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TWO WONGS DON’T MAKE A RIGHT

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TWO WONGS DON’T MAKE A RIGHT

President Trump’s executive order denying citizenship to “anchor babies” has caused quite a stir. The media insist that kids born to illegal aliens on U.S. soil are automatic citizens at birth. Although asserted with smug arrogance, they then bury any discussion of the issue in lies.

Thus, for example, the entire media claim that Trump’s order is about “birthright citizenship.” That’s rather circular. The precise question at issue is whether kids born to illegals are citizens by right. It would be like calling a case about transgenders a “women’s rights” case.

In fact, for nearly a century, no one disputed that “birthright citizenship” referred exclusively to the citizenship of children born on U.S. soil to citizens and legal immigrants—not including tourists, diplomats or others in the country temporarily. No court has ever held otherwise.

But the Times neurotically insists that anchor babies’ citizenship is “well-established through the 14th Amendment and nearly 130 years of case law.” The Newspaper of Record is lying about the record.

Actually, the idea that babies of illegals have won the citizen jackpot was invented by Justice William Brennan in 1982 and inserted as dicta—i.e., idle chitchat, not part of the court’s ruling—in a footnote. He cited no law, no constitutional provision and no court holding.

There’s your “well-established” doctrine that anchor babies are citizens—Doctor Demento’s crayon scribbling on the Constitution in the 1980s.

The legendary “130 years of case law” said to establish the citizenship of anchor babies refers to an 1898 case, U.S. v. Wong Kim Ark, that took the 14th Amendment’s guarantee of citizenship to freed slaves and gave it to a child of legal immigrants.

Manifestly, the opinion in Wong had nothing to do with illegal immigrants.

Otherwise, Brennan wouldn’t have had to announce his personal opinion in 1982 that children born to illegals should be treated as citizens. It would already have been the law.

The Wong court never expressly refers to legal or illegal immigrants at all. The concept would have been incomprehensible in 1898. From 1620 to 1920, pretty much anybody could come to America—although in the late 19th century, we began excluding the diseased, the criminal and the feeble-minded. (Probably why Brennan had such a soft spot for illegals.)

There was no social safety net, so if you couldn’t make it, you went home. Until we began plunging immigrants into the warm bath of government handouts, about half of all immigrants didn’t stay. No deportations necessary: They left the same way they came.

It wasn’t until the 1960s that three major innovations conspired to wreck our country: 1) the rise of the welfare state; 2) television; and 3) international air travel. Suddenly, every poor person on Earth was showing up, uninvited, and demanding that we support them for life.

The ruling in Wong does not require that we make their kids citizens. That case merely held that a Chinese man born to parents living in the U.S. as “permanent domiciled residents” was a citizen. Solicitor General John Sauer argued that the court’s repeated references to Kim Ark’s parents being “permanently domiciled” in the U.S. meant they were in the country legally.

Justice Neil Gorsuch objected, saying that “you don’t see domicile mentioned in the debates” over the 14th Amendment.

Of course not! That amendment was about freed slaves.

The framers might have made that point with greater clarity, except our Constitution intentionally avoids referring to race or slavery, out of embarrassment. Instead, the framers used convoluted euphemisms, like “free Persons” and “all other Persons” or “Person held to Service or Labour.”

Even the post-Civil War amendments—despite being all about slaves and slavery—go out of their way to minimize the subject, by, for example, guaranteeing “equal protection” to “any person within [a state’s] jurisdiction.”

That’s the reason for the 14th Amendment’s strange locution: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

The odd phraseology wasn’t an IED meant to blow up in the country’s face a century later. The framers were expressing their discomfort with the “peculiar institution” that had been demanded by plantation owners in need of cheap labor. (Because, otherwise, “the crops would rot in the field”!)

A few of the media’s other favorite moments from the oral argument were Justice Amy Coney Barrett’s retort to Sauer, “Yeah, yeah, yeah, yeah—but what about the Constitution?” and Chief Justice Roberts’ remark, “It’s a new world. It’s the same Constitution.”

