Authored by Mike Shedlock via MishTalk.com,

The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way.

Sanctions Fail Again and Again

The Wall Street Journal reports China’s AI Engineers Are Secretly Accessing Banned Nvidia Chips

Chinese artificial-intelligence developers have found a way to use the most advanced American chips without bringing them to China.

One entrepreneur helping Chinese companies overcome the hurdles is Derek Aw, a former bitcoin miner. He persuaded investors in Dubai and the U.S. to fund the purchase of AI servers housing Nvidia’s powerful H100 chips.

In June, Aw’s company loaded more than 300 servers with the chips into a data center in Brisbane, Australia. Three weeks later, the servers began processing AI algorithms for a company in Beijing.

“There is demand. There is profit. Naturally someone will provide the supply,” Aw said.

Renting far away computing power is nothing new, and many global companies shuffle data around the world using U.S. companies’ services such as Google Cloud, Microsoft Azure and Amazon Web Services. However, those companies, like banks, have “Know Your Customer” policies that may make it difficult for some Chinese customers to obtain the most advanced computing power.

The buyers and sellers of computing power and the middlemen connecting them aren’t breaking any laws, lawyers familiar with U.S. sanctions say. Washington has targeted exports of advanced chips, equipment and technology, but cloud companies say the export rules don’t restrict Chinese companies or their foreign affiliates from accessing U.S. cloud services using Nvidia chips.

Buyers and sellers of computing power use a “smart contract” in which the terms are set in a publicly accessible digital record book. The parties to the contract are identified only by a series of letters and numbers and the buyer pays with cryptocurrency.

The process extends the anonymity of cryptocurrency to the contract itself, with both using the digital record-keeping technology known as blockchain. Aw said even he might not know the real identity of the buyer. As a further mask, he and others said Chinese AI companies often make transactions through subsidiaries in Singapore or elsewhere.

One decentralized GPU provider with more than 40,000 chips in its network, io.net, advertises in its user guide that it doesn’t impose know-your-customer restrictions. This “allows users to access GPU supply and deploy clusters in less than 90 seconds,” it says.

Meanwhile, Aw is raising more money from a group of investors in Saudi Arabia and South Korea. They plan to build a cluster of Nvidia’s latest Blackwell chips for another Singapore company with a Chinese parent.

“No one is breaking the export controls,” Aw said. “Legally speaking, they are Singapore companies.”

Know Your Customer’s Customer’s Customer

China sets up an AI company in Singapore.

AI developers buy cloud time through a subsidiary that further masks the operation by paying in Bitcoin.

In turn, the subsidiary buys time from a company Dubai or Singapore that hosts the servers.

US politicians outraged. But some of us are amused knowing full well that sanctions don’t work.

And instead of cloud profits going to US corporations, the profits go to Saudi Arabia, Singapore, Dubai, and South Korea.

Only Amazon is forced to “know your customer”.

Flashback Lesson

Didn’t you declare victory on these sanctions?

Here’s the deal: China and India will always buy. And they should. It’s in their best interest.

— Mike “Mish” Shedlock (@MishGEA) September 18, 2023

Massive Failure of Sanctions

• September 19, 2023: Lesson of the Day: Sanctions Don’t Work Because They Create New Markets

• December 29, 2023: How Russia Makes a Mockery of US Sanctions in One Picture

• February 19, 2024: US Impounds Thousands of German Vehicles Over One Tiny Part Made in China

• May 21, 2024: Another Sanction Failure: The US Blacklisted Xiaomi Three Years Ago Now it Makes EVs

• June 11, 2024: Russia to Export Coal to India Via Iran. It’s a 4 Alarm Bells Fire

Sanctions don’t work but they do drive up prices and/or create competition for US companies.

The beneficiary is either the sanctioned company, as in the case of China’s EV maker Xiaomi, or intermediaries as in today’s example.

Biden Eases Sanctions on Venezuela, Blocks Rare Earth Mining in Alaska

On April 21, 2024 I noted Biden Eases Sanctions on Venezuela, Blocks Rare Earth Mining in Alaska

What a hoot. How’s that great tradeoff working out?

Since we know the answer, here’s our real question of the day: Is robin Brooks finally ready to throw in the towel on the effectiveness of sanctions?

If he responds, I will add an addendum.

Authored by James Howard Kunstler via Kunstler.com,

“RFK, Jr. Murders Whale With Chainsaw!”

