel stealth spy drone and claimed to have reverse-engineered the aircraft. Tehran later displayed and tested drones modeled on the RQ-170, including the Shahed-171/Simorgh and Shahed-191/Saegheh families.

Reuters reported in 2014 that Iran claimed a domestically built copy of the RQ-170 had flown.

Today, Iran is one of the leading manufacturers of suicide Shahed drones (besides Russia and Ukraine), which have wreaked havoc on U.S. military bases and allied countries. The U.S. is also ramping up its version of these drones called “Lucas.”

There are some stealth moves afoot by the Trump administration and Congress, which are poised to formalize the long-standing close US-Israel relationship, on the level of a formal defense pact.

A sweeping new legislative proposal in Congress is moving to more deeply intertwine and combine the two countries’ military arsenals. The House of Representatives’ version of the 2027 National Defense Authorization Act (NDAA) released this past week contains Section 224, devoted to military integration with the name “United States-Israel Defense Technology Cooperation Initiative.”

The section lays out that the Untied States has already historically contributed an inflation-adjusted $200 billion in military assistance to Israel since 1948, and seeks to more permanently solidify this relationship on a legal basis.

Responsible Statecraft has reported that “Section 224 lays the groundwork for bilateral research and development, co-production of weapons, joint ventures, licensing agreements, and seemingly every manner of US-Israeli military-industrial complex cooperation.”

The report said the new congressional provision “would greatly expand coordination to seemingly every area of defense tech, including AI, quantum, autonomous systems, directed energy, cyber, biotech” while further proposing “network integration” and “data fusion.”

Crucially, this would in effect combine both countries’ military data, and further formalize intelligence-sharing. While all of these things already happen to a large degree, it is at the moment still subject to the policies and direction of whatever US administration happens to be in office.

If passed, the new legislation would make this automatic and basically irreversible – again, akin to a formal defense pact or treaty.

What follows is some fuller reporting from Responsible Statecraft, which warms that “the result could well be a US political system even more susceptible to the whims of an Israeli government that seemingly has no qualms about drawing the US into military conflicts in the Middle East“…

Section 224 lays the groundwork for bilateral research and development, co-production of weapons, joint ventures, licensing agreements, and seemingly every manner of US-Israeli military-industrial complex cooperation. The US and Israel already work together heavily on missile defense, but this provision would greatly expand coordination to seemingly every area of defense tech, including AI, quantum, autonomous systems, directed energy, cyber, biotech, and many more. It also proposes “network integration” and “data fusion.” In other words, the US military’s data could soon be the Israeli military’s data.

If fully enacted, this proposal would provide a higher level of military-industrial integration than the US has with any other country in the world. To be sure, the US has worked closely with its NATO partners on co-production and shared supply chains, most notably via the Defence Production Action Plan. And, as the number one arms dealer in the world, the US provides weapons to militaries across the globe. But that is mostly a one-way street, with the US providing weapons to foreign buyers who only occasionally make parts for those weapons themselves, as in the case of the F-35’s global supply chain.

Section 224 would be a different beast entirely. It would fuse the US and Israeli defense sectors in multiple areas vital to the battlefields of the future, like autonomous systems and cyber. It would also bring extraordinary Israeli influence to the US beyond what it already has through the Israel lobby and its robust network of social media influencers. It would give the Israeli government the opportunity to greatly expand one of the most powerful levers of influence in US politics: jobs in the US By expanding or starting new co-production facilities like it already has in Mississippi and Arkansas, the Israeli government could boast of providing jobs on US soil, thereby securing allies among members of Congress who represent the districts where those jobs lie.

The ambitious scheme is unlikely to be met with much resistance from either the mainstream of the Republican or Democratic parties; however, the Dems have tended to vote against giving President Trump free reign regarding Operation Epic Fury. War Powers votes tend to break down along party lines, with the GOP typically shooting down these efforts of Congressional oversight.

