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Kirk Herbstreit could very well be the reason Taylor Swift gets a nephew-in-law in the near future.

D4vd was back in court Monday, Aug. 31, where the 21-year-old singer’s new attorney entered not guilty pleas to all three charges in the gruesome murder of 14-year-old Celeste Rivas Hernandez. D4vd, whose real name is David Anthony Burke, surprisingly dropped his high-powered private defense team and turned to a public defender after apparently running out...

D4vd was back in court Monday, Aug. 31, where the 21-year-old singer’s new attorney entered not guilty pleas to all three charges in the gruesome murder of 14-year-old Celeste Rivas Hernandez. D4vd, whose real name is David Anthony Burke, surprisingly dropped his high-powered private defense team and turned to a public defender after apparently running out...

The British model took to Instagram, sharing a carousel of images and videos that included the businessman and their 3-year-old daughter, Athena.

The British model took to Instagram, sharing a carousel of images and videos that included the businessman and their 3-year-old daughter, Athena.

"Since 2019, Amazon.com has secretly and systematically overcharged its approximately 1.2 million advertising customers by manipulating the “auctions” that it uses to set the price of ads on its platform," according to the lawsuit.

The singer appeared to be struggling to finish his concert Saturday.

The singer also fell ill onstage and had to cancel his concert abruptly in June.

Stranger Things is coming back to Netflix, only not in the way you might wish.

Olivia Rodrigo's star-studded new festival earned rave reviews for what happened on stage — but getting out was a show of its own.

LA County Steals $5M Fire Relief For ICE-Raid Checks

Authored by Steve Watson via Modernity News,

In bombshell findings, Los Angeles County sliced a wildfire housing fund in half and steered the cash toward households claiming income loss from ICE raids, detentions, and deportations - without requiring anyone to disclose immigration status.

Taxpayers who watched entire neighborhoods burn in January 2025 now watch the same government treat federal immigration enforcement as another "emergency" worthy of six-figure rent wipeouts.

After the Eaton and Palisades fires, supervisors approved $10 million to help tenants and landlords dealing with fire-related rent losses. They then kept $5 million for fire claims and moved the other $5 million into a priority category covering "economic hardship because of federal actions targeting immigrant communities." Another $9.788 million from the Affordable Housing Trust Fund was pointed at the same category unless fire victims still had unmet need.

? BOMBSHELL: Los Angeles County is STEALING funds from a wildfire relief fund to give up to $15K CHECKS to noncitizens or residents "impacted by ICE raids"

All "without checking the recipient's immigration status"

$5 MILLION has already been redirected ?

THIS IS OUTRAGEOUS!... pic.twitter.com/49ZnnZHFen

— Eric Daugherty (@EricLDaugh) August 29, 2026

Households can receive up to six months of housing debt relief, generally capped at $15,000 per rental unit. Eligible costs include unpaid rent, mortgages, and related expenses.

The county's own February 2026 program guide states: "Program eligibility does not require the disclosure of household members' immigration status."

If an applicant claims federal enforcement caused the hardship, officials may ask for detention records. They do not have to produce them. An attestation or other hardship can still qualify the household. The county therefore cannot tell the public how many noncitizens received the money - because it chose not to collect the data.

White House correspondent Natalie Winters first laid out the paper trail: money assembled after neighborhoods burned was reassigned to cushion the consequences of ICE operations, then structured so the public may never know who was paid.

EXCLUSIVE: L.A. County took $5 MILLION from wildfire rent relief—and redirected it to erase housing debt after ICE detentions and deportations.

Illegal aliens can collect up to $15,000. County officials explicitly wrote the rules so immigration status does not have to be... pic.twitter.com/2rrjT4tUQ6

— Natalie Winters (@nataliegwinters) August 24, 2026

County leaders have not hidden the priority. Fourth District Supervisor Janice Hahn said, "Rent relief is about stability - keeping people safe in their homes and making sure landlords stay whole. This is real help, not a loan, and it does not depend on immigration status."