“Our society is now a strange hybrid of the Middle Ages, the Third Reich, and Brave New World. We have two classes – lords and peasants; we are in the midst of a very profitable genocide; and it’s all infused with surveillance technology, mind-altering drugs, and wall-to-wall propaganda.”

– Dr. Toby Rogers

The alliance between Robert F. Kennedy, Jr. and Donald Trump is many things. But first it’s an all-clear signal to a large class of less-than-fully brain-damaged Americans that it’s okay to quit being insane.

As you know, this election is no longer a battle between the political Left and Right. It’s an epic struggle-session between the sane and the insane.

You just witnessed the Democratic Convention nominating an empty pantsuit whose only record as a high government official is failure to protect and defend the nation and to support its constitution. All arranged without any real votes cast. Pretty neat trick, pulled off under the banner of Saving Our Democracy. Please understand that it was the result of hypnotizing so many vulnerable personalities into a mass formation psychosis. They were vulnerable because they are scared stiff by propaganda specifically targeting their deepest archetypal fears — in this case, fear of Daddy, meaning fear of behavioral boundaries, in short, of being civilized.

Thus, the advocacy for Hamas terrorists (Israel = Old Testament = moral boundaries), abortion (no more babies = die-off of cultural line), drag-queens (“mother” = demonic imposter), open border (border = nation’s boundary), the Ukraine War (“Let’s You and Him Fight”), censorship (hatred of fairness), mandates and lockdowns (destroy purposeful, meaningful, productive life), and so on. The propaganda engineered to produce this madness surely comes from our intel blob. They have devoted all the years since the founding of the CIA in 1947 to developing and refining their methods of mindfuckery. They have unleashed it lately at full force because they fear that Mr. Trump will deconstruct their intel blob and possibly prosecute some of its current and former officials for serious crimes such as treason, misprision of felonies, and murder.

The final ingredient in all that is submission of the populace to these programmatic suggestions.

Simply put, they yield to the fears induced in them. Try to enter the mind of a committed Democratic voter. You’ll discover that you are locked out. Sharing of thoughts is impossible because there is no thought in there, only disordered emotion.

Ask a Democrat what they think Donald Trump actually did as president for four years. I guarantee you they will say only one thing: he cancelled abortion.

Which is actually not true. He nominated several Supreme Court Justices who ruled that abortion properly belonged under the jurisdiction of the fifty states. (It was the act of ruling that drove them nuts because rules = boundaries.)  Of course, all the single batshit crazy cat-ladies of Boston, New York, Atlanta, Chicago, Minneapolis, Seattle, Portland, Denver, and Los Angeles now raging over the issue are free to abort themselves to their hearts’ content.

So, Kamala Harris emerges from this Cluster-B personality disorder exercise in hypnosis (the convention) as the avatar of . . . “joy” . . . in the absence of any ideas about actually running the government of a country which, for the moment, is run by nobody because the current president (“Joe Biden”) is both mentally unfit and on permanent vacation. None of this is very promising. The raptures of “joy” tend to obscure the idea that there is a future to be concerned about.

Enter Robert F. Kennedy, Jr.

He explained his view of the situation and his role in it with unsurpassed clarity last Friday in a powerful and moving speech outlining a decision that must have been very painful for him. As I averred he would do last Friday morning, he denounced the party of his ancestors in unequivocal terms for coming to militate against its own traditional principles — opposing war, fighting for free speech, helping poor working people, and against weaponizing government agencies. He threw his support to Mr. Trump because it’s become obvious that Mr. Trump’s aims and ideas are more in-tune with those forsaken principles of Mr. Kennedy’s father and his uncle, JFK.

And now he’ll campaign on behalf of Mr. Trump, with the expectation that he will play an important, well-defined role in the next Trump administration — in charge of a range of public health issues that he is deeply familiar with from decades of litigation and researching the books about pharmaceutical racketeering actually written by himself.

It’s Monday after the convention. What’s on the candidates’ campaign schedule today. CNNs “Campaign Latest” page says that Mr. Trump will give a speech in Detroit today to the National Guard Association where he is expected to greet the endorsement of former Rep. (and Lt. Col. In the National Guard, Tulsi Gabbard). Kamala Harris has no public appearances scheduled, but CNN reports that she has raised a fabulous $540-million since her launch a few weeks ago. Isn’t that nice? Boolah boolah, lotsa moolah. On Wednesday, Ms. Harris and her veep sidekick, Tim Walz, embark on a bus tour around Georgia. Bus tours will be the signature of their campaign.

