With draconian export controls and blacklisting by Washington elites, Chinese tech giant Huawei is still operating and, in fact, producing new high-tech smartphones with components increasingly sourced from domestic suppliers. 

A new teardown analysis by tech repair company iFixit and consultancy TechSearch International, first reported by Reuters, shows Huawei’s Pura 70 Pro has a NAND memory chip sourced domestically from the Chinese telecom equipment maker’s in-house chip unit, HiSilicon. 

iFixit and TechSearch found the Pura 70 handset was operating on a Huawei-made advanced processing chipset called the Kirin 9010. They said the new chip is likely an “improved version” of the advanced chip used by Huawei’s Mate 60 series, which was launched last year to compete with Apple’s iPhone 15 lineup. 

“While we cannot provide an exact percentage, we’d say the domestic component usage is high, and definitely higher than in the Mate 60,” Shahram Mokhtari, iFixit’s lead teardown technician, said. 

Mokhtari continued, “This is about self-sufficiency, all of this, everything you see when you open up a smartphone and see whatever are made by Chinese manufacturers, this is all about self-sufficiency,” Mokhtari said.

The central theme is that a worsening tech war between Beijing and Washington pushes Huawei to source more handset components in domestic markets. This is an alarming development for Washington politicians, who have spent several years sanctioning China to prevent them from acquiring high-tech Western chips and chip-making tools, as well as the hope of imploding China’s tech-creating abilities. However, the restrictions are backfiring, as Huawei now manufactures smartphones with more domestically sourced chips than ever.  

Just wait for the day when Chinese state media, such as the Global Times, boasts that Huawei’s phones are made entirely with domestic parts. Given the current trajectory, we believe that day is approaching.

Reuters cited analysts who believe Huawei’s phones are denting iPhone market share in the world’s largest handset market. 

However, since the Pura 70’s components are not entirely sourced domestically, IFixit and TechSearch’s analysis shows South Korean company SK Hynix makes the DRAM chip. 

Given the chip restrictions, SK Hynix told Reuters it had been “strictly complying with the relevant policies since the restrictions against Huawei were announced and has also suspended any transactions with the company since then.”

The analysis showed that the processor used by the Pura 70 Pro was 7 nanometers (nm), similar to the chip used to power the Mate 60. 

“This is significant because news of the 9000S on a 7nm node caused a bit of a panic last year when US lawmakers were confronted with the possibility that the sanctions imposed on Chinese chipmakers might not slow their technological progress after all,” iFixit said.

iFixit continued, “The fact that the 9010 is still a 7nm process chip, and that it’s so close to the 9000S, might seem to suggest that Chinese chip manufacturing has indeed been slowed.”

The re-emergence of Huawei, taking on Apple, has infuriated Washington. There was a report from Bloomberg earlier this week that the US revoked licenses that allowed Huawei to buy semiconductors from Qualcomm and Intel. 

The biggest takeaway: Huawei is on a mission to entirely source components from local suppliers as the tech war between China and the US heats up. 

Authored by Jonathan Lesser via RealClearEnergy,

Forty-two was the mystical number that explained “life, the universe, and everything” in Douglas Adams’ comic novel, The Hitchhiker’s Guide to the Galaxy.  Today, another mystical number, the so-called social cost of carbon (SSC), is providing the excuse for the Environmental Protection Agency and green-energy-enamored state regulators to enact crippling energy policies.

The SCC is the thumb on the scale that can justify virtually any policy aimed at eliminating fossil fuels. When the EPA first proposed its rule to reduce mercury emissions from coal-fired power plants, the agency’s cost-benefit analysis determined the benefits would be minuscule. Any putative benefits, it turns out, would come instead from reductions in carbon emissions and, here’s the key, based on a calculated value for the SCC.  The same was true for the EPA’s earlier attempt at carbon regulation via a “Clean Power Plan,” which was shut down by the Supreme Court. But here we are again with the agency’s newest rules trying to force coal plants to further reduce mercury emissions and to force both coal and natural gas-fired power plants to capture 90% of their carbon emissions. The technology to accomplish this doesn’t exist and EPA Administrator Michael Regan admitted the rule will force the closure of fossil-fuel power plants.

The SCC values used by the EPA are derived from calculations in integrated planning models (IPMs). Those models assume a simplistic linear relationship between carbon emissions and world temperature (never mind that the validity of that linear assumptions is a subject of deep debate in scientific circles). The models then assume that the resulting temperature increases cause all forms of environmental doom – rising sea levels, more disease, and declining agricultural production – for which yet more estimates are made to assign future cost consequences. Here’s the key: the IPMs project these costs out for the next 300 years (not a typo). Then, those far future costs are “discounted” to estimate a value in today’s dollars by using truly absurd assumptions about such things as inflation and economic growth.

A tongue-in-cheek forecaster’s creed is “Give them a number or give them a date. Don’t give them both.” Attempting to predict the future three centuries hence may be standard fare for science fiction writers, but basing energy policies on such predictions is insane.

