Breakfast briefing: Investors on edge as global bonds sell off

Economy / news

Bond markets shout warnings; dairy prices hold; US data stable on stockpiling; Japanese sentiment firms; China's debt nears US levels; Australian building permits fall; UST 10yr at 4.80%; gold falls and oil jumps; NZ$1 = 58.9 USc; TWI-5 = 62.4

2nd Sep 26, 7:28am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news bond yields worldwide climbing as rising oil prices are raising inflation concerns. Financial markets have raised the chance of widespread interest-rate hikes. US Treasury 10 year yields hit 2025 highs at 4.8%, while Japan’s equivalent rate hit 3% for the first time since 1996. German bund yields climbed to 15-year highs and UK gilt yields to 18-year highs.

Not helping are a new round of attacks by a trigger-happy US on Iran.

But first, there was a full dairy auction overnight and the overall results were modestly positive. Prices in USD were up +0.9% and up +0.6% in NZD. The big mover down was cheddar cheese suffering a -6.6% fall. The big mover up was SMP with a +5.3% gain. WMP was very little-changed. In fact, SMP prices are now higher that WMP prices, the first time like this since July 2022. In between, the WMP premium actually got as high as +US$1550/tonne.

In the US, there were two factory PMIs out for August, both essentially holding a moderate expansion there. The widely-watched ISM one came in fractionally lower than for August, with new orders growing at a slightly slower rate and price pressure little-changed. The internationally benchmarked S&P Global one was little changed, noting output and orders both rising at slower rates, with stock building efforts continuing amid supply issues and higher prices.

The US Logistics Managers’ Index fell for a second consecutive month due to a slowdown in inventory expansion, while logistics costs continued to rise at a high pace.

July JOLTS data shows job openings rising while quits fell, but these changes were actually quite minor.

The US RCM/TIPP optimism index is still in an easing trend that started in early 2025, but it has held at a modest level in August, similar to the June and July levels. There were offsetting shifts with greater confidence among investors and higher-income households, but a deterioration in sentiment for non-investors and lower-income households.

Meanwhile the Dallas Fed services sector activity moderated in August, but is still expanding.

The Canadian factory PMI was little changed where their expansion was maintained at solid rate with output, new orders and employment all rising in August.

Japanese consumer sentiment rose again in August, something it has been doing consistently since April.

As we suspected, the private China factory PMI by S&PGlobal (Rating Dog) came in much more positively that the official version, and expanded at a rate that beat estimates, even if it is modest. How sustainable that improvement is will be interesting to see because input price inflation rose but output prices fell for first time in 2026 so far.

And we should probably note that China's government debt is now at ¥100 tln for the first time (NZ$25.3 tln),107% of their GDP. And that is just their central government. (But to be fair, a notable part of that rise involves a shift from old opaque local government debt to a more transparent national treatment.) While that may seem high (and it is), the equivalent US federal debt level is 124% of their GDP. For New Zealand it is 49%, for Australia 34%.

EU CPI inflation came in at 3.3% in August, the expected level, but up from 2.9% in July. All this rise was fuel cost related. Their core CPI rate actually dipped slightly to 2.4%.

Meanwhile, German retail sales actually fell, and quite hard, down -2.5% in real terms in July from a year ago with the current month drop an outsized -3.4%, so the recent bite has been aggressive. In nominal terms there year-on-year levels are just level-pegging.

Australian building consents were expected to fall in July and they did, and by about the expected amount, down -3.6% from June to remain up +9.0% from a year ago. House consents fell -4.2% but multiunit consents held little-changed (-0.4%). Still, that leaves the multiunit sector up almost +20% from a year ago. (Some of those are likely to have been Bathla developments in Western Sydney, so are unlikely to proceed now.)

The UST 10yr yield is now just on 4.80%, up another +4 bps from yesterday at this time. The 30 year yield is at 5.26%, up +1 bp. The key 2-10 yield curve is now at +41 bps (unchanged). Their 1-5 curve is now at +39 bps (+3 bps) and the 3 mth-10yr curve is at +104 bps (+4 bps). The China 10 year bond rate is down -1 bp at 1.68%. The Japanese 10 year bond yield is now at 3.01%, up +7 bps, and a new 30 year high. The Australian 10 year bond yield starts today at 5.16%, up +6 bps. The NZ Government 10 year bond rate is now at 4.82%, also up +6 bps from yesterday.

