Baltic Dry Index. 2095 -05 Brent Crude 68.26
Spot Gold 4954 Spot Silver 75.64
US 2 Year Yield 3.43 +0.03
US Federal Debt. 38.700 trillion US GDP 31.164 trillion.
“The way to maximize production is to maximize the incentives to production. And the way to do that, as the modern world has discovered, is through the system known as capitalism—the system of private property, free markets, and free enterprise.”
Henry Hazlitt
Will today’s roaring 20s end in another 1929 style bust? No say the US stock casinos, though the AI bubble may well prove them wrong.
Yes, says the non-partisan Committee for a Responsible Federal Budget who see US federal debt rising to 56 trillion within a decade and the USA entering a debt spiral where the interest of the debt rises faster than the USA GDP.
The west could still save the declining dollar reserve standard but happily, no one in Washington District of Crooks remotely cares. Fiat dollars or gold and silver anyone.
Arriving about the same time as the US debt spiral, the Great Western State Water Crisis as the falling Colorado River level fails to keep up with western demand. Unhappily, no one in Washington D.C. remotely cares, either.
Asia stocks rise despite lingering AI worries, oil
down after U.S.-Iran talks
Asian stocks pushed higher on
Wednesday despite the renewed artificial intelligence worries gripping international
markets, while oil prices were under pressure after Iran touted
progress in nuclear negotiations with the United States.
The New Zealand dollar sank after
the central bank said monetary policy needs to remain
accommodative for some time to support the economic recovery.
Japan’s benchmark Nikkei 225 index rose
0.93% to 57,090.14, poised to snap a three-day skid, while Australia’s
S&P/ASX200 was up 0.5%.
Mainland China, Hong Kong, Singapore,
Taiwan and South Korean were among markets closed for Lunar New Year holidays.
The positive start in Asia followed
a lackluster session on Tuesday on Wall Street as investors grappled
with the outlook for the AI boom.
Concerns that companies are
over-investing, along with angst about the extent to which the
nascent technology could disrupt labor markets, have fueled investor
jitters in recent weeks.
In the U.S. overnight, The Dow Jones
Industrial Average .DJI rose 0.07% to 49,533.19, the S&P 500 was up 0.10% at
6,843.22 and the Nasdaq Composite gained
0.14% to 22,578.38. The S&P 500 fell 0.88% initially before making up
ground to close in positive territory.
The yield on benchmark U.S. 10-year
notes was flat at 4.054% on Wednesday. The 30-year bond yield
fell 0.4 basis points to 4.6788%.
“AI uncertainty remains a source of
volatility, both in terms of the difficulty in assessing which AI companies
will be the winners and losers but also what sort of impact will AI have in
other companies and sectors of the economy,” NAB analysts said.
Brent and West Texas Intermediate crude oil futures
were little changed on Wednesday at $67.42 and $62.32 per barrel, respectively,
after both slid to close at more than two-week lows in the previous session.
Following talks in Geneva on Tuesday,
Iran’s foreign minister said Tehran and Washington reached an understanding on main “guiding principles” towards
resolving their longstanding nuclear dispute, easing worries about a military
conflict near the Strait of Hormuz that could disrupt
global oil supply.
Gold as 0.2% weaker to
around $4,867 per ounce and silver was
down by around the same margin to around $73.30 per ounce.
“Gold prices dipped as a stronger U.S.
dollar weighed on the market, with declining U.S. Treasury yields providing
little support,” ANZ analysts said.
“Investors remained uncertain amid subdued
trading in Asia. Prospects of easing geopolitical tension with positive
outcomes from the Iran-US talks in Geneva weighed on haven demand for gold.”
The U.S. dollar index, which measures the
greenback against a basket of major peers, was flat in Asia hours at 97.12.
The traditional safe-haven currency held
its ground as geopolitical risks kept markets on edge and investors awaited
minutes from the Federal Reserve’s January meeting, due later on Wednesday, for
signals on the path for interest rates.
The euro edged down 0.1% to $1.1844,
while sterling stabilised at $1.3563 following a 0.5% slide in the previous
session.
The New Zealand dollar slid 0.6% to
$0.6014. The Aussie dollar eased 0.2% to $0.7075.
The yen firmed 0.1% to 153.12 per
dollar.
Japan’s annual bond issuance will likely
surge 28% three years from now due to rising debt-financing costs,
Reuters reported on Tuesday, citing a finance ministry
estimate.