If the justices are so concerned with the meaning of the Constitution, the only possible conclusion is that the 14th Amendment doesn’t have anything to do with immigrants at all. It’s about freed slaves. Wong was wrong and should be overruled. And if they won’t say that, then maybe drop the sanctimony about being legal purists doing straight constitutional interpretation.

Wong may be contrary to the 14th Amendment’s history and precedent, but that doesn’t mean it flung open the door and gave automatic citizenship to just anyone. Unlike anchor babies, Wong’s parents were not in the country illegally, and his citizenship was the only issue decided by the court.

COPYRIGHT 2026 ANN COULTER

 

From Mark Wauck’s “What Was The Ceasefire About?”

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From Mark Wauck’s “What Was The Ceasefire About?”

… On Trump’s side, we’ve seen the reports that the US is currently stripping its Asian bases of standoff precision missiles. However, I continue to suspect that the ceasefire theater was precipitated by an internal crisis, probably twofold in nature. The crisis is a crisis of leadership amid growing doubts regarding Trump’s ability to lead and in the context of a severe lack of public support for the Anglo-Zionist war—including a continuing collapse in support for or even in sympathy for the Zionist Entity itself. Here’s how I see this crisis unfolding.

First came Trump’s insistence on a boots on the ground raid to snatch a major portion of Iran’s enriched uranium. Had that raid been successful, it might have fueled hope in the typically Anglo-Zionist fantasy of an internal Iranian regime change, based on lost confidence in the regime’s competence. At the least, it might have allowed for a pause to prepare for the bigger push for complete subjugation and fracturing of Iran. The raid failed in fairly spectacular fashion, requiring a massive coverup of losses—including human casualties—which placed the US military on difficult political grounds.

Second came Trump’s inability to conceal his rage at the shambolic failure and Iran’s refusal to submit, which led to his vulgar, profanity laced “civilization ending” social media tirades over the weekend. In my speculation, a line in the establishment must have been drawn. The reset required not only a pause to retool militarily but also politically. Thus the ceasefire theater. The desperation for a ceasefire—before Iran could call Trump’s deadline bluff—was so serious that the US was forced to accept Iran’s maximalist position. That, of course, has been discarded amid a blizzard of lies. But the truth is out:

DD Geopolitics @DD_Geopolitics

3h

 CONFIRMED! The White House reviewed and approved a social media post by Pakistan’s prime minister, Shehbaz Sharif, which explicitly stated that Lebanon was part of the ceasefire agreement.

However, after Israel bombed Lebanon, the Trump administration backtracked, claiming that Lebanon had not been included in the deal.

That rush to extricate Anglo-Zionism from Trump’s rhetorical excesses has led to another black eye for the Zionist Entity—which launched its Freudian Operation Eternal Darkness on Lebanese civilians—but it achieved the purpose of deflecting attention from Trump’s TACO.

The major problem facing Anglo-Zionist Central is that a mere military munitions resupply—dangerous in itself because the stripping of America’s Asian bases enhances China’s hand—is far from guaranteed to succeed. Iran publicly flexed its strong hand by revealing the numbers of its missile and drone arsenal, and the Anglo-Zionists are painfully aware that their military effort has failed. Is it time for another roll of the dice?

Trump has renewed his efforts to arm twist the NATO countries into what looks like a suicidal attempt at a blunt force reopening of Hormuz.

Pressure leads to understanding? !!!

Again, this is a sign of desperation, but we’re seeing it being pushed forward yet again. It would be ludicrous on its face—why would NATO countries commit this absurd form of suicide? We’ve seen them breaking ranks out of sheer panic for economic survival—but for the financial leverage that the Anglo-Zionist still possesses. But it looks like that fading leverage may not be up to the task at hand. The NATO countries appear to be playing a delaying game, a diplomatic form of the old rope-a-dope strategy—appearing to agree while setting up conditions that are road blocks:

DD Geopolitics @DD_Geopolitics

The US is ramping up pressure on European allies to take a military role in the Strait of Hormuz. According to Der Spiegel, NATO Secretary General Mark Rutte has informed European capitals that Trump expects concrete commitments within days—such as sending warships or other military assets. General political statements are no longer considered sufficient.