Let me tell you what that means: instead of flying expeditiously between campaign stops where they might have to state some positions on public issues, Harris & Walz will eat up many hours on long bus rides from Point-A to Point-B, hiding from the public and the press.

Bobby Kennedy, meanwhile, is cramming as many media appearances as possible into his schedule, submitting to questions about everything, including the latest barrage of accusations about his fully-disclosed personal history.

Fox has had him on several programs, though the other cable news stations are ignoring him, as are The New York Times and the WashPo, except to publish scurrilous stories from his mindfucked siblings and cousins – the latest being that he cut the head off a dead whale on the beach at Cape Cod with a chainsaw.

Readers are supposed to construe that to mean he murdered a whale with a chainsaw.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Amid the doldrums of summer liquidity, today saw some give back from Friday’s euphoric response to Jay Powell’s latest flip-flop.

Rate-cut expectations declined (most notably focused on a shift from 2024 to 2025)…

Source: Bloomberg

Stocks – broadly-speaking – did not love it and gave some back with the Nasdaq the biggest loser (and S&P dragged down by Tech). The Dow managed to reach a new all-time high before purging most of it back.

It’s been an interesting couple of days for Mag7 stocks…

Source: Bloomberg

…as the world readies for NVDA’s earnings…

Source: Bloomberg

The dollar rallied modestly, erasing some of the dovish decline…

Source: Bloomberg

Despite the dollar gains, gold rallied…

Source: Bloomberg

Treasury yields rose modestly (just 1-2bps), but remain down from pre-Friday panic. The short-end continues to outperform…

Source: Bloomberg

Oil prices also continued to rebound, with WTI back above $77…

Source: Bloomberg

After surging above $65,000 twice over the weekend, Bitcoin was sold (ubiquitously) during the US day session

Source: Bloomberg

…and ETH is now at its weakest relative to BTC since the start of the DeFi boom…

Source: Bloomberg

Finally, while the seasonals are holding up for now, the worst period of the year looms (September H2)…

BTFD to all-time high, then STFR and rest for post-election surge?

Federal Reserve Chair Jerome Powell has been a serial bubble blower, only to later deflate bubbles through interest rate hikes and restrictive monetary policies. In this note, we’ll examine the recreational vehicle industry’s boom and bust and the current multi-year downturn. 

In early 2020, a combination of factors sparked the RV boom, including Fed Powell’s reduction of interest rates to the zero lower bound and Democratic cities that imposed tyrannical government-enforced lockdowns that caused folks to flee to rural America. To some extent, Starlink space internet made remote working from RVs possible in some of the most remote areas in the nation. However, as soon as Powell began to hike rates in response to inflationary forces in early 2022, the boom turned into a bust as the affordability of these homes on wheels collapsed. 

The RV bust has now persisted beyond the two-year mark, and to understand the industry’s current environment, look no further than Lazydays, an RV dealership with over two dozen locations nationwide, which bills itself as the world’s largest. The company recently reported significant revenue declines and sluggish sales, with no immediate recovery.

Powell slays the RV bubble with interest rate hikes. Notice how Lazydays’ revenue began to slide shortly after the hikes started. 

“Our best view is that the second quarter sales trajectory continued in July, and most industry experts are pointing to 2025 as the likely inflection for a meaningful industry recovery,” Lazydays CEO John North told analysts in a recent call discussing second-quarter results. 

North said, “So, facing that backdrop, we have continued to focus on the things we can control, maintaining healthy vehicle inventory, improving F&I per unit and achieving substantial total gross margin improvement sequentially from the first quarter.”

With discounts of up to 55% on RVs listed on the Lazydays website, North’s remark about “maintaining healthy vehicle inventory” might hint at a different reality: way too much inventory…

Across the industry, seasonal data from the RV Industry Association shows shipments are below a 16-year average for this time of year. 

With Powell likely to embark on an interest rate-cutting cycle on Sept. 18, the question becomes if North’s prediction of a bottom in the RV industry will be realized at some point in 2025. If so, Lazydays’ shares are down 75% on the year, and it might be worth throwing this ticker on the bottoming watchlist. 

Via SchiffSovereign.com,

It almost sounded like an apology. Almost…

On Friday, Federal Reserve Chairman Jerome Powell stood in front of reporters and explained how we got here… and how inflation took hold.