Third District Supervisor Lindsey Horvath framed the two events as equivalent: "Whether you are fighting to survive the impacts of the fires or of ICE, we are standing with you to keep you housed." She also said, "Parents are choosing between risking detention to earn wages or staying home and watching bills pile up. No one should face such a choice."

Board Chair Hilda L. Solis grouped "emergencies like federal immigration enforcement and the 2025 wildfires" in the same sentence.

The program later reopened so tenants could apply directly. Demand immediately outran supply. Round One drew thousands of applications seeking tens of millions more than the pool available. Officials still treat immigration-enforcement hardship as a qualifying emergency on the same form as fire displacement.

A separate Small Business Resiliency Fund has already sent more than $5.4 million to 1,327 businesses officials say were hit by enforcement actions, curfews, and workforce disruptions. Grants of $2,000 to $5,000 covered rent, payroll, and inventory. That pot came from Care First Community Investment dollars and later supervisor add-ons, not the original fire housing line, but it sits in the same political project: treat ICE activity as a local disaster requiring cash.

Nearly 600 days after the January 2025 firestorm, large numbers of Palisades and Altadena families remain displaced. Reporting in late July found roughly two-thirds of surveyed survivors still out of their homes, with homeowners facing rebuild gaps around $500,000.

Federal long-term recovery money has moved slowly. Local officials spent months expanding categories and rewriting application rules instead of concentrating every available dollar on people whose houses actually burned.

The pattern is larger than one county line item. Governor Gavin Newsom's $2.5 billion state wildfire package saw roughly $14 million diverted to California Highway Patrol overtime for downtown Los Angeles demonstrations against ICE the summer after the fires.

Investigative reporting showed much of the money that was spent circulated back through state agencies rather than reaching survivors directly. A substantial share of the original allocation was never released.

California's political class has spent a year and a half telling fire victims that help is coming while writing program language that treats an immigration raid the same as a house reduced to ash.

The result is a rent-relief machine that can cut a $15,000 check to a household that never lost a roof to fire, never has to prove lawful presence, and can decline to produce detention records.

This is a prime example of the Democrats showing Americans who they really are.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 08/31/2026 - 15:40

EU Commandos Board 6th Russian 'Shadow Fleet' Tanker After Putin Threatened Reverse Action

Another Russian 'shadow fleet' tanker has been boarded by European forces - and this time the provocative action took place in Mediterranean waters. In a Monday post on X, Kaja Kallas announced the action by troops under the EU's Operation Irini. They boarded the MV Sun tanker for "flag verification," following suspicions that the vessel was in violation of international law.

"Illegal oil sales from shadow fleet ships are a critical lifeline for Russia’s war in Ukraine, and we’ll continue to cut them off," Kallas wrote of what marks the sixth shadow fleet ship to be boarded in recent months. Most of these have happened in northern European waters, with Mediterranean incidents being more rare.

Kaja Kallas/X

It was specifically the Italian Defense Ministry that carried out the EU action, with Italian navy's Thaon di Revel ship conducting the boarding which occurred to the west of the island of Pantelleria as the targeted vessel was progressing from the port of Cotonou in Benin to Istanbul.

Russian President Vladimir Putin just a little over two weeks ago threatened to do the same in reverse, after the past year saw several examples of EU intercept action, sometimes involving French or Swedish commandos descending onto a tanker's deck from helicopters and arresting crew members. The seized vessels are then typically taken to nearby European ports.

The latest European Union sanctions package passed last month stipulates that EU members can sell the oil or any seized cargo obtained from these 'shadow fleet' vessels.

Putin has reiterated Kremlin outrage at this scheme, condemning it as "piracy and banditry". This also after Sweden has lately declared its intent to hand seized Russian grain over to Ukraine.

"We will be forced to respond in kind," Putin said in mid-August. Russian forces will act "wherever we ourselves deem necessary and appropriate — anywhere," he added.

According to more of what Putin threatened at the time, as translated and presented in Reuters...

"We can see that the authorities of certain countries, in violation of international maritime law, are attempting to restrict the movement of our economic operators’ vessels..., and ​have recently gone so far as to consider the possibility of seizing our vessels and selling off ⁠the ⁠property they have plundered from ⁠us," said Putin.