European diplomats say Trump’s demand amounts to an ultimatum following his meeting with Rutte. Germany has indicated general willingness to join a mission, but only under conditions such as a UN mandate and either a lasting ceasefire or a negotiated truce.

Beyond Hormuz, Trump is also reportedly pressuring NATO allies with threats. US media say he is compiling a list of European countries that supported or opposed him in his war on Iran, with possible US troop withdrawals from “uncooperative” allies. Spain is mentioned as a key case after refusing overflight rights for US military aircraft.

Germany, meanwhile, has placed no restrictions on US bases, but Trump is said to view Berlin as unsupportive because of political messaging describing the conflict as “not our war”—a quote attributed to Defense Minister Boris Pistorius, though it was reportedly misattributed in Washington to Chancellor Friedrich Merz.

In the meantime, while awaiting developments, we see the pivot to more blustering in this curious social media post. I say curious, because to my eye this reads like a Hegseth production rather than a Trump one. See what you think:

Could this be a sign that Trump is being restricted, at least for the time? There are a few Trumpian flourishes, such as—”bigger, and better, and stronger than anyone has ever seen before”—but even those fail to capture the essential BS.

In the meantime, while awaiting a return to full scale military action, Iran has restricted Hormuz traffic. And that’s the real name of the game.

Continues …

Postcards from the Empire: Postcard from 1967

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Peggy Fleming, America’s lovely skating champion

America in 1967 was still recognizably America 1.0, with the trends that eventually created today’s America 2.0 mostly suppressed until they exploded full force in 1968.

Sometimes it’s good to take a break from the mass insanity taking place and seemingly getting worse by the day and take a step back in time to a different era, one that was still sane even if the early indicators of what was to come were already there.

As a kid I loved baseball. It was easily my favorite sport. I not only played it every day during summer months (on Little League teams and neighborhood wiffle ball games), I could tell you who won the batting crown, or homerun title, or the World Series in any year someone would name along with thousands of other useless stats. The walls and door of my bedroom were papered in pictures of baseball stars, and I collected baseball cards by the thousands; alas like so many other kids of my generation those cards are long gone. You get the picture.

But I loved sports in general, and as a kid in the 1960s various adults who knew of my love for baseball gave me copies of Sports Illustrated, some of which I still have and occasionally peruse.

Sports Illustrated was the largest and most influential sports magazine for many years after its founding in 1954. It was owned by Time, which meant it had significant corporate money behind it. Time, Newsweek, Look, Life, Sports Illustrated, Associated Press and CBS, ABC, and NBC exercised a monopoly on what Americans saw and read in those days. Many young people today attack “Boomers” for not fighting back more, but we had few sources of information and they were essentially identical, though there has always been a small minority of patriots for generations fighting the good fight in a mostly brain-dead society. Besides who could foresee the horrors of the Permanent Cultural Communist Revolution 40 and 50 years on? But that topic is for another column. The monopoly sources of information we digested were always mainstream liberal, moving along with the tide – actually pushing the tide – especially after the assassination of JFK, when the culture instantly began moving leftward. Those of you who remember the Beatles appearing for three consecutive weeks on the very popular Ed Sullivan Show know of the huge impact they had on American society in directing attention away from the murder of a young, charismatic President and toward the first days of the counter culture.

The counter culture didn’t really come on full force until the fateful year of 1968, a year of revolution which in retrospect may have sealed America’s fate as it marked the first largescale organized attempts to subvert the country from within and from many different directions. It was the communist “march through the institutions” and it succeeded beyond anything even Joe McCarthy could have envisioned. The children and grandchildren of the ‘60s radicals are today’s overlords, “peace, love and tolerance” long ago forgotten and replaced by a rigidly totalitarian mindset.