To be fair, he rightly diagnosed the root causes: extreme government spending and money printing during the pandemic. And then, when the economy reopened after the lockdowns, there was a sudden surge in inflation.

The Fed and its army of experts assumed this inflation would be a temporary phenomenon—what they called “transitory.” They said that, due to the pandemic lockdowns being lifted, prices would rise suddenly, then fall back down.

This turned out to be one of the worst calls in the history of central banking. As we now know, inflation wasn’t transitory. Prices rose and continued to rise higher and higher, and they haven’t come back down.

To his credit, the chairman acknowledged this mistake on Friday.

But he was in quite a jovial mood about it, even joking with reporters about how in late 2021 they all set sail on, “The good ship transitory,” essentially making light of their enormous error that turned a lot of people’s lives upside down.

His joke got a lot of laughs from the room, and it’s nice to see there can be so much levity about a mistake that has cost Americans so dearly.

Adding to the sting is that this press briefing took place at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming—one of the most exclusive and expensive resort towns in the world. And there he was, in fancy Jackson Hole, cracking jokes about blowing the inflation call—a mistake that has wreaked havoc on so many people’s lives.

To be honest it was a bit offensive… sort of like how many generals during World War I drank champagne as their men were being starved and slaughtered on the battlefield.

But again, it was at least an acknowledgment that they got it wrong. And this shouldn’t be an earth-shattering revelation. The Fed is not some all-knowing, all-powerful institution; it’s comprised of flawed human beings. Everyone makes mistakes— you, me, and the Fed Chairman too.

(Although ideally Fed officials would make fewer, smaller mistakes than the rest of us…)

Part of the reason the Fed was wrong is because they claim their decisions are data-driven. But the data they rely on is itself deeply flawed; just look at the most recent revision from the Labor Department, which is a major data source the Fed looks at  when crafting policy decisions.

The Labor Department said last week that they were revising down the number of jobs created in 2023 by over 800,000. That’s a huge miss, and it proves that the data the Fed relies on to make decisions is also fundamentally flawed.

So basically our monetary system is run by flawed human beings who make far-reaching, life-altering decisions based on flawed data. What could possibly go wrong?

Quite a lot, obviously. And that’s why it’s worth briefly examining where else the Fed could get it wrong.

And we see two clear items on the horizon:

One is the presidential election.

A couple of weeks ago, the Fed chairman almost bragged about how the outcome of the Presidential and Congressional elections are irrelevant to them and do not factor into their economic forecasts at all.

This is completely absurd.

On the one hand, you have Kamala Harris, who wants to impose price controls, pass tax hikes, enforce arduous business regulations, push energy prices higher, and more.

On the other hand, Trump wants to reduce the independence of the Fed.

You couldn’t have more diametrically opposed policy outcomes.

Yet the Fed is willfully ignoring the massive consequences of what could transpire in November. They’re not thinking about it or planning for it. And that is insane.

The second issue is the national debt.

The Fed isn’t sounding the alarm bells. And in the past, it has actually supported the government spending even more money.

And it’s not like “the data” is suddenly absent here. The Congressional Budget Office (CBO) has estimated an additional $22 trillion in new debt over the next decade. And generally, the CBO is conservative— meaning the debt will likely grow even quicker than that.

Who’s going to lend that money to the Treasury Department?

The Fed should know they will play a major role in funding government debt and deficits— triggering a massive money printing operation with major impacts. Yet they don’t say a word about it. They don’t seem to be thinking about it.

We’ve been clear about our assessment of this situation: $22 trillion in new debt will almost certainly be highly inflationary. And a Kamala Harris presidency is extremely likely to knock the US dollar off its throne as the world’s dominant reserve currency.

There’s a very narrow path to avoid that outcome, but it’s looking more and more likely every day.

You’d think the Fed would be planning for it. But they don’t say a word about it, and insist these factors don’t matter to them at all.

To us, this is why it makes so much sense to own real assets—scarce critical resources such as food, energy, key minerals, and productive technology.

If the Fed proves unable to tame inflation, critical commodities like these will grow in value.

And if by some miracle we avoid major inflation, there’s little downside to owning profitable businesses which produce some of the most vital resources on the planet.

Fresh controversy has broken out over the Sept. 10 debate on ABC between Donald Trump and VP Kamala Harris, after the Harris campaign insisted that both candidates’ microphones be live throughout the full broadcast.

