Zero Rss

Maryland's Glock Ban Aims At The Gun, Not The Criminal

Authored by David Manney via PJ Media,

Maryland Gov. Wes Moore signed SB 334 into law Tuesday, putting the state on a collision course with gun owners, firearm dealers, and 2nd Amendment groups.

The law targets "machine gun convertible pistols," mainly Glock-style semiauto handguns that use a cruciform trigger bar. Maryland lawmakers argue criminals can convert those firearms into fully auto with illegal devices called Glock switches.

The question remains: Why is Maryland banning future sales of common handguns because criminals already break the law with illegal conversion devices?

SB 334 bars manufacturing, selling, offering for sale, purchasing, receiving, or transferring covered pistols after January 1, 2027. Current owners won't have to surrender their firearms, and like hell they should. Active and retired law enforcement officers receive exemptions, and the law also allows immediate family transfers, inheritances, and certain gunsmith repairs.

State Sen. Sara Love (D-Montgomery County) sponsored SB 334. Del. Nicole Williams (D-Prince George's County) sponsored HB 557, the companion bill in the House of Delegates. The Senate passed SB 334 by a 28-16 vote on March 19. The House passed it 91-40 on April 9 before Moore approved the bill as Chapter 771.

Supporters frame the law as a public safety measure. Baltimore Mayor Brandon Scott, Maryland Attorney General Anthony Brown, and other officials have also pursued Glock through litigation, arguing Glock pistols can be converted too easily with auto sears.

Police officials have warned about converted weapons appearing in crimes and threatening officers. A fully automatic weapon in criminal hands can turn a street dispute into a massacre in seconds.

Yet the constitutional problem remains. Glock switches are already illegal under federal law and Maryland law. The new law burdens future lawful buyers because criminals misuse illegal parts. The National Shooting Sports Foundation, the firearm industry trade association, warned the measure would prohibit an entire class of lawfully made and lawfully sold handguns. The NRA also prepared a legal challenge after Moore approved the law. From the NSSF:

"To borrow on a line from James Carville, whom Democrats revere, 'it's the criminal, stupid,'" said Lawrence G. Keane, NSSF's Senior Vice President & General Counsel. "These bills, and similar laws passed in other states, punish law-abiding citizens by infringing on their Second Amendment rights to legally obtain the firearms they choose to protect themselves and their families against criminals who, by definition, have no respect for life or law. Instead of enforcing the law and holding these criminals accountable, Maryland's lawmakers pander to gun control donors and antigun special interests to ban an entire class of firearms, which the U.S. Supreme Court's Heller decision clearly holds violates the U.S. Constitution. Should Governor Moore sign these bills into law, NSSF intends to have Maryland's Attorney General Anthony Brown explain in court why Maryland willfully violates the rights of her citizens and ignores its responsibility to hold criminals accountable."

Mark Pennak, president of Maryland Shall Issue, has called the bill unconstitutional and signaled a lawsuit. Maryland House Republicans also urged Moore to veto the bill, arguing the law bans the most popular handgun in the state because of conduct already forbidden by law.

The United States Supreme Court has said the 2nd Amendment protects weapons "in common use" for lawful purposes, and New York State Rifle & Pistol Association v. Bruen requires modern gun laws to fit the nation's historical tradition of firearm regulation.

Maryland didn't solve the Glock switch problem by signing SB 334; it shifted pressure from criminals with illegal conversion devices to lawful buyers who want ordinary self-defense handguns.

Courts will decide whether the state can make that leap. Until then, Moore has given Maryland a gun law with a messy constitutional foundation and a lawsuit almost certain to follow.

Tyler Durden Fri, 05/29/2026 - 20:55

'We Outright Grabbed The Wallets': Bessent Boasts $1BN In Iran State Crypto Seized To Date

Washington's economic war on Iran and its 'shadow' banking network continues, as on Friday Treasury Secretary Scott Bessent announced the US has seized $1 billion in Iranian cryptocurrency assets as part of the economic component of President Trump's Operation Epic Fury.

The billion dollar figure represents the running total seized to date, building on prior milestones in the conflict, particularly a recent major April 2026 freeze of $344 million in USDT on the Tron blockchain. By close of April, $500 million total had been seized.

And so clearly with the addition since then of some half-billion dollars more in seized digital assets, the US Treasury program has only greatly accelerated in the last several weeks.

During his Friday speech before the Reagan National Economic Forum, Bessent stated:

"Just outright grabbed the wallets. Some of them may be typing in right now and might not realize their wallet had been grabbed."

Assets are held "on behalf of the Iranian people" - he described, while framing that the Iranian government had 'stolen' the money from the Iranian populace.

Bessent on Iran:

We have seized about $1 billion of Iran's crypto — just outright grabbed the wallets.

Some of them may be typing in right now and might not realize their wallet has been grabbed.

This is money that's stolen from the Iranian people. pic.twitter.com/h3ycrJn1Jy

— Clash Report (@clashreport) May 29, 2026

Bessent is signaling further relentless waves of OFAC wallet designations and aggressive asset forfeitures coming in the next months, as highly sanctioned Iran continues to seek alternative means of conducting financial transactions.

As we've featured before, for ordinary Iranians - roughly one in six of the population - crypto served as a vital lifeline. Facing relentless rial depreciation (down nearly 90 percent since 2018), chronic inflation of 40 to 50 percent, and frequent power blackouts or internet shutdowns during protests, citizens turned to Bitcoin and stablecoins like U.S. dollar-pegged stablecoins (USDT) on the Tron network to hedge savings, facilitate remittances, and move value when traditional banking failed. Spikes in Bitcoin withdrawals to personal wallets often coincided with domestic unrest and regional conflicts.

Yet this parallel financial system has also become a powerful tool for the state. The Islamic Revolutionary Guard Corps (IRGC) steadily tightened its grip on Iran’s crypto flows. IRGC-linked addresses received more than $3 billion in 2025—up from over $2 billion in 2024—with their share rising to more than 50 percent of total Iranian crypto inflows by the end of 2025. These figures represent conservative lower bounds based only on identified and sanctioned wallets.

Washington in the meantime is still entertaining dreams of sparking some kind of anti-regime uprising based on applying the economic squeeze to the Iranian system, but apart from unrest back in January, this has utterly failed to materialize. 

Tyler Durden Fri, 05/29/2026 - 20:30

Why Stable Systems Fail: The Illusion Of Institutional Control

Authored by Luc Lelièvre via The Mises Institute,

There is a persistent belief in modern political life that systems fail because they become fragile. Institutions, it is assumed, weaken under pressure and eventually break down. This intuition is not just incomplete—it is backward.

Systems do not fail when they become fragile; they become fragile because they have already lost contact with the realities they claim to govern. What appears as stability is not strength, but the final illusion of a structure that can no longer correct itself. This is not a matter of conspiracy or intent, it is structural. 

When institutions become more responsive to their own internal logic than to the world they were created to manage, this dynamic begins to unfold. As James C. Scott observed in Seeing Like a State, modern administrative systems must simplify in order to function. They translate complex, local, and context-dependent realities into legible categories, procedures, and metrics. This makes governance at scale possible—but it also creates systematic blind spots.

At first, the displacement of reality is subtle. Signals are filtered, anomalies are treated as exceptions, friction is absorbed. From within the system, nothing appears fundamentally wrong: Processes continue, reports are generated, decisions are made. This is the phase most observers mistake for stability.

In reality, the system becomes less responsive—not because it lacks information, but because it can no longer recognize what falls outside its categories. It does not consciously ignore reality; it simply ceases to register parts of it. As its categories harden, the system becomes more coherent, outputs are more consistent, procedures are more standardized. Language is more uniform, however, this coherence is achieved by exclusion, not mastery.

Rigidity is not strength, it is the loss of adjustment. At this point, fragility appears to emerge under pressure. However, this is misleading. A system becomes fragile because it must prevent itself from recognizing its own failure. Any signal requiring fundamental revision threatens not just a policy, but the system’s internal logic. The cost of recognition becomes prohibitive.

This is the knowledge problem identified by Friedrich Hayek: knowledge in society is dispersed, tacit, and often inarticulable. No centralized system can fully integrate it. As argued in The Fatal Conceit, attempts to do so inevitably distort or suppress what cannot be processed.

A contemporary illustration is the bureaucratic handling of the covid pandemic in Canada and Quebec. Centralized directives frequently overrode local realities and visible human costs. Once the framework was fixed, admitting significant errors became too costly. Criticism was absorbed through procedure rather than leading to meaningful revision—an instance of administrative rigidity that sustained the appearance of control.

At this point, the problem is no longer ignorance but overreach. Systems do not merely fail to process dispersed knowledge; they restructure reality so that corrective feedback no longer enters. What replaces it is not coordination, but representation. Under these conditions, power does not respond, it absorbs.

Demands are acknowledged but redirected. Critiques are translated into procedural adjustments. Pressure accumulates without producing structural change. It is dispersed, reformulated, or deferred. This creates a second illusion: that pressure leads to correction; it does not.

Pressure can be absorbed indefinitely—so long as it does not align. Fragmented demands rarely threaten a system. Even widespread dissatisfaction can coexist with institutional continuity if it lacks coordination and timing. Saturation is not mobilization.

As Mancur Olson argued in The Rise and Decline of Nations, mature systems accumulate organized interests that resist adaptation. Over time, this produces rigidity while preserving the appearance of order. What appears to be stability is closer to inertia than to equilibrium. Feedback loops become captured. Signals are no longer responses to reality, but to negotiated representations of it. The system ceases to adjust and begins to persist.

History repeatedly illustrates this pattern.

Late-stage regimes often display surface stability. Their structures remain intact, their procedures continue. Their authority is formally unchallenged. However, beneath this lies a growing disconnect between institutional representation and lived reality. The system persists—but as a closed loop.

When change occurs, it is rarely gradual. It emerges when multiple conditions converge—economic strain, political disillusionment, social fragmentation. Only then does accumulated pressure become transformative. Until that point, stability can appear indefinite.

This is why a crisis is often misread as the beginning of failure. By the time fragility becomes visible, it has long been present; what changes is not instability itself, but its expression. The real danger is not that systems fail, but that they continue to function after losing the capacity for correction.

As Ludwig von Mises emphasized in Bureaucracy, administrative systems can operate according to rules even when those rules no longer achieve their intended ends. The mechanism continues—but without effective steering.

Markets, by contrast, reveal what bureaucracies suppress. Price signals communicate information about scarcity, preference, and misallocation that no centralized structure can replicate. Coordination emerges not from design, but from dispersed knowledge. Correction rarely comes from within closed systems.

Stability, in this sense, is not evidence of health, it is often the final stage of a system that has lost the ability to adapt. Modern systems do not fail when they become fragile. They become fragile because they have already failed—structurally and long before that failure becomes visible.

The more decision-making is centralized, the more lived knowledge is replaced by abstract representations detached from reality. What follows is not reform, but substitution. At that point, the system no longer responds in any meaningful sense, it simulates a response.

Its stability is an illusion produced by abstraction, rigidity, and the suppression of signals it cannot process. It endures not because it is strong, but because it no longer registers what would force it to change.

The question is not when the system will fail, it is how long it can continue after failure has already occurred. History suggests the answer is uncomfortable: Systems do not collapse when they finally become unstable; they appear stable until the moment their failure can no longer be ignored.