I chose the March 13, 1967 issue of Sports Illustrated to review. I have plenty of other issues to look back on if there is sufficient interest having more of them reviewed. 1967 was the year the Permanent Cultural Communist Revolution began to gain steam, which then boiled over in 1968 with the assassinations of RFK and MLK, huge protests against the Vietnam War, bombs and anarchy reigning on many college campuses, the rise of the Black Panthers and the Black Power movement, the beginning of “women’s lib,” which morphed over time into toxic feminism and the beyond-sad psychological and physical state of so many women today, the largescale fighting in the streets of Chicago during the Democrat National Convention, and a lot more.

When I look back at these old Sports Illustrateds, I focus on not just the articles, but the racial dynamics of them as compared to the racial dynamics of today, the ads of the time, and the costs of various things, whether advertised items, the salaries of athletes, the cost of building sports arenas and the value of sports franchises, etc.

The articles in Sports Illustrated in 1967 were longer and more varied than they became over time, reflecting the longer attention span Americans then had. There were also weekly departments featuring such non-mainstream sports as boat racing, horse shows, bridge and other pursuits. Hockey and golf were covered much more than they later were – ESPN and its brother far-left outlets have done their best to diminish interest in hockey because it’s just “too darn White,” while golf coverage focused solely on Tiger Woods, who while a great golfer was also the most over-hyped, over-worshipped athlete ever along with various basketball and football stars as black athletes began receiving far more lavish attention than White ones, and if you haven’t noticed that yet you obviously have zero interest in sports and how they’re covered.

To briefly look at a few articles from the 3/13/67 SI, there was a piece on that year’s Doral Open golf tournament. Keep in mind that according to the Bureau of Labor’s statistics, it takes $9.80 today to purchase what $1 could in 1967, or just short of ten times as much. As seemingly always with government statistics, that’s fake news, in this case greatly underestimating the real inflation rate.

Doug Sanders won the ’67 Doral Open and received a check for $20,000. Today the average first place money for winning PGA Tour events is between $1 million and $2 million, or between 50 and 100 times as much as Sanders won. The winner of The Players this year will take home $4.5 million and The Players isn’t even a major, one step below. The winner of the Tour Championship will win $10 million in ’26, while the winner of the Fed Ex Cup, a year-long cumulative event, also receives $10 million. As a side note, the Doral Country Club is now owned by the President of the United States.

The article “Crystal and Steel on the Ice” was about the women’s world figure skating championship, won by then 18-year-old Peggy Fleming, who went on to win the gold medal at the 1968 Winter Olympics. Peggy was described as a “beauty from Colorado Springs who looks as fragile as a Viennese chandelier.” Imagine the horror that would erupt today if any type of traditional femininity was ascribed to an American figure skater, or any female public figure for that matter. The article adds more now taboo language: “Girl watching in general, and Peggy watching in particular, is one of the more rewarding aspects of figure skating.”

Peggy Fleming indeed was lovely to look at and watch, feminine and graceful while still being the best at her craft. Nowadays, the femininity of female athletes is long gone in many sports. Those of a certain age may recall how the somewhat muscular girl swimmers from East Germany were ridiculed when they excelled in the 1960s. Now it’s almost mandatory that American female athletes be muscle-bound, including skaters and gymnasts, while the “culture” encourages women in general to be not just tough looking and acting, but covered in tatts and fat and to have green or purple hair. And some people sincerely wonder why so many American men no longer want anything to do with American women. Add on laws that rape husbands in divorces and child custody, or that throw them in jail based solely on a woman’s claim of abuse, and the destruction of the natural harmony between men and women is all but complete. But that’s also a topic for another column.

Continues on Don Wassal’s Substack at the Subscribe button….

Due to circumstances beyond my control…

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Due to circumstances beyond my control, I have not been able to deal with the website. That’s a  problem with a one-man operation. Anyway, I should be able to get things back to normal soon. Kevin M

ZeroHedge: Iran Scrambling To Restore Bombed Missile Bunkers Within Hours After Being Struck

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Iran Scrambling To Restore Bombed Missile Bunkers Within Hours After Being Struck

Iran’s resilience after more than a month of very heavy US-Israeli bombing has become obvious. The country’s somewhat ancient air force and navy have been largely obliterated, and yet all the while the Iranian military has kept up intense ballistic missile and drone strikes on Israel and Gulf states. Tehran’s missile arsenal is what is understood to have always been formidable.