The Trump campaign, meanwhile, has insisted that mics be muted when candidates aren’t speaking – which worked out swimmingly for Trump during his June debate with President Biden. [We suspect muted mics will allow Trump to throw Harris off by talking massive shit when nobody else can hear, and her handlers know this.]

“We have told ABC and other networks seeking to host a possible October debate that we believe both candidates’ mics should be live throughout the full broadcast,” said Harris campaign senior adviser, Brian Fallon, telling Politico

“Our understanding is that Trump’s handlers prefer the muted microphone because they don’t think their candidate can act presidential for 90 minutes on his own. We suspect Trump’s team has not even told their boss about this dispute because it would be too embarrassing to admit they don’t think he can handle himself against Vice President Harris without the benefit of a mute button.”

According to another person familiar with the negotiations, “She’s more than happy to have exchanges with him if he tries to interrupt her,” adding “And given how shook he seems by her, he’s very prone to having intemperate outbursts and … I think the campaign would want viewers to hear [that].”

Trump camp responds

The former president’s team has characterized this as a bait-and-switch, and wants the ABC debate governed by the same rules as the Biden debate.

“Enough with the games. We accepted the ABC debate under the exact same terms as the CNN debate. The Harris camp, after having already agreed to the CNN rules, asked for a seated debate, with notes, and opening statements. We said no changes to the agreed upon rules,” senior adviser Jason Miller told the outlet. “If Kamala Harris isn’t smart enough to repeat the messaging points her handlers want her to memorize, that’s their problem. This seems to be a pattern for the Harris campaign. They won’t allow Harris to do interviews, they won’t allow her to do press conferences, and now they want to give her a cheat-sheet for the debate. My guess is that they’re looking for a way to get out of any debate with President Trump.”.

More via Politico:

There are a few points here worth noting:

1. The rules for the CNN debate were never agreed to by Harris’ campaign; they happened when Biden was still the candidate.

2. Trump himself has sought additional debates with rules different from the CNN standard, including proposing a Fox News-hosted debate on Sept. 4 with “a full arena audience,” as Trump posted on Truth Social earlier this month. (The CNN debate had no in-person audience.)

3. In 2020, the Trump campaign wanted mics to remain on during the whole debate. “It is our understanding … that you will soon be holding an internal meeting to discuss other possible rule changes, such as granting an unnamed person the ability to shut off a candidate’s microphone,” Trump’s then-campaign manager, BILL STEPIEN, wrote to the Commission on Presidential Debates on Oct. 19, 2020. “It is completely unacceptable for anyone to wield such power. … This is reminiscent of the first debate in 2016, when the President’s microphone was oscillated, and it is not acceptable.”

4. As for Miller’s assertion that Harris wanted a seated debate with notes, Fallon pushed back vigorously. “All three parties (Trump, Harris and ABC) have agreed to standing and no notes, and we never sought otherwise,” he said. Another source familiar with the negotiations laughed when we asked if Harris ever asked to be seated, saying it wasn’t true.

On Sunday night, Trump slammed ABC, writing on Truth Social; “I watched ABC FAKE NEWS this morning, both lightweight reporter Jonathan Carl’s(K?) ridiculous and biased interview of Tom Cotton (who was fantastic!), and their so-called Panel of Trump Haters, and I ask, why would I do the Debate against Kamala Harris on that network?“

Harris’ campaign. meanwhile, says that when they accepted ABC’s invitation, ‘the rules themselves were up for debate.’ 

Let’s see how this goes.

Authored by Luis Cornelio via HeadlineUSA.com,

Remember when the government colluded with Big Tech to censor news detrimental to Democrats ahead of the 2020 election? Well, they’re at it again, this time openly bragging about their latest collusion.

California has announced the first-ever “partnership” with Google and Meta (Facebook’s parent company) to fund local newsrooms and launch a government artificial intelligence program. 

With a price tag of $250 million—$175 million from taxpayers and $55 million from Google—this program will provide direct financial support to newsrooms. 

The deal emerged as a settlement between Big Tech and the state government after California Democrats threatened to impose fees on platforms that profit from news content. 

The multi-million-dollar fund will be managed by the UC Berkeley School of Journalism and disbursed to newsrooms over five years, with annual approvals required. 

Critics have warned about the dangers of government and social media giants sponsoring the news. 