Tyler Durden Fri, 05/29/2026 - 20:05

US Service Members Targeted Via Commercial Location Data, Pentagon Tells Senators

Adversaries have used commercially-available location data to attack individual US service members in war zones, according to a report furnished by the Department of Defense to Oregon Sen. Ron Wyden, and first reported by Reuters. Wyden is a Democratic member of the Senate intelligence committee. 

Responding to four questions Wyden had posed about this potential avenue of vulnerability for service members deployed to the Middle East, the Pentagon said that US Central Command "has received multiple threat reports concerning adversary exploitation of commercial location data to target or surveil US personnel in theater. The Threat Fusion Cell identified, tracked, and disseminated these threats through the USCENTCOM Threat Working Group and to component force protection personnel." 

A US Army soldier takes an iPhone selfie at a base in Qayyara, Iraq in 2016 (Reuters - Alaa Al-Marjani)

Elaborating on the nature of the threat, the Pentagon noted that: 

"Commercial location data can be used to identify where U.S. troops congregate and their pattern of life, which can be exploited by adversaries ​to target attacks such as missiles, drones, and roadside bombs, as well as for counterintelligence purposes." 

The Pentagon's brief set of responses did not provide details on any specific incidents. Early in the US-Israeli war on Iran, two DOD officials were wounded in an Iranian drone strike on a Crowne Plaza hotel in Bahrain. After the strike, a senior Iranian official told Drop Site that Iran had built a "target bank" of both American and Israeli personnel.  “The fact that they’ve now pinpointed the residences/locations of some of these forces has really caught the Americans and Israelis off guard," the official said, without detailing Iran's methodology. He did say the building of the target bank began after the 2025 12-Day War.   

⭕️ NEW: Iranian Hotel Strike in Bahrain Injured U.S. Defense Personnel, Diplomatic Cable Comfirms

U.S. lawmakers and mainstream media have described Iranian strikes on Gulf hotels as indiscriminate attacks on civilian targets. But The Washington Post reports that two U.S.… https://t.co/ch17xmxHdb pic.twitter.com/A18A4jd7BK

— Drop Site (@DropSiteNews) March 2, 2026

The Pentagon response to Wyden was dated April 14. On Thursday, Wyden and a bipartisan group of 13 other senators sent a letter to the Defense department's chief information officer, expressing "serious concern that the [DOD] has not taken basic steps to protect U.S. military personnel from the serious counterintelligence and force protection threat posed by the collection and sale of personal information, including cell phone location data, by data brokers."

This vulnerability was identified at least 10 years ago, when tech contractor Mike Yeagley briefed the Joint Special Operations Command on how enemies could exploit commercially available phone location data to create "pattern of life" profiles of individual service members. The contractor, who first publicized the nature of his 2016 briefing in a 2024 Wired article, showed JSOC's senior officers how he'd tracked phones from US bases that house special ops soldiers to an abandoned cement factory in Syria, which they were using as a forward operating base near an ISIS stronghold in Kobane. The rattled JSOC officers immediately relocated the briefing to a better-secured room. 

For that same article, Wired journalists teamed up with German investigative reporters to acquire a free sample of 3.6 billion coordinates -- some separated by mere milliseconds -- on upwards of 11 million mobile advertising IDs in Germany, covering a two-month period. "Our analysis revealed granular location data from up to 12,313 devices that appeared to spend time at or near at least 11 military and intelligence sites, potentially exposing crucial details like entry points, security practices, and guard schedules," the journalists reported.  

Journalists used commercial data to pinpoint location signals from 800 devices at the US Army's European headquarters at Lucius D. Clay Kaserne (Wired)

In their letter sent Thursday, the Democratic and Republican senators scolded the Pentagon for leaving troops vulnerable:

"DoD officials have not treated this counterintelligence and force protection threat as a five-alarm fire... DoD has known about this threat for over a decade, yet have failed to take meaningful steps to protect our men and women in uniform. That is simply unacceptable."

They urged the Defense Department to take several specific actions, including the disabling of advertising ID on all DOD-issued smartphones, and ordering service members to disable the advertising ID on personal phones taken onto military installations or on overseas deployments. They also called for the Pentagon to remove browsers  "designed to facilitate data collection by Google and other advertising companies, such as Google Chrome, from DOD unclassified computers and smartphones." They concluded their letter by posing five follow-up questions, with a due date of June 26. 

At least 13 American service members have been killed in the undeclared war on Iran, and approximately 400 have been wounded in action. It will likely take further probing by Wyden and others to determine whether it's likely that commercially-available data was used to pinpoint any of their locations. 

Tyler Durden Fri, 05/29/2026 - 19:40

The Loophole That Put Drunk Truckers Back On The Road

Authored by Jacob Burg via The Epoch Times,

A federal database built to flag and remove drunk and drugged truckers from U.S. highways used the equivalent of an "honor system" as its last line of defense between a family in a minivan and a substance addict steering an 80,000-pound mass of steel.

Trucks fuel up at the Love's Truck Stop in Springville, Utah, on Dec. 1, 2021. George Frey/AFP via Getty Images

The Federal Motor Carrier Safety Administration (FMCSA) launched its Drug and Alcohol Clearinghouse in early 2020 to improve road safety by providing employers, law enforcement, and state agencies with real-time information on substance-use violations by commercial drivers.

Truckers caught driving while under the influence, or violating the Transportation Department's alcohol and substance regulations, are flagged in the system with a "prohibited" status and must complete a return-to-duty process to reinstate their commercial driver's licenses.

But what if a current alcoholic or drug addict could immediately get back behind the wheel by paying a third party to simply check off a box inside the database, rather than complete and pass follow-up drug or alcohol testing?

That's how Brandon Blackburn, 34, was able to get back on the road, he told The Epoch Times. Blackburn was arrested last year on charges of driving while impaired in a construction zone with cocaine in his possession, according to the Prentiss County Sheriff's Department.

Blackburn said his "prohibited" status was cleared by another man who simultaneously runs a trucking company and advertises his "substance abuse professional" services across a network of trucking-related Facebook groups.

According to Blackburn and evidence reviewed by The Epoch Times, Blackburn and others appear to operate within a network of actors who have been exploiting loopholes in federal rules to illegitimately clear "prohibited" commercial drivers in the federal Drug and Alcohol Clearinghouse.

This was revealed by evidence presented in a multiseries investigation by Rob Carpenter of FreightWaves, a news outlet focused on the global supply chain. The Epoch Times reviewed the evidence collected by FreightWaves, independently verified each facet of the story, and interviewed Blackburn, who confirmed that the scheme worked for him and others.

Blackburn admitted to The Epoch Times that he cleared drivers who had been flagged with drug or alcohol violations even though he didn't have the necessary certification to do so. He claimed some of the people he helped had their licenses incorrectly flagged in the system, and said he was trying to help truckers and veterans in need.

Blackburn describes himself as a small player across a network of actors that operates like a multilevel marketing scheme. He claimed that several others are much more prolific and are still operating.

"We've never seen anything like this before. It sent shockwaves through our industry," Jo McGuire, executive director of the National Drug and Alcohol Screening Association, told The Epoch Times.

The implications are not just grave for road safety, but also for employers who rely on the clearinghouse to avoid hiring drivers who may be at a higher risk of bringing on a multimillion-dollar court settlement in the event of a serious highway accident.

This is how the scheme proliferated in plain sight, and why, despite new and upcoming rule changes to the certification process in the clearinghouse, employers may be unaware they're hiring a potentially dangerous driver.

The Scheme Explained

Once a driver is caught driving under the influence, or is flagged after testing positive for drugs or alcohol, his or her license receives a "prohibited" status from the clearinghouse.

Examples of drug and alcohol violations include having a blood alcohol level of 0.04 or greater while on duty for "safety-sensitive" operations and using any prohibited drugs.

Even driving with sealed alcohol containers in the cab, as long as they are not part of the driver's shipment, counts as an alcohol violation.

In late 2024, the FMCSA updated the clearinghouse to immediately downgrade a commercial driver's license once the driver received a "prohibited" flag, forcing him to start the return-to-duty process to get back on the road.

As part of the return-to-duty process, a driver typically works with his employer to select a substance abuse professional who provides an initial assessment and offers education and treatment recommendations. The process involves six steps, with the driver needing to pass a drug or alcohol test on step five before completing a follow-up testing plan in step six.

The way the federal agency designed the database was critical for how the scheme unfolded. Step five only requires a testing date, rather than a copy of a negative drug or alcohol test. The driver's employer is responsible for verifying the results and entering the date of the negative test.

However, drivers without current or prospective employers may register accounts in the clearinghouse as owner-operators and can designate third-party administrators to complete that part of the process.

This is how the scheme proliferated, based on the evidence reviewed by The Epoch Times. Employers, substance abuse professionals, and third-party administrators were only required to self-certify in the clearinghouse database. No identity verification was involved in the process.

By law, a substance abuse professional must be a licensed physician, social worker, psychologist, certified employee assistance professional, certified drug and alcohol counselor, or state-licensed or certified marriage and family therapist.

But since the clearinghouse allowed users to self-certify, anyone could check the box without having the credentials. The same was true for third-party administrators.

Based on evidence reviewed by The Epoch Times, Blackburn and others appear to have been operating in the clearinghouse with multirole accounts, including as substance abuse professionals, third-party administrators, and employers.

Some Facebook users who publicly advertised Blackburn's services mentioned being out of work when they began the return-to-duty process, meaning they would have had to use a third-party administrator to verify and submit the date for a negative test result.

Several online databases exist for legitimate substance abuse professionals who work with the Transportation Department, including NAADAC's directory and SAPList.com. Blackburn could not be found on either database.

Blackburn said it's easy to circumvent the prescribed clearinghouse process from a basic Google search. He told The Epoch Times that he got involved after seeing the scheme persist from the moment the clearinghouse was launched.

It operates like a multilevel marketing, or "pyramid," scheme, Blackburn said. If you see a user in one of several related Facebook groups advertise helping drivers with the return-to-duty process, and they mention a particular person they worked with, that person is taking a cut.

Multiple users advertising return-to-duty services mentioned Blackburn and others based on hundreds of public Facebook comments that were reviewed for this story.

Blackburn insists he has stopped, but claims the others have not. He said he was struggling with a drug problem, relapsed last year, and that was the reason for his arrest.

Scale

Blackburn said he charged around $100 for his services and never more than $150. The entire return-to-duty program with a legitimate substance abuse professional can cost between $1,000 and $3,000 when evaluations, education, treatment, and tests are included.

A total of 368,984 violations have been reported to the Drug and Alcohol Clearinghouse since its launch, according to its most recent monthly summary report.

That tally includes 360,107 drug violations and 8,877 alcohol violations. The drug violations include the use of marijuana (206,394), cocaine (57,075), methamphetamine (29,017), and a long list of synthetic opioids.

As of Jan. 2, 328,431 drivers had been reported to the database with at least one drug or alcohol violation. Of those, 202,345 remain in "prohibited" status with their licenses still downgraded.