Imagine someone in the year 1724 predicting life – and technology – today. Benjamin Franklin was 18 years old and working in his father’s print shop. George Washington would not be born for another eight years. The French scientist Antoine Lavoisier, who first identified carbon as an element in 1789, would not be born until 1743. The first patent on a flush toilet would not happen for another half-century. Thomas Edison would not invent the light bulb and the telephone for another 150 years. Could anyone in 1724 have imagined automobiles, mobile phones, and MRI machines? How about integrated circuits, nuclear power, and B-2 bombers?

To presume we can accurately predict, or even imagine, what the world will look like 300 years from now is just as preposterous. Yet, simplistic models and arbitrary assumptions are being used to drive energy policy decisions today. Using the SCC estimates, and assuming that new technologies will magically appear, the EPA can justify virtually any pollution control regulation, including those that effectively mandate electric vehicles. Similarly, even though offshore wind generation costs five times more than natural gas and coal, the SCC can “prove” the benefits of offshore wind exceed its costs. New York State, for example, assumes that, by 2040, thousands of megawatts of “dispatchable emissions-free generators” (the equivalent of a natural gas generator burning pure hydrogen) will provide the necessary backup for unreliable offshore wind, even though no such generators exist.

Contrary to the economic fantasies peddled by green energy advocates, policies to eliminate fossil fuels based on the supposed benefits captured by the SCC will cripple the U.S. economy. Electricity prices, coupled with ill-considered plans to electrify virtually everything, will soar. Supplies will dwindle, requiring rationing, either explicitly or through rolling blackouts, such as those experienced every day in South Africa. Rather than creating some green energy nirvana, the lack of adequate and affordable electricity will cause societal decay.

All of this based on a made-up number.

Jonathan Lesser is a senior fellow with the National Center for Energy Analytics and president of Continental Economics.

A major security scandal is developing at Japan’s Yokosuka Naval Base, where drone footage was recently filmed above an American nuclear-powered supercarrier without any activated anti-drone systems to intercept hostile unmanned aerial vehicles. This comes as loitering munitions, also known as kamikaze drones, are the hottest weapon on the modern battlefield in Eastern Europe and the Middle East.

X account “这是我小号4”, translated in English from Chinese as “This is my trumpet number 4,” uploaded aerial videos and images of Yokosuka Naval Base. Some of the footage was directly over the USS Ronald Reagan. 

The X account wrote in English, “For anyone who thinks it’s fake….” They attached a screenshot of the drone’s flight path of the naval yard on a map to the post. 

For anyone who thinks it’s fake pic.twitter.com/PdfwHAnwqj

— 这是我小号4 (@Xiao_Hao_4) April 2, 2024

The latest data from intel research firm Strategic Forecasting shows USS Ronald Reagan was recently moored at Yokosuka Naval Base. Footage from the drone was taken in early April. 

The account posted additional images of the naval yard and US warships. 

pic.twitter.com/JOCfTFMI68

— 这是我小号4 (@Xiao_Hao_4) May 8, 2024

Where are the anti-drone systems to guard against this type of aerial security breach? 

pic.twitter.com/5Qx1CLQbIn

— 这是我小号4 (@Xiao_Hao_4) April 4, 2024

In English again, the account said, “It took a month for the Japanese army to just realize…” The person was referring to a news story by the Japan Broadcasting Corporation, also known as NHK, covering his activity on social media about posting drone videos of US and Japanese warships. 

It took a month for the Japanese army to just realize… https://t.co/TH6mWxQZV8

— 这是我小号4 (@Xiao_Hao_4) May 8, 2024

NHK cited Ministry of Defense officials who said drone videos were “likely genuine.” Other sources we spoke with confirmed the videos are likely real and noted the possibility that this could’ve been a Chinese-made DJI drone. 

Why didn’t the US and or Japan activate electromagnetic counter-measures against the drone?

The next question: Did a Chinese spy – pilot this drone?

By Simon Watkins of OilPrice.com

Since the mid-1990s, China’s extraordinary economic expansion almost singlehandedly drove a supercycle in key commodities prices it required to power such growth, including oil and gas. In 2013, it became the world’s largest net importer of total petroleum and other liquid fuels and, as late as 2017, its still high rate of economic growth allowed it to overtake the U.S. as the largest annual gross crude oil importer in the world. Late 2019 saw much of this activity grind to a halt as Covid hit the country, and the economic slowdown was exacerbated by its Draconian ‘zero-Covid’ policy that saw complete shutdowns of major economic centres at the slightest hint of infection. However, 2023 saw it achieve its official gross domestic product (GDP) growth target of “around 5 percent” – posting 5.2 percent in the end. The same official target is in place this year, with the key questions for oil markets being whether this will be achieved and if so, how easily?