Japan would need to issue up to 38
trillion yen ($248.3 billion) worth of bonds in the fiscal year starting in
April 2029 to fill a hole from expenditures surpassing tax revenues, up from
29.6 trillion yen in fiscal 2026, the report said.
Asia
stocks rise despite lingering AI worries, oil down after U.S-Iran talks
$56 trillion national debt leading to a spiraling
crisis: Budget watchdog warns the U.S. is walking a crumbling path
February 17, 2026, 12:24 PM ET
The United States is rapidly accelerating
toward a definitive tipping point in its financial history, the Committee
for a Responsible Federal Budget (CRFB) wrote in response to the
latest 10-year outlook from the Congressional Budget Office. The nonpartisan
budget watchdog issued a stark assessment: The current trajectory of borrowing,
which is running at double the 50-year historical average, is simply
mathematically unsustainable.
The CRFB cautioned that without immediate
legislative intervention, the federal government faces a future defined by
exploding interest costs, insolvent trust funds, and a national debt burden
that will shatter post–World War II records within four years.
It amounts to a report card for the Trump
administration’s first year back in office—potentially its last truly impactful
year of President Donald Trump’s term, if midterm elections swing either or
both of the House and Senate to Democrats. The CBO updated its projections to
account for the One Big Beautiful Bill Act (OBBBA), Trump’s tariff regime,
changes in immigration, and other factors. “With debt approaching record
levels, interest costs exploding, trust funds approaching insolvency, and
deficits expected to remain more than twice as large as the oft-discussed 3%
of GDP target,” the CRFB argued, “lawmakers should come together to enact
significant deficit reduction.”
The numbers: breaking records and breaking
the bank
According to the new CBO projections, the
federal debt held by the public is on track to reach a record 120% of gross
domestic product (GDP) by 2036. In sheer dollar terms, the pile of money owed
by the government is projected under the CBO’s baseline scenario to balloon
from nearly $31 trillion today to a staggering $56 trillion over the next
decade.
The speed of this accumulation is
unprecedented in peacetime. The CRFB notes that debt held by the public
currently hovers around 100% of GDP, which is already roughly double the
50-year historical average. Under the current baseline, federal debt is set to
surpass the all-time record of 106% of GDP—set in the aftermath of World War
II—by fiscal year 2030.
The driving force behind this surge is a
structural mismatch between what the government spends and what it collects.
Spending is projected to grow from 23.1% of GDP in 2025 to 24.4% by 2036. In
contrast, revenue is trailing significantly, rising only marginally from 17.2%
of GDP to 17.8% over the same period.
Consequently, the U.S. is facing a decade
of massive deficits. The CBO projects annual budget deficits will total $24.4
trillion over the coming decade, exceeding $3 trillion annually by 2036. As a
share of the economy, these deficits are expected to average 6.1% of GDP—more
than twice the 3% target that economists and the CRFB suggest is necessary to
place the national debt on a sustainable path.
It could easily get worse, too. If the
Supreme Court strikes down much of Trump’s tariff regime, as expected, and if
lawmakers make temporary previsions in the OBBBA permanent while reviving the
Affordable Care Act health insurance subsidies, a core Democratic promise, the
CRFB estimates debt spiking to 131% of GDP by 2036, rather than 120%. Under
these conditions, the deficit would reach $3.8 trillion in 2036, and the risk
of a full-blown fiscal crisis would grow exponentially.
The looming debt spiral
The most alarming aspect of the new
outlook is the compounding danger of high interest rates interacting with high
debt—the mechanics of what the CRFB calls a “debt spiral.” The CRFB warns that
later in the decade, the average interest rate on all federal debt is projected
to exceed the rate of nominal economic growth. Economists refer to this dynamic
as “R>G” (rate > growth). When the cost of servicing past debt grows
faster than the economy that supports it, debt accumulation becomes self-perpetuating,
making a fiscal crisis increasingly likely.
More
$56
trillion national debt leading to a spiraling crisis | Fortune
Ford’s $5.8B Kentucky Battery Plant Goes Quiet
Just Months After Opening, 1,600 Jobs Lost
Mon, February 16, 2026 at 9:00 PM GMT
Four months after it opened with fanfare
and promises of stable, high paying jobs, a $5.8 billion battery plant backed
by Ford Motor Company and South Korea’s SK On is now sitting idle in Glendale,
Kentucky.
