Authored by Jonathan Turley,

A new AP-NORC poll  is out and, consistent with earlier polling results, shows that there remains a disconnect between the media coverage and public opinion over the Biden corruption scandal. Despite the continued dismissal or downplaying of the scandal by many in the media, a massive 68 percent of Americans believe that President Biden acted either illegally or unethically in his involvement in his son’s foreign dealings.

The largest group (36%) believe that the president has done something illegal. The second largest group (33%) believed Biden has done something unethical.

Only 30% of American adults believe Biden has “not done anything wrong” as he has repeatedly claimed.  It seems like the same 30% has remained supportive on every issue for Biden — the same unchanging support that we have found at the extremes of every poll for both Biden and Trump.

Notably, however, 40% of Democrats now believe Biden has done something illegal or unethical in his handling of his son’s business dealings.

The percentage is overwhelming among Republicans at 96%.

What should worry Biden is that 74% of the key independent vote believes that he has done something illegal or unethical.

What is most striking about these polls is that the public has reached these conclusions despite a media that is overwhelmingly protective of the President. Most major media outlets downplayed or ignored the Hunter Biden laptop story while adopting ever-changing narratives to excuse the President’s role.

Just this week, the Boston Globe ran a story titled “Attacking Biden, GOP tries to have it both ways; He’s old and feeble — and a master criminal?” Of course, you do not have to be a genius to engage in influence peddling. You just need to be corrupt. Menendez was no Brainiac in taking cash and cars from foreign sources. Moreover, one of Hunter Biden’s corrupt clients reportedly viewed him as dumber than his dog but still gave him millions. The labyrinth of shell companies and accounts were set up by others, not the President or his son.

Despite the media running cover for the Bidens for years, the public is just not buying it. Indeed, they are not buying the media. The Washington Post recently acknowledged that it will lose $100 million and announced a new round of layoffs or buyouts.

CEO Patty Stonesifer blamed the continuing loss of readers and revenues on being “overly optimistic” about its growth in readership, subscriptions and ads for the past two years. There is a continued effort at failing media outlets to blame their losses on everything other than their embrace of advocacy journalism and writing off half of the country with its strident political bias.

In fairness to Stonsifer, advertising revenues are down for newspapers with the rise of digital sources for the news. However, the embrace of non-traditional sources of news is not, in my view, entirely due to technological or platform changes.

Much like some companies pursuing woke agendas despite opposition from their consumers, media executives cannot acknowledge that their brand of journalism may be at fault. Editors at the Post and other leading outlets have rejected objectivity in favor of advocacy for journalists — blurring the line between reporting and commentary. That was evident recently when the Post publicly reaffirmed that it was standing by the false reporting of Philip Bump on a variety of disproven stories. These are conspiracy theories and false claims that have been long debunked from Lafayette Park to the Hunter Biden laptop but the Post just declared that Bump was correct.

For his part, Bump recently became irate when confronted with his past false claims, declaring “I just I’m gonna lose my mind. I’m gonna lose my mind.”

Notably, the interviewer explained that many do not believe his reporting and Bump dismissed them as uninformed and said that they need to listen to him as the expert on such matters.

Noam Dworman asked “is there nothing we can talk about … half the country believes this stuff.”

Bump: “I know, because half the country doesn’t actually dig into the issues.”

Dworman: “Here’s your chance to disabuse people. They don’t read the Washington Post.”

Bump responded: “There’s just no point, because all you want to do is you want to have me here as the putative expert so that you can present me with things that have been debunked multiple times that I’ve written about.”

Dworman: “What’s been debunked?”

Bump: “These, these claims. I’ve written about this, this argument about his dad calling him. I’ve written about this. Did you read what I wrote?”

Dworman: “It’s not debunked. Neither of us were there.”

Bump: “Well, I debunked it in the standpoint that I’ve already addressed this and presented the counterarguments to it.”

Before leaving, Bump explained that there was little value to explaining his past claims “because you don’t listen to the press. I’m sitting here and I’m telling you, you’re wrong about these things, and you don’t listen, and you continue to insist upon things that are, you know, parsing of language. And it’s just, it’s this is why I keep saying it’s silly.”

Once again, the Post recently stood by Bump’s past false claims.

This is why the Stonesifer’s account is so striking. She assured staff that “we are working to find ways to return our business to a healthier place in the coming year.” That “healthier place” could be with more balanced reporters.

There are still excellent journalists at the Post who can restore balance in its coverage and regain the trust (and business) of readers. However, it requires a bit of self-awareness and reexamination on the part of the owner and the editors. Instead, the Post continues to write for that same 30% revealed in the poll by the AP, which steadfastly supports the Bidens despite rising evidence of corrupt influence peddling and false statements. You cannot sustain a major publication on 30% of the readership while writing off any conservatives or independents who want balanced coverage.

The disconnect in these polls shows that many in the public are simply dismissing the common narrative of the media. The uniformity in much of the coverage, particularly in the Biden corruption scandal, leaves many with the feeling of a de facto state media. That appearance is not helped with the White House giving marching orders to the media on how to attack the investigations into the Biden family while powerful Democrats warn reporters to “back off” the Bidens.

I have been a columnist and a television analyst for roughly three decades. I have written for papers like the Washington Post and worked for NBC, CBS, BBC, and Fox. I care deeply for the future of these media outlets. However, the lack of impact of the media on public opinion reflects the record low levels of trust in the media found in numerous polls.

That is the result, in my opinion, of the embrace of advocacy journalism and echo chamber coverage.

The “healthier place” for the media is the very place that many reporters abandoned in the past with the tradition of objectivity and neutrality in journalism.

Summary:

After giving the northern Gaza strip an evacuation ultimatum on Friday, Israel has so far withheld from launching a “significant” ground operation, with some speculating that requests from the US to evacuate all US citizens out of Palestine ahead of the invasion is what is holding Israel back. Meanwhile, Iran’s foreign minister on Saturday said that if Israeli “war crimes & genocide” are not stopped, the war might expand to other parts of the Middle East if Hezbollah joins the battle, and that would make Israel suffer “a huge earthquake.” Meanwhile, Axios reported that Tehran has sent Jerusalem a message through the UN that it will intervene if the campaign in Gaza continues, and particularly if it launches a ground offensive.

This was followed by news Sunday morning that the US has been backchanneling with Iran in recent days to warn against escalating the conflict in Israel (after all, Biden can’t afford to lose those sanctioned Iranian oil exports whose re-embargo would promptly send the price of oil above $100).

Another reason why Israel may be waiting: the Pentagon confirmed that it has ordered a second carrier strike group to the eastern Mediterranean Sea after a first carrier strike group, led by the USS Gerald R. Ford, arrived off the coast of Israel last week.

Background:

On Saturday, the Israeli army said it’s making preparations for “significant ground operations” in Gaza, with the Israel Defense Forces saying in a statement that the next phase of the war can include a coordinated land, sea and air assault.

Israel has called up a record 300,000 reservists and has been pounding Gaza after the unprecedented incursion in which more than 1,000 Hamas fighters swept across the border and attacked Israeli military posts, bases and settlements. More than 1,300 Israelis died, mostly civilians, and up to 150 people were abducted and taken into Gaza. More than 1,900 Palestinians have been killed in the Israeli bombing campaign as fears mount of major casualties once Israel sends troops into the crowded coastal strip, home to 2.3 million people. Israel on Friday gave 24 hours for more than 1 million Palestinians to evacuate their homes in Gaza.

Separately, Israel confirmed for the first time that there were intelligence indications of something happening in Gaza two hours before the attacks last week. The head of Shin Bet, Israel’s internal security service, spoke with military personnel about the reports, said Tzachi Hanegbi, head of Israel’s National Security Council. “Both sides assessed that this is something other than it turned out to be,” he said.