16 April saw China’s National Bureau of Statistics release the country’s Q1 GDP figure, which showed a 5.3 percent year-on-year increase. This was way above consensus analyst expectations of 4.6 percent and was also a rise from the Q4 2023’s 5.2 percent. “Aside from the continued decline in the property sector, policy support is filtering through investment,” Eugenia Victorino, head of Asia strategy for SEB in Singapore exclusively told OilPrice.com. “With property sales now 60 percent lower than their mid-2021 peak, transaction volumes are now comparable to levels last seen in 2012,” she added. “Investments in other sectors are also picking up, particularly in manufacturing and energy production and supply, and in the coming months, infrastructure investment will also start to accelerate on the back of fiscal stimulus,” she said. “The strong performance in the first two months of the year suggests that an economic recovery is underway,” she underlined. March’s key Caixin/S&P Global China manufacturing purchasing managers’ index (PMI) also came in very bullish. At 51.1 in the month, up from 50.9 in February (above 50.0 indicates expansion), it was the strongest since February 2023. “Overall, China’s manufacturing sector continued to improve in March, with expansion in supply and demand accelerating, and overseas demand picking up,” said Caixin Insight Group senior economist, Wang Zhe. April’s Caixin China General Manufacturing PMI also increased – to 51.4, beating estimates of 51 – and recording the sixth straight month of growth in factory activity. New orders rose the most in over a year and foreign sales increased at the fastest pace for nearly three-and-a-half years.

This robust performance across several major sectors in China’s economy – including, crucially manufacturing – is in sharp contrast to the growth drivers seen last year. In the immediate aftermath of Covid, the country’s growth became reliant on just reopening the economy and removing negative policies – property, consumer, and geopolitics – rather than on aggressive stimulus, to drive activity, Rory Green, chief China economist for GlobalData.TSLombard exclusively told OilPrice.com at the time. “For the first time, a cyclical recovery in China [was] being led by household consumption, mainly services, as there [was] a great deal of pent-up demand and savings – about four percent of GDP – following three years of intermittent mobility restrictions,” he said. In terms of the effect that this had on oil prices at the time, it is apposite to note that transportation accounts for just 54 percent of China’s oil consumption, compared to 72 percent in the U.S. and 68 percent in the European Union. In 2022 and early 2023, net oil and refined petroleum imports were eight percent lower by volume than the pre-Covid peak, with infrastructure and export-oriented manufacturing partly offsetting lower mobility and less property construction. At that phase of China’s economic rebound, then, oil demand did increase, but the scale of this was far from sufficient to drive oil prices significantly higher on its own. This was even more the case, as China continued where possible to buy oil from Russia at a substantial discount.  

Before this ‘Covid Phase’, China had already undergone several transitions in its core economic growth model, the effects of which continue to be felt to this day. From 1992 to 1998, its annual economic growth rate was basically between 10 to 15 percent; from 1998 to 2004 between 8 to 10 percent; from 2004 to 2010 between 10 to 15 percent again; from 2010 to 2016 between 6 to 10 percent, and from 2016 to the 2019 between 5 to 7 percent. For much of the period from 1992 to the middle 2010s, much of China’s massive economic growth was founded on a huge energy-intensive expansion of its manufacturing capabilities. This also involved the mass migration of new workers from the countryside and into the cities, which required a huge energy-intensive infrastructure build-out. Even after some of China’s growth began to switch into the less energy-intensive service sectors, its investment in energy-intensive infrastructure build-out remained very high. This pattern continued for many years, alongside the third phase of China’s economic growth, which was the rise of a middle class that powered domestic consumption-led demand for goods and services. All these phases had the net result of markedly increasing China’s demand for oil and gas. 

Although this ‘Post-Covid Phase’ of growth currently looks like one that will see powerful drivers from several sectors of China’s economy – including manufacturing – it does not necessarily mean that oil prices will feel the full effects of this. The key reason here is that China continues to buy oil at greatly reduced prices not just from Russia, but also from Iran and Iraq too, through various mechanisms analysed in full in my new book on the new global oil market order. Despite sanctions in place on the first two of these countries, the U.S. is happy to look the other way for the most part, as oil demand being satisfied ‘off the official books’ ultimately feeds through into lower demand elsewhere in the global energy markets, so reducing bullish price pressure. Additionally, China does not want to encourage higher oil prices from any of those multitude of Middle Eastern countries over which it has developed an influence because the U.S. and several of its key allies remain China’s major export customers. The U.S. alone still accounts for over 16 percent of its export revenues. Rising energy prices in these countries could again fuel inflation and cause interest rates to rise, bringing the prospect of economic slowdown with them, as was seen in the aftermath of Russia’s invasion of Ukraine in 2022. According to a senior source in the European Union’s (E.U.) energy security complex spoken to exclusively by OilPrice.com recently, the economic damage to China – directly through its own energy imports and indirectly through damage to the economies of its key export markets in the West – would dangerously increase if the Brent oil price remained over US$90-95 pb for more than one quarter of a year. 

Rising energy prices also have direct ramifications in U.S. presidential elections, in which China does not want to be seen playing a part, at least overtly. Longstanding estimates are that every US$10 pb change in the price of crude oil results in a 25-30 cent change in the price of a gallon of gasoline, and for every 1 cent that the average price per gallon of gasoline rises, more than US$1 billion per year in consumer spending is lost, adversely affecting the U.S. economy. Historically, around 70 percent of the price of gasoline is derived from the global oil price. This feeds through into the second part of this equation, as also analysed in full in my new book, which is that since the end of World War I in 2018, the sitting U.S. president has won re-election 11 times out of 11 if the economy was not in recession within two years of an upcoming election. If it was in recession in this timeframe, then only 1 sitting president has won out of 7 times (although even the 1 is debatable).