“This is beyond Orwellian,” said Dan Schneider, the vice president of a free speech department at the Media Research Center (MRC).

“With a tiny portion of its annual revenue, Google is going to use every reporter and news outlet to remake society in its own warped image.”

MRC has released several reports accusing Google of interfering in the 2024 election by burying Republican campaign websites while promoting those of Democrats.

The Media Guild of the West echoed Schneider’s concerns, stating, “California’s journalists and news workers oppose this disastrous deal with Google and condemn the news executives who consented to it in our names.” 

The union rebuked the newsrooms celebrating what it described as an “opaque deal” involving taxpayer funds and “minimal financial commitments from Google to return the wealth this monopoly has stolen from our newsrooms.” 

In contrast, California Gov. Gavin Newsom hailed the deal as a “major breakthrough” to ensure the survival of newsrooms and bolster local journalism. 

“The deal not only provides funding to support hundreds of new journalists but helps rebuild a robust and dynamic California press corps for years to come, reinforcing the vital role of journalism in our democracy,” he claimed.

While Newsom lauded the agreement as a lifeline for journalism, it comes amid growing scrutiny of Big Tech’s influence and manipulation of content.

Google and Facebook are currently under investigation by the House Oversight Committee for allegedly censoring searches and content related to an assassination attempt on President Donald Trump

Update(1235ET): It appears President Emmanuel Macron is feeling the pressure after French authorities arrested Telegram founder and CEO Pavel Durov over the weekend. The prosecutor’s office has since said his detention may last until Aug.28.

Several prominent tech entrepreneurs and public figures – for example Elon Musk – have decried the move as selective persecution against a known advocate of free speech. In a rare move Macron weighed in directly on Monday, claiming it has nothing to do with his government and that Durov’s arrest and ongoing detention is not politically motivated.

Macron said Monday, “The arrest of Telegram’s president on French territory took place as part of an ongoing judicial investigation. This is in no way a political decision. It is up to the judges to decide.” Macron further condemned what he called “false information” surrounding the case.

Yet even The New York Times has pointed out that this has become a “Free Speech Flashpoint”… And others point out that that the truth is precisely the opposite of everything Macron asserted…

Every word he wrote must be interpreted in reverse. This is Orwellian. https://t.co/Sl04vnpmVM

— Nassim Nicholas Taleb (@nntaleb) August 26, 2024

As for Macron’s dubious appeal to this being a simple matter of the “rule of law” prevailing…

In Europe, the rule of law is governed by the state.

— Giovanni B. Ponzetto – 🇨🇦🇮🇱 (@gbponz) August 26, 2024

No one believes this…

“France is deeply committed to freedom of expression and communication, to innovation, and to the spirit of entrepreneurship.”

No one believes this.

— Collin Rugg (@CollinRugg) August 26, 2024

“France is deeply committed to freedom of expression…” claims Macron.

Meanwhile, some very recent history…

* * *

French judicial authorities have extended the detention of Telegram founder and CEO Pavel Durov following his surprise arrest at Paris’ Le Bourget airport on Saturday. 

The list of charges include fraud, drug trafficking, organized crime, terrorism promotion and cyber-bullying on the popular encrypted messaging platform. “It is absurd to claim that a platform or its owner are responsible for abuse of that platform,” the company has said in a fresh statement.

The 39-year old Russian-born Durov, who also holds French and UAE citizenship, is being held for “questioning”. Le Monde is reporting Monday that his detention has been extended by the investigative magistrate.

His detention “was extended beyond Sunday night by the investigating magistrate who is handling the case, according to a source close to the investigation.”

“This initial period of detention for questioning can last up to a maximum of 96 hours,” Le Monde continues. “When this phase of detention ends, the judge can then decide to free him or press charges and remand in further custody.”

So at this point the initial 48 hours was extended to the max of 96 hours, during which time the judge must charge him or release. However, in more serious cases the detention period can reportedly be extended for up to 144 hours, or six days.

Le Monde reviews further:

France’s OFMIN, an office tasked with preventing violence against minors, had issued an arrest warrant for Durov in a preliminary investigation into alleged offenses including fraud, drug trafficking, cyberbullying, organised crime and promotion of terrorism, another source said. Durov is accused of failing to take action to curb the criminal use of his platform.