"Naturally, ​this is nothing less than piracy and robbery. And if this begins to be put into ​practice, we shall be forced ⁠to respond in kind. And not necessarily in those waters where raids on our ships and vessels are planned, but wherever we ourselves deem it necessary and appropriate."

But so far this has yet to happen, other than major Russian military action in the Black Sea, which has chiefly targeted Ukrainian imports, as well as southern Ukrainian ports.

🇪🇺#EU naval forces has seized tanker belonging to the🇷🇺Shadow Fleet yesterday
EUNAVFOR MED IRINI pic.twitter.com/lupJ7wBfYz

— C4H10FO2P ☠️ (@markito0171) August 31, 2026

So while Russia would not likely act in European waters, such a scenario would be more likely to go down in places like the Black Sea or Baltic region, or perhaps the faraway Indian Ocean. Still, Putin's patience is likely wearing very thin.

Tyler Durden Mon, 08/31/2026 - 15:20

Trump Mulling New 'Limited' Strike Package, After Iranian Attack On Jordan Base Summary

• Trump vows retaliation, mulls more 'limited' strikes after Iran's own 'retaliatory' missile attacks on US bases in Jordan.
• Eight Iranian missiles were intercepted by Jordan amid the first major tit-for-tat military strikes in a month.
• US forces struck Iranian missile launchers on Larak Island, reportedly killing two people.
• Iran threatens further retaliation, while regional tensions reignite across UAE, Qatar and Red Sea.
• Global oil prices rose Monday in wake of the overnight renewed fighting.

//--> //--> Strait of Hormuz traffic returns to normal by October 31?
Yes 11% · No 90%
View full market & trade on Polymarket

* * *

Trump Mulling New 'Limited' Strikes (Again)

New reporting from Axios: "President Trump and his senior aides have been considering waging limited strikes in the Strait of Hormuz to prevent Iran from reconstituting its radar and missile capabilities to attack ships, according to three U.S. officials."

This suggests that once again when US 'bad options' tighten related to Iran and the Hormuz crisis, there is still this (bad) idea among decision-makers that the Pentagon can just 'bomb its way out' of a crisis that's of Washington's own making. Such an assumption has already been tried and tested several times before, amid what is now six months into the war.

"The plan, which was developed over the past week by U.S. Central Command (CENTCOM) and supported by Secretary of Defense Pete Hegseth, had not been approved by Trump ahead of this weekend's exchange of fire with Iran," Axios continues. "But he could greenlight it after the new escalation."

And still this reported new potential escalation is being presented by Axios as if it's somehow the US fully in the driver's seat, when in reality this continues to be a "bombing campaign in search of a strategy". More from Axios:

• One U.S. official said the idea behind the plan is to reduce the risk of Iranian attacks on oil tankers, U.S. Navy ships and Air Force aircraft — to "mow the lawn," as this person put it.
• A White House said: "The President retains all options at his disposal. The Iranians want to make a deal, but they are always a day late and a dollar short."

This comes as some top generals have taken the ultra-rare action of leaking their views of this to the press. "Several U.S. military leaders have advised Defense Secretary Pete Hegseth that prolonging large-scale operations against Iran is unsustainable and risks weakening their ability to confront threats elsewhere, including the U.S. homeland, according to people familiar with a recent assessment prepared for the Pentagon chief," wrote the Washington Post on Sunday.

More latest from Trump (via Newsquawk):

US President Trump says Iran strikes will be limited; Strait of Hormuz is in extremely good shape; A lot of oil coming out of Hormuz; Ships came through Hormuz last night with Navy assist.

The Iranians meanwhile appear to be ready for the possibility of renewed dialogue, but they also certainly don't appear to be "begging" - as Trump has maintained. "The US must return to its commitments and abide by the terms of the memorandum; only then can we exit this situation," Iranian Foreign Minister Abbas Araghchi said on Telegram Monday.