Trucks drive away from the Port of Long Beach, Calif., on May 15, 2026. Under the Federal Motor Carrier Safety Administration’s Drug and Alcohol Clearinghouse, truckers flagged as “prohibited” after impaired driving must complete a return-to-duty process to regain their commercial licenses, but some can reportedly get back behind the wheel by paying a third party to check a box in the database. John Fredricks/The Epoch Times Tyler Durden Fri, 05/29/2026 - 19:15

662 Billion Reasons To Worry: Moody's Raises AI Data-Center Funding Fears As Apollo Shops Huge Anthropic Debt Deal

Unless you have lived under a rock for the last year (or month), you will know that the explosive growth of artificial intelligence is fueling a massive infrastructure buildout.

In a chart book published nearly simultaneously with Moody’s report, Apollo Global Management chief economist Torsten Slok worked to put the enormity of data center spending into perspective.

With total capital expenditure on data centers estimated at roughly $646 billion, or about 2% of U.S. GDP, Slok noted that is roughly equivalent to the GDP for Singapore, Sweden, and Argentina. Defense spending in 2025, meanwhile, was around $917 billion.

However, as Moody's warned this week, the aggressive financing structures supporting this explosive growth are creating significant systemic risks that could ripple across global credit markets and the broader economy.

The most recent example of this buildout - and its coincident debt-funding - is the $36 billion debt financing package currently being shopped by Apollo Global Management and Blackstone to enable Anthropic’s large-scale acquisition of Google’s custom TPU chips.

As Bloomberg reports, this complex, high-leverage deal - partially backed by Broadcom - underscores how private equity and specialized financiers are channeling enormous capital into AI hardware and data centers through layered debt instruments.

The move would mark one of the largest-ever private credit deals and also the biggest chip-financing debt transaction.

It aims to tap Broadcom’s credit quality to provide computing-power access to Anthropic, which just eclipsed rival OpenAI in valuation (and its ecosystem has been dramatically outperforming)...

While such deals accelerate AI capacity, they also concentrate risk.

More concerning is the scale of hidden liabilities across the industry.

According to Moody’s Ratings, the five major U.S. hyperscalers (Amazon, Meta, Alphabet, Microsoft, and Oracle) have accumulated approximately $662 billion in future data center lease commitments that have not yet commenced.

Combined with other commitments, the total undiscounted future lease exposure reaches $969 billion.

To put the scale of this hidden obligation into perspective, Moody’s accounting analysts David Gonzales and Alastair Drake calculated that the unrecorded $662 billion is equivalent to 113% of these five hyperscalers’ most recent adjusted debt.

These obligations remain entirely off-balance-sheet under current accounting rules, despite representing binding long-term liabilities.

But as Gonzales told Fortune in a statement that it’s “not as if [these hyperscalers] have have avoided a liability through structuring,” characterizing the $662 billion at issue as “yet to be on the balance sheet,” rather than missing.

“More accurately,” he added, “they have not yet received the services to trigger this liability as of this time, but they will.”

This accounting deferral masks the true leverage in the system.

As these leases activate over the next decade, they will migrate onto balance sheets, potentially weakening credit profiles, elevating leverage ratios, and increasing refinancing pressures.

While the AI infrastructure boom promises transformative productivity gains, Moody's is basically highlighting that the current funding model - reliant on massive off-balance-sheet debt and complex private financing - builds hidden vulnerabilities into the financial system.

Regulators, investors, and policymakers should closely monitor these exposures.

Heightened Systemic Concerns

• Contagion Risk: Heavy interdependence among hyperscalers, private credit funds, and infrastructure investors means distress at a few large players could rapidly spread through debt markets and counterparty exposures.

• Concentration & Interconnectedness: A small group of tech giants and a limited pool of specialized financiers dominate this financing. Any material setback in AI monetization or power availability could create correlated losses across the sector.

• Broader Market Impact: The $662 billion in off-balance-sheet exposure represents a delayed but massive claim on capital markets. In an economic downturn, forced deleveraging or asset fire sales could amplify volatility, tighten credit conditions, and affect investor confidence well beyond technology.

• External Amplifiers: Power grid constraints, regulatory hurdles, and geopolitical supply chain risks further compound the fragility of these highly leveraged bets.

In a stressed scenario - such as slower-than-expected AI revenue growth (the end of tokenmaxxing), rising energy costs, or higher interest rates - the simultaneous activation of these liabilities could trigger widespread credit rating downgrades and liquidity strains.

Specifically, Moody’s warned that these opaque accounting practices mask the true economic risk facing the tech industry. While leasing reduces upfront capital investments, carrying such massive future commitments severely limits a company’s financial and operating flexibility, especially if AI industry conditions change rapidly.

Because these liabilities are hidden, Moody’s concluded, in its own jargony way, that it is considering new ways to look at this issue.

“The accounting liability is unlikely to reflect certain plausible future scenarios … With this in mind, we will continue to assess cash exposures and debt-like adjustments as time progresses and the dates of new leases draw nearer. We may make a nonstandard adjustment to Moody’s adjusted debt based on our expectation of likely cash outflows.”

Without greater transparency and more resilient capital structures, the race for AI supremacy risks generating systemic stress that could undermine broader economic stability.

Tyler Durden Fri, 05/29/2026 - 18:50

Japan Crude Imports Fall 66% To Record Low

By Tsvetana Paraskova of OilPrice.com

Amid the supply disruption in the Middle East, Japan’s crude oil imports crashed by 66% in April from the same month last year, dropping to an all time low, official Japanese data showed on Friday.

Japan imported 4.07 million kilolitres, or about 850,000 barrels per day (bpd), of crude oil last month, down by 65.7% from the April 2025 levels, the monthly petroleum statistics of the Ministry of Economy, Trade and Industry (METI) showed.

Crude imports from the Middle East region, which delivered more than 90% of Japan’s total crude imports before the war, plunged by 68% in April from a year earlier.

Japan’s imports from Saudi Arabia crashed by nearly 58%, and supply from the United Arab Emirate (UAE) to Japan plunged by 69.4%, the Japanese government data showed. Of the total severely reduced crude supply, the Middle East continued to account for more than 90% of Japanese crude imports, at 93.7% in April.

Japan in April imported the lowest volume of crude oil from the Middle East on record dating back to 1979 as the Iran war and the de facto closure of the Strait of Hormuz choked supply from the region.

Japan’s crude imports from the Middle East plummeted by 67.2% in April compared to the same month of 2025, provisional trade data from Japan’s Finance Ministry showed last week. The April 2026 volume, estimated in Japan at 3.843 million kiloliters of crude oil, was the lowest since data collection began in 1979.

Japan has just welcomed the first shipment of Middle East crude via the Strait of Hormuz since the Iran war began on February 28.

Japan is also releasing crude from its strategic reserves as part of an IEA-coordinated global effort to release 400 million barrels of crude and oil products.

The ongoing oil stocks release, which is Japan’s biggest ever, is helping Japanese refiners increase throughput. So is alternative supply from producers outside the Middle East, including rare cargoes from Azerbaijan and Latin America.

Tyler Durden Fri, 05/29/2026 - 18:25

Anti-Trump Entertainers Bolt From Freedom 250 Celebration

Several entertainers abruptly backed out of President Donald Trump-linked Freedom 250 concerts this week after learning more details about the patriotic celebration planned for the National Mall.

As American Greatness reports, the cancellations add to the long-running tensions between Americans and the politically progressive entertainment industry.

Young MC, Morris Day, the Commodores, Bret Michaels, and country singer Martina McBride were among the performers who announced they would no longer appear at “The Great American State Fair,” a series of concerts and events scheduled for June 25 through July 10 in Washington, D.C.

The event is being organized by Freedom 250, a group launched by Trump late last year that describes itself as a “national, non-partisan organization leading the celebration of our Nation’s 250th birthday.”

Trump selected former State Department official Keith Krach to serve as the organization’s CEO.

The cancellations came just one day after organizers unveiled the first wave of performers.

McBride said on social media that she initially agreed to participate because she believed the event would remain politically neutral.

“Yesterday things started changing and what we were told is, in fact, not what is happening,” she wrote Thursday.

Young MC similarly suggested he was uncomfortable with the event’s political ties.

“The artists were never told about any political involvement with the event,” he wrote on Instagram, adding that he hoped to “perform in D.C. in the near future at an event that is not so politically charged.”

Morris Day also confirmed his departure in a brief Instagram statement.

“Contrary to rumor, Morris Day & The Time will not be performing at the ‘GREAT AMERICAN STATE FAIR,’” he posted.

C& C Music Factory issued a confusing statement, distancing themselves from the event:

"As the Creator of C&C MUSIC FACTORY, I can state that we stand for love of all people and races globally and neutrality in all beliefs, in freedom and justice for all humanity"

The greatest lip-syncers ever - Milli Vanilli - are also out:

"The original/real vocalists of Milli Vanilli, Jodie Rocco, Linda Rocco. Brad Howell, John Davis, and Charles Shaw will NOT be performing their hits live at The Great American State Fair. Others using the name 'Milli Vanilli' that appear on the advertisement should be considered a tribute band with no association vocally or musically to our sound or songs."

At least one “I Love the 90s” act will be there: Vanilla Ice.

“He is proud to help celebrate America’s 250th Anniversary!” a representative for the “Ice Ice Baby” rapper wrote in an email to the AP.

“Everyone is welcome to attend and celebrate USA’s Birthday and our Freedom!”

Tyler Durden Fri, 05/29/2026 - 18:00

Obama-Nominated Judge Orders Trump's Name Removed From Kennedy Center Building

Authored by Matthew Vadum via The Epoch Times,

A federal district judge on May 29 ordered that President Donald Trump’s name be removed from the John F. Kennedy Center for the Performing Arts and blocked officials from shuttering the venue for two years for renovations.

Obama-nominated, Washington-based Judge Christopher R. Cooper issued an order temporarily halting the closure and preventing the name change.

“Congress gave the Kennedy Center its name, and only Congress can change it,” the judge said.

The new ruling came in response to litigation initiated in December 2025 by Rep. Joyce Beatty (D-Ohio) who sued Trump and the Kennedy Center board of trustees over its renaming as the Donald J. Trump and John F. Kennedy Center for the Performing Arts. Beatty is an ex officio member of the center’s board of trustees.

Rep. Joyce Beatty (D-Ohio) (C) and Rep. Adriano Espaillat (D-N.Y.) (C) arrive for an event on Capitol Hill in Washington on Sept. 3, 2025. Andrew Harnik/Getty Images

“Representative Beatty is entitled to summary judgment on the renaming issue,” Cooper wrote Friday.

“The Kennedy Center’s organic statute makes crystal clear that the Center is to be named for President [John] Kennedy, and it cannot bear any other formal name or public memorial based on the Board’s unilateral say-so,” the judge wrote.

Cooper also ordered that Beatty have her voting rights restored as an ex officio trustee.

“The Center’s organic statute makes no distinction between the powers of general and ex officio trustees,” Cooper wrote.

“Nothing in the statute permits the Board to discriminate categorically between the two as to fundamental trustee rights,” the judge wrote.

“And stripping ex officio trustees of their voting rights runs afoul of common-law trust principles incorporated into the statute, principles which presumptively place trustees on equal footing when it comes to participating in the trust’s administration.”

Days before, the Kennedy Center board had unanimously voted to rename the institution the Trump-Kennedy Center.