Meanwhile, Hamas, which has been designated as a terrorist group by the US and the European Union, said Israeli air strikes killed another nine of its hostages in the past 24 hours, raising the total to 26. Many governments, including the US and European countries, are rushing to evacuate citizens in anticipation of an Israeli incursion into Gaza, though the Rafah border crossing out of Gaza to Egypt was reported to be closed to foreign nationals Saturday.

On the diplomatic front, Joe Biden’s team has voiced anxiety about Israel’s 24-hour evacuation demand, a deadline that the European Union and the United Nations called unrealistic. On Friday, Biden said people shouldn’t “lose sight of the fact that the overwhelming majority of Palestinians had nothing to do with Hamas” something Biden tweeted on Sunday morning.

We must not lose sight of the fact that the overwhelming majority of Palestinians had nothing to do with Hamas’s appalling attacks, and are suffering as a result of them.

— President Biden (@POTUS) October 15, 2023

The US Embassy in Israel said it’s “working on potential options for departure from Gaza.” US citizens living in or visiting Gaza may be allowed to leave on Saturday, according to a US official. The embassy said it’s facilitating more chartered evacuation flights from Tel Aviv’s Ben Gurion Airport and urged US citizens and immediate family members to use them “while they are available.” The US government also said it is assisting US nationals and their immediate family members with a valid travel document to depart Haifa via sea for Cyprus on Oct. 16, according to a statement on the US Embassy in Israel website.

The State Department in Washington authorized the departure of non-emergency embassy personnel on Friday, citing an “unpredictable security situation.” With commercial flights to Israel disrupted, European countries such as France and Germany also have been providing planes to get their citizens out of the region.

Latest Developments:

Israel Says More Than 600,000 Gazans Have Moved South

More than 600,000 Gazans from Gaza City and its surroundings have relocated southward, following instructions from the Israeli Defense Forces, IDF Spokesman Daniel Hagari says. 

Bloomberg notes that this is Hagari added this exodus is despite efforts by Hamas, which rules the Gaza Strip, to keep them in the north to serve as human shields.

Hagari urged those remaining in the north to evacuate for their safety.

* * *

Egypt Weighs Letting in Foreigners and Palestinians From Gaza

Egypt is coming under intense pressure to allow refugees to cross the border and escape an Israeli bombing campaign and expected ground invasion.

But, as WSJ reports, for Cairo, opening the border is a tough call.

Egypt plays a unique role with Hamas, mediating its conflicts with Israel while also helping squeeze the U.S.-designated terrorist group with a blockade on goods and travel out of the Gaza Strip. It has been reluctant to allow the tensions and troubles of Gaza to enter its own country in the form of large numbers of refugees.

The US is confident Egypt’s border with Gaza will be opened to allow in crucial humanitarian aid, Blinken told reporters in Cairo. 

“Rafah will be open,” the top US diplomat said after meeting President Abdel-Fattah El-Sisi.

“We’re putting in place with the United Nations, with Egypt, with Israel a mechanism by which to get assistance in.”

A US envoy, David Satterfield, will be in Israel on Monday to work out practical details. 

* * *

FBI Director Warns of possible copy-cat attacks

“Here in the U.S. we cannot and do not discount the possibility that Hamas or other foreign terrorist organizations could exploit the conflict to call on their supporters to conduct attacks on our own soil,” Wray told reporters on Sunday.

The FBI has been sharing intelligence about possible violence with state and local law enforcement, he said, though officials said most of the threats haven’t proved credible.

The head of the FBI, Christopher Wray, warns of the inspiration that Islamist threats in the US may receive from the events here. pic.twitter.com/OxpyenluZD

— DEFCONTV (@DEFCONNEWSTV) October 15, 2023

It’s just a good job the US’ southern border is so secure!

* * *

Iran’s foreign minister on Saturday called on Israel to stop its attacks on Gaza, warning that the war might expand to other parts of the Middle East if Hezbollah joins the battle, and that would make Israel suffer “a huge earthquake.” Hossein Amirabdollahian told reporters in Beirut that Lebanon’s Hezbollah terror group has taken all war scenarios into consideration and Israel should stop its attacks on Gaza as soon as possible. Meanwhile, the Axios news site reported that Tehran has sent Jerusalem a message through the UN that it will intervene if the campaign in Gaza continues, and particularly if it launches a ground offensive. The report cited two diplomatic sources with knowledge of the matter. The report said Amirabdollahian made the comments when he met Saturday with UN Middle East envoy Tor Wennesland in Beirut, a meeting that led to intense criticism from Israel. A short while later, Iran’s mission to the UN warned in a tweet that if Israel’s “war crimes & genocide” are not stopped immediately, this could have “far-reaching consequences” and the situation could “spiral out of control.”

If the Israeli apartheid’s war crimes & genocide are not halted immediately, the situation could spiral out of control & ricochet far-reaching consequences—the responsibility of which lies with the UN, the Security Council & the states steering the Council toward a dead end.

— Permanent Mission of I.R.Iran to UN, NY (@Iran_UN) October 14, 2023

* * *

US Warned Iran in Back-Channel Talks on War: The US has held back-channel talks with Iran in recent days to warn the country against escalating the conflict in Israel, as Israeli forces prepare an expected ground assault in response to last weekend’s surprise attack by Hamas. “We have means of communicating privately with Iran, and we have availed ourselves of those means over the past few days to make clear privately that which we have said publicly,” White House National Security Advisor Jake Sullivan said Sunday on CBS News’s Face the Nation. Sullivan said the US couldn’t rule out that Iran might intervene in the conflict, and was monitoring both the possibility of direct involvement by Tehran and proxy activity by Hezbollah across the border with Lebanon.

* * *

Israeli army awaits “political” green light for Gaza invasion:  The Israeli army is awaiting a “political decision” on the timing of a major ground offensive on the Gaza Strip, military spokesmen said Sunday as civilians stepped up desperate efforts to flee northern Gaza. Military spokesmen Lt. Col. Richard Hecht and Rear Adm. Daniel Hagari told separate briefings on Sunday that “a political decision” will set off any action against Hamas. “We will be holding discussions with our political leadership,” Hecht told one briefing.

Prime Minister Benjamin Netanyahu told troops near the Gaza border on Saturday that “more is coming.” But he did not say when any ground operation would start. Military spokesmen have told reporters that any invasion would aim to eradicate Hamas’ militant network and leadership so that it cannot stage more attacks. The Israeli military has particularly singled out Yahya Sinwar, the chief of Hamas in Gaza who they blame for the Oct. 7 attacks. “That man is in our sights,” Hecht said on Saturday. “He is a dead man walking and we will get to that man.”

* * *

Rockets were fired at Tel Aviv and southern Israel overnight, and the Israel Defense Forces attacked targets in and around the northern part of Gaza. It was not immediately clear how much damage, if any, was caused in the rocket attacks. One Israeli died on Sunday in a Hezbollah attack on Israeli army posts near the border with Lebanon. Subsequent reports indicate that more rockets had been fired into northern Israel from Lebanon.

Initial reports say that rockets were fired from Lebanon. Waiting for further confirmation.

— Joe Truzman (@JoeTruzman) October 15, 2023

Impacts reported in norther Israel. pic.twitter.com/YZgIoofboU

— Moshe Schwartz (@YWNReporter) October 15, 2023

* * *

Moroccans Push to Sever Israel Ties in Mass Protest:  Tens of thousands of protesters took to the streets of Rabat, Morocco’s capital, demanding King Mohammed VI to severe ties with Israel which were restored in 2020. The marchers denounced as “barbaric” ongoing military intervention by Israel in Gaza and demanded the closing of its liaison office in the Moroccan capital. 

* * *

Blinken Meets With Saudi Crown Prince:  Blinken travelled to Riyadh on Sunday for an hour-long talk with Saudi Crown Prince Mohammed bin Salman that the top US diplomat deemed “very productive.”   MBS highlighted Riyadh’s diplomatic outreach “to calm the situation,” the official Saudi Press Agency reported.