But this could sail through with little or nothing in the way of public debate, or even knowledge, at all. It means future generations of taxpayers could find themselves even more deeply on the hook for the permanent defense of a foreign nation.

Authored by Matthew Piepenburg via VonGreyerz.gold,

2026 is screaming “Uh-Oh” signals from nearly every sector and asset class with alarming yet eerily ignored clarity. This explains why the longer-term case for gold couldn’t be more obvious, regardless of natural price retracements in the near-term.

In fact, if global financial conditions were not otherwise so disturbing, this historical moment in time would be fascinating.

But rather than just say this, let me show you.

Rising Yields: The Most Misunderstood/Important Signal of 2026?

For example, the $145T global bond market, which is $20T greater in size than the global stock market, remains less understood yet far more significant as an indicator.

Specifically, this “boring” bond market is foretelling an historical sovereign debt crisis which is already playing out before way too many closed eyes.

Yields on sovereign IOUs (British, American, German, Italian, Japanese, etc.) are climbing to the highest levels seen in decades.

Three Reasons/Warnings for Rising Yields

These yields rise when demand, price and, of course, TRUST in government bonds tank.

This dying trust has a lot to do with global debt levels at over $360T and U.S. public debt levels reaching an embarrassing $40T marker, which effectively makes America one big “bad credit.”

(1) Lenders Demand a Risk Premium

Those with bad credit, of course, are charged a higher risk premium or “yield” by lenders, which explains why the yield on the U.S. 10Y has risen by 75 basis points in a matter of months despite a Fed which has yet to raise rates in 2026.

The Fed, alas, is openly losing control of its bond market. This matters, because rising yields mean rising debt costs, which debt-addicted and debt-driven nations like the USA simply can’t control or afford anymore.

(2) More Buyers than Sellers of USTs

In addition to its fall from credit grace, the home of the world reserve currency and once sacred “return-free-risk” 10Y UST is watching helplessly as former buyers of its critical IOUs are rapidly becoming sellers—a force which just sends those fatal yields even higher.

China, for example, once held over $1.3T in USTs. Today it holds less than $650B. Japan, the world’s largest holder of U.S. debt, just sold more USTs in Q1 of 2026 than it has sold in the last four years.

(3) The Brutal Math of Debt

But the most obvious reason for the dumping of American bonds boils down to just brutal math.

Uncle Sam, which is now running an unsustainable 7% current account deficit, is adding $2.5T of new debt to its banana republic balance sheet per year. America spends 50% of its annual tax revenue just to pay interest on its outstanding debt.

Trillions more in unfunded liabilities are also owed, for which the USA simply does not have the funds.

To fill this income vs expense “gap,” it’s no great mystery that this can only be done with trillions more debased, “mouse-clicked” fiat dollars.

This extraordinary (and increasing) dollar-dilution direction explains why the DXY can’t break 100 despite spiking yields.

Gold and a Little Bit of History Repeating Itself

The slow yet steadily increasing death spiral of fiat currencies is fascinating, obvious and yet totally ignored by current stock chasers—at least for now.

It is also a perfect set-up for gold, which the world continues to ignore based on recent and short-term price action rather than longer-term preparation or historical understanding.

The fake liquidity now and to come to “solve” the above bond crisis is an almost mirror image of the 1970-1980 era, when the Dollar lost 50% of its purchasing power, and gold went from $35 to $850 an ounce.

But like the current bull run in gold, the template of the 1970s didn’t happen in a straight line, as midway through that infamous decade, gold saw sell-offs which shook out speculators yet made longer-term investors generational wealth.

The recent price declines in gold are thus no surprise within a secular bull cycle.

As explained elsewhere, gold’s value, liquidity and prominence have been confirmed by forced sales (from sovereigns to fund managers) to create needed liquidity in times of stress.

Such behavior confirms rather than detracts from gold’s rising profile and prominence in the years and cycles to come.