And now US intelligence has freshly assessed that Iranian personnel are busy excavating bombed underground missile bunkers and silos and restoring them to operation within a mere hours of US and Israeli strikes.

The New York Times on Friday featured American intelligence analysis saying that Tehran has retained a substantial number of missiles and mobile launchers, raising serious doubts on how close Washington actually is to eliminating the Islamic Republic’s missile capability.

The report states that Washington cannot determine how many launchers have been destroyed because Iran has deployed decoys. Underground bunkers and silos may appear damaged, but launchers are rapidly recovered from rubble and returned to use through the quick work of excavators and heavy equipment.

Anna Kelly, a White House spokeswoman, has painted a rosy picture from the Pentagon’s point of view: “Here are the facts: Iranian ballistic missile and drone attacks are down 90 percent, their navy is wiped out, two-thirds of their production facilities are damaged or destroyed, and the United States and Israel have overwhelming air dominance over Iran,” she said.

A senior Western official in the NY Times stated that Iran is firing approximately 15-30 ballistic missiles and 50-100 suicide drones per day across the region.

US officials additionally told the Times that Iran aims to preserve as much of its missile-launch capability as possible to sustain its threat posture throughout the conflict and after it ends.

Some of the remaining launchers are currently inaccessible, buried under rubble from repeated airstrikes, but there’s the expectation that Iran will race to dig them out. NYT further cites the following:

Haaretz, the Israeli publication, reported earlier that Iran had used bulldozers to dig out missile launchers that had been buried, or “corked,” in underground bunkers.

President Trump and US planners around him probably didn’t expect the Islamic Republic to put up as much of a fight as it’s still able to do this many weeks into Operation Epic Fury.

Iranian missiles have continued to wreak havoc across Israel especially, with citizens spending many hours each day huddled in shelters, especially in central Israel and Tel Aviv.

Financial effects of Trump’s disastrous war

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From Mark Wauck: China’s best friend

G7 Banking Giant Joins China’s Financial System While World Just Sold $82B In US Bonds

The Iran war is triggering a global shift of capital out of the United States and, if you ask many fund managers, central bankers, and investors, this shouldn’t be the case. Even in the Iraq war, the 08 crisis, and the 2020 lockdowns, the US was always considered a safe haven destination. Well, we just aren’t seeing that happen. US assets are no longer trusted. The war is triggering a global recalibration. Now, Trump’s war update speech just spooked the markets even more. Instead of looking for a genuine off-ramp, the US still wants to continue the war and has warned of further escalation. As the result, the Treasury market collapsed and US stocks continued to fall. Inflation is a real concern and the future of the dollar is now suspect. It’s no longer the safe haven it once was.

This is why global investors are making a grand pivot to China. Chinese assets are now seen as a beacon of stability. Even during the Iran war, Chinese assets dropped by only 3%. That’s the Hang Seng index, where foreigners put their money. Conversely, the S&P was down by almost 6%. Investors in China lost less money. It’s important to understand why that’s the case. The world today is facing an historic energy crisis. Given enough time, oil prices could hit $120, $150, or even $200 a barrel. Economies that weren’t ready for the shock saw their markets crash. That’s why stock prices in Japan and Korea collapsed–because they were too dependent on imported energy. 90% of Japan’s oil and 70% of Korea’s crude came from the Middle East. Their industries are taking significant collateral damage. However, investors are now piling into Chinese assets because Beijing was very well prepped. China has so much oil reserves as stockpiles that they’re actually providing supplies to Southeast Asia. Their energy mix also includes renewables and nuclear power. So, Chinese factories will hum along, production won’t fall, and domestic growth will be rather stable. Because of that, the Chinese currency is actually rising against the dollar. It’s up by 1.8% even during the Iran war. This makes imports cheaper and reduces the impact of higher fuel prices. Inflation is not a concern in China.