Saudi Crown Prince Mohammed bin Salman and I met today in Riyadh and discussed the Hamas terrorist attacks on Israel. pic.twitter.com/HjoGMmTzqi

— Secretary Antony Blinken (@SecBlinken) October 15, 2023

* * *

Blinken Will Return to Israel on Monday:  US Secretary of State Antony Blinken will return to Israel on Monday for further consultations with senior officials there, his spokesman said. The top US diplomat was previously in Israel on Thursday as part of a frenetic tour of the region that included stops in Qatar, Jordan, Bahrain and the United Arab Emirates as well as Saudi Arabia, as the Biden administration tries to limit the threat of a spreading conflict in the Middle East.

* * *

Blinken Urges China to Use Its Influence:  US Secretary of State Antony Blinken urged Beijing to use its influence to prevent other state or non-state actors from attacking Israel and widening its war with Hamas, the State Department said. Blinken spoke with Foreign Minister Wang Yi before departing from Riyadh, where the top US diplomat was attempting to shore up support for Israel among Arab nations, said State Department spokesman Matthew Miller. He met with Saudi Arabia’s Crown Prince Mohammed bin Salman, the State Department said.

* * *

Israel, Hezbollah exchange fire, heightening fears of a second front opening:  Cross-border fire erupted between Israel and Lebanon early Sunday, killing at least one person on the Israeli side of the border. Both the Israeli military and the Lebanese militant group Hezbollah acknowledged the fighting. Hezbollah says it fired guided missiles toward an Israel army post in Shtula from Lebanon, according to the militant group’s Al-Manar TV. The Israeli military said earlier it was targeting southern Lebanon after initial report of a shooting near the Lebanese border.  

The group said in a statement the attack was in retaliation for Israeli shelling that killed Reuters videographer Issam Abdallah on Friday and two Lebanese civilians on Saturday. Israel has responded by targeting the outskirts of the town of Ait el-Shaab, the Israeli military said. The Israel Defense Forces also banned civilians from going within two-and-a-half miles of the Lebanese border. In addition, the Reuters news service reports, Israel disrupted GPS electronic location services in the northern border area and at the Gaza front, according to Reuters. Israel’s Magen David Adom rescue service said a 40-year-old man was killed in the attack from Lebanon, without elaborating or giving his nationality.  As Israel wages its war against Hamas over last week’s unprecedented attack by the Gaza Strip militant group, there’s been concern that Hezbollah could enter the war as well as Israel moves toward launching a ground offensive in Gaza.

* * *

Hezbollah Strikes Israeli Army Posts:  Iran-backed Hezbollah attacked two Israeli army posts near the border with Lebanon in response to what the militant group said was the killing of Lebanese nationals in recent days. One of the Middle East’s most powerful militias, Hezbollah said it fired guided missiles against an Israeli army post in Shtula in Upper Galilee. An hour later, it said its members used “live ammunition” to target an army post in Al-Raheb and destroyed a tank.

* * *

Israeli Shares Down 3% As War Enters Second Week:  Israel’s TA-35 stock index fell sharply on Sunday as Israel continues to strike back against Hamas targets and tensions rise on the northern border with Hezbollah. The index was down 3.3% in early afternoon, having reached the lowest levels since mid-2021. Banking stocks led the decline. The sector was down 12.3% last week “on account of volatility concerns,” the Tel Aviv Stock Exchange said. Other Middle Eastern markets were narrowly mixed.  

* * *

Israel Acknowledges Reports of Gaza Activity: Israel confirmed for the first time that there were intelligence indications of something happening in Gaza two hours before the attacks last week. The head of Shin Bet, Israel’s internal security service, spoke with military personnel about the reports, said Tzachi Hanegbi, head of Israel’s National Security Council. “Both sides assessed that this is something other than it turned out to be,” he said.

* * *

Abbas Stresses Need for Humanitarian Corridor in Biden Call:  In a phone call with US President Joe Biden late Saturday, Palestinian President Mahmoud Abbas stressed the urgent need for humanitarian corridors to be opened in the Gaza Strip so that basic materials and medical supplies such as water, electricity and fuel, can be delivered to civilians. Abbas also told Biden he rejected the displacement of Palestinians from Gaza and affirmed his rejection of the killing or abusing of civilians on both sides, calling for the release of civilians, priosners and detainees.  

* * *

Pope calls for humanitarian corridors for Gaza residents: Pope Francis called on Sunday for humanitarian corridors to allow the delivery of essentials to the Gaza Strip, which is under heavy Israeli bombardment following a bloody attack on Israel by Gaza’s rulers, Hamas. “Humanitarian law must be respected, especially in Gaza, where it is urgent and necessary to guarantee humanitarian corridors and help the population,” said the Pope after his traditional Angelus prayer in Rome’s Saint Peter’s Square.

* * *

U.S. arranges for ship to evacuate Americans from Israel to Cyprus Monday: The United States has organized a ship to take Americans out of Israel to Cyprus on Monday, the U.S. Embassy said. With Israel moving toward an invasion of the Gaza Strip, the ship will leave from the Israeli port of Haifa for Limassol, taking “U.S. nationals and their immediate family members with a valid travel document,” the U.S. embassy said in a security alert Sunday. Tens of thousands of U.S. passport holders live in Israel and 29 have been confirmed killed in the Hamas attacks on October 7. Another 15 are missing and believed to be among hostages held by Hamas since the attacks. The U.S. embassy didn’t say how many people would fit on the ship but said “boarding will proceed in order of arrival and is on a space limited basis.” Each passenger will have to sign a document promising to repay the cost of the trip and will only be allowed to bring one suitcase. The embassy said some chartered flights would be arranged from Cyprus for onward travel.

* * *

UK Foreign Minister Urges Israel to Show Restraint:  James Cleverly called on Israel to avoid civilian casualties in Gaza and respect international law in any military operations against Hamas, saying his “strong advice” was being offered from a position of friendship.” It’s in Israel’s interest to avoid civilian casualties because Hamas wants to turn the conflict “into a wider Arab-Israeli war, or indeed a war between the Muslim world and and the wider world,” the UK foreign minister said on Sky News. His comments came hours after Prime Minister Rishi Sunak said the UK stood unequivocally with Israel, making no mention of the plight facing Palestinian civilians.

* * *

Gaza Death Toll Reaches 2,300: The number of people killed in Israeli attacks on Gaza has reached more than 2,300, local authorities said, with thousands more wounded in the past eight days. This now outnumbers the death toll of the 51-day Israel-Hamas war of 2014, according to Ashraf Al-Qedra, a spokesperson for the Gaza health ministry. The 2014 war killed more than 2,200 Palestinians, according to UN figures. At the time it was the deadliest and most destructive violence since Hamas took over the Gaza Strip.

* * *

Situation in Gaza hospitals getting ever more desperate: Medics in Gaza warned Sunday that thousands could die as hospitals packed with wounded people run desperately low on fuel and basic supplies. Palestinians in the besieged coastal enclave struggled to find food, water and safety ahead of an expected Israeli ground offensive in the war sparked by Hamas’ deadly attack. A week of blistering airstrikes have demolished entire Gaza neighborhoods but failed to stem militant rocket fire into Israel. Hospitals are expected to run out of generator fuel within two days, according to the U.N., which said that would endanger the lives of thousands of patients. Gaza’s sole power plant shut down for lack of fuel after Israel completely sealed off the 25-mile-long territory following the Hamas attack.

* * *

Israel Says it Killed Hamas Military Leader:  The Israeli military said on Sunday its fighter jets killed the Hamas military leader responsible for the attack on one of Israel’s communities last Saturday, Kibbutz Nirim. In a statement, the military said this occurred Saturday night during operations that also took out Hamas rocket launchers. It said the man was commander of the Nukhba forces in Khan Yunis in the southern Gaza Strip. Nukhba are the elite Hamas military unit that Israel says trained and led the October 7 attack. Hamas has been designated as a terrorist group by the US and the European Union.