Russian officials and media have been especially vocal in calling out France’s dubious case against Durov…

Today’s Russian papers on Pavel Durov’s detention in Paris:

* “The blow to Telegram threatens to become a blow to Russia.”
* “Telegram might become a tool of Nato…”
* “If Telegram crashes, how will [our army] fight?”#ReadingRussia pic.twitter.com/q4IYalPjHM

— Steve Rosenberg (@BBCSteveR) August 26, 2024

Absurdly, some American pundits are suggesting ‘Russian links’ and are seeking to justify Durov’s detention based on political alliances, smearing those speaking out on the obvious free speech issues: “Certain quarters…”

Most Americans have no idea who Pavel Durov is, what Telegram is, or why it might be important to the Kremlin. But his arrest swiftly drew attention from certain quarters. pic.twitter.com/a6jngeE1wb

— Jamie Dupree (@jamiedupree) August 25, 2024

The reality is that Durov actually has long been seen as an enemy of Putin and has a deeply antagonistic relationship with the Kremlin.

In 2014, Pavel Durov fled Russia, selling his multi-billion dollar social media company VK after refusing to censor content and share user’s private information with the Russian government.

In 2024, France, an EU and NATO member, arrested Durov for refusing to censor content on… pic.twitter.com/J2M7By1Yr5

— KanekoaTheGreat (@KanekoaTheGreat) August 25, 2024

Geopolitical analyst Arnaud Bertrand points out that “This is insane.” He goes on to explain:

Pavel Durov actually acquired French nationality in 2021 through an exceptional procedure: the so-called “eminent foreigner” process. Initiated by the Minister of Foreign Affairs, it grants French nationality to “a French-speaking foreigner who contributes through their eminent action to the influence of France and the prosperity of its international economic relations”. 3 years later France arrests the guy for doing the very same “eminent actions” they’d granted him citizenship for 3 years earlier. Make it make sense.

Telegram has stated that “Durov has nothing to hide and travels frequently in Europe.” The company continued: “Telegram abides by EU laws, including the Digital Services Act – its moderation is within industry standards.”

Authored by Charles Hugh Smith via OfTwoMinds blog,

So here we are, with a handful of winners declaring the system is working great and high-fiving each other, too busy congratulating themselves to see the tsunami of karma racing toward shore.

It’s a toss-up which is wider: the widening gap between the top 10% and the bottom 60%, or the gap between the complacency of the top 10% and the reckoning that’s overdue. Call it karma, just desserts or the wheel of history, the unfairness and inequality of a rigged system generates blowback, and the longer it is suppressed, the greater the eventual swing of the pendulum to the opposite extreme.

But really, who cares about the bottom 60% being left in the dust by a system rigged to benefit the top 10% because hey, the S&P 500 is going to 6,000–yippee! More free money for everyone who bought assets years or decades ago before the Federal Reserve decided the best way to “boost growth” was to inflate assets to generate “the wealth effect” among those who already owned the assets being inflated.

And once the fortunate few were awarded the vast majority of the Fed’s unearned largesse–the top 10% own 93% of stocks–they have the wiggle room to ignore inflation. The bottom 60% living on wages–well, not so much.

Readers remind me that many of Americans’ financial ills are self-inflicted: poor money management, instant gratification over making sacrifices for long-term gains, getting into credit card debt with 22% interest rates, buying vehicles they can’t afford, paying $100 for an oil change instead of learning how to change the oil themselves, and so on–all of which indeed make modest financial circumstances much more difficult.

Having been in the bottom 60% in terms of earnings most of life, I constantly preach the virtues of frugality and anti-consumerism, learning how to do things for ourselves so we don’t have to pay for them, and building networks of reciprocity–I help you, you help me–that make all the difference between financial security and insecurity. These are the fundamentals of Self-Reliance.

But better money management doesn’t erase the rigged system that has sluiced the lion’s share of the nation’s gains to the top 10% and left the bottom 60% in the dust. If the rising tide raises all ships, then how is it the bottom 50% own a rounding-error share of the nation’s financial wealth– 2.6%:

The bottom 50% own 11% of the nation’s real estate value–a mere fourth of the 44% owned by the top 10%.