That same day, new lettering was installed on the outside of the building along with digital rebranding.

Tyler Durden Fri, 05/29/2026 - 17:40

Japan Prepares To End Quantitative Tightening Amid Bond Market Turmoil

With Japanese bond yields recently hitting record highs and bond market volatility soaring, overnight Reuters floated a trial balloon that Japan's central bank may pause the unwinding of its massive debt holdings next fiscal ​year, which would give Prime Minister Sanae Takaichi some relief amid growing investor concerns about her growing spending plans.

A pause would mark a turning point in the Bank ‌of Japan's quantitative tightening plan - started in 2024 as part of Governor Kazuo Ueda's efforts to unwind a decade-long, massive stimulus which everyone said would result in failure. Well, there it is. The next step, of course, is more QE.

According to Reuters, which is well known for being the mouthpiece of BOJ insiders, at its June 15-16 meeting, the Japanese central bank will review its bond taper plan running through March next year and lay out a new plan for fiscal 2027. With no change expected to the existing taper plan, markets are focusing on whether the BOJ would keep reducing its monthly bond purchases in fiscal 2027 or maintain the current pace.

While ​there is no consensus yet within the BOJ on the final decision, a pause in taper is increasingly seen as the preferred option with uncertainty over the Iran war keeping ​bond markets jittery, said two sources familiar with the deliberations.

"Markets remain volatile, so there's no need to rush," one of them said on the BOJ's ⁠taper, adding that many market players appeared to favor maintaining the current pace of buying. Ironically, the market volatility is precisely the reason to rush. 

Political considerations may also push the BOJ to pause as rising bond yields threaten to confine Takaichi's spending plans. "What the ​administration wants to avoid most is rises in bond yields," said one of the sources. Of course, if the intention is to avoid bond yields from surging, it's far too late.

Japan's 20Y bond yield rises as high as 3.511%, highest since 1996 as global interest rates go vertical pic.twitter.com/Rc1gKjfGyo

— zerohedge (@zerohedge) May 13, 2026

Confirming the end of the QT is effectively a done deal, some investors are now calling on the BOJ to pause its bond taper plan, a central bank survey ​earlier this month showed, highlighting the challenge it faces in reducing its massive Japanese government bonds (JGB) holdings. 

Even before the Reuters report, there had already been some indications the BOJ might consider slowing its taper plan amid market uncertainty. A clearer signal on the BOJ's taper plan will come next week, when the central bank releases minutes of its meeting with bond market participants held on May 21-22.

"We've seen a pretty fast rise in bond yields, which makes it hard for investors to buy ​bonds. The finance ministry may be getting worried too," said former BOJ official Nobuyasu Atago. "Given the political headwinds, I see no reason for the BOJ to keep tapering next fiscal year," he said.

Concerns ​over Japan's worsening finances and rising inflation pushed up the 10-year JGB yield to a 30-year high of 2.8% last week, nearing the 3% estimate the finance ministry set in compiling its fiscal 2026 budget. A rise ‌above 3% ⁠would boost debt servicing costs and reduce scope for other spending.

The BOJ's rate-hike decision may also affect its taper plan with an increase in short-term rates to 1% from 0.75% seen as a strong possibility at the June meeting. While the central bank has said its taper program has no monetary policy implications, the case for slowing QT becomes stronger if it pushes through a hike, something it has been woefully unable to do so far despite a collapsing yen. 

"With the bond market so unstable, it would be natural for the BOJ to play it safe and avoid causing undue market turbulence," said Mari Iwashita, executive rates strategist at Nomura Securities, who projects a taper pause ​in fiscal 2027.

"A combination of a taper pause ​and rate hike would be a good ⁠one," as the former will ease upward pressure on yields, while the latter would alleviate concern the BOJ is behind the curve in addressing inflationary risks, she said.

It's not just Japan: rising debt and volatile yields have heightened challenges for central banks unwinding their balance sheets that ballooned from years of heavy asset ​purchases to reflate their economies. In the US, analysts doubt whether new Fed chief Kevin Warsh can push through his calls for a smaller balance ​sheet as U.S. Treasuries lose ⁠their luster.

The BOJ has also been cautious in its QT program which started in 2024, and under which the central bank gradually reduced purchases and currently trims monthly buying by 200 billion yen each quarter. 

Political hurdles for the BOJ's QT have heightened under Takaichi, who has vowed to cut tax and boost spending by issuing even more debt in the world's most indebted economy. 

Taper or not, a reduction in the BOJ's holdings, currently at around 500 trillion yen, will proceed steadily due ⁠to the runoff ​of maturing JGBs that already shaved 20% off its balance sheet from a peak in late 2023.

That's all the more ​reason for the BOJ to maintain the current pace of buying, said former BOJ executive Akira Otani, currently at Goldman Sachs Japan.

"When inflationary risks from the Middle East conflict and the government's proactive fiscal policy are putting upward pressure ​on bond yields, proceeding with further tapering could cause political friction by pushing up yields," he said.

Tyler Durden Fri, 05/29/2026 - 17:20

This Is The Deep State On Parade Like A Naked Emperor

Authored by James Howard Kunstler,

In the annals of Deep State WTF-ery, is there a stranger case than CIA officer David Rush turning up with $40-million in 303 one-kilogram gold bars, plus $2-million in cash, plus a stash of 30 mostly Rolex watches?

Well, yeah, the stranger story is how the guy got hired by the CIA in the first place.

Rush was arrested on Monday, May 18, by an FBI SWAT team at his home in Loudoun County, VA. Agents searched the house all day long and found the stash. Rush is currently charged with theft of public money and allegedly falsifying his military and academic credentials to obtain federal employment benefits, including roughly $77,000 in improper military leave pay. He’s scheduled to make a federal court appearance in Alexandria today.

Rush first applied for a job at the CIA in March 2006. He claimed to have a bachelor’s degree in math from Clemson University and a master’s from the Rensselaer Polytechnic Institute (RPI). He was rejected. He reapplied later that same year. Bumped again. He reapplied again in 2009, adding a new credential: that he’d been a US Navy test pilot and flight trainer. This time, he was hired.

Rush’s college credentials were found to be false, but it is unclear when that was discovered. Since he included them in his two earlier 2006 failed applications, why were they not flagged in his successful 2009 application? His claim of being a US Navy pilot was also found to be false (he was an information systems tech in his Navy service). The FBI affidavit unsealed recently details the pattern of lies across all applications.

Understand that CIA vetting procedures are supposed to be exceedingly rigorous. The process is stressful and invasive — many candidates drop out or are weeded out. The background check involves interviews with practically everybody who knows the applicant going back decades, his criminal history, work, financial history, education, military service. The applicant gets a polygraph exam. Even after getting hired, monitoring continues.

Rush was hired at the very start of the Obama admin; Leon Panetta was the newly appointed CIA Director. Wouldn’t you like to hear him ‘splain how David Rush managed to get hired? Was somebody smoothing his way in? Rush rose to become a senior executive service (SES) officer with a top-secret (TS/SCI) security clearance. His exact duties, the division he worked for, his day-to-day responsibilities have not been disclosed.

Rush allegedly requested the gold and foreign currency from the CIA for “work-related expenses” between November 2025 and March 2026. The agency later could not account for the assets or locate records explaining their official purpose. A search of a storage locker at CIA connected to Rush turned up only a small amount of the requisitioned cash.

“There is a whole process that we go through to get that money. I don’t just walk into the logistics office and say ‘Excuse me, I need $100,000 tomorrow.’ There is a form I have to fill out. It’s not a bank vault you walk into. It doesn’t work like that.” — Tracy Walder, 46, a former FBI special agent and CIA officer, quoted in The New York Post.

Wouldn’t you assume that some higher-up CIA officer would have to sign off on such a colossal requisition of gold and money? (And where does the CIA get so much gold on-demand?) Perhaps the very Director of the CIA approved it — which would be John Ratcliffe through 2025 up to right now. Doesn’t he have some ‘splainin’ to do? (Was Rush set-up? Was this a sting?)

Assuming Rush spent some period of time as an entry-level CIA employee, when did his rise to SES level happen? John Brennan became CIA Director in early 2013 (the start of Barack Obama’s second term). What were David Rush’s relations with John Brennan? Was Brennan his mentor? Does the gold stash have any connection with the current legal problems of John Brennan and other former high officials involved in the long-running “grand conspiracy” case about the attempted overthrow of a president?

You might imagine that Rush’s phone and computers were seized in the May 18th raid on his house — though it’s unlikely he used such conventional channels for black ops chatter. It’s conceivable, though, that any alt-communications of his were captured by the vast national security surveillance apparatus, and that DNI Tulsi Gabbard might have come across them this past year. How else might Director Ratcliffe have been tipped off?

This story is not going away. The scale of the grift is spectacular and vivid — 303 gold bars! — like a Hollywood movie. Rush’s explanation of “work-related expenses” sounds preposterous. If the requisitions were made serially, over several months, as appears, then the agency had more than one opportunity to review and question them.

Rush faked his entire back-story. How incompetent (or corrupt) are the agency’s past managers that he got away with it for so long? How many other gross fakers, rogues, grifters, and tools are embedded in the agency, and who are they really working for? The institutional embarrassment is monumental. Trust in the so-called Intel Community is at an all-time low.

Indictments and trials are coming.

This is the Deep State on parade like a naked emperor.

Tyler Durden Fri, 05/29/2026 - 17:00

Bessent Signals Crackdown On Dark-Money Funded NGOs In "Weeks, Months Ahead"

Last year, readers were briefed on what was then the investigative phase into dark-money-funded NGOs and alleged foreign influence operations routed through far-left activist networks. These NGOs and activist networks advance anti-capitalist agendas, mobilize protests and riots to fuel unrest under the banner of toxic social justice, and have also served as a permanent protest-industrial complex designed to delay, deny, and destroy President Trump's pro-America agenda.

Fast forward to late spring, and there now appears to be a clear transition inside parts of the Trump administration from the investigative phase to the action phase.

Treasury Secretary Scott Bessent signaled just that during a Thursday press briefing.

Here, the exchange between a reporter and Bessent suggests the potential enforcement phase has already begun:

Reporter: "I want to ask you about Antifa. In October, the Treasury Department started working with the FBI to investigate who's funding Antifa. Can you give us an update on that investigation? How close are you guys finding out who is funding it?"

Scott Bessent: "It is ongoing. We made substantial progress, and I think in the weeks and months ahead, we are going to have a lot to report""

(Bessent continues on IRS guidance for nonprofits): "The IRS is now giving guidance on the Form 990, which nonprofits they have to file. We are going to demand that nonprofits know their grant recipients. So if a grant recipient is violent, if they are suppressing people's rights, then YOU are responsible for that. And I think that's a very good first step."

Watch the Exchange: 

🚨 WOW! Scott Bessent just revealed the IRS has moved to make NGOs LIABLE for violent activity committed by their grant recipients like Antifa

George Soros has been put on NOTICE.

"The IRS is now giving guidance on the Form 990, which nonprofits they have to file. We are going… pic.twitter.com/15ToheHbwa

— Nick Sortor (@nicksortor) May 28, 2026

What's key to understand is that Bessent lays out a timeline of the action phase against the radical left that seeks revolution and routes its operations through dark-money-funded NGOs and activist groups.