Developing

The cryptocurrency ecosystem continues to mature, and industry growth is fueled by increased utility and accessibility. In recent years, merchants have embraced digital currency payments as once-wary consumers open up their crypto wallets, paying for anything from staple items at supermarkets to restaurant dinners. Even Elon Musk’s Tesla Motors accepts Dogecoin for certain products sold on the automaker’s website. 

Merchants are becoming more receptive to their customer’s needs and expectations and growing demand for digital currency payments. The latest is the automaker Ferrari, which has started to accept crypto payments for luxury supercars in the US and will extend digital payments to Europe, according to Reuters. 

Ferrari’s decision to accept crypto indicates the company’s views on infrastructure, security, and regulatory framework around digital payments are enough to begin receiving Bitcoin from wealthy customers. 

Ferrari’s Chief Marketing and Commercial Officer Enrico Galliera said the decision to begin offering digital payment solutions came in response to dealers with wealthy clients who had built crypto fortunes. 

“Some are young investors who have built their fortunes around cryptocurrencies,” Galliera said, adding, “Some others are more traditional investors, who want to diversify their portfolios.”

Galliera did not reveal how many supercars the Italian luxury sports car manufacturer plans to sell via a crypto transaction. In the first half of this year, the automaker shipped 1,800 cars to the Americas. He noted the company’s order book was “fully booked well into 2025”. Still, he wanted to explore alternate forms of payment: “This will help us connect to people who are not necessarily our clients but might afford a Ferrari.” 

Reuters said, “Ferrari has turned to one of the biggest cryptocurrency payment processors, BitPay, for the initial phase in the US, and will allow transactions in bitcoin, ether and USDC, one of the largest so-called stablecoins.” 

“Prices will not change, no fees, no surcharges if you pay through cryptocurrencies,” Galliera said.

To protect Ferrari from volatility in crypto markets, Bitpay will immediately turn Bitcoin into traditional currency. 

“This was one of our main goals: avoiding, both our dealers and us, to directly handle cryptocurrencies and being shielded from their wide fluctuations,” Galliera said.

Even though Ferrari’s order book is full through 2025, a global luxury slowdown has spread worldwide as recession risks are elevated in 2024. Perhaps Ferrari’s push into crypto is a move to stoke new demand as it sees trouble ahead. 

Authored by Jeffrey Tucker via The Epoch Times,

For years now, luxury goods have thrived. It’s not surprising. There has been relative peace, seeming prosperity for the few, and a “Hunger Games” sense of “Let them eat cake” alive in the world. You see it in the lavish and widely advertised events of the Met Gala or the World Economic Forum in Davos. The well-to-do have been living it up with very conspicuous consumption.

This was especially true with zero-percent interest rates, which lasted more or less from 2008 to 2021. This policy was a huge subsidy to the largest businesses and the peddlers of every conceivable absurdity, from crazy theories like DEI and ESG to decadence in goods and services.

Just as it took away the reward for thrift, it was a boon to every extravagance.

It made the cost of borrowed capital essentially free, while punishing savers.

But declining economic fortunes come for everyone in the end, even those who imagine themselves insulated. This week we’ve seen the luxury brand stocks take a heavy hit.

“LVMH Moët Hennessy Louis Vuitton posted sales below analysts’ expectations for the third quarter,” writes the Wall Street Journal, “as the luxury industry grapples with inflation and high interest rates that are squeezing consumer spending.”

“The owner of Louis Vuitton and Dior brands has struggled to lure big-spending Chinese consumers back as Chinese tourism has been slow to pick up again since the pandemic. China was the world’s largest luxury market before Covid-19 hit.”

Indeed, the stock has been utterly slammed, hitting a low for the year after a very long and hugely lucrative run-up.

US luxury goods stocks are basically flat now from the start of COVID (having diverged dramatically since mid 2022 from Europe)…

Not all is well in the world economy, not even in China, and so now we see luxury brands taking it on the chin. Inflation and high interest rates are the culprit. Borrowed capital is finally experiencing a positive cost for the first time in a decade and a half. This has imposed a slow but relentless squeeze on all bank accounts, even the most well-endowed ones.

You have surely encountered these brands in the past. Walking through the best airports, you see jewelers, handbag sellers, and fashion designers with fancy things on sale. You get interested, and then your eye catches the price. It’s astonishing and you almost cannot believe that anyone buys them. But they do. The question is why.

Luxury goods like this have long fascinated economists because they stress the normal laws of demand. Usually with a single good, all other conditions remaining the same, the lower the price, the greater the intensity of demand for the same good. But sometimes, the opposite happens. The higher the price, the more people are convinced of the merit of the purchase.

These are divided between two classes: so-called Veblen goods and Giffen goods.

• The Veblen good is one that obtains higher demand due to the way in which its status triggers a sense that it should be more valuable.

• The Giffen good is one in which the price rise itself signals a great broad demand regardless of social status.

French wines might be Veblen goods whereas Bitcoin might be Giffen goods, bought for fear of missing out.

Regardless, both run contrary to conventional wisdom about the relationship between demand and price. I have often wondered why in the world someone would spend $3,000 for a handbag whereas you can obtain something very close to it from eBay for 1/100th the price. The reason has to do with consumer confidence in the product. If even one person asks the question “Where did you get it?” you can answer with confidence and feel great about that.

For some people, that is worth a lot of money.

I’ve felt this way about many wines too. Yes, I can taste the difference between a $12 wine and a $120 wine (I think?) but it doesn’t matter to me. But for some people, sky-high prices signal quality (“You get what you pay for”) and so spending extra comes with great benefits.

But all of this is provided that you can afford it.

We can indulge in all such personal and cultural scrupulosity over brands and status provided that they fit within the family budget. It’s the same on the supply side. When borrowed capital comes at zero price, there seems to be no limit to what is possible.

For years, companies were tempted by the idea that so long as there was some revenue stream, it simply did not matter how leveraged the company could become. So long as there were lenders, there were borrowers. So long as there were consumers, there were companies ready to leverage up.

The dreams of infinite prosperity under a central bank willing to bear the cost forever, if only to keep the financial sector afloat, all seem well. It went on long enough to tempt the entire financial culture to believe it would last forever.

But when times are tough, these luxury goods tend to be the first things to go. You figure out how to be happy with the used handbag from eBay or the lower-priced wine. When the cutting begins, this is the first place you cut.

It was inevitable in these tough economic times—and despite the Biden administration’s pronouncements, these times are increasingly grim—that luxury goods of all types would end up on the chopping block. The stock prices of the luxury brands are a telling predictor of what is to come. If present trends continue, we could see a widespread selloff, together with a closing of high-end retail outlets that have long relied on splurging consumers to provide the cash flow.

We might consider what other luxury goods we as a country consume. A huge welfare state, bases in countries all over the world, bailouts for anyone and everyone, free medical care for anyone in need, and medical experiments on the whole population just to try out fancy new drugs and disease mitigation strategies. This is just for starters. These are the luxuries of prosperity.

It’s time we prepare, and this includes the very rich. The closet full of Louis Vuitton bling doesn’t put food on the table or pay the mortgage. It sure was good while it lasted.

By most accounts from the front and according to the strategic information currently on hand, the war in Ukraine is all but over and Russia has essentially won.  Russia continues to occupy at least 20% of Ukrainian lands and has solidified its lines.  As expected, Ukraine’s much hyped counteroffensive was hot air and it is clear that their ability to field combat ready soldiers has been greatly diminished.  Without an offensive capable military, Ukraine has nothing left except whatever mid range arms NATO gives them to harass Russian forces to minimal effect.  All Putin has to do is bide his time until the money and weapons run out.  

