Submitted by Thomas Kolbe
Friedrich Merz does not make it easy to interpret current economic data correctly. The debt king from Brilon is not only distorting the statistics with his “special (debt) assets”: More than 320 billion euros in direct and indirect state subsidies are flowing, according to Freiburg economist Lars Feld, through subsidy channels that are penetrating ever deeper into the German economy. Artificial economies are emerging there, economic homunculi that will remain permanently dependent on the taxpayer.
What Is Still Growth, and What Is Debt-Financed Illusion?
In July, the Federal Statistical Office reported a strong increase in orders for German industry: Real order backlogs rose by 2.5 percent compared with the previous month, and by as much as 10.9 percent year-on-year – a figure of Olympic proportions.
Behind the statistical facade, however, it quickly becomes clear where the wind is actually coming from: Above all, the Other Transport Equipment sector increased its order backlog by 3.9 percent compared with the previous month – the billions in debt for the defense industry are creating a positive mood at Rheinmetall, Hensoldt and Co.
What a contrast to the real economy! The automotive industry, still the backbone of the German economy, can no longer escape its downward spiral: In July, carmakers once again recorded a decline in their order volume, this time by 1.7 percent compared with the previous month.
Adjusted for debt-financed defense orders, it becomes clear that the trend is still heading south. The fact is that with every additional month of the current policy, the economy is losing ground to foreign competitors. Who is surprised, given the sky-high energy costs and Brussels’ increasingly aggressive regulatory agenda?
The election campaign team of the Federal Chancellor had barely finished celebrating the good news from industry when the band of illusions snapped and reality came rushing back like an arrow.
A current assessment of the actual situation in the engine room of the German economy gives reason to fear the worst for this year: On Thursday, the German Engineering Federation VDMA reported a real decline in production of 4.1 percent for the first seven months compared with the same period of the previous year.
That is a horror figure, descending on the Federal Chancellor like a media guillotine. The outlook is dark: Since 2018, the sector has lost almost one-fifth of its production activity.
This dramatic development is not part of a typical economic cycle. Germany is caught in a spiral of deindustrialization that even historically unprecedented government debt programs will no longer be able to slow down. The parties of eco-socialism bear responsibility for this disaster, above all Merz and the CDU.
Confused, yet firmly committed to this political ideology, the Chancellor steers his government through the fog. At the ceremony marking the 150th birthday of Konrad Adenauer, Merz emphasized his unwavering commitment to reform and was met with icy silence.
He had only one of 630 votes in the Bundestag, Merz said. His authority to set policy guidelines did not extend beyond the cabinet either. After that, he said, one found oneself on the high seas of the Bundestag.
It is always the same game: A commitment to reform and an awareness of the problems are staged for the cameras. In reality, the government remains committed to the joint strategy of the CDU/CSU and SPD: the debt-financed expansion of the state economy.
It seems almost comical when Friedrich Merz resorts to nautical metaphors in his hour of need. Is he not himself the captain who, to put it somewhat pathetically, is steering the state ship straight toward the iceberg visible to everyone?
Where is even the attempt at reform? Why does Merz not dare to break with the destructive climate policy and begin a serious path toward consolidating public finances, one that includes a remigration program, encompasses an end to the senseless development aid, and also includes a rejection of the taxpayer-funded NGO establishment? A return to diplomacy with the Russians would also be the order of the day.
Of course, it would mean the end of the coalition. Merz would have only the AfD left as an option. Yet Merz remains trapped inside the firewall cocoon. Despite the visible crisis, the Chancellor shows no progress in understanding the situation and refuses any willingness to reform. Politically speaking, Merz is a globalist who firmly believes in the success of his military Keynesianism. It is supposed to support the collapsing economy and, if necessary, at the price of geopolitical risks in relations with Russia.
Yet the collapse of the economy is moving faster than he is. How far exactly was described by consulting firm Roland Berger, which in its analysis of the automotive industry drew a definitive line under the Chancellor’s hopes for a rapid recovery. In the coming years, Berger forecasts, another 200,000 jobs will be cut in this sector. A catastrophe is taking shape that everyone can see, yet which is not leading to a political change of course.
Within a few years, only around half a million people will still be employed in the former German key industry, according to Berger. A development with drastic consequences for the entire sclerotic German economy.