Vance: I believe that Trump was sending a message to Iran through his post about Kharg Island. https://t.co/y3HZjRhjEE

— barry with the NED (@bonzerbarry) August 31, 2026

"The solution is clear and unambiguous: the US must return to its commitments and to the agreement its own president signed" - and, he continued, "Should that happen, everything can be put back on track." The Iranian top diplomat said, "All countries share the concern that the war must end as quickly as possible."

Trump Vows US will Respond to Iranian Attacks

President Trump has continued teasing possible 'retaliation' on Kharg Island after an Iranian overnight ballistic missile attack on American bases in Jordan. Trump says the US will respond to the Iranian attacks, according to Fox. According to further context via Newsquawk: 

• Note, the remarks from US President Trump were broadcast as part of a interview on Fox on "Sunday Night In America".
• Follows the US hitting Larak Island on Sunday. In response, Iran fired on US bases within Jordan.
• Reports since indicate that Iran's retaliation did not cause any significant damage.
• Modest upside seen in energy benchmarks and downside in the risk tone in proximity to this remark.

Iran state media is meanwhile reporting that two were killed in the CENTCOM attack on Larak Island late yesterday, which triggered this fresh round of fighting.

"During the attack on Larak Island late Sunday, two people were martyred and several others were injured. The injured in the incident are receiving medical services and their treatment is ongoing," the official IRNA news agency said.

Also, the Iranian foreign ministry stated: "The Armed Forces of the Islamic Republic of Iran will have no hesitation in exercising their inherent right to self-defense and will respond decisively, as appropriate, to any military aggression by the enemy."

The Jordanian government has meanwhile confirmed the Iranian ballistic missile attack: 

The Jordanian Armed Forces said Sunday it intercepted eight missiles that had entered the country's airspace, according to Jordan's Al-Mamlaka TV broadcaster.

A spokesperson for the military said all eight missiles were destroyed before they could do any damage, according to the broadcaster.

Military Strike Tit-for-Tat Resumes After Weeks 

Brent crude futures climbed back above $90 a barrel, while West Texas Intermediate topped $86 after the US and Iran exchanged strikes for the first time in about a month. Tehran also claimed that an unidentified supertanker was struck by naval mines in the Strait of Hormuz.

Meanwhile, diesel crack spreads are approaching $100 a barrel again, suggesting an increasingly severe shortage across refined-product markets as the summer draws to a close. 

US Central Command said American forces struck Iranian rocket launchers that were preparing to deploy anti-ship mines in the critical waterway. The US has touted the Oman shipping corridor as open for business and moving crude and other energy products. Tehran's inability to halt tankers passing through that part of the strait may suggest that its offensive capabilities have been degraded.

Iran's Islamic Revolutionary Guard Corps said it retaliated by targeting US air bases in Jordan, while the United Arab Emirates intercepted an Iranian drone over its territorial waters.

Trump: 'Failed Nation'

Trump on Monday morning issued a Truth Social declaring Iran a "failed nation":

The US military (CENTCOM) has said it did not target Kharg Island in the overnight strikes. According to a summation of there things stand:

The latest U.S.-Iran escalation appears increasingly centered on control of the Strait of Hormuz. Iran has been using small boats to monitor and identify commercial vessels transiting the Strait using Omani waters for an undetermined period. The boats can blend into civilian maritime traffic, making them difficult to distinguish from ordinary vessels. This comes amid sporadic Iranian attacks and attempts to restrict ships transiting Hormuz without Iranian permission.

The U.S. then struck Iranian missile launchers on Larak Island after assessing they were preparing to deploy sea mines into the Strait. Iran responded with missile attacks targeting U.S. bases in Jordan, with eight missiles reportedly intercepted. Al Udeid Air Base in Qatar was also reportedly targeted, though that remains unconfirmed.

The pattern suggests Iran is attempting to reassert control or disrupt maritime traffic through Hormuz, while the U.S. is acting to prevent Iran from closing or mining the waterway. Various reports indicate transits through the strait of Hormuz have declined. What remains to be seen is whether the strikes from both sides tonight will continue in the coming days.

Crude Transit Opening?

"Brent crude is firmer at $90.48/bbl, up 2.5%, as tensions around the Strait of Hormuz support the geopolitical risk premium," UBS analyst Dharmesh Gangaram wrote in a note.