We suspect that one of the key focuses is on U.S. Marxist tech financier Neville Roy Singham, who has reportedly been living in China and has been linked by The New York Times to CCP-aligned propaganda activist networks.

This week, far-left Turkish-American millionaire and Twitch streamer Hasan Piker committed an operational-security mistake by publicly identifying Singham as the "funding vehicle" for Marxist political movements in the U.S. routed through a network of nonprofits.

Piker revealed last week that he received a U.S. Treasury's "Requests for Information" subpoena over his "humanitarian trip" to Cuba with pro-China CodePink cofounder Susan Medea Benjamin. Keep in mind that CodePink is connected to the Singham network.

We've been early to the story of some nonprofits used as adversarial influence operations, as noted last year:

• Is There A "Cuba Connection" Behind The Radicalization Of America's Nonprofit Left

Last October, Seamus Bruner, Director of Research at the Government Accountability Institute, briefed President Trump on television about radical left NGOs and activist networks.

"We have identified dozens of radical organizations, not just the decentralized Antifa organizations, but dozens of radical organizations that have received more than $100 million from the Riot Inc investors," Bruner told Trump.

Source: Government Accountability Institute

This subject is near and dear to Elon Musk, who at the time commented on a video of Seamus briefing Trump.

Way more than $100M of US taxpayer money

— Elon Musk (@elonmusk) October 8, 2025

The best understanding we can provide readers is that the investigative phase into these radical-left NGOs has entered the action phase.

Hedge fund legend Kyle Bass noted, "SecScottBessent is doing God's work. Imagine if the IRS required a full donor list to be public to maintain the 501 (c) (3) ’s tax-exempt status."

Tyler Durden Fri, 05/29/2026 - 16:40

One In Three American Men No Longer Working

Via American Greatness,

The number of American men participating in the workforce has fallen to one of its lowest levels in nearly two decades, according to new federal labor statistics.

Just 66 percent of men age 20 and older were employed or actively seeking work as of April, according to data released earlier this month by the US Bureau of Labor Statistics. That figure has dropped sharply from 73 percent in 2006 and now sits near levels last seen during the fallout from the 2008 financial crisis.

The numbers mean roughly one in three American men are no longer in the workforce.

The only modern period with lower participation rates came during the economic devastation caused by the 2020 pandemic, when male workforce participation collapsed to 59 percent.

While employment rates gradually recovered during the years following the Great Recession, those gains were wiped out during the pandemic downturn. Participation rebounded somewhat within two years before beginning another steady decline that has continued into 2026.

The downward trend appears ongoing. Male workforce participation fell another full percentage point in April compared with the same period in 2025, according to Labor Department data.

Several economic shifts are contributing to the decline.

Industries that have traditionally employed large numbers of men including transportation, manufacturing and other labor-intensive sectors, have shed jobs over the past year, according to the Washington Post.

At the same time, growing numbers of retirees and male students have reduced the share of men participating in the labor market.

The labor picture for women has followed a different trajectory.

Female workforce participation also declined during the past two decades, though the swings have been less dramatic. Women saw only a 2-point decline during the 2008 recession, compared with a 5-point drop for men.

Women’s labor force participation has also remained more stable since the pandemic recovery, never falling below 56 percent since 2022.

The economy increasingly appears to favor sectors dominated by female workers. Healthcare and education jobs have grown over the past year, helping women capture nearly all recent job gains.

Of the 369,000 jobs added to the US economy since 2025, 96 perent went to women while just 4 percent went to men, according to the Washington Post.

Despite the shrinking share of men participating in the labor force, male unemployment has remained relatively low, hovering between 3 percent and 4 percent since 2021.

Tyler Durden Fri, 05/29/2026 - 16:20

Trump Refiles Lawsuit Over Wall Street Journal Article Linking Him To Epstein Letter

Authored by Jackson Richman via The Epoch Times,

President Donald Trump has refiled his $10 billion defamation lawsuit against Dow Jones & Company, publisher of The Wall Street Journal, over an article that alleged he signed a birthday letter sent to convicted sex offender Jeffrey Epstein.

Trump’s legal team submitted the revised complaint exactly on the May 27 deadline set by U.S. District Judge Darrin Gayles. In April, Gayles dismissed the original lawsuit, ruling that Trump had failed to show that The Wall Street Journal acted with “actual malice,” the legal standard required in defamation cases involving public figures.

The updated complaint, which is seven pages longer than the original filing, again argues that Trump suffered significant financial and reputational damage from what his attorneys describe as a “false, defamatory, and malicious” article.

Trump has repeatedly denied authoring the 2003 letter.

In the new filing, Trump’s attorneys argue that only two surviving individuals could confirm whether the letter existed. According to the complaint, Trump “vehemently denied” writing it, while Epstein associate Ghislaine Maxwell allegedly told federal officials she had no knowledge of the document.

The complaint further accuses reporters Khadeeja Safdar and Joe Palazzolo, along with Dow Jones and News Corp., of either knowingly publishing false information or intentionally avoiding evidence that contradicted the story.

The original Wall Street Journal report said that Trump denied both writing the letter and drawing the image.

However, Trump’s legal team states “the Defendants falsely, maliciously, and defamatorily state as fact that regardless of how the alleged letter was prepared, it nonetheless contains President Trump’s authentic signature.”

Responding to requests for comment, publisher Dow Jones declined to discuss the refiled lawsuit but reiterated a previous statement issued in July 2025.

“We have full confidence in the rigor and accuracy of our reporting, and will vigorously defend against any lawsuit,” a company spokesperson said.

In dismissing the original case, Gayles explained that proving actual malice requires evidence that a publisher knowingly reported false information or acted with reckless disregard for the truth. He wrote that Trump’s earlier complaint “comes nowhere close to this standard.”

Gayles also noted that The Wall Street Journal sought comment from Trump, the Justice Department, and the FBI before publication. Trump denied writing the letter, the Justice Department did not respond, and the FBI declined to comment.

The judge further stated that claims the newspaper ignored contradictory evidence were weakened by the article itself, which included Trump’s denial. Allegations of ill intent alone, he wrote, were insufficient to establish actual malice without supporting factual evidence.

Attorneys representing the newspaper have argued that the article’s claims are true and therefore not defamatory. However, Gayles declined to decide those factual disputes at this stage of the proceedings. He said questions regarding whether Trump authored the letter or maintained a personal relationship with Epstein remain unresolved.

To proceed with the lawsuit, Gayles wrote, Trump must provide clear evidence that The Wall Street Journal knowingly published false information or acted with reckless disregard for the truth.

The judge characterized the original complaint as relying on “formulaic” accusations that failed to meet the high legal threshold required for public figures pursuing defamation claims.

Following the dismissal, Trump addressed the case on Truth Social, saying his legal team would submit a revised complaint before the court’s deadline.

“It is not a termination, it is a suggested re-filing,” Trump wrote.

Trump originally filed the lawsuit in July 2025 after The Wall Street Journal published an article about the sexually suggestive letter allegedly bearing his signature in a birthday album created for Epstein’s 50th birthday in 2003.

Tyler Durden Fri, 05/29/2026 - 15:40

"Closing The Nuclear Fuel Cycle" - Newcleo's $780M War Chest And Oklo Partnership Fuel $2.4B SPAC Debut

It's open season in the nuclear industry for going public, and this week's episode features newcleo, a European lead-cooled reactor developer. 

The Paris-based developer of lead-cooled fast reactors (LFRs) and closed-cycle MOX fuel announced it will merge with NewHold Investment Corp III (ticker NHIC) in a deal valuing the company at roughly $2.4 billion. 

A $220 million oversubscribed PIPE at $10 per share plus up to $209 million from the SPAC trust should deliver as much as $429 million in gross proceeds before redemptions and fees. The combined entity expects to list on Nasdaq under ticker NWCL in the second half of 2026.

Hopefully their transition to public markets doesn't follow the same path as microreactor developer Hadron Energy…

Founded by Stefano Buono (the man who took Advanced Accelerator Applications public on Nasdaq in 2015 and sold it to Novartis for $3.9 billion in 2018), Newcleo has already raised approximately $780 million privately across Europe. It generated roughly $80 million in revenue last year from its vertically integrated supply-chain subsidiaries while building a 900-plus employee team across seven countries and 16 offices. 

The technology: Newcleo’s 200 MW (electric) reactor uses liquid lead coolant. The company highlights that lead is cheap, high-boiling, and chemically inert with water and air. The lead is paired with proprietary MOX fuel (a mixture of uranium and plutonium) fabricated from reprocessed nuclear waste.

Their target for commercial fuel manufacturing is 2031, and they hold a pipeline of 9.2 GW of advanced commercial opportunities, including a state-backed Slovak project for up to four 200 MWe units.

As we recently covered, Oklo was selected by the Department of Energy for advanced negotiations under the Surplus Plutonium Utilization Program; one of five firms tapped to convert up to 20 metric tons of Cold War-era weapons plutonium into usable reactor fuel. Newcleo is Oklo’s fuel-cycle partner on the deal, supplying European MOX expertise and potential project capital.

The two companies already signed a strategic partnership last October that contemplates up to $2 billion in Newcleo-affiliated investment into U.S. advanced fuel fabrication infrastructure, alongside Sweden’s Blykalla.
 

Tyler Durden Fri, 05/29/2026 - 15:25

Bitcoin ETFs Bleed $2.8B In Record 9-Day Outflow Streak

Authored by Helen Partz via CoinTelegraph.com,

US-listed spot Bitcoin exchange-traded funds (ETFs) posted their longest outflow streak since launch, extending withdrawals as institutional demand for Bitcoin exposure weakened.

Spot Bitcoin ETFs recorded another $223 million in net outflows on Thursday, marking the record nine-day outflow streak since the funds launched in 2024, according to data from Farside Investors.

The latest streak surpassed the previous record eight-session outflow run recorded in February 2025, though its roughly $2.84 billion in cumulative withdrawals remains below the $3.2 billion lost during the earlier selloff.

US spot Bitcoin ETF outflows in May 2026 versus February 2025. Source: SoSoValue

Visualizing further shows BTC ETFs have seen outflows for 13 of the last 15 days...

The outflows suggest institutional demand for Bitcoin exposure is weakening through the ETF channel, and come as major corporate holders such as Strategy face renewed pressure even as some new altcoin products like Hyperliquid (HYPE) ETFs continue attracting investor interest.

BlackRock’s IBIT leads the outflows at $2 billion

Signs of institutional selling have also emerged beneath the surface.

BlackRock’s iShares Bitcoin Trust (IBIT), the largest US spot Bitcoin ETF by assets, accounted for a massive share of losses during the nine-session outflow streak, recording its largest single-day outflow since launch earlier this week, driven largely by a sizeable dark pool transaction.

The fund recorded roughly $2.04 billion in cumulative outflows between May 15 and Thursday. As Cointelegraph reported, a $527.8 million withdrawal on May 27 marked IBIT’s second-largest daily outflow on record, narrowly below the $528.3 million record posted on Jan. 30, 2025.

BTC holdings for all US spot Bitcoin ETFs as of market close on Wednesday. Source: Wallet Pilot

While the precise motivation behind the trade is unknown, CoinDesk notes that the scale of the redemption suggests some investors may be reallocating capital away from bitcoin exposure and toward sectors that have recently generated stronger returns.