Wall Street lower again with the S&P500 down -0.7% and the Nasdaq down -1.0%. Overnight, European markets were lower between London's -0.3% and Frankfurt's -1.1%. Tokyo ended its Tuesday trade down a minor -0.1%. Hong Kong fell -0.9%. But Shanghai only fell -0.2%. Singapore was down -0.8%.The ASX ended its Tuesday down -0.1%. And the NZX50 was down -0.9%.

The price of gold is now at US$4335/oz, and down -US$97 from yesterday at this time. Silver has fallen -US$1.50 to just under US$64.50/oz.

Oil prices are up +US$4.50 at just over US$90/bbl in the US, while the international Brent price is just under US$94.50/bbl. Hormuz transits have held very low with just seven ships exiting over the past 24 hours, three of which are tankers (1 dark with transponders off) and six entering for new loads (2 dark). The Red Sea activity is marginally lower than yesterday with less than 20 each way at the Yemen chokepoint.

The Kiwi dollar is down -30 bps from yesterday at just on 58.9 USc. Against the Aussie we are down -20 bps at 82.4 AUc. Against the euro we are also down -20 bps at 50.8 euro cents. That all means our TWI-5 starts today at just over 62.4, down -30 bps from yesterday.

The bitcoin price starts today at US$77,297 and down -2.0% from yesterday at this time. Volatility over the past 24 hours has remained modest at just on +/-1.2%.

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48 Comments

by slowlearner | 2nd Sep 26, 8:07am 1788293228

Netball and hope. It seems like a good example to the malaise of so much of NZ governance, the Board and professional management of NZ Netball. Having a world champion team with an exceptional coach is no protection from incompetence in governance.
I think of my ancestors in this country, trying to make a life at the edge of the world. If I could ask them for their thinking, it’s possible that it may have been, as Peter Blake expressed, what makes the boat go faster. Lou wrote about this in another thread yesterday, clearing away the clutter, individual responsibility. It’s good to have a social safety net, but when the net ties us up, we need to think a bit more. I am guessing that Netball NZ did all kinds of shifting deck chairs, but not the effective stuff.
Someone doing something sensible, having some expertise can change the landscape. What seems to be missing from NZ Inc, leadership, hope. Think about the leaders that you respect, are any of them involved with governance of our nation? Why not? What have we stuffed up to have such inadequate governance?

by JimboJones | 2nd Sep 26, 8:08am 1788293332

This poll is very interesting: https://www.roymorgan.com/findings/10321-nz-national-voting-intention-august-2026

Labour are only on 24% vs National 31%. Weren't Labour leading National not so long ago?
Greens on 15.5%. If they did have a coalition with Labour, then Labour wouldn't be able to call the shots with those numbers
Opportunity on 9.5% and kingmaker.

Labour have completely lost the progressive vote. By that I mean people who are reasonably wealthy and economically conservative, but would prefer solar to LNG, prefer Waka Kotahi to NZTA, prefer 30kmh on residential streets, liked the clean car discount, etc. I put myself in that category and Labour are well down my list of options in this election. National seem like a better option thanks to Chris Bishop, and Opportunity are the new kid who are cleaning up those votes.

by Foxglove | 2nd Sep 26, 8:28am 1788294513

The more polls there are the more they are discredited. Surely by now it is obvious that the various pools being canvassed are either not credibly representative in either number or selection, are pitched and analysed with predisposed questions and answers relatively. Add to that most of the media being selective as to their particular agenda, emphasising on one hand, downplaying on the other.

by Albert2020 | 2nd Sep 26, 9:27am 1788298060

The various polls leading up to the last election were very accurate regarding the result of the election. You think their sampling methodology has changed?

by Foxglove | 2nd Sep 26, 9:44am 1788299082

If any of them have changed their methodology they haven’t, as far as I can see, told anybody about it and are hardly likely to in any case. If I recall correctly believe the Roy Morgan polling proved to be the most accurate, as it happens thats the one attached to JJ’s post, and again from what I can see, they are regarded to be something of a maverick poller. Have no doubt there is going to be ongoing fluctuating and contradicting poll results for the next two months. Let’s wait and see who has been the most consistently accurate this time round.

by WinHonourHelp | 2nd Sep 26, 10:35am 1788302109

According to this poll, 22% of men under 50 will vote Green, second only to National. Just who are these guys! Also 25% of woman under 50, second to Labour.

by mfd | 2nd Sep 26, 11:03am 1788303824

The environment and climate become more important the longer you expect to survive to suffer the consequences of our current trajectory. Makes sense to me.