The top 10% excel at a few things they rarely receive full credit for: one is choosing their parents wisely, another is believing that since they’re doing great, everyone is doing great— a self-serving delusion that doesn’t reflect reality: those who don’t own a share of the $45 trillion in stock market wealth weren’t issued rose-colored glasses:

The 10% below the top 10% reckon they’re “middle class,” but how can the top 20% be “middle class”? The reality that the “middle class” has eroded into the top 20% haves and the top layer of the have-nots who still harbor illusions is conveniently obscured by economic cheerleaders lumping the fantastic gains reaped by the top 10% in with the bottom 90% and declaring the entire population is reaping splendid gains. But statistical trickery can’t obscure the systemic unfairness of a rigged game.

While many finger the abandonment of the gold standard as the Original Sin, this ignores an economic change of equal consequence: the collapse of all societal values other than increasing shareholder value, which optimized hyper-financialization (stripmining the real economy to enrich financiers and corporations) and hyper-globalization, which stripmined the nation to enrich the top 10% who own 93% of all corporate shares.

These forces drastically eroded the purchasing power of wages to the benefit of the owners of assets, who skimmed the vast majority of the immense financial gains of hyper-financialization and hyper-globalization. Those who depend on wages lost out, those who owned assets enjoyed ten-baggers not from genius but from mere luck.

So here we are, with a handful of winners declaring the system is working great and high-fiving each other, too busy congratulating themselves to see the tsunami of karma racing toward shore.

Those of us who did nothing more than buy a house and invest in index funds–the same common-sense steps taken by previous generations to earn modest returns–and who through no special effort reaped enormous gains thanks to the Fed’s “wealth effect”–might benefit from a bit of humility by admitting our gains are the result of a system rigged to benefit all who bought assets before “the wealth effect” rocket-launched the value of our assets. The word few dare utter is “unearned.”

In the end, it won’t matter what we think, like, believe or hope, for reversal is the movement of Tao. Put colloquially, the pendulum of inequality driven by a rigged system will swing to the other extreme, and claiming that payback is somehow “unfair” won’t change the trajectory or the volatility.

*  *  *

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In a strategic move which puts pressure on Ukraine in response to its ongoing Kursk incursion into Russia, Belarus has built-up its troops along parts of its southern border with Ukraine.

A Sunday statement by Ukraine’s Ministry of Foreign Affairs demanded that Belarus pull back its forces or risk further escalation and “tragic mistakes”.

The statement described that under the guise of exercises, “a significant number of personnel, including Special Operations Forces, weapons, and military equipment” are present at the border. It additionally named the presence of former Wagner PMC forces.

“We warn Belarusian officials not to make tragic mistakes for their country under Moscow’s pressure,” the Ukrainian foreign ministry continued. “We emphasize that Ukraine has never taken and is not going to take any unfriendly actions against the Belarusian people,” it added.

Belarus and Russia are treaty allies which form a “Union State” – and Moscow utilized Belarusian territory to kick off its February 2022 invasion of Ukraine territory. President Putin last year also ordered the positioning of tactical nuclear warheads at Belarusian bases, overseen by Russian officers. Both countries are under heavy US/EU-led sanctions.

Alarmingly, Kiev has also called out Belarus for threatening nuclear safety, given the proximity of the alleged force build-up, per Politico:

Ukraine’s statement noted the Belarusian troop deployment was concentrated in an area near the Chernobyl Nuclear Power Plant, warning: “Conducting exercises in the border area and in close proximity to the nuclear power facility… poses a threat to the national security of Ukraine and global security in general.”

Kiev’s fresh statement concluded: “We warn that in case of a violation of Ukraine’s state border by Belarus, our state will take all necessary measures to exercise the right to self-defense guaranteed by the UN Charter.”

“Consequently, all troop concentrations, military facilities, and supply routes in Belarus will become legitimate targets for the Armed Forces of Ukraine.”

Ukraine and its Western partners have been monitoring the presence of Wagner mercenaries in Belarus and in foreign lands…

Russia’s Wagner mercenary group said on Monday that it only operated in Africa and in Russian ally Belarus, and its soldiers were no longer fighting in the Ukraine war. https://t.co/UPdAKjrghF

— Levent Kemal (@leventkemaI) August 26, 2024

Despite several border incidents and accusations, Belarus has by and large stayed on the sidelines throughout the Russia-Ukraine war, though it has allowed Moscow forces to launch drones from its territory. But a feared troop incursion by Minsk forces into Ukraine has never come.

Yet Ukraine’s threats that Belarusian troops could become “legitimate targets” are somewhat empty, given Ukraine’s military is suffering severe manpower problems, and the opening of another war front with Belarus would only exacerbate the crisis.