But even worse still for Zelensky and friends is the fact that the propaganda machine driving western sentiment and monetary support is quickly dying.  Admissions of “war fatigue” among Americans and Europeans are beginning to surface and majority support for further funding has ended.  Without a clear outline of what victory in Ukraine actually looks like, and with many in the west facing stagflationary crisis, enthusiasm has floundered.  It should also be noted that the war in Ukraine never garnered any meaningful American support for the deployment of troops, and for good reason.

No one wants to jump headlong into WWIII.

With Ukraine becoming the ugly girl at the school dance, the attention of establishment warhawks (Neo-cons and Democrats) has swiftly shifted over to Israel, much to the dismay of Zelensky.  The Ukrainian leader warned in an interview with a France 2 broadcaster:

“There is a risk that international attention will turn away from Ukraine, and that will have consequences…”

Zelensky has desperately tried to associate Ukraine with Israel as if the two nations are engaged in the same fight.  He even went as far as to insinuate that Vladimir Putin was the mastermind behind the destabilization of the Middle East and insisted that NATO funding packages for Israel should be tied to funding packages for Ukraine. 

Let’s not forget how disjointed and strange a Ukraine/Israel association would be, given Ukraine’s Nazi leanings.  This is the same government that actually invited a real life Nazi SS officer to be applauded by Canada’s parliament as a war hero just last month.  The disconnect may be the reason why the Israelis rejected military aid to Ukraine for so long.     

The Biden Administration is running with the multi-war package idea, asking Congress to approve additional funding for Ukraine, but attaching it to a plan which would include funding for Israel, Taiwan, and US border security.  In other words, if conservatives want the border to be protected, they must agree to spend hundreds of billions of dollars on two ongoing war fronts as well as a third potential front with China.

It is highly unlikely according to officials on both sides of the aisle that this will succeed.  But, when the establishment piles on a host of different projects into a single funding plan, it is usually because this allows them to enter into false negotiations.  That is to say, there are certain projects they actually want and others they don’t care about.  They cut the funding programs they never intended to keep so that congress can feel like they gained something in the bargain.  The question is, which war do they really want to fund, knowing they will not get congressional approval for both?

Israel is better placed to become the new warhawk darling, given the country garners more sentiment from US and European conservatives who are increasingly wary of Ukraine.  The far-left support of Ukraine and their rabid anti-Russia propaganda has left many conservatives suspicious of the entire affair.  Leftists are revealing a similar zealotry in favor of Palestinian intifada, which might convince people on the right to support Israel by default.   

Right or wrong, it’s easier to find Republicans that favor Israel simply on religious grounds than it is to find those that care about Ukraine, and this seems to be the key to the future of the establishment agenda – A conservative majority must be onboard for any new war endeavor to last.  Ukraine’s failures have proven that.

There may be an overestimation, however, in terms of how many conservatives are open to funding yet another foreign quagmire.  Fears of Islamic extremism are justified, but not necessarily enough to compel Americans to ignore their own mounting problems at home.  Selling them on a plan to commit US funds and even military forces to Israel might be more difficult than the establishment thinks.

Authored by RFE/RL Staff via OilPrice.com,

• The CTBT, signed in 1996, aimed to reduce the threat of nuclear war and the spread of radioactive material.

• Despite the US not ratifying it, most signatories, including Russia and the US, have adhered to its terms.

• Tensions and increased weapon development hint at Russia’s potential decision to withdraw, further eroding international arms control frameworks.

The Anti-Ballistic Missile Treaty. The Intermediate-Range Nuclear Forces Treaty. The Treaty on Open Skies. New START.

For years, the pillars of international arms control have been crumbling: agreements signed by Washington, Moscow, and others during and after the Cold War aimed at reducing the threat of nuclear war, costly arms races, or overall military tensions.

The Comprehensive Nuclear-Test-Ban Treaty may be the next to go.

Signed in 1996, the treaty was a major step to preventing the spread of nuclear weapons technology and keeping a lid on the arsenals of the world’s biggest nuclear powers. Along with earlier treaties, the agreement, known as the CTBT, also aimed to reduce the spread of radioactive material that was blasted into the atmosphere and the oceans during the frenzied days of the Cold War.

Here’s the problem: The treaty never went into effect because a number of countries, including the United States, never ratified it.

Still, most signatories — including Russia and the United States, whose arsenals are by far the biggest in the world — have abided by the ban.

Now, however, Russia is making noises about backing out and “de-ratifying” the treaty.

Here’s what you need to know about the CTBT and its potential unraveling:

How’d It Come About?

The United States and the Soviet Union, as well as Britain, conducted hundreds of nuclear tests between 1945, when the world’s first atomic bomb was detonated in the U.S. state of New Mexico and 1961, when Soviet officials detonated the world’s most powerful weapon, the Tsar Bomba. France joined the nuclear testing club in 1960; China, in 1964.

The fallout, literal and figurative, from the testing led to a partial ban on atmospheric, oceanic, and space tests in 1963; underground tests continued to be allowed.

In 1974, India tested its first nuclear device, further expanding the nuclear club. A 1980 test by China became the last atmospheric test by any country anywhere.

Moscow’s final test — underground — occurred in October 1990 on the remote Arctic archipelago called Novaya Zemlya. Britain, the United States, France, and China all conducted their final tests in the years that followed, prior to 1996, mainly underground.

What’s It Do?

The CTBT basically bans all tests that result in a fission chain reaction, essentially a nuclear explosion.

Signed in 1996, the treaty was sent out to 187 signatory countries for ratification, but it has never come into effect because of a group of holdout countries.

Russia signed and ratified the treaty in 2000. The United States signed, but the U.S. Senate refused to ratify, citing concerns about verifying other countries’ compliance with the ban. Despite nonratification, the United States has complied with the moratorium. China signed but didn’t ratify.

Neither India, nor Pakistan, nor North Korea — all of which have conducted open nuclear tests since 1996 — is a member.

The treaty does allow for states to conduct subcritical, or zero-yield tests. Those involve explosives and nuclear materials but do not result in a fission reaction, the reaction that gives atomic weapons their terrible power. Both the United States and Russia are known to have conducted such tests.

Despite not ratifying the treaty, the United States does provide $33 million annually in funding for a system set up to monitor possible nuclear tests, as well as the Vienna-based organization charged with overseeing it.

What’s The Problem Now?

As relations between Washington and Moscow have worsened, major treaties between them have also frayed or collapsed entirely.

Washington unilaterally pulled out of the Anti-Ballistic Missile (ABM) treaty in 2002, angering Moscow. Washington for years accused Moscow of trying to cheat on the Intermediate-Range Nuclear Forces (INF) treaty until it effectively collapsed in 2019. In 2021, Russia withdrew from the Treaty on Open Skies, which allows countries to conduct surveillance flights over one another’s territories in order to observe weapons and military sites.

Both countries have adhered to New START, which capped the number of warheads and “delivery vehicles” each could possess.

New START’s extension, by both Russia and the United States in early 2021, was a lone bright spot in the continuing erosion of arms control.

But the agreement expires in 2026 and cannot be extended. Unless a successor treaty can be agreed upon and ratified, there will be no limits on the countries’ arsenals after that year. Tensions over Ukraine have kept the two sides from even sending inspectors to one another’s countries, as stipulated for in New START.

Both countries have also moved to modernize and upgrade their arsenals. But in a sign of deepening distrust, the U.S. State Department suggested in a 2022 report that Russia had not adhered to the standard of “zero-yield” testing.

So Russia Wants To Pull Out Then?

For more than a decade, the Kremlin has increased spending not only on conventional weapons and force strength but also on modernizing and expanding its strategic arsenal.

In 2018, Putin boasted that Russia was developing new weapons like an unmanned, nuclear-capable, underwater torpedo, and a hypersonic “glide” missile. He also bragged of the development of a nuclear-powered cruise missile — the Burevestnik, which has had major problems.