by Foxglove | 2nd Sep 26, 11:39am 1788305989

Understandable on those points yes but it is highly questionable whether the Green Party here carries that same mantle as a priority to the degree that is accorded to the traditional Green movement internationally. Rather it is arguable that the thrust here in NZ concentrates mostly on social and economic policy to be found usually, on the extreme left side of politics. Furthermore leading up to and since the last election the Green Party here has repeatedly produced elements of unsavoury and intemperate behaviour unbecoming of any respectable political party. However as evidenced here it seems, they have not exactly been marginalised by the electorate accordingly which would suggest is because they have been wise enough to simply keep their heads down more than usual.

by mfd | 2nd Sep 26, 11:44am 1788306270

Yes they've certainly got a split between the environmental and the social wings of the party, and the social wing seems to be ascendant. Some will argue they are both parts of the same process of looking after the world as whole, but it means more time spent talking about migration than reforestation, social welfare rather than water quality etc, and means there can only be a strong environmental voice when the Left are governing. I've voted Green in the past but considering my options this time.

by interesting1234 | 2nd Sep 26, 12:25pm 1788308723

I think the reality is that they are indicating the populace are looking back and realising that neither red or blue have credibility in delivering results despite outlandish promises like the reds promising more social housing (and delivering greater child poverty), then blue saying growth will come back while cancelling large projects which may have helped with that by now.
There is only so long one can handle a poorly delivering manager before they jump ship to another organisation, or in this case, political party.
The lead up to this elections is also showing how childish, unimaginative, and ingenuine both red and blue are. I liken it to watching two monkey flinging dung at each other on stage and trying to out shout each other, with the country watching on seeing nothing achieved and feeling their time could be put to better use elsewhere.

by powerdownkiwi | 2nd Sep 26, 8:33am 1788294809

You have had enough info put under your nose, to not 'be in that category'. Same with the HCF (Jacobi thread).

Why do people insist on ignoring/avoiding a demonstrable set of truths?

For those interested in thinking about the predicament we face: Surplus Energy Economics | The home of the SEEDS economic model – Tim Morgan

'We’ve seen this process unfold over a protracted period and, in a credit-based monetary system, liabilities are the numbers to watch. Since 2005, and stated at constant values, global debt has grown by 150%, and broader financial assets (which are not disclosed in full) by not less than 175%.

Nothing in the material economy has come anywhere near these rates of monetary expansion. Over that twenty-year period, energy consumption has increased by 34%, all-important ex-cost surplus energy by 26% and material economic prosperity by 24%.

On the basis of inflecting comparative scarcities, investors should, ideally, be shorting anything monetary, and going long on the material.'

Just what I've been saying here, for years. But instead, we've going to ignore that, and focus on a short-term election of leaders ??? based on the past.

Whether Labour do or don't figure, given the current state of the planet, is irrelevant. Populism is dependent on the degree of ignorance held - and obviously fiercely held by some - by the voting populace. They, increasingly, know the jig is up and that the status-quo can no longer deliver its promises. Bereft of the truth, they blame 'others'. Local Government, public servants, Putin, the Left, the Right, whatever. Without much depth of thinking - like: How is it that the public service is somehow unsupportable, given that it was OK in Hall's Glide Time days? That link gives the reason - but how many voters know?

by Let me be Frank | 2nd Sep 26, 9:14am 1788297240

Good link....

"Ultimately, there’s no reason why the “real” economy of the material shouldn’t contract in a reasonably manageable way. But the complex will fail – and there has never been anything that rivals, for sheer complexity, the contemporary financial system."

It could be manageable (though not necessarily easy) if only it was widely recognised.

by powerdownkiwi | 2nd Sep 26, 9:48am 1788299335

One nation, alone and ex private/corporate, owes 40 trillion. Alone, I reckon that debt is unresolvable.

Globally?

If we're going to honour every token ($ proxy held), they're going to have to be worth an awful lot less, each. And reducing...

by Let me be Frank | 2nd Sep 26, 6:01pm 1788328898

the maths says yes

by murray86 | 2nd Sep 26, 10:31am 1788301877

A big concern for me is that with all the money expansion that has occurred, there has been little economic benefit to the country. Some of the rich have got richer, but it seems most of the money created is flowing out of the country, at the expense of ordinary Kiwis.