Volkswagen alone counts around 63,000 individual companies in its global supply chain – more than 10,000 of them in Germany.
The true significance of the decline of this industrial powerhouse is almost impossible to grasp amid the current dynamics. It is telling that the media mainstream attempted to consistently exclude this historically unprecedented collapse from this year’s election coverage.
The fact remains, however, that the CDU in particular bears a considerable share of the responsibility for Germany’s deindustrialization. Whether it was the nuclear phase-out, largely decided by the Union, the aggressive policy of CO₂ taxation, or ever stricter climate regulation – the CDU has created facts both in Berlin and in Brussels together with its green socialist partner parties.
And against this secular trend, the Federal Chancellor’s military Keynesianism will not be able to hold out for long.
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About the author: Thomas Kolbe, a graduate economist, has worked for or over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.
Tyler Durden Tue, 09/22/2026 - 05:00The view that Islam is more likely to encourage violence than other religions is more widespread in the United States today than when Pew Research Center first asked Americans this question in March of 2002, around six months after the catastrophic events of the 9/11 terrorist attacks orchestrated by Al-Qaeda Islamists.
As Statista's Katharina Buchholz reports, in January, 51 percent of surveyed American adults said Islam was more likely to encourage violence, split between 76 percent of Republicans or Republican leaners and 29 percent of Democrats or Democratic leaners.
Shortly after the attacks that claimed the lives of almost 3,000 people, these number had still stood at an average of 25 percent, with both Republicans and Democrats answering more similarly.
You will find more infographics at Statista
As soon as Sept. 17, 2001, president at the time, George W. Bush, visited the Islamic Center of Washington, D.C. and was quoted saying "Islam is peace", showcasing how different sentiments were at the time, even among Republicans.
But 9/11 was also a watershed moment for the United States and the world as a whole, eroding trust in a stable world order and a positive future.
The number published by Pew could be interpreted so that the wars that followed in Afghanistan and Iraq did more damage to the relationship between the United States and the religion of Islam that 9/11 immediately did. The survey answers over time show how political polarization, affecting many if not most topics, has progressed in the United States in the past decades.
Pew Research Center also found that around 40 percent of U.S. adults said Muslims had a negative impact on the country, while another 40 percent said their impact was neutral and 17 percent thought it was positive.
Between the years 2000 and 2020, the number of mosques in the United States had grown from around 1,200 to 2,800 while the number of Muslims living in the U.S. also more than doubled to 5.5 million.
Tyler Durden Tue, 09/22/2026 - 04:15Authored by José Niño via The Libertarian Institute
On January 22, 2003, Donald Rumsfeld stepped behind the podium at the Foreign Press Center in Washington and, with one answer to a Dutch public television reporter, redrew the map of Europe. The reporter wanted to know why so many Europeans trusted Saddam Hussein more than then-President George W. Bush. The defense secretary fired back with words the Pentagon transcript preserved in full:
"Now, you’re thinking of Europe as Germany and France. I don’t. I think that’s old Europe. If you look at the entire NATO Europe today, the center of gravity is shifting to the east. And there are a lot of new members."
Rumsfeld kept going. “Germany has been a problem, and France has been a problem.” When the reporter cited public opinion, he refused to budge. “But you look at vast numbers of other countries in Europe. They’re not with France and Germany on this, they’re with the United States.”
Berlin and Paris erupted in response. The transcript shows Rumsfeld never spoke the words “new Europe,” yet headlines supplied them within hours, and Radio Free Europe conceded that his underlying point about a split continent held up. A year later in Munich, he told reporters he felt too old for regretting his comments at the time.
The Iraq showdown gave the phrase its teeth. France and Germany, backed by Russia, wanted inspectors to keep working, and Paris threatened to veto a second war resolution at the United Nations. On January 30, 2003, the leaders of Britain, Spain, Italy, Portugal, Denmark, Poland, Hungary, and the Czech Republic answered with the “Letter of Eight,” a joint commentary urging unity against Baghdad. Six days later, foreign ministers from the Vilnius Ten, a bloc stretching from Albania to the Baltics, endorsed what they called Secretary of State Colin Powell’s “compelling evidence” and demanded “a united response from the community of democracies.”