Gangaram continued, "Overall, the desk sees a cautious, risk-off start to the session. Geopolitical developments and lower European liquidity are likely to remain the key drivers, with particular attention on the resources complex amid broad-based weakness in precious metals."

Despite the overnight tit-for-tat attacks, an estimated 6 million to 8 million barrels per day of crude, primarily from US-allied Gulf producers, continues to move through Hormuz.

We previewed this in a note last week titled:

• "Dark" Tanker Fleet Shatters Iran's Hormuz Stranglehold As Gulf Oil Exports Top Two-Thirds Of Pre-War Level

"The key is to watch the barrels, and as long as they continue to flow through the Strait of Hormuz, the buying appetite in the market remains muted for fear of being caught out," Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note.

Last week, the top US commander for the Middle East said American forces had cleared Iranian mines from the Hormuz waterway, declaring the shipping lanes open.

With its missile batteries, drone launchers, naval units, surveillance networks, or command infrastructure degraded, Iran appears to be shifting from conventional sea denial toward a lower-cost asymmetric strategy.

Weekend Developments

•  US attacked two missile launchers of the IRGC on Larak Island on Sunday, which were said to be on standby to launch missiles with sea mines toward the Strait of Hormuz, while there were later reports of explosions heard near Larak Island.
• US Central Command said IRGC claims of US aggression in the Strait of Hormuz are false, but added the US conducted limited precise action against IRGC minelaying forces that posed an imminent threat in the Strait of Hormuz.
• Iran’s Revolutionary Guards warned the US strike on Larak Island would be met with a response and punishment, while it said several soldiers and civilians were killed and wounded in the assault.
• Iran's Revolutionary Guards later announced that they retaliated with missiles and drones against two US bases in Jordan and warned that any attack against them will be met with a more devastating response, although a US official cited by Fox News stated no major damage in Iranian attacks on US forces in Jordan and that all missiles were intercepted.
• Iran's Press TV noted reports of Iran firing missiles towards US vessels in the Strait of Hormuz, and there were reports of explosions heard in the UAE and in Qatar, while Iran's army later said it launched tens of drones at the Al Minhad air base in the UAE.
• IRGC said a supertanker caught fire and was halted after being struck by two naval mines in the Strait of Hormuz, while it added that the tanker was attempting to pass illegally through the Strait of Hormuz and that ships must comply with its rules for passage. IRGC separately announced that it shot down a US MQ-9 drone over the Strait of Hormuz.
• Iran's Foreign Ministry said it will respond decisively to any further enemy military aggression, and stated that the US and parties supporting its military actions bear full responsibility for consequences of escalation.
• US President Trump reiterated in a pre-recorded Fox News interview that Iran cannot have a nuclear weapon and said the Iran blockade has been unbelievable, while he also commented that the US had to intervene in the Middle East to prevent Iran from using a nuclear weapon against Israel and other countries in the region and possibly against the US.
• US President Trump posted a generated video with the caption "Kharg Island being blown to smithereens!!!"
• US Treasury Secretary Bessent said the US Treasury plans to impose more Iran secondary sanctions every week, starting with banks. He also stated that they are telling banks it's not okay to have Iranian money and to aid the Iranian regime, and they will probably just sanction a bank outright next time, after the US imposed curbs on an Egyptian bank's United Arab Emirates branches.
• Iranian President Pezeshkian said they are not looking for war, but will give a decisive response to the aggressors, while he added that instability and unrest in the region are not in the interest of any countries and will create challenges for everyone.
• Iran's President said on Friday that Iran is ready for cooperation and understanding with regional countries, including Saudi Arabia and the UAE, while it is to open its route if four commitments are met. He also stated that Iran is to increase gasoline prices, and that exports and imports have decreased by up to 35% because of US sanctions and the blockade.