As fully expected, Russian President Vladimir Putin struck a defiant tone in his speech at Moscow’s Red Square for the annual events commemorating Russia’s WW2 victory. Addressing thousands of soldiers in ceremonial attire, Putin accused the “arrogant” West of stoking conflict around the world. 

“We know what the exorbitance of such ambitions leads to. Russia will do everything to prevent a global clash,” he said. “But at the same time, we will not allow anyone to threaten us. Our strategic forces are always in a state of combat readiness,” he stressed in reference to the country’s nuclear forces.

The 71-year-old leader hailed that “Victory Day unites all generations,” and vowed: “We are going forward relying on our centuries-old traditions and feel confident that together we will ensure a free and secure future of Russia.”

He called Victory Day “very emotional and poignant” as “Every family is honoring its heroes, looking at pictures with dear faces and remembering their relatives and how they fought.”

He contrasted the “heroes” – Russian troops fighting in Ukraine, with the West – which is “fueling regional conflicts, inter-ethnic and inter-religious strife and trying to contain sovereign and independent centers of global development.”

Present for the ceremony was nearly 10,000 Russian troops, including 1,000 who have fought inside Ukraine. According to AP correspondents, Putin underscored his ‘nuclear deterrent’ messaging by having nuke-capable missiles present: 

Nuclear-capable Yars intercontinental ballistic missiles were pulled across Red Square, underscoring his message.

The Soviet Union lost about 27 million people in World War II, an estimate that many historians consider conservative, scarring virtually every family.

One theme which emerged from Putin’s speech is that the West has ignored and forgotten the immense sacrifice that Russians made in defeating the Nazis in WW2.

Russian🇷🇺 President Vladimir Putin presides over the Victory Day celebrations in Moscow

Did you know? It would take approximately 51.3 years to hold a minute of silence for each of the 27 million Soviets that died in World War 2

More coverage: https://t.co/H1LZRQsy0p pic.twitter.com/Rx67mkTUs0

— Afshin Rattansi (@afshinrattansi) May 9, 2024

Putin’s family too was personally impacted by the war and defense of the homeland:

As Putin tells it, his father, also named Vladimir, came home from a military hospital during the war to see workers trying to take away his wife, Maria, who had been declared dead of starvation. But the elder Putin did not believe she had died — saying she had only lost consciousness, weak with hunger. Their first child, Viktor, died during the siege when he was 3, one of more than 1 million Leningrad residents who died in the 872-day blockade, most of them from starvation.

For several years, Putin carried a photo of his father in Victory Day marches — as did others honoring relatives who were war veterans — in what was called the “Immortal Regiment.”

Putin in the speech emphasized, “Today we see how the truth about the Second World War is being distorted. It hinders those who are used to building their essentially colonial policy on hypocrisy and lies.”

The man sitting next to Putin on the podium is war veteran Yevgeny Kuropatkov, who will turn 101 this year.#VictoryDay #Moscow #Russia
pic.twitter.com/gYCvMVmhTf

— StellaMoscow (@SgforgoodStella) May 9, 2024

He also addressed the Ukraine conflict specifically, pointing out that the entire West is working tirelessly to defeat Moscow.

“We know, and you know this better than anyone else, the enemy has enough modern tools, since the entire Western community is working for our enemy, dreaming about Russia ceasing to exist in its current form,” Putin described.

Putin concluded his speech with the words, “Glory to the valiant armed forces! For Russia! For victory! Hurray!”

🗣 Putin concluded his speech at the parade with the words, “Glory to the valiant armed forces! For Russia! For victory! Hurray!” pic.twitter.com/hJKpzZQCNG

— Sputnik (@SputnikInt) May 9, 2024

He called what’s going on a “system of confrontation” by the collective West, which views Russia as “weak”. “I am sure they are now convinced that this was far from the reality, and rather the opposite is true,” he emphasized.

Via Greg Hunter’s USAWatchdog.com,

Legendary financial and geopolitical cycle analyst Martin Armstrong has new data on how well the Biden economy is doing. 

Spoiler alert:  It’s not doing well, and the financial system is about to tank.  

I asked Armstrong if the US government could default on its debt if countries around the world continue to stop buying it?  Armstrong explained:

“I think the US could default on its debt as early as 2025, but probably in 2027. 

We have kicked the can down the road as far as we can go.  

It’s not just in the United States.  Europe is in the same boat.  So is Japan.  This is why they need war. 

They think by going into war, that’s the excuse to default on the debt.  They simply will not pay China.  If they try to sell their debt–good luck.  We are not redeeming it.  The same thing is happening in Europe. 

So, once that happens, you go into war, and that is their excuse on this whole debt thing to collapse, which wipes out pensions etc.  Then they can blame Putin. 

This is the same thing Biden was doing before saying this was Putin’s inflation. 

Then, with the whole CBDC thing (central bank digital currency) . . . .  the IMF has already completed its digital coin, and they want that to replace the dollar as the reserve currency for the world. . . . These people are desperately just trying to hang on to power.  Nobody wants to give it up, and nobody wants to reform.”