In recent years, researchers have been monitoring a surge of activity on the Novaya Zemlya archipelago: satellite imagery showing an uptick of construction at one or possibly two settlements that researchers had identified as sites for a possible test of a nuclear device or the trouble-plagued Burevestnik.

A top Russian nuclear researcher called for Russia to resume testing, and on October 5 Putin announced a successful test of the Burevestnik, though he provided no details.

Putin also opened to the door to Russia resuming nuclear testing, saying it could “de-ratify” the CTBT. A week later, on October 12, the speaker of the State Duma, the lower house of parliament, introduced legislation to withdraw ratification.

The prospect of Russia withdrawing prompted alarm bells, including from the CTBTO, the Vienna-based organization charged with monitoring compliance.

What Happens Next?

Even if “de-ratification” ends up happening, as is likely in the Kremlin-controlled parliament, that does not necessarily mean Russia will start blowing up uranium or plutonium again, on Novaya Zemlya or otherwise.

“I think that withdrawal of ratification is a strictly political step — leveling status with the U.S.,” said Nikolai Sokov, a former Russian Foreign Ministry official and arms control expert.

“I think the main motive is the perception that ‘Russia tried too hard in the past and made too many concessions’ and now ‘We’re not interested in arms control more than other countries.'”

Leonid Slutsky, head of the Duma’s foreign affairs committee, emphasized that Russia would not be withdrawing its signature under the treaty or “withdrawing from the voluntary moratorium on nuclear testing.”

“We are withdrawing the ratification, thus restoring legislative parity with the U.S. Congress,” he told the newspaper Kommersant.

“It was especially important for [the CTBTO] to hear that revoking ratification does not mean that Russia intends to resume nuclear tests and implies that Russia will continue to fully participate in the work being done for the Treaty’s entry into force,” Mikhail Ulyanov, Russia’s ambassador in Vienna, told the state news agency RIA Novosti.

Still, it’s not a good sign, experts say — all the more so, given the demise of other treaties.

Russia or any major nuclear power backing out of the CTBT “would be a huge blow to the [global nonproliferation] regime and would undoubtedly lead to a cascade of nuke testing by other states,” Lynn Rusten, a former U.S. arms control negotiator, told RFE/RL.

There could also be other nonproliferation or arms control treaties that are at risk, since, according to Sokov, the Kremlin has initiated a review of all similar agreements.

One strong candidate for “de-ratification” or a downgrading of Russia’s involvement, he said, is the 1992 Chemical Weapons Convention, which obligates members to destroy their stocks of chemical weapons.

Russia’s compliance with that treaty has been in question since the near-fatal poisonings of former Russian intelligence agent Sergei Skripal in England in 2018 and opposition activist Aleksei Navalny in Siberia in 2020.

In both cases, Western scientists identified a powerful Soviet-era nerve agent and suggested that Russia had maintained a secret, undeclared chemical weapons program.

Authored by Charles Lipson via RealClearPolitics.com,

The virulent anti-Israel protests across America and Europe throw a glaring light on the bizarre alliance between left-wing activists and militant Muslims. That odd combination has been the bedrock of political activism at universities and in the streets for years. It began in universities, where it now dominates political discourse, threatens Jewish students, and intimidates anyone brave enough to voice their dissent. We can now see how it has spread far beyond the campus.

What makes the alliance so strange are the deep-seated differences between leftists and Muslim fundamentalists over core beliefs.

The left supports women’s rights and full equality in the workplace and public sphere. Militant Muslims oppose them.

The left supports gay rights and gay marriage. Militant Muslims toss gays off buildings. None would dare hold a public march in Pakistan, Iran, or Saudi Arabia.

The left supports abortion rights. Militant Muslims oppose them.

The left supports religious freedom, including the right to reject religion altogether. Militant Muslims believe heretics should be executed.

The left rallies against book banning. Militant Muslims embrace it for any book they believe insults Islam or supports Israel.

The left opposes the death penalty. Militant Muslims endorse it and praise their governments for using it.

These beliefs are not marginal for either group. They are foundational, and they are profoundly opposed to each other. Still, the two groups have formed a long-standing alliance. How do they deal with these profound differences? And why are they allied?

They deal with differences very simply: They never mention them when they act jointly, primarily against Israel and its supporters across the world. They have joined together to form a more powerful coalition against shared enemies. They would destroy that partnership by raising issues where they differ.

Far better to focus on their agreement, which goes beyond hating Israel to claim Western capitalism has oppressed, degraded, and ruined the world. Since the U.S. is now the world’s greatest power, it is tagged as the main source of that malignancy, at home and abroad. As they see it, Africa, Asia, the Middle East, and Latin America are poor because they have been oppressed by capitalist nations and their corporations. If they have terrible governments, they have them only because the West has installed and sustained them.

This critique is based on a shared, but muddled, ideology. The heart of that ideology is its illiberalism. Both groups are fundamentally opposed to the forbearance of individual differences, including very different views and goals, that are essential to Western constitutional democracies. In their place, these opponents rely on a toxic brew of ideas drawn from:

• Karl Marx, of course

• Franz Fanon (“The Wretched of the Earth”)

• Edward Said (“Orientalism”)

• Herbert Marcuse (and the Frankfurt School of “cultural Marxism”)

• And, for the most extreme Muslims, revolutionary theologians like Sayyid Qutb, the intellectual father of Egypt’s Muslim Brotherhood and its subsidiary in Gaza, Hamas

The mixture of these ideas makes a confused jumble. But “incoherent” doesn’t mean “useless.” It serves as a kind of makeshift glue that binds disparate groups in opposition to what they see as the West’s oppressive bourgeois culture, its tolerance for divergent views, and the unequal outcomes produced by market competition (softened by transfer payments). Overturn it all, they say, in the name of “social justice.” They have no idea of what to replace it with. In fact, the coalition would break apart if either side emphasized its proposed alternatives.

This negative, often nihilistic, ideology inverts the old adage, “might makes right.” Their implicit claim is that “weakness and poverty make right.” It doesn’t. What’s right or wrong has nothing to do with who has wealth and power and who does not.

These self-proclaimed champions of the poor add one more sloppy argument to the mix. They claim people are poor and weak only because they have been oppressed and exploited.

One implication is that people in poor countries would be far better off if they had never been touched by the West and its institutions. They would thrive under their own social and political systems (and, in the West, some version of socialism). That, at least, is the unspoken claim underlying the coalition of the left and militant Islam. Some progressives (who aren’t poor) make common cause by self-flagellation. They are “repentant oppressors.” Their remorse has all the religious fervor of medieval monks who wore hairshirts and beat themselves with whips for their sins.

The idea that the West is responsible for the world’s poverty has a core of truthful criticism next to a mountain of lies. One doesn’t have to apologize for colonialism to note that almost everyone on planet Earth lived in grinding poverty until the cumulative effects of industrialization began to take hold after 1800. That process began in northwestern Europe and gradually spread across the world, lifting income, health, diet, and life expectancy. Where it failed was in countries racked by civil unrest or governed by rapacious regimes that didn’t provide public order or secure property rights and stole the revenues needed to provide essential public goods.

As for human liberation, no societies voluntarily ended human bondage until the West did it, mostly in the 18th and 19th centuries. Britain spent enormous sums stationing its navy off the African coast to prevent the transshipment of slaves, which had been captured and sold by local tribes. Britain gained nothing financially from that effort; it did it for moral reasons. In America, “free states” in the North and Midwest abolished slavery well before the Civil War. The war itself ended slavery, though blacks were still oppressed for another century by Jim Crow laws (in the South) and segregation (everywhere). Those practices were always inconsistent with the Western ideal of human equality and were finally outlawed in the mid-1960s by the Civil Rights Act and Voting Rights Act.