Nevertheless, many are understandably following traditional thinking that a “yield-less pet rock” is less impressive than a high-yielding sovereign bond.

But bonds are only “high-yielding” because they are unloved, distrusted and broken; the only way to “fix” them, moreover, is by debasing the very currency used to measure their so-called “higher” yields.

Such logic misses the currency-weak forest for the higher-yielding trees.

But as figures like Charles Mackay or John Hussman have so often reminded us, “logic” goes out the window when tech stocks and market meme manias replace basic common sense, sound valuation or even a mediocre grasp of history.

Meanwhile: Stocks Defy Sanity, Valuation and Common Sense

Looking at the current U.S. stock market is like looking at a bad, surrealist film with a cheap laugh-track.

By literally every metric, the S&P is grotesquely overvalued:

Investors are currently paying maximum prices for unprecedented valuation risk and historically minimal dividend income.

That’s not logic. It’s madness. As consumer sentiment tanks to the lowest levels recorded at the University of Michigan, and as U.S. credit card delinquency rates climb past 12%, the S&P smiles…

Lead to Temptation

As usual, the Wall Street whales and their Sirens on the rocky shores of the equity and credit trap are seducing the retail plankton to their cyclical doom—pumping stocks on the backs of suckers before the big boys take profits on the eve of a fall.

Of course, the infamous “Buffett Indicator”, which measures equity market cap against GDP, has never been clearer (or higher) in confirming such risk:

But the far more telling “Buffett Indicator,” in my mind, lies in the simple fact that Berkshire Hathaway is sitting wisely in nearly $400B in cash.

Alas, the Oracle of Omaha is openly getting out of harm’s way as legions of retail investors march toward an equity cliff.

The tragedy of the so-called S&P 500 (led by 10 stocks) is that it is really no stock market at all. Instead, it lives and breathes off the moral hazard notion that bad news is good news, as there is always a firehose of Fed liquidity (printed dollars) waiting to “accommodate it.”

Every dip is now perceived as a prelude to a V-shaped recovery compliments of the Federal Reserve, which is neither “Federal” nor a “reserve.”

From Temptation to Lying

But such a dishonest title is no match for the dishonest wordsmithing for which the Fed is now so infamous, whether in denying a “non-recessionary recession,” a growing rather “transitory” inflation trend, “non-QE QE” or just flat out lying about actual vs “reported” inflation.

In fact, the Fed’s desperate yet consistent policy of using dishonest words to buy time, markets and votes while hiding honest math will only continue under Kevin Warsh, a trend which he has all but openly confessed.

In case you haven’t noticed, Warsh intends to measure PCE inflation under a new metric called “trimmed mean PCE,” which effectively removes all the bad inflationary data to create a fictitious notion that inflation is under control.

This is duplicity at its finest. After all, even a witch can look pretty if you take away the warts, which is all Warsh’s new Fed policy boils down to.

In fact, what Warsh is doing is nothing surprising nor anything new.

The Oldest & Only Trick Left: Inflate Away Debt

While the rest of us endure the invisible theft of compounding inflation, the policy makers in DC will secretly welcome it as a means to inflate away their sovereign bar tab on the backs of your purchasing power and wealth.

This is called “negative real rates” or “financial repression,” and it’s the oldest trick in the book of desperately broke nations, namely: Let inflation rip higher than interest rates, but then lie about the embarrassing inflation.

When Even the Official Math is Bad

What’s as disturbing, however, is that even the “official” inflation data, as dishonest and downplayed as it is, is still alarming evidence of open monetary policy failure.

Current U.S. CPI inflation (the cost of consumer goods) is racing past 3.8%, and current U.S. PPI inflation (the business cost of making goods) is already at an embarrassing 6%–well beyond the Fed’s 2% “targets.”

But this is just the beginning. Since the Strait of Hormuz closed, the cost of fertilizer has risen by 20%, gasoline by 52%, European natural gas by 54%, jet fuel by 58%, and WTI crude oil by 60%.