Despite the selling pressure, BlackRock’s Bitcoin ETF remains the dominant US spot Bitcoin fund by assets under management. IBIT held roughly 792,000 BTC as of market close on Wednesday, representing about 62% of all US spot Bitcoin ETF holdings, according to Wallet Pilot data.

US spot Ether ETFs have also faced persistent selling pressure, logging 13 consecutive days of outflows between May 11 and Thursday, with cumulative losses of roughly $694 million.

HYPE ETFs buck the broader slowdown

While spot Bitcoin ETFs face sustained selling pressure, newly launched HYPE ETFs have continued attracting fresh capital from investors.

The products recorded steady inflows between May 12 and Thursday, with cumulative net inflows rising above $100 million, according to SoSoValue.

Daily flows in US-listed spot HYPE ETFs. Source: SoSoValue

Other altcoin funds such as spot XRP ETFs also recorded steady gains over the period, totaling roughly $120 million in net additions between May 4 and Thursday.

The divergence underscores a shift in crypto fund flows, with investors pulling back from Bitcoin and Ether ETFs while newer products tied to tokens such as Hyperliquid’s HYPE continue to attract inflows.

Tyler Durden Fri, 05/29/2026 - 15:00

The Two Ugly Paths Now Facing The US Economy

Submitted by QTR's Fringe Finance

I was watching Andrew Ross Sorkin on 60 Minutes last Sunday. Sorkin was on the show to promote his new book, 1929: Inside the Greatest Crash in Wall Street History — and How It Shattered a Nation.

When Leslie Stahl asked him during his interview whether we would have another crash, Sorkin answered: “The answer is, we will have a crash. I just can’t tell you when, and I can’t tell you how deep. But I can assure you, unfortunately, I wish I wasn’t saying this, we will have the crash.”

At one point he says “We are either living through some kind of remarkable boom, [or we’re reliving] 1929.”

I thought to myself: hell, I can do better than that, and I didn’t even write a book about 1929. Because at this point, the real question is not whether we are headed toward some sort of financial reckoning…the question is what form that reckoning takes.

And after looking at the current economic landscape, I increasingly believe there are only two realistic outcomes over the next several years: a soft default through inflation or a hard default through financial crisis. The former seems more likely than the latter, and can be confusing to people because nominal prices staying steady or rising while inflation runs out of control won’t look like a “crash” that most of 60 Minutes’ viewers will expect. It’ll be a crash upward.

To understand why, let’s start with where we are right now and summarize a lot of what I’ve written about over the past month or two. There’s four key things I’m watching:

1. inflation

2. market valuation

3. the consumer

4. the bond market

These four things have worked together to produce a combination that I believe is close to locking up the economy and taking away any response options from the Central Bank that won’t have immediate and ugly consequences.

Inflation remains structurally above the Federal Reserve’s target despite one of the most aggressive rate-hiking cycles in modern history. Even now, inflation is still running around 3.8%, nearly double the Fed’s stated objective. This is no longer a temporary post-pandemic distortion that policymakers can dismiss away with optimistic forecasts and revised models.

Inflation has become embedded across the economy, from housing and insurance to healthcare, wages, food, and government spending itself. The cost structure of modern American life has permanently shifted upward, while policymakers continue pretending that a return to stable 2% inflation is just around the corner. It’s not.

At the same time, financial markets continue to trade at historically stretched valuations. The Shiller P/E ratio sits around 42x versus its mean of 17.3x and market capitalization relative to GDP has surged above 230%, levels associated not with healthy long-term expansion but with periods of deep speculation and excess.

A better way to look at this instead of valuations are high is that the market is extraordinarily vulnerable to falling further in percentage terms. When valuations become detached from underlying economic reality, the downside risk grows larger because there is simply farther to fall once confidence breaks. Expensive markets do not automatically cause crashes, but they create the conditions where even modest disappointments can trigger violent repricing. Especially if the market’s rally has been on poor breadth and the result of speculation on options and the passive bid.

Beneath the surface, delinquency data shows that the consumer is tapped out. Student loan delinquencies have surged back toward record levels as repayments resume into an economy where borrowing costs and living expenses have both exploded higher.

Credit card delinquencies are now sitting at their highest levels since the aftermath of the financial crisis, while auto loan defaults, especially among subprime borrowers, have reached multi-decade highs. Americans are financing $50,000 vehicles with monthly payments exceeding $750 at interest rates that would have seemed absurd just a few years ago.

Consumers have largely maintained spending not because household finances are healthy, but because they have increasingly relied on debt to sustain a standard of living that inflation has steadily eroded.

And the rate at which consumers are saving is dwindling significantly now.

But the most important warning signal in the economy is not the stock market or the consumer. It is the bond market.

Under normal economic conditions, weakening growth and financial stress would push long-term Treasury yields lower as investors seek safety and begin pricing in future Federal Reserve easing. Instead, the opposite is happening. The 10-year Treasury yield remains around 4.5%, while the 30-year Treasury has pushed above 5%. Those are not comforting numbers. They reflect a growing discomfort with the long-term fiscal trajectory of the United States itself.

This is the trap the United States now finds itself in.

And because of these four factors, I believe there are only two paths we can go down. The more likely path I think puts gold eventually on a (rocky and volatile) tracjectory to eventually get to $10,000.

The first, and in my view the more likely outcome, is the soft default. This is the inflationary path where policymakers ultimately choose to save the Treasury market through monetary intervention. They will not describe it as money printing, of course. They will use softer language such as liquidity support, balance sheet management, market stabilization, or yield curve control. But the mechanism is ultimately the same. The Federal Reserve creates money in order to purchase government debt and suppress long-term yields before the Treasury market becomes unstable.

This approach would almost certainly succeed in stabilizing borrowing costs in the short term. But it would come at the expense of the currency itself. That is why I increasingly believe the next major crash could actually be an upward crash. Stocks may continue rising in nominal terms. Gold could surge. Real estate and hard assets may inflate even further. On paper, asset values appear strong and financial markets may even seem resilient. But underneath the surface, the purchasing power of the dollar continues eroding year after year.

That is what a soft default looks like. The government technically honors its obligations, but repays those obligations in increasingly devalued dollars. Savers lose purchasing power. Wage earners fall behind inflation. The middle class gets squeezed as the cost of living rises faster than incomes. Yet politically, inflation remains preferable because it spreads the pain gradually across society instead of concentrating it into one catastrophic event. I’ve even speculated that the Fed could wind up inventing new inflation numbers out of thin air for PR purposes if this happens: The Fed Will Invent New Inflation Numbers Out Of Thin Air

The second possibility is the hard default. This is the more chaotic and openly destructive scenario where policymakers lose control before they can inflate their way out of the problem. A hard default would not necessarily require the United States to formally announce that it is refusing to pay its debts. It could emerge through failed Treasury auctions, a debt ceiling accident, a severe liquidity freeze in the bond market, delayed government obligations, or a broader sovereign confidence crisis that causes investors to rapidly reassess the safety of U.S. debt.

In that environment, Treasury yields could spike violently higher while banks and financial institutions holding large amounts of long-duration government debt come under enormous pressure. Credit markets could freeze. Equity markets would likely experience a rapid downward repricing before policymakers responded with emergency interventions. Government spending cuts and forced austerity measures could suddenly become unavoidable not because Washington chose discipline voluntarily, but because markets imposed discipline externally.

🔥 90% Off If You Subscribe Today. This coupon allows for 90% off of annual subscriptions and results in a 90%+ savings over paying the monthly rate for a subscription to the blog. You keep the discounted rate for as long as you wish to remain a subscriber. I will not be offering 90% off anytime again soon after the long weekend: Get 90% off forever

This is the scenario policymakers fear most because once sovereign confidence begins breaking apart, events move very quickly. Financial history repeatedly shows that debt crises tend to unfold slowly for years and then suddenly all at once. I see this as the less likely scenario, but between the two paths, I’d venture to guess we have 99% of what could possibly take place nailed down and out in the open.

I believe the soft default remains far more likely than the hard default for one simple reason: policymakers will do almost anything to avoid immediate collapse. They will print before they default. They will monetize debt before they accept a disorderly Treasury market. They will sacrifice the purchasing power of the currency before they willingly allow the government’s financing structure to implode.

Sorkin says he knows a crash is coming but does not know what form it will take. I think we can narrow it down much further than that. The next crisis will probably not look like 1929, and it may not even resemble 2008. The more likely scenario is an inflationary sovereign debt crisis disguised for a period of time as economic resilience. It will look like rising nominal asset prices, stubborn inflation, endless liquidity support, and growing pressure on the dollar itself as policymakers attempt to suppress yields and keep the Treasury market functioning.

Because ultimately, once long-term interest rates become politically intolerable, the Federal Reserve will face an impossible choice. It can defend the dollar by allowing yields to rise and risk detonating the debt structure, or it can defend the Treasury market through intervention and risk significantly higher inflation. Under a new Fed chair like Kevin Warsh, the options are still fundamentally the same. Policymakers can change the language, revise inflation metrics, redefine targets, and introduce new programs, but they cannot escape the underlying arithmetic.

History strongly suggests they will choose inflation. Not because it solves the problem, but because it delays the reckoning.

And that is ultimately where I disagree with Sorkin. I do not think the future crash is unknowable. I think the pressure points are already obvious. To me, the only real question is whether the United States defaults honestly through crisis or dishonestly through inflation. I’d bet on the latter, and as an investor it would make me keen to watch gold if it gets smacked lower an an initial shock to markets before the Fed intervenes. Because I could easily see a situation where gold keeps retreating, perhaps to $4,000 or lower, sharply moving lower during the initial shock, maybe to $3500 or lower, before doubling or tripling in the years after a Fed response that I believe could be very inflationary and push gold closer to $10,000 over time.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions.

As of May 20, 2026 I no longer actively trade (read my story here) and my accounts are managed by recurring contributions to trusted third parties and advisors and/or recurring contributions mostly to sector ETFs. Such advisors, through individual equities, options, index funds, mutual funds, ETFs, or other securities, may have positions in names that I know nothing about. Basically, I could own or not own anything at any point, and not have any idea about it.

And all positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Tyler Durden Fri, 05/29/2026 - 14:20

Was Amazon's Tokenmaxxing Fiasco Behind Claude's $500M Mystery Bill?

Axios reported this week that an unnamed Anthropic enterprise client managed to run up roughly $500 million in Claude charges in a single month after failing to put usage limits on employee licenses.

The company was not named, but we suspect Blue Origin might not be the only thing that blew up for Jeff Bezos this month.

Just as the Axios report landed with the $500M tidbit, Amazon was shutting down an internal AI-usage leaderboard after employees reportedly began “tokenmaxxing” - routing unnecessary work through AI tools to inflate their usage scores. The result was a perfect case study in what happens when corporate America turns AI adoption into a metric, then acts surprised when employees optimize for the metric instead of the work.

Whether or not Amazon was the mystery Claude whale, its internal AI experiment shows exactly how a runaway enterprise AI bill can happen.

The $500M Claude Mystery

The Axios item was brief, but extraordinary:;

An AI consultant tells Axios one of their clients recently spent half a billion dollars in a single month after failing to put usage limits on Claude licenses for employees. 