The current fight over millions of illegal immigrants obscures one fact common to all modern states and two crucial features of American history. The common fact is that state sovereignty includes the essential right to control who can enter each country. What makes U.S. history so unusual is that it has welcomed tens of millions of legal immigrants and integrated them, by fits and starts, into a society where common citizenship transcends ethnic and religious heritage. Today, most Americans appreciate the fruits of that integration in art, music, food, and culture, drawn from multiple cultural traditions. The left, with its focus on identity politics, damns much of that sharing as “cultural appropriation.” It is a deliberate attempt to divide the country into separate, opposed camps, based on birth.

The depth of this ideological rot is most visible on college campuses, where some students (and a few faculty) hate America and Israel so much they have actually rallied in support of Hamas and attempted to justify its atrocities as somehow the liberation of the poor and oppressed. It’s a disgusting idea.

It’s high time Americans went beyond revulsion and defended their basic, liberal ideals and the constitutional democracy founded upon them. We don’t have to accept the mantle of “oppressors” because of events that happened long before we were born, for which we are not responsible, and from which we never profited. We don’t have to accept the damning slur that our success is due to “privilege” rather than hard work, time-tested values, and a good education. The greatest “privilege” is not inherited wealth or status. It is being raised in a stable home by loving parents, living in an orderly community, and growing up in a country where each of us is free to pursue our own goals and define ourselves as we choose.

We can and should recognize America’s flaws – and work toward correcting them – without falsely painting our nation’s past as primarily a legacy of slavery and stolen wealth (the “1619” project and its twin, “decolonization” studies).

America is a great nation, for all its flaws.

Its greatness lay in the experiment of 1776 and establishment of a democracy that has endured and slowly incorporated all its people into the body politic.

The values that undergird that democracy are worth remembering, worth cherishing, and worth fighting to keep, even as a vile coalition celebrates those who kidnap and murder in the perverted name of religion. That’s not “social justice.” That’s an age-old crime.

Authored by MN Gordon via EconomicPrism.com,

“As interest costs go up in the United States, you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which puts us in an untenable fiscal position.”

– Paul Tudor Jones, October 10, 2023

Feeling the Pinch

The difficulties that an overindebted economy will encounter from rising interest rates range far and wide.  Though they shouldn’t come as a surprise.

Quite frankly, it’s real simple.  As interest rates rise, borrowing money becomes more expensive.

Car payments are an obvious example of the effects of rising interest rates.  The average new car loan today has a monthly payment over $750, with an interest rate of 9.5 percent.  What’s more, the monthly payment for roughly 17 percent – or about 1 in 6 – of new vehicle loans is over $1,000.

Financing a house purchase has also become grossly expensive.  The average 30-year fixed rate mortgage is around 7.65 percent.  Several years ago, it was below 2.65 percent.

According to Zillow’s fall housing market outlook, “the monthly principal and interest to buy a typical home has increased 122 percent in the past three years.”

Homeowner’s insurance has also gone through the roof.  In fact, from May 2022 to May 2023, the national average home insurance costs were up 21 percent.  This is on top of a 12 percent home insurance increase between May 2021 and May 2022.

Naturally, housing affordability is at an all-time low.  By one estimate, incomes would have to jump 55 percent for housing to be considered affordable.

But it’s not just those financing car or house purchases that are feeling the pinch.  Some companies are also finding that higher interest rates are a great big problem for business operations.  As borrowing costs rise, debt servicing takes a giant bite out of profits.

To adapt, businesses must either reduce costs or persuade customers to pay more for their products and services.  Some businesses, through a combination of these alternatives, will succeed.  Others will go bankrupt.

Net Interest Record

There were 16 bankruptcies filed by companies with more than $1 billion in assets during the first 6-months of 2023.  According to Cornerstone Research, this is over 45 percent higher than the first-half-year average of 11 bankruptcies filed by companies with more than $1 billion in assets from 2005 through 2022.

The effects of rising interest rates on the cost of home loans, car loans and business loans, is putting a tight squeeze on the economy.  When these loans go unpaid, and the debt goes bad, the banking sector will be in a world of hurt.

These same dynamics, of rising interest rates and increased loan payments, are also putting the squeeze on Washington.  Federal debt has been completely out of control for decades.  Higher interest rates are now increasing the annual cost of servicing the massive pile of federal debt, which has now amassed to over $33 trillion.

Net interest – what the Treasury pays to service the debt – in fiscal year 2023 came in at $660 billion.  This marked a new record and was well above the prior record for net interest ever spent in the budget of $476 billion in FY2022.

The critical reason for the net interest disaster is the immense amount of debt the Treasury will have to roll over at higher rates over the next 12 months.  Roughly $7.6 trillion of publicly held outstanding U.S. government debt will mature in the next year.  This will have to be financed at interest rates that are dramatically higher than they were just a few years ago.

Fundamental Insanity

The fiscal fundamentals facing the U.S. Treasury are, in a word, insane.  By all honest accounts there’s just too much doggone debt.  There’s no way it will ever honestly be paid off.

Brian Riedl, senior fellow at the Manhattan Institute, recently crunched the numbers.  What he found is an unadulterated disaster.

“Even with no additional spending expansions — Washington is already scheduled to borrow $119 trillion over the next three decades, pushing the debt toward 200 percent of the economy.  Even at the low interest rates projected by the Congressional Budget Office (CBO), a debt this massive would leave interest payments as the largest federal expenditure, consuming more than one-third of all federal taxes.  Any additional borrowing would just pour gasoline on the fire.”

Yet additional borrowing is the name of the game in Washington.  For FY2023, the federal government ran a deficit of $1.7 trillion.  Moreover, it is likely interest rates will be much higher than those projected by the CBO.

The 2-year Treasury note currently yields about 5 percent.  In February 2021, its yield was 0.12 percent.  So, the fundamental insanity Riedl identified will, in reality, be even more insane.

Thus, as the interest rate on government debt resets higher, taxpayers – including you – will see more and more of their tax dollars going to pay net interest.

Any honest observer knew this day would come.  Though for government officials it was a mounting problem that was much, much easier to ignore.

Why stick your neck out for a problem that may be pushed off into the future, beyond your lifetime?

How the Dianne Feinstein Effect Wrecked the Future

Dianne Feinstein, for instance, was a U.S. senator for over 30 years.  Now, after decades of terrible decisions, she’s up and kicked the bucket.

Feinstein will never have to face the full ramifications of her handiwork. 

Many others, with zero respect for the future, also know the messes they’ve made will be left for others to contend with.

Joe Biden, George Dubya Bush, Nancy Pelosi, Chuck Schumer, Donald Rumsfeld (dead), Mitch McConnell, Harry Reid (dead), Mitt Romney, Dick Cheney, Donald Trump, Bernie Sanders, Lindsey Graham, Elizabeth Warren, Paul Wolfowitz, Barack Obama, Barney Frank, Chris Dodd, Barbara Boxer, Robert Byrd (dead), and many, many more.

“In the long run, we are all dead,” said 20th Century economist and all-around statist, John Maynard Keynes.

This, in short, was Keynes’ rationale for why governments should borrow from the future to fund economic growth today.  This rationale provided the faux academic justification that allowed Congress to promise roses without thorns, rainbows without rain, and salvation without repentance.

Attempting to spend a nation to prosperity using borrowed money at everyday low rates courtesy of the Fed is not without consequences. 

In the short run, an illusion of wealth can be erected.  In the long run, that illusion slips into decay and disrepair.  Rising interest rates expedite the failure of fiscal recklessness.

Contrary to Keynes’ dangerous claptrap, racking up massive amounts of government debt hasn’t delivered the nirvana of rising long-term living standards. 

Rather it delivered the disparity of stagnating GDP and rapidly rising government debt, and an extreme wealth gap to boot.

No doubt, as Yogi Berra noted, “The future ain’t what it used to be.”

In the long run, some of us are not dead after all.  We’re all still here, living with the consequences of a failed state.

*  *  *

Today, more than ever, unconventional investing ideas are needed.  Discover how to protect your wealth and financial privacy, using the Financial First Aid Kit.