About 1,600 workers are out of a job, and
a political firestorm has erupted over who is to blame.
The sprawling 1,500-acre site, known as
BlueOval SK, was hailed in summer 2025 as a transformational investment for the
region.
Local leaders described it as a
cornerstone of the electric vehicle (EV) future, a magnet for suppliers, and a
lifeline for families seeking long term employment in advanced manufacturing.
The facility was designed to produce EV batteries, anchoring Ford’s ambitious
EV expansion.
The Sudden Collapse
By December, that optimism had collapsed.
Ford and SK On ended their joint venture at the site. Soon after, Ford
confirmed it would idle the plant for roughly 18 months.
Instead of building batteries for cars and
trucks, the company said it would pivot production toward energy storage
systems aimed at utilities, data centers, and commercial customers.
Ford cited slowing EV demand in the United
States and a shifting regulatory landscape as key reasons for the dramatic
pause. Executives pointed to forecasts that once predicted EVs could account
for as much as 45 percent of US auto sales by 2030.
Those projections have since been revised
down to between 9 and 18 percent, reflecting softer consumer uptake and policy
uncertainty.
The Political Blame Game
At the center of the political storm is
Donald Trump. During his presidency, Trump weakened national vehicle emissions
standards and sought to block California from enforcing stricter clean car
rules.
He also vowed to scrap the federal tax
credit that reduced the price of new EVs by up to $7,500 and to curtail
government support for charging infrastructure.
Kentucky Governor Andy Beshear squarely
blamed Trump’s policies for the shutdown. He argued that eliminating EV
incentives drained consumer interest just as billions were being invested in
domestic battery plants.
According to Beshear, the 1,600 layoffs
were a direct consequence of federal policy decisions that undercut demand.
More
Ford’s $5.8B
Kentucky Battery Plant Goes Quiet Just Months After Opening, 1,600 Jobs Lost
In other news, UK socialism at work.
UK minimum wage is raising youth unemployment,
Bank of England's Mann says
Reuters
Sun, February 15, 2026 at 11:12 AM GMT
LONDON, Feb 15 (Reuters) - A sharp rise in
Britain's minimum wage for younger workers over the past three years has
contributed to an increase in unemployment for that age group, Bank of England
policymaker Catherine Mann said in a newspaper interview on Sunday.
The unemployment rate for 18-24 year olds
in Britain was 13.7% in the three months to November, up from 10.2% three
years earlier and its highest since the fourth quarter of 2020.
Over the same three-year period,
unemployment for the whole workforce has risen to 5.1% from 3.9%.
Speaking to the Sunday Telegraph, Mann
said she believed the rise in youth unemployment reflected disproportionately
big increases in the minimum wage for that age group, rather than being a
leading indicator for a broader rise in unemployment.
"I think we have to be very careful
in the storyline about youth unemployment being the canary in the coal mine
for a deeper deterioration in the labour market," she said.
"The accumulation over three years of
the rise in the National Living Wage for that group has been manifested in
unemployment for that category of workers. Very unfortunate, but it is true. It
is a fact," she added.
Britain's minimum wage rate for 21-22
year-old workers has risen by 33% over the past three years to bring it in
line with the 12.71 pounds ($17.35) hourly National Living Wage paid to older
workers, while the rate for workers aged 18-20 has risen 46% to 10 pounds an
hour.
Britain's government has said it wants to
bring the minimum wage paid to 18-20 year-old workers in line with older
workers too.
Mann is a former chief economist at the
Paris-based Organisation for Economic Co-operation and Development and voted
against the BoE's last three rate cuts due to concerns about inflation.
UK minimum wage is
raising youth unemployment, Bank of England's Mann says
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Sterling falls as UK unemployment hits highest rate in five years
Published Tue, Feb 17 2026 1:16 AM EST
LONDON — Sterling dipped and British government
bond yields fell Tuesday morning after data showed the U.K.’s unemployment rate
rose to a five-year high while wage growth slowed.
The pan-European Stoxx 600 hovered above the
flatline as of 8:47 a.m. GMT (3:47 a.m. ET), with Italy’s FTSE MIB also
adding nearly 0.4%. France’s CAC 40 rose
0.2%, and Germany’s DAX was
trading just below the flatline
The U.K.‘s FTSE 100 was
up 0.3% shortly after the market opened. Sterling fell
against the dollar, last down 0.5% to trade at $1.356, after the U.K.’s earnings and employment report showed
that the number of payrolled workers fell 0.4% on a yearly basis to 30.3
million in January 2026.