Washington repaid the loyalty. On May 8, 2003, the Senate voted 96 to 0 to admit Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia while their foreign ministers watched from the balcony. The Senate’s own ratification resolution cited their February 5 statement on Iraq. All seven entered NATO in 2004, bringing three former Soviet republics into the alliance for the first time.
Troops trailed the rhetoric. On August 16, 2004, the Bush White House announced a posture overhaul that would bring home “about 60,000 to 70,000 uniformed personnel” over a decade and ship heavy Cold War forces out of Germany. Romania signed a defense cooperation agreement in 2005, and Bulgaria followed in 2006, opening Mihail Kogalniceanu, Novo Selo, and Bezmer to rotating American units. At Bucharest in 2008, Bush pressed allies to declare that Ukraine and Georgia “will become members of NATO.” Russia later went to war with Georgia that August.
Every president since has pushed the line east. Barack Obama canceled Bush’s Polish interceptor plan in 2009 but substituted a phased shield whose Romanian base at Deveselu went operational in May 2016. After Crimea joined the Russian Federation, NATO stationed four multinational battlegroups in the Baltic states and Poland, with Americans leading the Polish unit. Donald Trump’s first administration quit the INF Treaty in August 2019, and Secretary of State Mike Pompeo declared that “Russia is solely responsible for the treaty’s demise.” A 2020 pact with Warsaw produced a forward headquarters for V Corps in Poznan.
President Joe Biden hardened the frontier further. After February 2022, American forces in Europe swelled to roughly 100,000, congressional researchers noted. The Army opened its first permanent garrison in Poland in March 2023, and NATO declared the Aegis Ashore interceptor site at Redzikowo mission ready in July 2024.
Esteemed diplomat George Kennan saw where this road led. Reacting in 1998 to the first round of enlargement, the father of containment told Thomas Friedman, “I think it is the beginning of a new cold war. I think the Russians will gradually react quite adversely and it will affect their policies. I think it is a tragic mistake. There was no reason for this whatsoever. No one was threatening anybody else,” as The American Conservative recounted.
Donald Trump’s second term scrambled the script. In October 2025, the Pentagon sent a 101st Airborne brigade home from Romania without a replacement, leaving about 1,000 Americans in the country. U.S. Army Europe and Africa insisted the move was “not an American withdrawal from Europe or a signal of lessened commitment to NATO and Article 5” but “a positive sign of increased European capability and responsibility.” Armed Services Chairmen Senator Roger Wicker (R-MS) and Rep. Mike Rogers (R-AL) fired back that the decision “appears uncoordinated and directly at odds with the President’s strategy.”
Then Trump feuded with German Chancellor Friedrich Merz over the Iran war. On May 1, 2026, Pentagon spokesman Sean Parnell announced, “The Secretary of War has ordered the withdrawal of approximately 5,000 troops from Germany.” Defense officials told CBS the missile battalion slated for Germany would go elsewhere. Three weeks later, Trump rewarded Warsaw instead. “Based on the successful Election of the now President of Poland, Karol Nawrocki, who I was proud to Endorse, and our relationship with him, I am pleased to announce that the United States will be sending an additional 5,000 Troops to Poland,” he wrote. Polish Foreign Minister Radek Sikorski suggested the move would simply hold American numbers near previous levels.
Punish old Europe, reward new Europe. Rumsfeld would recognize the playbook.
Ukraine will decide how far that playbook runs. In July 2026, Thomas Graham of the Council on Foreign Relations outlined a plausible settlement built on a ceasefire along the front, Western security ties for Kiev without NATO membership, and an end to further eastward enlargement, terms Moscow could market as victory. Graham warned against assuming the tide favors Kiev. Bloomberg sources reported that Vladimir Putin wants the rest of Donbas before serious talks, and envoys Steve Witkoff and Jared Kushner left Moscow in September without a breakthrough.
Suppose Russia keeps its conquests at a ruinous price. A pyrrhic win of that kind would shut NATO’s door to new members, and Washington’s national security class would likely respond as it did in 2003, by pouring money and manpower into the eastern allies it already has. The scaffolding survives every Trump trim. Allies have pledged 5% of GDP on defense by 2035, and a CRS report counted about 86,000 U.S. personnel in European NATO countries as of March 2026, with Congress requiring certification before numbers fall below 76,000.