The United States provided more than $50 billion in aid to over 150 countries and territories, regional funds, and NGOs in 2021.

Each year, Congress appropriates foreign assistance based on national security, commercial, and humanitarian interests.

In this map via Visual Capitalist’s Bruno Venditti, USAFacts uses data from the U.S. Agency for International Development (USAID) to highlight the countries that received the largest portion of aid.

Food Assistance and the War on Drugs

In 2021, the U.S. directed its aid towards nations grappling with internal conflicts and humanitarian crises.

Following the withdrawal of American troops that same year, Afghanistan emerged as the primary recipient of substantial aid, receiving billions of dollars annually as part of the humanitarian response.

Among the top countries benefiting from U.S. assistance are various African nations contending with both famine and internal conflicts. Notably, Colombia stands out in the top 10, receiving millions of dollars to combat drug trafficking.

Israel Leading in Aid Over Time

Since the end of World War II, the U.S. has disbursed more than $3.75 trillion in foreign aid (adjusted for inflation).

The post-war years saw foreign aid peak, primarily because of the Marshall Plan. This initiative aimed to assist in restoring the economic infrastructure of post-war Europe.

At its height in 1949, U.S. foreign aid totaled nearly $100 billion.

Israel has been by far the largest cumulative recipient of U.S. foreign assistance. Since the 1940s, Israel has received more than $300 billion, with most of it in military support, aiding the country in developing a missile defense system and other projects.

The primary reason for this foreign aid has been to guarantee U.S. interests in the region, given Israel’s proximity to Syria to the northeast, Hezbollah-influenced Lebanon to the north, and an Islamist insurgency in Egypt’s Sinai to the south.

After a two-decade conflict that took millions of Vietnamese lives and roughly 58,000 American lives, Vietnam is Washington’s second-largest recipient of financial support. This money is used for economic and technological cooperation, military support, and even to aid cleanup efforts from the U.S. military’s use of Agent Orange in Vietnam during the war.

Since 1975, Egypt has been a significant recipient of substantial foreign aid from the United States, primarily as part of diplomatic efforts to mitigate tensions in the Arab-Israeli context.

Washington also sent large aid packages to South Vietnam, South Korea, and other countries during the Cold War.

Since 2003, much of the money has been directed toward Iraq, Afghanistan, and Pakistan.

The Debate Surrounding U.S. Foreign Aid

According to a recent report by the Congressional Research Service, foreign aid can serve as a means to bolster the United States’ global influence, tackle worldwide challenges, and advance common values.

Nonetheless, the same report reveals that certain Americans and Members of Congress consider foreign aid an expenditure the country cannot afford, given current budget deficits and competing budget priorities.

In 2021, U.S. assistance to other countries accounted for around 0.7% of the federal government’s total expenditures.

Authored by Jonathan Turley, op-ed via The Hill,

This month, the sudden appearance of Special Counsel Robert Hur caused as much of a stir as Bigfoot suddenly appearing on Pennsylvania Avenue.

Unlike his counterpart, Special Counsel Jack Smith, who has been aggressively prosecuting former president Donald Trump, Hur has virtually disappeared since his appointment to investigate President Joe Biden. Hur surfaced to interview Biden over his possession of classified documents, including some that go back to his time as a U.S. senator.

I have referred to Hur as a “neutron prosecutor” — a special counsel with no possible charge, under Justice Department policy barring the indictment of a sitting president. If that was not enough of a problem, Hur may have growing evidence that accounts offered by the White House over the discovery of the documents are false.

The new evidence could prove transformative, not only for the criminal but the impeachment investigation of the president.

This week, the House Oversight Committee released a new timeline on the discovery of classified documents in various locations associated with Biden. From the outset, many of us flagged problems with the account that had been given by Biden, who insisted that he had no knowledge or involvement in the removal or use of the documents.

The most glaring problem is that, after they were removed at the end of his term as vice president, the documents were repeatedly moved and divided up. Some were found in the Penn Center office used by Biden in Washington, D.C. Others were found in his garage and reportedly in his library. 

Biden made clear from the beginning that he expected the investigation to be perfunctory and brief. He publicly declared that he has “no regrets” over his own conduct and told the public that the documents investigation would soon peter out when it determined that “there is no ‘there’ there.”

Now, however, it appears that a critical claim by the White House in the scandal may not only be false, but was knowingly false at the time it was made. The White House and Biden’s counsel have long maintained that, as soon as documents were discovered in the D.C. office, they notified the national archives. Many asked why they did not call the FBI, but the White House has at least maintained that, unlike Trump, they took immediate action to notify authorities.

However, it now appears that this was not true.

One of the closest aides to Biden and a close friend to Hunter Biden is Annie Tomasini. She referred to Hunter as her “brother” and signed off messages with “LY” or “love you.”

Tomasini was once a senior aide to Joe Biden and, according to the Oversight Committee, inspected the classified material on March 18, 2021, two months after Biden took office — nearly 20 months before they were said to be found by the Biden team.

The committee now alleges that the White House “omitted months of communications, planning, and coordinating among multiple White House officials, [Kathy] Chung, Penn Biden Center employees, and President Biden’s personal attorneys to retrieve the boxes containing classified materials. The timeline also omitted multiple visits from at least five White House employees, including Dana Remus, Anthony Bernal, Ashley Williams, Annie Tomasini, and an unknown staffer.”

If true, the evidence demolishes the timeline long maintained by the Biden team. That could have an immediate impact on both the criminal and impeachment investigations.

The timeline has been a critical distinction drawn by the White House in distinguishing this matter from the Trump indictment, in which Smith charged the former president with 37 counts, including retaining classified information, obstructing justice and making false statements, and other charges.

Biden insisted that he was entirely “surprised” by the discovery of the documents in Nov. 2021.

He echoed the narrative of both his lawyers and the media at large:

“And they did what they should have done,” he said.

“They immediately called the Archives — immediately called the Archives, turned them over to the Archives, and I was briefed about this discovery.”

In reality, Biden’s counsel and associates conducted repeated searches and declared repeatedly that no further classified documents were found. That was repeatedly found to be untrue.

Moreover, the concern is that Biden’s lawyers, in the course of these private searches, may have consolidated material and contaminated the scene by the time FBI agents conducted their searches. This includes changing how documents were originally stored and whether classified markings were visible to anyone working around the Biden home or garage.

Now it appears that the discovery had actually been made months earlier.

The timeline would now more closely mirror Trump’s timeline in the knowing retention of classified material, the failure to turn over all of the classified material despite assurances from counsel, and alleged false accounts about the document’s discovery.

It is not clear what Hur can do if he finds either from witnesses or forensic testing (including perhaps fingerprints on the documents) that President Biden lied.

I have long disagreed with the policy that the Justice Department has long held, that prosecutors should not indict a sitting president. Were he to seek an indictment, Hur would have to ask for reconsideration of the policy based on a decades-old memo issued by the Office of Legal Counsel under President Bill Clinton, who at the time faced calls for an indictment for perjury.

The DOJ policy will also put pressure on the House in its ongoing impeachment inquiry. In my recent testimony at the first Biden impeachment inquiry hearing, I mapped out four possible articles of impeachment. They included obstruction and abuse of power.

If this new timeline is accurate, the question is whether Biden knew that the account being put forward by his staff and counsel was false. It also raises the question of whether the president knowingly possessed classified documents and lied about their removal, use, and discovery. Finally, if Biden repeated his public denials to Hur, there could be added allegations of false statements to federal investigators, another commonly-charged federal crime.

We still have to see if there is evidence to support such crimes, but what is clear is that the past narrative may no longer suffice.

In his press conference announcing the criminal charges against Trump, Smith declared, “We have one set of laws in this country, and they apply to everyone….Nothing more, nothing less.”

The question for Hur is whether they can also apply to a sitting president. Likewise, if these allegations are true and Biden knowingly committed these crimes, the question for Congress could be whether he should remain as president.