As a result, money is flowing into the yuan to buy Chinese stocks and bonds. The shift is happening and every new investment in Chinese assets is dollars denied to US markets. During Trump’s Easter address, he further emphasized the fact that the US economy is broken. There isn’t $18 trillion worth of investments coming in to the US–in fact, the war is bankrupting the economy. It’s forcing the US to borrow more money and is putting tremendous pressure on the bond market. Meanwhile, critical obligations in the country can’t be paid and an eventual default might really happen.

Trump: … to make up. But we, it’s not possible for us to take care of daycare, Medicaid, Medicare, all these individual things. They can do it on a state basis. You can’t do it on a federal. We have to take care of one thing: Military protection.

As an investor, that is the last thing you really want to hear. Would you want to buy US treasuries when the dollar could get debased from a default? And when we say default, we mean: printing money to pay for all these obligations. That’s why investors are seeking alternative assets, especially in China, to hedge themselves. And now a G7 banking giant is [making a shift?] for their clients. Deutsche Bank has successfully issued a record-breaking 5.5 billion RMB Panda Bond, which is almost a billion dollars worth. What’s important is the demand for said bonds in the Chinese currency. Demand hit 8.6 billion R&B or 1.6 times over subscription. Investors wanted the bonds because, despite the low yields compared to treasuries, the Chinese currency is still stable.

Deutsche Bank is the first EU bank in 2026 to issue a Panda Bond, and it’s not going to be the last. Banks move to where the demand is, to get to where the money will flow. And it’s obvious Chinese bonds are rising in prominence. The longer the war drags on, the more Panda Bonds will be issued and the more Panda Bonds are going to be bought. US debt is going to get hammered, especially as inflation in the US continues to climb. And as inflation rises, the odds of rate cuts are going to disappear rather fast. US crude oil has risen to an incredible $112 a barrel. That’s a 70% increase in price from just before the war. Gasoline has risen only by 40% at most, which means there’s still more room for prices to catch up. There’s always a lag effect for energy inflation to hit the real economy. In February, US CPI inflation was 2.4% which is very low. We haven’t factored in the energy shock from the Iran war just yet. The US stock market is beginning to factor that in. The currency and bond market are starting to price in this shock. Just wait till March and April CPI comes in. We could see bond yields spike while the dollar crashes. If inflation rises by a full percentage point, it would completely halt rate cuts. In fact, that could trigger the Fed to hike rates by 25 basis points at the very least.

In the West, many were laughing about China’s deflation. Instead of rising prices, China had stable or falling prices. And now, everyone is praying for deflation because a nasty price shock is coming for all of us. Chinese bond yields have been staying rather steady for a few years, and they are in fact dropping. For bond holders, that is a gain. Meanwhile, the currency is gaining strength against the dollar, which is yet another net gain. For big investors like institutions, banks, and wealth funds, they need this stability. And with Trump in office, US markets are anything but stable. It’s trading like an emerging market on the brink of collapse. US yields are bouncing around like junk bonds while the stock market is not anchored in reality. And we have the US president trying to jawbone the markets on a daily basis. He is spinning a narrative of never ending US dominance.

When investors put money into a country, the underlying driver is the economy. Are they making money? The longer this conflict drags on, the higher inflation will get and wreck the US economy more. The problem with Trump is his lack of understanding of the Middle East. He really believes Iran will just let go of Hormuz and the energy crisis will be over just like that. It’s really bizarre just hearing him speak about it.

Trump: In any event, when this conflict is over, the strait will open up naturally. It’ll just open up naturally. They’re going to want to be able to sell oil because that’s all they have, to try and rebuild. That will resume the flowing and the gas prices will rapidly come back down.