So, oops to every CFO who recently approved "AI adoption" as a corporate priority.

In the old software world, when true nerds roamed the land, a bad rollout usually meant paying for licenses employees barely touched. The waste was real, but at least it was mostly static. In the new agentic AI world, a bad rollout - or simply adopting AI for everything - can quickly become devastating: thousands of employees - or autonomous agents operating on their behalf - prompting, testing, summarizing, refactoring, retrying, and spinning up new tasks on usage-based pricing.

That is the heart of the current enterprise AI hangover. Companies spent the past year foisting AI on employees, often without a clean way to separate productivity from dashboard-friendly activity. And now the hangover is here. 

Microsoft has reportedly started canceling most Claude Code licenses and steering developers toward GitHub Copilot CLI. Uber reportedly burned through its entire 2026 AI coding-tools budget by April, with COO Andrew Macdonald saying it was “very hard to draw a line” between rising Claude Code usage and useful consumer-facing output. Meta killed an employee-created “Claudeonomics” dashboard after workers competed to rank among the company’s top AI token users.

Amazon’s Tokenmaxxing Fiasco

Amazon’s version of the problem was almost too on-the-nose.

Earlier this month, Financial Times reported that Amazon employees were using MeshClaw, an internal OpenClaw-style AI agent tool, to inflate AI usage metrics. MeshClaw let employees vibecode themselves agents that could interact with workplace systems, including code deployments, email triage, and Slack-style communications.

The company had also been pushing aggressive AI adoption internally. According to the FT, more than 80% of Amazon developers were expected to use AI tools weekly, and internal leaderboards tracked AI usage. Employees reportedly responded by routing non-essential tasks through AI agents in order to boost their token counts.

They even had an internal leaderboard - KiroRank - that issued nerd points (or whatever) to employees who tokenmaxxed. Apparently it didn't take long for them to realize this was a huge mistake - nuking KiroRank after it encouraged some workers to perform tasks that did not necessarily solve customer or business problems, but did help them climb the rankings. Amazon senior vice president Dave Treadwell reportedly told staff: “Please don’t use AI just for the sake of using AI.”

Amazon later emphasized that KiroRank was an informal employee-created tracker, not a formal performance system, and said it was never intended to promote AI usage for usage’s sake. The company also said it still tracks AI token usage to measure costs, but does not encourage tokenmaxxing.

Why Amazon Tops The $500M Suspect List

Start with the obvious: Amazon has one of the deepest strategic relationships with Anthropic of any company on earth.

Amazon announced in April that it would invest another $5 billion in Anthropic, with the possibility of up to $20 billion more tied to commercial milestones, on top of the $8 billion it had already invested. The same announcement said Anthropic had committed to spend more than $100 billion over ten years on AWS technologies.

That makes Amazon more than an ordinary Claude customer. It is an investor, infrastructure provider, distribution partner, and cloud beneficiary of Anthropic’s growth. 

Then there's the scale. Reuters reported in February that Amazon projected roughly $200 billion in capital expenditures for 2026, up sharply from 2025, as Big Tech raced to build out AI infrastructure. That level of spending needs demand signals. Internal AI usage is one of those signals.

Then there is the timing. Amazon’s MeshClaw usage controversy surfaced in May. KiroRank was deprecated in late May. Axios’ unnamed $500 million Claude bill appeared at the same moment the industry was waking up to the cost of tokenmaxxing.

2 weeks to kill the ROI Golden Goose pic.twitter.com/7wuDMpBNvb

— zerohedge (@zerohedge) May 29, 2026

So, yeah... 

Circle Jerk Intensifies?

The broader issue is not whether Amazon specifically spent $500 million on Claude in one month. The broader issue is that the AI boom is increasingly built on circular flows of money, usage, and valuation.

Hyperscalers invest billions in model companies. Model companies commit to spend billions back on hyperscaler cloud infrastructure. Enterprises push employees to use the tools. Token consumption rises. Rising usage supports higher revenue projections. Higher revenue projections support higher valuations. Higher valuations justify more infrastructure spending.

On paper, it looks like demand. In practice, some of that demand may be employees and agents burning tokens because management told them usage equals progress.

Reuters recently warned that Anthropic’s explosive growth tells only half the story, noting early signs of corporate AI fatigue even as revenue projections and valuation math move higher. The warning is simple: AI demand may be real, but not all usage is economically productive.

Which is a pretty big narrative killer...  If a developer uses Claude Code to ship a meaningful feature faster, that is adoption. If an employee routes fake busywork through an autonomous agent to climb a leaderboard, that is not adoption. It is metered theater.

The problem is that both show up as tokens.

There's an old idea in economics called Goodhart’s Law: when a measurement becomes the target, it stops being a useful measurement.

In plain English, if you tell employees they will be judged by a number, they will make the number go up - whether or not the underlying business gets any better.

That's exactly the danger with enterprise AI adoption. Token usage can be a useful internal signal. It can show whether employees are experimenting with tools, whether teams are adopting new workflows, and where demand is rising. But once token usage becomes a scoreboard, it no longer measures productivity. It measures willingness to burn tokens.

Tyler Durden Fri, 05/29/2026 - 14:05

Clorox CEO Steps Down For "Health Reasons" After Six-Year Stock Rout

Clorox shares tumbled on Friday after Chair and CEO Linda Rendle said she will step down for "health reasons," prompting the board to begin a search for her replacement.

"Rendle will also serve in an advisory role for a period following the appointment to drive business performance and a smooth leadership transition," Clorox wrote in a press release.

Rendle wrote in a statement, "Serving as CEO of Clorox for the past six years—and being part of this special company for more than two decades—has truly been the privilege of my career."

Under Rendle's six-year tenure, Clorox shares have fallen from grace, down a staggering 57%.

Here's what Wall Street analysts are saying, courtesy of Bloomberg:

TD Cowen (hold, PT $90)

• Analyst Robert Moskow says the announcement reinforces concerns about execution missteps amid CLX's plans to modernize its enterprise resource planning software and launch new products, particularly restaging cat litter."

• "We expect the company to guide below consensus for FY27."

BNP Paribas (neutral, PT $97)

• Analyst Kevin Grundy says CLX's next CEO will inherit a host of challenges, including worsening business performance, volatility in delivery, and subdued category growth.

• "Former and now retired CEO of CHD, Matt Farrell, is very unlikely, but would be a home run for CLX's shareholders"

So, did Rendle actually step down for "health reasons," or was it because investors had lost confidence in the turnaround timeline?

Tyler Durden Fri, 05/29/2026 - 13:20

Dollar Dominance Remains Alive And Well

Authored by Lance Roberts via RealInvestmentAdvice.com,

The dollar is supposed to be dying. We’ve heard that argument for the better part of a decade, and it’s getting louder, not quieter. The narrative goes that BRICS countries are building an alternative, that China is dumping Treasuries, that gold is replacing the dollar as the world’s reserve asset, and that Washington is so desperate to find buyers for the next debt issuance that it’s now offering dollar swap lines to Gulf states as a backdoor liquidity rescue. Make no mistake, the “Persistent Purveyors of Doom” have a story. However, the data doesn’t support any of it.

Dollar dominance isn’t fading. In fact, the events of late April 2026 just delivered the loudest counter-signal in years.

Thesis Vs. Reality

I’ve been arguing for years that the “dollar collapse” thesis confuses inflation with debasement. You can’t be debasing a currency that the rest of the world is fighting harder than ever to acquire. We covered the rebasement argument in our previous piece on the dollar’s plumbing, and in “The Dollar’s Death is Greatly Exaggerated.” The latest data only sharpens the case for dollar dominance.

According to the U.S. Treasury’s most recent Treasury International Capital report, released April 15 with February 2026 data, foreign residents purchased $101 billion of long-term U.S. securities in February alone. Net TIC inflows totaled $184.5 billion for the month. On top of that, foreign holders added $91.6 billion to their Treasury bill holdings. Total foreign ownership of U.S. Treasuries hit a record $9.49 trillion in February, up $198 billion in the month and $587 billion over the trailing 12 months. However, that headline number actually undercounts the reality. It excludes foreign holdings managed through U.S.-domiciled hedge funds and the Cayman Islands basis trade, which the Federal Reserve estimates pulls another $1.5 trillion of de facto foreign demand into the bid stack. Adjusted for that, true foreign-linked exposure runs closer to $11 trillion.

Beyond stock-of-debt figures, the flow data tells the same story. Indirect bidder participation, the auction proxy for foreign demand, has run consistently above 70% of accepted bids on recent benchmark issues. Bid-to-cover ratios on 10-year and 30-year auctions have held above 2.5 across multiple cycles. If the world were truly walking away from the dollar, we’d see weak auctions, tailing yields, and a steepening term premium driven by rejected supply. Instead, we see the opposite. The U.S. just printed roughly two-and-a-half trillion in deficits over the past year, and global investors absorbed every basis point of it.

That doesn’t sound like a fire sale. On the contrary, that looks like the strongest sustained demand for U.S. sovereign debt in history.

Why Central Bank Gold Buying Reinforces Dollar Dominance

Here’s the part of the story the doomers consistently get wrong. The gold bugs have built an entire belief system on a category error. Of course, central banks have been buying gold in size. The World Gold Council’s Q1 2026 Gold Demand Trends report, published April 29, shows central banks bought 244 tonnes of gold net in Q1 2026 alone, up 3 percent year-over-year. That extends 17 consecutive months of net official-sector purchases, even with gold prices peaking above $5,400 an ounce in January.3 Total Q1 physical gold demand reached 474 tonnes, the second-highest quarter on record. Furthermore, the WGC forecasts roughly 850 tonnes of central bank purchases for full-year 2026, on par with 2025 and consistent with the multi-year pace. The trend is real and significant. However, it is not, in any practical sense, an escape from the dollar.

Gold is priced in dollars. The LBMA Gold Price, the global benchmark used to mark central bank holdings, settles in U.S. dollars per ounce. When the People’s Bank of China, the National Bank of Poland, or the Reserve Bank of India accumulates gold, the value of those reserves is reported, audited, and benchmarked in U.S. dollars. Of course, the unit of account doesn’t change just because the asset does. Furthermore, when those same central banks need to deploy gold for liquidity, the counterparty pricing reverts to dollars. That applies whether the deployment is through swaps, repo, or sale. The gold and dollar markets are not parallel systems. They’re the same system, with gold serving as a dollar-priced reserve asset.

That distinction matters because it reframes the entire de-dollarization narrative. A central bank that shifts 5% of reserves from Treasuries into gold has not abandoned the dollar. Instead, it has rebalanced inside the dollar-priced reserve system. The same is true for the Bank for International Settlements gold swaps, the Shanghai Gold Exchange yuan-quoted contract, and even the Russian central bank’s pre-sanction accumulation. Every one of those positions has a dollar-equivalent value because dollars are how the world prices reserve wealth. Even when gold is bought, sold, or pledged, the cross-rate to USD is the reference point. There’s no other deep, liquid pricing rail. In that sense, gold accumulation reinforces dollar dominance rather than threatens it.