Once Trump exits, the hawks who blasted his Romania cut will still hold the blueprints and the bases. They may well revive Rumsfeld’s New Europe as a permanent front against Moscow, anchored in Poland, Romania, and the Baltics. Kennan warned that such a posture breeds the hostility it claims to deter. Americans deserve a debate before Washington signs them up for another generation of geopolitical tension with the Russian Bear.
Tyler Durden Tue, 09/22/2026 - 03:30Houthi officials have put Egypt, Turkey, and Pakistan on notice amid the ongoing Saudi-Yemen conflict, and as Riyadh urges partners to assist militarily against the Ansar Allah movement. Iran's state Nour News, which is affiliated with the country's Supreme National Security Council, has issued a report saying the three Saudi allies "will likely be targeted in the next stages"
- per a Houthi official.
The Houthi official warned that "The targeting of Iran by the enemies will not be limited to the country's borders and, according to him, the next efforts will be to target Egypt, Turkey and Pakistan."
Source: SPAAlready the Houthis have launched several attacks on Saudi Aramco facilities, also including fuel depots next to Riyadh's international airport. The Houthis subsequently confirmed sending ballistic missiles on the capital, in a first of the war. This happened Friday night into Saturday.
According to more from the Iranian media report:
Referring to the position of these three countries in the Islamic world, he said that their power and influence could be an obstacle to the Zionist regime's plans. The Ansarullah official stated that this plan is based on pushing Egypt, Turkey, and Pakistan towards wars and internal conflicts, and that Saudi Arabia plays a role in this process. According to him, such a situation could lead to the erosion of capabilities, weakening, and disintegration of the internal social fabric of these countries
Saudi Crown Prince Mohammed bin Salman was just in Cairo meeting with Egyptian leader Abdel Fattah El-Sisi. The visit came just in the wake of an Iranian-backed militia attack on the key Saudi East-West pipeline, which one US official described as having been launched from Iraq.
A big focus of the MbS-Sisi meeting was regional security. The Saudis have been asking all regional allies for support at a moment the internationally recognized Sanaa government is rapidly losing ground to the Houthis.
Washington has appeared to shrug its shoulders, staying on the sidelines thus far. President Trump was reported ready to pull the trigger against the Houthis but reportedly TACO'd by close of the weekend.
But there's even greater pressure on the Pakistanis and Turks to take action, given the recently signed Mecca Defense Pact. We featured the following commentary last week:
Turkey's new commitments to Saudi Arabia under the Mecca defence pact could increase the risk of Ankara being drawn into a confrontation with Yemen's Houthis, a development that could have significant consequences for Turkish supply lines to the Horn of Africa. Although Turkey has yet to ratify the pact, expected in October, continued Houthi attacks against Saudi Arabia, and Ankara’s recent participation in the Saudi-led Multinational Maritime Defense Alliance make some form of confrontation possible.
Another big, obvious risk includes the whole thing spinning out into a full-on regional war, which would likely further fuel US-Iran confrontation, and possibly bring in the Israelis.
Bigger conflict would also likely close Red Sea shipping. The Houthis have so far only declared the Bab Al-Mandab Strait off limits to Saudi and Israeli-linked ships. But the fear is that any moment the group could begin assaults on all international shipping, akin to the ongoing crisis in the Strait of Hormuz.
Even very good reporting on Saudi-Houthi situation often says the Houthis e.g. "reignited" the war this summer, or some such. But this July, Saudi struck airport in Sanaa, the Yemeni capital, to block an Iranian plane from landing. Sometimes that's not even mentioned...
— Andrew Day (@AKDay89) September 21, 2026The Iranians and Houthis know they hold this card, and are likely intentionally slow-playing their leverage, but ready to pull the trigger on the next potential round of escalation with the US-Saudi-Israeli axis.
Tyler Durden Tue, 09/22/2026 - 02:45Submitted by Thomas Kolbe
Revenge is sweet. It tastes all the sweeter the longer one has had to wait for it to arrive, and the deeper the pain of the humiliation that preceded it.
Some may still have the images of the great debt crisis of a decade and a half ago before their eyes: German politicians, led by then-Finance Minister Wolfgang Schäuble, traveled to Athens at regular intervals to make sure everything was in order. Greece, the supposed sinner of the debt crisis, had gone off the rails, accumulated too much debt and was quickly made the scapegoat for the financial-market and sovereign-debt crisis. It was convenient - because it diverted attention from Germany’s own failures.