I asked Armstrong what should the common person be doing now? 

Armstrong surprisingly said, “I think you need, safely, two years’ worth of food supply. . . .This is what I have.   It’s not just prices will go up, but mainly because there will be shortages.  Then, you do not know what they are going to do with the currency. . . . They will do whatever they have to do to survive.  That’s what governments always do.”

Armstrong says his most recent data suggests that government approval ratings in the USA are worse that Biden’s 8% approval rating. 

Congress, according to Armstrong, is dragging the bottom with a 7% approval rating. 

Armstrong has long said that people will buy gold and silver when faith in government crashes. 

That is exactly what Armstrong is seeing around the world today.  Gold is bouncing around the $2,300 level, and Armstrong sees “a new gold and silver rally coming soon.” 

War is also coming sooner than later with the announcement that Ukraine will be joining NATO as early as July.   When the next war starts, Armstrong warns,

“You are going to have to watch the bank because long term interest rates are going to go up.  Nobody wants to buy government debt, and you are going to have to hunker down at that stage in the game.”

Armstrong is also predicting a big turn on or about this week.  Armstrong predicts a recession will start then and go on until 2028. 

GDP will continue to fall, and inflation will continue to rise. 

Armstrong says it is the perfect storm for a dreaded “stagflation economy.”

There is much more in the 54-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Martin Armstrong, who will preview his “Mid-Year Seminar” in London May 24 & 25 for 5.4.24.

*  *  *

To Donate to USAWatchdog.com Click Here

There is some free information, analysis and articles on ArmstrongEconomics.com. There are many new and recent reports to consider buying by clicking here. The upcoming event Armstrong is hosting is called the “Mid-Year Seminar” in London on May 24 & 25.  There are tickets available for the in-person conference, and multiple option packages to buy for streaming.  (This is the first overseas event Martin Armstrong has hosted since 2019.)

Earlier this week, on Tuesday, a Canadian Jewish businessman was murdered in the city of Alexandria, Egypt when an unknown gunman approached his car and shot him at point-blank range.

A shadowy terrorist organization has claimed responsibility as ‘retaliation’ for Israel’s military operation in the Gaza Strip. Further the group calling itself “Vanguard of Liberation Group for Martyr Mohamed Salah” (after the Egyptian police officer who killed three IDF troops in a mid-2023 border shooting) is claiming that the victim, identified as Ziv Kipper, was a “Mossad agent”. 

“Wait for the next,” the unknown organization posted in an internet message. “Shalom from the children of Gaza.” The group also reportedly posted a video and image of the killing [warning: graphic]. However Egypt’s Interior Ministry has been quick to downplay the incident, and instead of ‘terrorism’ Egyptian security sources have chosen to initially call the killing a robbery.

According to Reuters, “The group posted a photo purporting to show Kipper being shot in his car.” But “Egyptian security sources said they had no information on the existence of the group or whether it had been involved in the incident.”

The Egyptian government is typically very sensitive when it comes to claims of terrorism targeting Westerners and foreigners, given also historic terror incidents have at times decimated its crucial tourism industry. Egypt has motive to want to downplay or cover-up the circumstances of the attack:

The supposed organization said that it had targeted the businessman over Israeli operations in the Palestinian-Egyptian border town and Hamas stronghold of Rafah. The Vanguard claimed that the businessman, who was the CEO of an Egyptian frozen fruits and vegetables export business, had used his commercial activities as a cover for Israeli intelligence operations.

The group said that the alleged act of terrorism was a continuation of the historical Egyptian fight against Israel, and decried the current Egyptian leadership as puppets.

The man had Israeli citizenship along with Canadian citizenship, according to BBC:

Neither Israel nor Egypt have yet officially named the man who was killed. However, the Israeli foreign ministry confirmed that the victim was a businessman with dual Canadian-Israeli citizenship.

It added that the Israeli embassy in Cairo was in contact with the Egyptian authorities. Egypt’s interior ministry, meanwhile, said in a statement that the man had been “residing permanently” in the country.

This is also a sensitive time where Hamas-Israel truce talks have continued in Cairo, via mediators, but the talks have ultimately shown little progress or results, at a moment Israel is poised to progress with its ground offensive on Rafah.

Unconfirmed images of the victim and his identity have been widely circulating even as respective governments remain quiet:

BREAKING:

An Egyptian terror group murdered Ziv Kiefer, a Israeli-Canadian businessman in an antisemitic attack in Alexandria today

🇨🇦🇮🇱🇪🇬 pic.twitter.com/fXhDsH1uPo

— Visegrád 24 (@visegrad24) May 7, 2024

If indeed this tragic killing in Alexandria was an act of anti-Jewish terrorism by shadowy Islamic extremists, it’s a very dangerous precedent and points to the possibility of more such terror acts to come against Jews or possibly foreign travelers – especially if the Rafah operation proceeds and escalates.

Authored by Nick Giambruno via InternationalMan.com,

Every day, there are over 2,000,000,000 consumer transactions around the world.