The same World Gold Council survey that gets cited to “prove” a dollar decline shows that 73% of central bank respondents expect a moderately or significantly lower USD share of reserves over the next five years. The doomers stop reading at that headline. The reality is that the IMF’s most recent COFER release, covering Q4 2025, puts the dollar’s share of allocated reserves at 56.77%. That figure is essentially flat versus the prior quarter, with most of the variation explained by exchange-rate effects rather than active selling.

Total foreign exchange reserves stood at $13.14 trillion at year-end 2025. The dollar’s share of reserves has fluctuated between roughly 56% and 72% over the past three decades. At every level, however, it has been a multiple of every other reserve currency combined. The euro sits at 20.25%, and the yen and pound around 5% each, with the yuan, despite all the hype, still under 2%.

Bessent’s Dollar Swaps Extend Dominance

Indeed, Treasury Secretary Scott Bessent has spent the last several weeks discussing the possibility of extending dollar swap lines to allies in the Persian Gulf and Asia, with the United Arab Emirates as the lead candidate. Predictably, the doomers have framed this as a fire-sale-prevention move, claiming that Washington is offering swaps to keep Gulf sovereigns from dumping Treasuries amid the Iran conflict. However, that reading misses the strategy entirely.

Bessent said it himself in plain language. In his April 22 testimony to the Senate Appropriations Subcommittee, he stated that swap lines “are to maintain order in the dollar funding markets and to prevent the sale of U.S. assets in a disorderly way.” Two days later, in a coordinated X post, he went further: “Additional swap lines can benefit our nation by reinforcing dollar usage and liquidity internationally,” and “extending permanent swap lines can be a major first step in creating new U.S. dollar funding centers in the Gulf and Asia.” He closed with the line that defines the entire policy framework:

“Dollar dominance and reserve currency status are strengthened by constant long-term initiatives, including countering the growth of problematic, alternative payment systems.”

That’s not the language of a desperate Treasury Secretary trying to plug a leaky bid stack. On the contrary, that’s the language of a policymaker using monetary infrastructure to extend American financial reach. Swap lines are how Washington exports dollar liquidity. The 2008 crisis playbook used them defensively to backstop European and Japanese banks. Bessent is now reaching for the same tool offensively. He’s planting new dollar funding nodes in regions where alternative payment systems, including BRICS clearing rails and yuan-denominated commodity pricing, have been making noise.

Consider the geometry. Permanent swap line access turns a partner country’s central bank into a node of the dollar system. Once that line is in place, local banks have a guaranteed dollar liquidity backstop. As a result, there is no real incentive to develop a non-dollar alternative. The UAE flirted publicly with yuan-denominated oil pricing as recently as last year. A swap line eliminates that option in practice. It makes the dollar backstop too cheap and reliable to abandon. This is the same logic that has kept the existing G7 swap lines (Canada, ECB, Japan, UK, Switzerland) firmly inside the dollar orbit since the financial crisis.

Furthermore, this isn’t theoretical. Bessent has already run this playbook in practice. In September 2025, the Treasury used the Exchange Stabilization Fund to extend a $20 billion swap line to Argentina ahead of Milei’s pivotal October election. The strategic logic was identical. Reinforce dollar liquidity in a partner economy. Prevent disorderly Treasury liquidations during a political stress event. Lock the country into the dollar system at the moment of maximum strategic value. Bessent has publicly stated that the Argentina facility was fully repaid within months, validating the operational template. The UAE proposal extends the same framework to the Gulf, and the broader Asian conversation that Bessent referenced suggests the network is about to expand significantly.

Swap lines are the carrot. Sanctions are the stick. Bessent has been just as direct about the second tool as about the first, and the timing of the messaging is no accident.

Furthermore, in late April, the Treasury unveiled what it’s calling “Economic Fury,” a coordinated campaign to “systematically degrade Tehran’s ability to generate, move, and repatriate funds.” The mechanics are revealing. The U.S. Navy is enforcing a blockade of Iranian ports. Kharg Island oil storage is filling up because Iranian crude has nowhere to go. Tankers facilitating covert trade face direct sanctions exposure. Critically for this discussion, OFAC has already frozen $344 million in cryptocurrency wallets tied to the regime.

That last data point matters more than the doomers will admit. It directly validates the argument we made in our previous piece on digital dollar infrastructure. Stablecoin and crypto rails are not an escape from the dollar system. Instead, they’re an extension of it, with new enforcement capabilities attached. When Treasury can freeze nine-figure crypto positions through compliance pressure on issuers and exchanges, the supposed “uncensorable” alternative to dollar custody turns out to be more censorable, not less.

The reality is that dollar dominance is reinforced by both tools simultaneously. On the carrot side, you have liquidity provision, swap lines, digital dollar adoption, and the deep Treasury bid. On the stick side, you have sanctions reach, OFAC freezes, blacklisting, and naval enforcement of commodity flows. Of course, both capabilities are expanding, not contracting. Foreign reserve managers know this. Furthermore, they are also calculating that being inside the dollar orbit, even with custodial diversification, is far safer than being targeted by it.

The UAE OPEC Exit Validates the Strategy

Then came April 28. The UAE announced it was leaving both OPEC and OPEC+, dealing a heavy blow to the cartel and to its de facto leader, Saudi Arabia. The timing was not coincidental. Just six days earlier, Bessent had publicly endorsed an emergency dollar swap line for Abu Dhabi before the Senate. The UAE central bank governor, Khaled Mohamed Balama, had traveled to Washington during the IMF and World Bank spring meetings to meet with Bessent and Federal Reserve representatives.

Read the sequence carefully. First, Iran’s missile strikes hit Gulf infrastructure, and then the Strait of Hormuz closes. UAE faces a real liquidity stress event. Washington offers an emergency dollar backstop, security guarantees, and the deployment of Israel’s Iron Dome on UAE soil. Days later, the UAE walks out of the petroleum cartel that the doomers have spent years claiming was about to abandon the dollar in favor of a “petroyuan” alternative. Instead, the UAE just publicly chose the dollar bloc over its OPEC peers. The swap line offer didn’t avert a crisis through emergency liquidity. It reorganized a major Gulf state into the U.S. financial orbit at the moment of maximum strategic opportunity.

That is dollar dominance functioning exactly as Bessent described it in his testimony. Carrot first. Then, the strategic realignment is second. The petroyuan narrative just lost its most credible Gulf candidate.

Pushback: But What About De-Dollarization?

The strongest version of the de-dollarization argument runs as follows. After the 2022 sanctions on Russia froze roughly $300 billion in central bank reserves, every other sanction-vulnerable country had to reassess custodial risk. China shifted holdings from direct U.S. custody to Belgium and Luxembourg. BRICS expanded membership. The Saudi-Iran rapprochement, brokered partly by Beijing, signaled a regional pivot. In addition, Russia and China increased bilateral trade settled in yuan and rubles. All of this is true.

However, none of it actually undermines dollar dominance at the system level. Sanction-driven custodial diversification moves Treasuries from the New York Fed to Euroclear. Yet it doesn’t move them out of the Treasury market. China’s reported direct holdings have declined, but its total exposure, including third-country custody, has remained roughly flat. Furthermore, BRICS settlement still reverts to dollars at the cross-border invoicing layer. No participant wants to hold rubles, rupees, or yuan as a long-term store of value. Bilateral yuan settlement, despite the headlines, remains a sliver of total trade flows.

The reality is the doomers are confusing diversification with abandonment. Foreign reserve managers are doing two things at once. First, they’re spreading custodial risk across more jurisdictions. Second, they’re adding gold as a politically neutral hedge. Both moves leave the dollar as the dominant unit of account, the dominant settlement asset, and the dominant store of value. As shown above, the share has barely moved.

Beyond the traditional reserve channel, digital dollar infrastructure is rapidly expanding the dollar’s reach into emerging markets. Demand for dollar-denominated digital tokens has hit all-time highs in Latin America, Africa, and Southeast Asia. Tether’s Q1 2026 attestation, published May 1, confirmed direct and indirect U.S. Treasury exposure of approximately $141 billion as of March 31, against $191.8 billion in total assets and $183.5 billion in liabilities. The reserve buffer reached a record $8.23 billion, and Q1 net profit hit $1.04 billion. That makes Tether the 17th largest holder of U.S. Treasuries globally.

Furthermore, USDT circulation grew by more than $5 billion during April alone, pushing total supply above $188 billion. In Latin America, dollar-pegged digital tokens accounted for 40% of crypto purchases in 2025, surpassing Bitcoin’s share. The Bitso report on 10 million Latin American users described the trend bluntly as “digital dollarization.” That kind of grassroots demand is dollar dominance in action at the consumer layer.

The GENIUS Act, signed into law last July, created the first federal framework requiring permitted issuers to back tokens with high-quality liquid assets, primarily short-term Treasuries. The April 2026 FinCEN/OFAC proposed rule extends sanctions enforcement directly into the issuer layer. As a result, Washington can freeze, block, or seize dollar-denominated digital tokens through the issuer’s compliance program. That isn’t a workaround away from the dollar system; it’s an extension of it, with new enforcement rails attached.

What This Means for Investors

The investment implications cut several ways. First, foreign demand for U.S. Treasuries is structurally strong, which keeps a bid under the long end of the curve even as deficits widen. Indeed, that’s bullish for duration. Second, central bank gold buying creates a price floor under bullion that didn’t exist in prior cycles. Investors should hold some allocation to gold. However, they should hold it for the right reason. It’s a dollar-priced inflation hedge and a political risk diversifier, not a fiat escape hatch. Finally, the digital dollar buildout is creating a new investable vertical. Custody, payments infrastructure, and compliant on-ramp providers (CRCL, COIN, V, MA, JPM, BK) sit at the intersection of fiat and digital dollar plumbing.

The contrarian read is this. If you bought into the dollar collapse narrative over the last five years, you missed gains in U.S. equities. You missed the Treasury bid that compressed yields during recent risk-off episodes. You probably overweighted gold and Bitcoin at peaks. The bottom line is that the trade that has worked across cycles is owning U.S. assets denominated in U.S. dollars. Diversifying across the dollar-priced reserve system has worked. Diversifying against it has not.

What does this mean for portfolio positioning right now? It means duration risk is rewarded by structural foreign demand. Equity risk is supported by the dollar-priced earnings of multinational franchises. Gold belongs in the portfolio at a strategic weight, not a doomsday weight. Furthermore, investors should pay close attention to which firms are positioning for the digital dollar buildout. That’s where the next leg of dollar dominance is happening.

The doomers will keep selling fear. That’s the business model. Make no mistake, real risks exist. Fiscal trajectory, debt servicing costs, sanctions blowback, and CBDC competition are all worth tracking carefully. However, none of those risks add up to the collapse narrative being pitched on social media every other day. The reality on the tape is that foreign Treasury demand is at an all-time high. Central bank gold buying continues to reinforce dollar pricing. Swap lines are being deployed offensively to extend dollar reach. Digital dollar infrastructure is colonizing real-time commerce in emerging markets.

If the dollar were truly dying, none of this would be happening. The fact that all of it is happening simultaneously tells you everything you need to know about where the smart money is positioning. The dollar isn’t dying. It’s evolving. And dollar dominance is going to be the central pricing rail of the global financial system for a long time yet.

Tyler Durden Fri, 05/29/2026 - 13:00