That someone had apparently left a score to settle was made clear by Greek Finance Minister Kyriakos Pierrakakis in an interview with Handelsblatt on Monday. When the conversation turned to the debt question, Pierrakakis, who also serves as president of the Eurogroup, noted that reforms in fiscal policy might be painful at first, but would ultimately pay off politically and economically.
The man is right. And Berlin should listen to him, because the debt club around Friedrich Merz is knowingly driving the budget into the wall with new borrowing of more than 5 percent next year.
It really does sound like an open score to settle when the Greek generously praises Germany’s economic potential in flowery language while at the same time noting that the country is not untouchable: “Germany is the industrial locomotive of Europe” — Pierrakakis is mercilessly putting his finger on the wound. For he cannot have failed to notice how rapidly the country is economically destroying itself, how quickly it is deindustrializing in the grip of climate fanaticism and mutating from a nation of tinkerers and engineers into an open-air institution for moralists and degrowth ideologues.
While Germany has embarked on the road to second-class status, Greece is gradually growing out of its permanent crisis. The problem with the local economy remains the euro: The Greeks actually need a significantly devalued currency in order to compete more effectively on international markets. After the introduction of the euro and the cheaper borrowing costs made possible by Germany’s credit anchor, the country slipped into an artificial debt trap — the land of spendthrifts and pleasure-seekers, according to the ugly narrative.
German banks and insurers had invested as much as 45 billion euros in Greek bonds at the time — money for which German taxpayers ultimately had to foot the bill. Distorted interest rates caused by the introduction of the euro and the euro debt club’s highly heterogeneous economies were bound to produce such a disaster — and the next debacle is already taking shape: Debt is rising everywhere, while interest rates are climbing. The bond market is responding by selling government bonds, thereby driving up the cost of servicing debt through higher interest rates.
Were Greece’s efforts toward austerity and thrift ultimately in vain?
Whether the moment of the great debt reckoning has now arrived is rather unlikely — there is still plenty of room to push the sovereign-debt crisis to the point of rupture. Nevertheless, much is reminiscent of the period 15 years ago, when the bond market reacted in a similar way and the U.S. housing crisis spread through the market mechanism to the fragile European sovereign-bond markets. Greece, the EU’s smallest economy with the highest level of government debt, was hit first before the dominoes began to fall.
Schäuble’s Greek counterpart at the time was Giannis Varoufakis: an intellectual, committed socialist who stood up to the Teutons and the Troika of the European Central Bank, the International Monetary Fund and the European Commission — until his party Syriza and Prime Minister Alexis Tsipras were brought to their knees.
The consequence: austerity policy. Massive pension cuts, hospital closures — the shrinking of the welfare state. The Greeks experienced their social-policy Waterloo and have since managed to reduce their government debt ratio from the peak of the crisis, around 180 percent, to 146 percent.
Chapeau! The Greeks deserve every bit of respect in the face of the lax fiscal policies all around them — whether in Italy, Germany, France or Spain. Athens is staying the course, voting conservatively and struggling through this painful period of adjustment.
In the Handelsblatt interview, Pierrakakis becomes something of a fiscal-policy armchair philosopher: The cost of doing nothing, he says, is ultimately higher for everyone than the cost of reforms. That may be true. But the lesson contains a kernel of truth that will not move the German governing coalition even a millimeter toward the mountain of necessary reforms growing larger by the day.
Because consolidating this year’s 180-billion-euro deficit-ridden chaos budget would imply corresponding spending cuts. Tax increases would strangle the economy — Germany would have to begin with remigration, end development aid, reform the welfare state and seriously consider what to do about the war with Russia and the massive military buildup it entails.
The pain of austerity is still ahead for the Germans. Whether it is brought about through the bond market or through the harsh cuts of a reform government makes no difference.
All in all, it was a memorable interview because it describes Germany’s changing era from the perspective of the underdog. Above all, Pierrakakis’ remark that Germany has economic potential should resonate for a long time in its ironic sharpness. Because the country has overstretched its public finances and now lives on credit — just as the Greeks once did.
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About the author: Thomas Kolbe, a graduate economist, has worked for or over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.
Tyler Durden Tue, 09/22/2026 - 02:00