Visa, Mastercard, American Express, and other large companies process many of these payments.

Bitcoin, on the other hand, does not have anywhere near the capacity to handle this kind of volume.

There is a hard limit on the maximum number of transactions the Bitcoin network can process – about 576,000 transactions a day, or about 0.029% of all the world’s consumer transactions.

That’s why recording every Starbucks or McDonald’s transaction on the Bitcoin blockchain was never possible.

It was also never desirable.

If Bitcoin needed to record every consumer transaction on its blockchain—or even a fraction of them—it would require an industrial-scale operation with expensive data centers.

In that scenario, only large entities could run the Bitcoin software, and the average person would not be able to participate in enforcing the consensus parameters and the protocol.

That would kill Bitcoin’s decentralization because a few large entities would solely validate and enforce the protocol, which means they would be in charge.

In this scenario, Bitcoin might as well be another PayPal, Visa, or another centralized financial service where you need to ask for permission to do anything.

Remember, Bitcoin’s entire value proposition as a global money depends on being neutral, censorship-resistant, accessible to everyone, and controlled by nobody. To have these properties, it’s essential the average person can run the full Bitcoin software.

That’s why Bitcoin has a hard limit on the transactions it can handle each day. This limit is necessary so that the average computer—and soon the average smartphone—can easily run the full Bitcoin software. This is what makes Bitcoin genuinely decentralized and incorruptible, giving it unique monetary properties.

It’s crucial to emphasize that Bitcoin would be worthless without decentralization.

Scaling Bitcoin by compromising its decentralization would defeat its entire purpose.

Does that mean Bitcoin will never be able to scale and achieve widespread adoption?

Absolutely not.

Here’s the correct way to think of the situation…

Monetary Layers

When you use your credit card to buy a coffee at Starbucks, the money doesn’t land in Starbucks’ bank account when Visa approves the transaction.

Instead, a payment processor collects the money. It then aggregates a bunch of other transactions over a period. It then uses a commercial bank, which uses the Federal Reserve (the central bank of the US), to move the money from the payment processor’s bank account to Starbucks’ bank account for final settlement.

Aside from physical cash transactions, it’s not practical for Starbucks to immediately obtain final settlement. The company doesn’t have to clear with the Federal Reserve each cup of coffee it sells. Instead, it uses this layered approach with payment processors and banks to facilitate everyday transactions.

All successful financial systems have used a layered approach to scale, including the one based on a gold standard, the current fiat currency system, and now Bitcoin.

The key characteristic of Layer 1 financial transactions is finality. They represent the ability to perform irreversible transactions that can transcend borders.

In the current fiat currency system, Layer 1 involves the central bank clearing transactions for final settlement, like an international wire transfer.

Under a gold standard, the central banks of two nations used to settle balances between themselves with physical gold. Once Country A delivered the physical gold to a vault in Country B, there was final settlement.

Transactions on the Bitcoin blockchain are comparable to these. They represent final international settlement and clearance.

Consider the Federal Reserve’s Fedwire system, which processes and settles irrevocable transactions. Fedwire processes about 773,000 transactions each business day. There are about 251 business days a year, meaning Fedwire processes about 194 million transactions each year.

Bitcoin can process about 576,000 transactions each day and operates 24/7/365, which means it can process about 210 million transactions each year—roughly comparable to Fedwire.

In short, Layer 1 transactions are typical for high-value transactions that need security and finality. However, they are inappropriate for most consumer transactions—it’s unnecessary to use an international wire transfer to pay for a cup of coffee—which instead can happen on Layer 2.

Layer 2 transactions shouldn’t be compared to Layer 1 transactions—they’re totally different.

Layer 2 transactions involve systems built on top of Layer 1 that offer more convenience.

Using a credit card to pay for a cup of coffee is an example of a Layer 2 transaction. It involves a credit card company and a payment processor that enable convenient transactions on top of the Federal Reserve’s clearance for final settlement.

So, which Bitcoin transactions should be on Layer 1 and Layer 2?

Those are subjective decisions every individual must make.

The competitive free market for the scarce resource of space on the Bitcoin blockchain will decide its most efficient use and, thus, which transactions should be on Layer 1 or Layer 2.

In other words, whoever is willing to pay the transaction fee to the miners can have their transactions inscribed onto the Bitcoin blockchain (Layer 1).

Larger transactions that demand a high level of security will likely use the Bitcoin blockchain.

Smaller consumer transactions will probably use more convenient Layer 2 solutions, just like they do now and did under the gold standard.

The idea is to keep Bitcoin’s base layer secure and scale by building on top of it. It would make no sense to scale Bitcoin by compromising its Layer 1. That would be bad engineering.

Further, Bitcoin’s monetary properties depend on the credibility of its supply, which depends on its extreme resistance to change. Thus, changing the base layer to increase transaction throughput would have undermined Bitcoin’s monetary properties, demonstrating that someone can change it. If the base layer can be changed to accommodate more transaction throughput, it can also be changed to increase the supply.

Here’s the bottom line.

Bitcoin’s base layer could never process the world’s consumer transactions—and that’s not a problem.