Yet how can U.S. CPI and PPI inflation be in the single digits when everything else has risen by massive double digits?

Well, be patient, because the inflationary lag effect of this “conflict” in Iran (whatever you think of it) is racing toward your shores at an increasing wave height.

From Inflation to Gold: Keep it Simple

These inflation signals, as well as the bond signals above, and the stock mania already covered, are all just flashing neon-indicators of surreal “Uh-Oh” in the risk asset markets and an historical moment of currency debasement in your wallets and homes.

This is not fable but tragic fact.

Gold, whatever its current price, is positioning itself for a lengthy, secular and historical move north. It has a finite supply and infinite duration and is thus far more honest than the unlimited supply and finite duration of sovereign bonds and paper currencies.

For those who still think gold has not done enough, compare its recent history here:

…to the same history of global paper currencies here:

It’s really just that simple.

Gold will continue to climb because a global paper currency system distorted by decades of debt, dishonesty, desperation and debasement has nowhere to go but down.

For wealth preservation investors who understand the math of bonds and the history of debt, this simplicity provides for clarity in a time of fog, sanity in a time of madness, and wealth protection in a time of wealth destruction.

A commercial bus driver, who federal officials say could not speak English, faces two counts of involuntary manslaughter, with additional charges likely, after his charter bus plowed into vehicles on a Virginia highway Friday morning, killing five people, including an entire Greenfield, Massachusetts, family of four.

The New York Post reports that Virginia State Police revealed the 48-year-old bus driver, Jing S. Dong, was charged with two counts of involuntary manslaughter and will likely face additional charges after killing five people, including an entire family of four from Massachusetts: Dmitri Doncev, 45; his wife, Ecterina, 44; their 13-year-old daughter, Emily; and their 7-year-old son, Mark.

This is the car of an entire family that was ki11ed after a bus driver drove into the back of a stopped car.

The driver, Jing S. Dong, 48, of Staten Island, New York, is a Chinese born naturalized citizen who doesn’t read or speak English.

He attained his commercial driver’s… pic.twitter.com/AaQ8ZiwuZr

— Kentucky Girl (@Notwokenow) May 30, 2026

US Transportation Secretary Sean Duffy confirmed on X that Dong, “a man from China who became a U.S. citizen — doesn’t speak English. He received his commercial driver’s license from New York State in 2024.”

“Unacceptable. This is exactly why we are holding states accountable, enforcing the rules of the road, and cracking down on drivers who can’t speak English,” Duffy said.

Update on the tragic bus crash in Virginia:

Five people are dead, including a 13-year-old girl and a 7-year-old boy, after the driver of a motorcoach slammed into stopped traffic on I-95. @FMCSA Administrator Derek Barrs and our investigators are on the ground at the crash… pic.twitter.com/NWPBd9aLPr

— Secretary Sean Duffy (@SecDuffy) May 29, 2026

X sleuths have begun digging into the bus operator, allegedly E&P Travel Inc., and claim corporate records list the company’s registered address as an apartment unit in Kings Mountain, North Carolina.

Satisfactory safety rating… https://t.co/nKMVmxxkdc

— maybe danielle 💻🚛🇺🇸 (@maybedanielleee) May 29, 2026

There has been a shocking uptick in non-English-speaking migrant truckers involved in horrific highway crashes. Some of these truckers entered the country under the Biden-Harris regime’s nation-killing open border policies.

Duffy and the Trump administration have been cracking down on this through federal and state actions, especially CDL enforcement, English-proficiency rules, and licensing audits.

In recent weeks, the U.S. Supreme Court ruled that freight brokers can be sued under state law for negligent hiring when they hire unsafe trucking firms that later cause crashes. This could be an extinction event for non-English-speaking migrant truckers because no freight broker wants to carry that liability.

Back to the bus driver, Dong: How did he receive citizenship without being able to speak English?