Overnight Developments

• US officials said they are monitoring the Strait of Hormuz and will strike any forces that threaten navigation in the waterway, Al Arabiya reported.
• Iran's IRGC Navy said compliance with regulations issued for the Strait of Hormuz is mandatory and warned against being “misled” by the US, Press TV reported.
• Yemeni armed forces reportedly targeted Saudi ships in the Red Sea, ISNA reported citing Yemeni media reports.
• UAE Ministry of Defense denied reports that Al Minhad Air Base was targeted by missiles, calling the claims unfounded and saying it remains on high alert and fully prepared to respond to any threats.
• Iranian oil operations are continuing on Kharg Island, and the oil sector there has not stopped, Al Hadath reported.

Tyler Durden Mon, 08/31/2026 - 15:15

Rickards: The Dollar's Not Dying

Authored by James Rickards via The Daily Reckoning,

Last week's financial media was full of apocalyptic headlines: "$40 trillion in national debt!" "U.S. debt in a doom loop!" "The end of the dollar is near!"

Gold and bitcoin soared in lockstep with the dollar doom and gloom. If you took the headlines at face value, one would assume the dollar was already toast and U.S. Treasuries were worth no more than digital confetti.

The truth is that the dollar's position as the leading reserve currency is not in jeopardy. Of course, foreign exchange reserves are not simply piles of currency. They are largely held in liquid financial assets, including U.S. Treasury securities denominated in dollars.

Dollar-denominated assets will dominate global reserves for decades to come.

The reason is simple. There are few sovereign bond markets with the size, liquidity and depth of the U.S. Treasury market. Other large government bond markets, including Japan and major European markets, do not offer the same combination of scale and liquidity. King dollar will remain king.

This does not mean interest rates won't rise or inflation won't increase. Both are likely. But neither means the end of the dollar. It just means the Treasury pays more to borrow and you pay more at the gas pump and grocery store.

So, there are problems in the dollar bond markets, but debasement-trade hysteria is not a useful way to understand them.

BESSENT GOES AFTER THE BOND MARKET

U.S. Treasury Secretary Scott Bessent has just announced a plan to address higher interest rates in U.S. Treasury securities markets and, by extension, mortgage and credit card markets. It has both long-term and short-term components.

One short-term component involves U.S. support for Japan's efforts to prop up the yen, including joint currency intervention and potential greater use of the Federal Reserve's FIMA Repo Facility. That facility allows Japan to borrow dollars against its U.S. Treasury holdings rather than selling those securities outright.

In turn, that could take pressure off U.S. interest rates. Japan is the world's largest foreign holder of U.S. Treasuries, with about $1.12 trillion as of June.

Another short-term component is for the Treasury to purchase longer-dated Treasury securities, specifically those in the 10- to 30-year sectors. The Treasury recently announced that it will at least double the size of certain scheduled buyback operations from $2 billion to $4 billion, with the possibility of going higher.

Treasury has also relied heavily on short-term maturities such as one-month, three-month and six-month Treasury bills in its overall financing mix. These Treasury bills generally carry lower interest rates than longer-dated notes and bonds. Greater reliance on shorter maturities can lower U.S. interest expense, at least in the short run.

Treasury bills are also prized by dealers and hedge funds because they are highly liquid and are widely used as collateral in financial transactions. Supporting liquidity at the long end while maintaining a large supply of short-term Treasury securities makes sense. Why it is causing such hysteria in the media is a bit of a mystery.

BESSENT'S 3-3-3 GAMBIT

The longer-term component of the Bessent Plan is sometimes referred to as the Three Arrows.

The first arrow is to keep annual deficits at 3.0% or less of GDP. The second arrow is to achieve GDP growth of 3.0% or more. The third arrow is to increase U.S. energy production by the equivalent of 3 million barrels of oil per day.

That's where the shorthand 3-3-3 comes from: a 3% deficit, 3% real GDP growth and 3 million additional barrels of oil equivalent per day.

Since oil output does not directly impact fiscal policy, we can leave that to one side in our analysis. The deficit and GDP growth targets, however, are critical.

The metric that really matters in terms of whether investors have confidence in U.S. Treasury securities is the U.S. debt-to-GDP ratio. It's silly to hyperventilate about $40 trillion as the U.S. national debt unless you put that number in the context of the GDP available to finance and roll over the debt.