It’s crucial to remember that Bitcoin is not merely a new way to make payments—like a competitor to PayPal or Venmo—or a new phone app. It’s something much more profound: a superior alternative to central banks.

In other words, Bitcoin is a revolutionary innovation for the base monetary layer, something that hasn’t happened since mankind discovered gold’s potential as money thousands of years ago. It’s a quantum leap forward compared to other base monetary layers because it cannot be monopolized.

Bitcoin provides a foundation for a new financial system that is decentralized, politically neutral, accessible to everyone, controlled by nobody, censorship-resistant, immutable, trustless, totally resistant to debasement, and not dependent on any third party.

The critical point is that Bitcoin makes the base monetary layer trustless and minimizes the trust required to run Layer 2 systems. That’s a revolutionary improvement over the current and previous monetary systems.

The amount of value Bitcoin Layer 2 solutions could unlock is mind-bending.

Many Layer 2 solutions for Bitcoin will inevitably emerge.

Today, the Lightning Network—an open, peer-to-peer network built on Bitcoin that allows for nearly instantaneous transactions and almost zero fees—is the most prominent.

Tomorrow, it could be Bitcoin banks and federations.

Bitcoin banks and federations have enormous potential as a layered solution to bring Bitcoin to everyone and usher in a new era of free market banking worldwide. I’ll provide more details in a future article.

Before I go any further, I must clarify something important.

Bitcoin banking is NOT competing with self-custody. It competes with other custodial solutions like Coinbase, ETFs, and the traditional banking system.

Bitcoin banks are not as good as self-custody but not as bad as holding your BTC in an exchange. They are somewhere in the middle. It’s a trade-off and a reasonable one for some people.

In any case, I strongly advocate Bitcoin self-custody so that you have total financial sovereignty over your money.

However, as Bitcoin continues its ascent to the world’s dominant money, it will become significantly more expensive to self-custody, pricing out many people. That’s an excellent reason not to delay learning to self-custody—I suggest doing it as soon as possible.

Consider life during the gold standard. You would have been among the most wealthy if you owned gold bullion bars—the base layer monetary asset at the time. Most people did not own them. Instead, they owned other things like gold-backed notes that banks issued.

If Bitcoin becomes the world’s dominant money one day, owning BTC in a self-custody wallet would be like owning gold bullion bars during the gold standard—something only available to institutions and the wealthy.

That’s why I’ve just released an urgent PDF report revealing three crucial Bitcoin techniques to ensure you avoid the most common—sometimes fatal—mistakes.

Check it out as soon as possible because it could soon be too late to take action. Click here to get it now.

Conservative think tank Center for Renewing America floated the idea a year and a half ago that “It’s time to wage war on transnational drug cartels.” 

This comes as the drug death catastrophe in the US eclipses the entire Vietnam War every six months. The vast majority of deaths are derived from fentanyl-laced narcotics, which come from Mexico, via open southern borders pushed by radical leftists in the White House. 

The prospect of a million dead Americans over the next decade should be a significant concern for the leftists in the White House. Still, they could care less as their goal of flooding the nation with illegal aliens to sway future elections outweighs the fentanyl epidemic. 

The mass murder of Americans is truly shocking, with new evidence from the House Select Committee last month that detailed the Chinese Communist Party was helping to facilitate the manufacturing and exporting of fentanyl chemicals overseas that ended up being smuggled across the open southern border and or northern border into the US, then ending up on the streets of America. 

This is Joe Biden’s America.

Meanwhile in Kensington, Philadelphia PA

It is so sad Americans have given up… they’ve be one zombies on tranq and fentanyl. Nobody cares but soon you all will.

This summer cities will burn! Additionally, Antifa, BLM, radical Islamists and sharia… pic.twitter.com/yYupUwzu5P

— Tony Seruga (@TonySeruga) May 8, 2024

Fentanyl addicts taking over cities is a CCP ploy. It’s straight from history. Britain made the entire country of China addicted to their opium 200 years ago. This is a conscious strategy of revenge by the CCP.@XVanFleet @GordonGChang @VDHanson @GovRonDeSantis @KenPaxtonTX pic.twitter.com/NZoGCKpUI9

— The Healthcare Channel (@THEHCC) May 4, 2024

The Worst @McDonalds In The World: Who Knew The Happy Meal Came With Fentanyl

The True Story of how a once-beloved McDonald’s on Market Street in San Francisco has become a grim reflection of the city’s fentanyl genocide, homelessness crisis and the corruption of local leaders… pic.twitter.com/Wt06rmu0RA

— World Peace Movement (@darren_stallcup) April 25, 2024

More than ever, Americans want the Biden administration to act on securing borders and ports. Yet officials only whisper sweet nothings into voters’ ears as the border invasion worsens, hence why Biden’s polls are spiraling lower. 

Real Clear Politics data shows Biden’s polling data continues to sink. This comes as Bloomberg headline data showing “border crisis” exploded this year. 

Meanwhile, a new report in Rolling Stone, citing three sources close to former President Trump, suggests that on his first day back in office, should he be reelected, he plans to deploy America’s Special Forces operators to combat cartel leaders.