That’s 134,000 fewer employees since January 2025
and down 11,000 from the previous month. Meanwhile, the unemployment rate rose to 5.2% in December, up
from 5.1% a month earlier. The pound was last down 0.4% against the Euro.
UK unemployment is now at its “highest level” since
January 2021, hitting a five-year high, Samuel Fuller, director
of Financial Markets Online, said.
British government bond yields, known as gilts,
were down following the release of the jobs data. The 10-year Gilt was
down 3 basis points to 4.368%, while the 2-year Gilt shed
2 basis points to 3.563%.
---- Earnings remain
in focus for investors. Miners Antofagasta and BHP Group released earnings on Tuesday, as well as InterContinental Hotels Group.
Meanwhile, German inflation came in at
2.1% in January, up from 1.8% the previous month, the German Federal
Statistical Office reported on Tuesday. “The rise in overall consumer
prices intensified at the start of the year,” Ruth Brand, president of the
Federal Statistical Office, said in the release.
Overnight,
S&P 500 futures were near flat following two straight
negative weeks for the benchmark; U.S markets were shut on Monday for
Presidents’ Day.
Asian
financial markets were treading carefully on Tuesday in
holiday-thinned trading, with markets in mainland China, Hong Kong, Singapore,
Taiwan and South Korea closed on Tuesday for Lunar New Year.
European markets: Stoxx 600,
FTSE, DAX, CAC, miner earnings, data
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section Updates as they get reported.
China’s tech shock threatens the U.S. AI monopoly and is ‘just
getting started’
Published Mon, Feb 16 2026 7:30 AM EST
China’s rapid advancement in AI is threatening to shake up U.S.
dominance in the market, with one analyst warning of a tech shock that is just
getting started.
Rory Green, TS Lombard’s chief China economist and head of Asia
research, told CNBC’s “Squawk Box Europe” on Monday that America’s “perceived
monopoly” on tech and AI has been broken by China.
“I think the China tech shock is just getting started. It’s not
just AI, DeepSeek, and electric vehicles. China is moving up the value chain
very rapidly... It’s the first time in history that an emerging market economy
is at the forefront of science and technology,” Green said in a conversation
with CNBC’s Steve Sedgewick and Ben Boulos.
China is pairing dominant-market level tech with emerging-market
production costs, backed by its massive supply chain, Green said. He added that
with Xi Jinping being like a “tech bro” that is chucking money into these
sectors, it makes for a powerful mix that is really rapidly accelerating the
China tech story.
Indeed, Beijing quietly launched a 60.06 billion yuan
($8.69 billion) national AI fund last year, and has an
initiative called “AI+” which will see the tech integrated across its economy,
industries, and society.
China is quickly catching up to the U.S. in the AI arms race,
developing highly advanced models powered by homegrown chips, particularly
through massive Huawei chip clusters and abundant low-cost energy.
While U.S. chip giant Nvidia is viewed as the
gold standard for semiconductors used to train AI models, Huawei is narrowing
the gap by deploying larger volumes of chips and leveraging cheaper power to
scale compute.
TS Lombard’s Green explained that a “China tech sphere” could
easily form, as the world’s second-largest economy’s low-cost tech offerings
may be more attractive to developing economies.
“China is a top trade partner for most of the world, particularly
in emerging and frontier economies. What happens if that repeats on tech?”
Green said.
Developing economies that don’t have a national security issue
with China have a choice between “low-cost China tech, Huawei, 5G batteries,
solar panels, AI, probably some cheap RMB financing,” or “high-cost American
and European alternative,” he said.
“For these economies, I think the choice is fairly simple, and you
could see easily a world where maybe most of the world’s population is running
on a Chinese tech stack in five to 10 years time,” he added.
Additionally, Demis Hassabis,
the CEO of Google DeepMind, one of the world’s leading AI labs,
told CNBC in January that China’s AI models might be just “a matter of months”
behind U.S. and Western rivals and are closer to those capabilities than “maybe
we thought one or two years ago.”
More
China's tech shock
threatens U.S. AI monopoly: 'just getting started'
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
“The great danger to the consumer is the monopoly— whether
private or governmental. His most effective protection is free competition at
home and free trade throughout the world. The consumer is protected from being
exploited by one seller by the existence of another seller from whom he can buy
and who is eager to sell to him.”
Milton Friedman