Right now, gross U.S. federal debt is roughly 123% of GDP. That's the result of approximately $40 trillion of debt divided by roughly $32.5 trillion of annualized nominal GDP. That ratio is near the highest levels in U.S. history.

High debt-to-GDP ratios can be a drag on growth and leave governments with less room to respond to crises. A ratio of 60% is much more comfortable. A ratio of 30% is more comfortable still. The previous postwar high was reached around the end of World War II.

The annual deficit will not go down to zero. That's a fantasy. The level of U.S. national debt will also not go down anytime soon. That's another fantasy.

But that doesn't matter.

What does matter is whether the debt-to-GDP ratio goes down.

The way to do that is to grow the economy faster than the debt. If you can do that, the ratio goes down even if the debt goes up. That's Bessent's plan. That's what he meant when he said the U.S. could "grow its way out" of the debt problem. In theory, he was right.

For example, let's say annual deficits are $2 trillion so that a year from now the national debt will be $42 trillion. That's a 5.0% increase in the national debt.

But if GDP grows from $32.5 trillion to $34.5 trillion, that's a 6.2% increase. The debt-to-GDP ratio drops from roughly 123% to 121.7%. That's still high, but it's lower than the year before.

That's all the so-called bond market vigilantes need to see. As long as the debt-to-GDP ratio is coming down, bond investors have reason to retain confidence in U.S. Treasuries and the U.S. dollar.

The U.S. has done this before. The gross federal debt-to-GDP ratio reached roughly 119% in 1946 and was down to about 31% by 1980. That process took more than three decades and occurred under both parties using a combination of fiscal and monetary policy, strong nominal growth and inflation.

During that period, the national debt increased substantially. But GDP increased by more than 1,000%. And that was the key. If GDP grows faster than debt, the ratio comes down and America's fiscal position improves.

HERE'S THE DIRTY LITTLE SECRET

So, that's the plan. But there's a dirty little secret that Bessent has not emphasized.

When the government computes debt-to-GDP ratios, it's using nominal numbers, not numbers adjusted for inflation.

In the example above, GDP grew by about 6.2% while the national debt grew by 5.0%. That lowers the ratio, but it does not reveal how much of the GDP growth was real and how much was inflation.

The 6.2% nominal growth could have been 4.2% real growth plus 2.0% inflation. That's fairly healthy. But it could have been 2.2% real growth plus 4.0% inflation.

At 4.0% annual inflation, the purchasing power of the dollar is cut roughly in half in about 18 years and cut in half again over the next 18 years. That kind of inflation can destroy your net worth and income if you're not prepared.

So, how much inflation is included in the Bessent Plan? Secretary Bessent didn't say.

Investors should assume the worst.

The U.S. has had difficulty sustaining real growth of more than about 2.0% per year on average since the global financial crisis. If we need roughly 6.0% nominal growth to outrun the growth in debt and if we can only produce 2.0% real growth per year, then the difference has to come from inflation.

That could mean 4.0% inflation.

That's not a policy preference. It's just fifth-grade math.

In describing how the U.S. lowered its debt-to-GDP ratio dramatically between the end of World War II and 1980, I conveniently omitted the fact that consumer prices rose about 50% between 1977 and 1981.

That's one way the U.S. government took care of the debt problem.

I lived through that period. It was a fun time if you owned gold or real estate, if you used leverage and if you had a job that gave you a raise every few months.

It was not a fun time if you depended on fixed-income streams like annuities, insurance policies, pension plans or Social Security.

Which side of that trade are you on?

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Mon, 08/31/2026 - 15:00

The video showed his wife changing clothes, embracing her alleged lover, and walking around the house naked while her partner was seen lying on the sofa.

Ryan Gusto will lead the Marlins to victory against the Nationals, Stitches predicts.

An average of 8.6 million barrels of oil a day have been flowing through the Strait of Hormuz, maritime analyst firm Kpler confirmed in a new update that matches estimates from the Trump administration.

“It’s kind of unusual,” Reddington said of his newfound status.

Amanda Anisimova got quite the birthday surprise.

While it will be easy to make this another chapter in the annals of New York-Boston hatred, it is not that for me.