More from the report: 

Trump is currently campaigning for the White House on a public vow to, in his words, “make appropriate use of Special Forces, cyber warfare, and other overt and covert actions to inflict maximum damage on cartel leadership, infrastructure, and operations.”

The former president has not presented specific details in public about these plans — for example, how many U.S. troops he’d be willing to send into sovereign Mexican territory. But, the three sources tell Rolling Stone, in conversations with close MAGA allies, including at least one Republican lawmaker, Trump has privately endorsed the idea of covertly deploying — with or without the Mexican government’s consent — special-ops units that would be tasked with, among other missions, assassinating the leaders and top enforcers of Mexico’s powerful and most notorious drug cartels

The report continued:

One of the sources, who discussed the issue with Trump earlier this year, recalls the ex-president saying that the U.S. government should have a “kill list of drug lords,” as this source describes Trump’s ideas, of the most powerful and infamous cartel figures that American Special Forces would be assigned to kill or capture in a potential second Trump administration.

Just a few short years ago, the idea of using Tier 1 operators and suicide drones to knock out cartel leaders in Mexico would’ve been deemed too extreme, but not anymore, as the drug crisis leaves 100,000 Americans dead per year. 

In a separate report, David Asher, a senior fellow at Hudson Institute and former senior advisor to the State Department on China, noted that the Department of Justice has not taken down a major narcotics trafficking bank in decades. 

The last significant criminal law enforcement operation against a major bank occurred in 1988 when Bank Credit Commerce International — at the time one of the ten largest banks on the planet — was targeted and eventually put out of business with its dirty executives taken away in chains.

“There needs to be a top-down targeting approach against the Mexican cartels and their Chinese partners with military force being part of the strategy ala Pablo Escobar. As we approach 100,000 American deaths yearly from fentanyl, we must truly go to war against drug traffickers and designate them as the terrorists that they are. The Treasury Department should sanction and DOJ indict Mexican banks holding cartel cash — it’s hard to believe that a major Mexican bank has never been taken down before. No more “too big to fail, too big to jail,”” Asher noted.

With the possibility of Tier 1 operators taking out drug cartels, if Trump is reelected, there’s also an increasing chance the DoJ could sanction dirty Mexican banks to kill cartels financially. 

Authored by Steve Watson via Modernity.news,

Attention seeking trust fund babies at Princeton University have complained that the University is not monitoring their health while they camp out in tents and claim to be on a hunger strike in support of Palestinian people.

After previously whining about “unsafe conditions” due to officials denying them to sleep in tents, the group now claims “They are not keeping track of our vitals. They are not at all taking care of us.”

“We will continue to starve until they meet our demands,” the agitators added.

Princeton hunger striker complains the administration is “not monitoring our health. They are not keeping track of our vitals. They are not at all taking care of us.”

“We will continue to starve until they meet our demands.” 🤡pic.twitter.com/fn8TSnV239

— Breaking911 (@Breaking911) May 7, 2024

Explain exactly why anyone should be monitoring your vital signs?

In another video, one of them whined that she is “literally shaking” through starvation and that her group is all “immunocompromised.”

She then accused University officials of “physically weakening” the group on purpose.

Princeton ‘hunger strikers’ complain they are “literally shaking” through starvation & are “immunocompromised.” They accuse the Uni of “physically weakening” them on purpose after earlier complaining officials are not monitoring their vital signs. Report: https://t.co/F1VQYY6yMk pic.twitter.com/onupldimr6

— m o d e r n i t y (@ModernityNews) May 8, 2024

Circle these terrorists with food trucks https://t.co/kYXsO9UH9v

— Sean Agnew (@seanagnew) May 8, 2024

There are plenty of restaurants nearby.

Take mom and dad’s credit card and grab some tacos. You’ll be fine. pic.twitter.com/Y4kHGX7F0I

— LaborUnionNews.com (@WorkPlaceRpt) May 8, 2024

I’ll give $100 to whoever will set up a Weber right next to them and grill some burgers. https://t.co/hE9DL8Bkqd

— Buzz Patterson (@BuzzPatterson) May 7, 2024

“WE ARE NOT GETTING THE ATTENTION OUR STUNT IS DESIGNED TO PRODUCE!!!!” https://t.co/67T8ZtRNxH

— Brad Slager – Scrubbing Down In a Bloodbath (@MartiniShark) May 7, 2024

Tides Foundation can’t spring for a BP cuff, thermometer, a notebook and maybe a watch with a second hand? https://t.co/OOIXcw3BCP

— Vegas is my happy place (@hyperfocal) May 8, 2024

This is yet more nonsense at cult camp.

As we previously highlighted, agitators at Columbia complained that they were not being provided food or drink by the University while they were illegally occupying academic buildings.

The spokesperson they nominated to converse with reporters whined that they were not being provided ‘humanitarian aid’, betraying the fact that they were engaging in a kind of sick cosplay as Gazan refugees.

Many of them don’t know exactly what they are protesting against.

Others can’t even spell Palestine.

They want to free it but they can’t spell it. pic.twitter.com/XnfJK2FDhS

— m o d e r n i t y (@ModernityNews) May 7, 2024

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