When you hear things like this, it’s really terrifying for the world. Personally, they’re already suffering from higher energy prices. To joke about Hormuz suddenly reopening without a hitch is quite dangerous. If countries get pushed to the brink they will have to start finding money to save their economies. And what is the number one reserve asset they all hold? It’s dollar assets. And there’s a ton of dollar assets sitting on global balance sheets. Global investors hold a ton of US stocks and bonds. Foreigners own at least 20% of the entire US stock market. That’s nearly $19 trillion worth. They also hold a ton of US debt, both sovereign and corporate. That’s 30% of total treasuries and 30% of all corporate debt totaling $12 trillion. Now, just sit back and think a little about what happens during a liquidity crisis. If countries are pushed to the brink, they will need to liquidate their dollar assets, especially treasury bonds. Even if the world enters a recession, US yields might not drop. It could increase instead. It’s really critical to observe the Iran war.

Trump has trapped the US, has sandwiched the entire country into a really dangerous situation. And this is what happens when you lose your grip on reality and you become lost in your own personal maze of fantasies. Should the war end in a US loss, this is going to be disastrous for the dollar. And should the war drag on, it will result in a loss of confidence in the US fiscal situation. And here’s how delicate the situation is today. If the US loses the war, even if it’s a strategic loss, it will destroy US hegemony–starting with American influence in the Middle East. The Gulf countries won’t trust the US security umbrella anymore, and that will lead to less economic benefits and even the petrodollar breaking. There will be less demand for US bonds and this will break the exceptionalism narrative. But if Trump continues waging the war and turns this into a forever conflict the result will be just as bad. It will trigger even more endless borrowing. It’ll keep yields high and push the national debt to catastrophic levels. We will be heading closer to default. This is going to break the safe haven status of the dollar. Currency debasement is just a breath away.

So either way, the situation is horrific for USD holders. It is game over if Trump can’t find a suitable enough off-ramp for the war. He will need to find the delicate balance to spin another tall tail to trick the war once again. But it’s going to be harder to trick the world. There are just so many assets like gold and Chinese bonds on offer. If you’re a central bank, the smart move now is to diversify away [from the dollar]. And if you’re going to do it, you’d better do it quickly. If this evolves into a forever war, the final bill could morph into a trillion dollar disaster. It won’t stop at Congress giving the Pentagon $200 billion–it would probably be much, much, much more. Central banks are already dumping their holdings of treasuries. Since February, treasuries held at the New York Fed have dropped by $82 billion to just $2.7 trillion. It won’t be a surprise if it’s the Gulf countries selling to raise money to bolster their economies. Most definitely, they have to brace for impact from the economic costs due to the war. Their oil revenue has collapsed while their oil assets are literally being blown up by missiles. This will require them to raise a ton of money. And what do you think they have on hand? A lot of oil money sitting in US dollar reserves, US Treasury bonds.

The dump we see really makes sense. Better to get our money out now just in case yields spike higher for inflation. That’s what all central banks are thinking to themselves. Better to cash out now before the dollar crashes even further and then we all look like clowns. And it’s not just the Gulf States that could dump. The energy crisis is cornering many other countries, including US allies like Korea and, especially, Japan. Japan’s energy crisis is so colossal that it’s threatening every single industry they have–from making cars to making chips. Japan has to bring energy prices down. But they can’t raise rates or their debt implodes. They are running out of options here. Now, the yen recently cracked 160 to the dollar, and that means we have crossed a level where the Japanese government has to intervene or risk losing control. And the last time they launched a rescue, they sold nearly $100 billion worth. Japan is sitting on over $1.2 trillion in US bonds. What happens if Hormuz gets closed for another two or three months? What if it extends to half a year? It’s not impossible–and that will be horrific for Japan. The finance minister has vowed that decisive action is coming. They can’t let the yen spiral to oblivion or energy imports will become even more expensive. They might really pull the trigger this time on US bonds.

It’s really crazy, but Trump has managed to crater what’s left of the dollar’s prestige. All his policies are backfiring in real time. The trade war, for example, isn’t helping the US–it’s actually benefiting China’s export economies and their industries. The Iran war won’t cement USA hegemony–it’s breaking it down instead. And the big winner here, ironically, is China’s bond market.