This is the government wasting tax payers funds. Why would anyone support any form of taxation or any increase when politicians cannot be relied on to put the money to use where it benefits the country?

by interesting1234 | 2nd Sep 26, 12:27pm 1788308878

Populism is dependent on the degree of ignorance held - and obviously fiercely held by some - by the voting populace.

A very good statement. There's nothing more dangerous to major political parties than a more educated and informed populace, which I feel we are starting to see now leading up to this election. Pragmatism and new ideas are gaining traction, and old, engrained mantras and ways of thinking are being proven ineffective or subject to confirmation bias (housing market good for economy etc).

by bulls hit | 2nd Sep 26, 10:44am 1788302692

I just can't get past the LNG thing. Complete head in the sand stuff when their own electricity companies' CEOs are saying we no longer have a dry year issue.

It's either a submission to vested interests, blind political philosophy or boneheaded thickness, or a mix of all three. Regardless, the NATs won't be getting either of my votes

by interesting1234 | 2nd Sep 26, 12:29pm 1788308953

I'd bank on it being garnering clout for a handshake job after exiting politics, for a few of the current incumbents.

by gibbonsj | 2nd Sep 26, 2:52pm 1788317557

It's pretty easy to understand once you realise it is primarily for the the benefit of gas users and domestic gas infra providers. They can't afford to pay LNG + terminal cost prices, or everyone will defect to other energy sources, or shut down. Making the electricity system cover all of the terminal costs (in some scenarios nearing half the total cost of delivered gas) is a win-win. You get to bash electricity companies and simultaneously bail out some of the core voter base.

by bulls hit | 2nd Sep 26, 4:45pm 1788324300

That actually makes sense. So why don't they just come out and say that's why they want it and forget all the dry year bulls hit

by gibbonsj | 2nd Sep 26, 5:17pm 1788326276

Charging some random sector of the economy to bail out another isn't good policy and wouldn't be well received. Everyone serious knows that's what they are doing anyway, but at least they have some sort of plausible deniability.

by Let me be Frank | 2nd Sep 26, 6:03pm 1788329022

implausible deniability...maybe why they have lost credibility.

by ghytresd | 2nd Sep 26, 7:03pm 1788332622

Pandering to the uninformed electorate instead of changing their messaging as the facts change

by The Person | 2nd Sep 26, 11:56pm 1788350188

It's Simeon, he's not thick, suspect he's not under the thumb of lobbyists. That leaves blind ideology as the likely explanation

by Yvil | 2nd Sep 26, 8:50am 1788295809

by Yvil | 1st Sep 26, 4:22pm

Bond yields rising at an increasing rate whilst debt is at an all time high and also rising. To top it off, oil prices are also also rising.

How can this possibly not end up in a very serious collapse ?

It looks like we could get the answer very, very soon

by powerdownkiwi | 2nd Sep 26, 8:54am 1788296094

Crazy Town: Episode 131. Finding Crazy Town Part 3: Unlimited Limits to Growth - resilience

'Alex Leff:
That's so weird. Why would our government not believe there were any limits to growth? Did the economists get to them too?'

Pigeons. Home. Roost...

Time we talked about how to set up NZ to be resilient; to have the capacity to withstand shock(s).

by LouB | 2nd Sep 26, 10:35am 1788302152

Excellent link thanks. But at 49 minutes, how many head down, bum up people engaged in the daily grind have the time to listen and think? Retirement has some advantages.....

One point, in particular, lodged with me. That was in regard to economists being essentially fenced in to framing economic think by the current, dominant neoliberal paradigm, that is predicated on growth.

Which economists in NZ are actually thinking about and analysing alternate ways of economic structuring to allow an economy aka a society (because economics only has meaning within a human, social, context. Without people, all the theory is meaningless) that is bounded by limited resources and not pursuing growth?

by powerdownkiwi | 2nd Sep 26, 11:09am 1788304169

'Which economists in NZ are actually thinking...'

None that I can think of. Jacobi (other thread) being a classic example. Even Easton seems incapable of thinking outside their restricted box.

What annoys me more, is those who claim to position themselves in that space - the Helen Clark Foundation being a classic. But don't/aren't.

by murray86 | 2nd Sep 26, 11:10am 1788304240

"Which economists in NZ are actually thinking about and analysing alternate ways of economic structuring to allow an economy aka a society (because economics only has meaning within a human, social, context. Without people, all the theory is meaningless) that is bounded by limited resources and not pursuing growth?"

Short answer - NONE!

Why? Are vested interests driving the direction or management and control?

by Yvil | 2nd Sep 26, 1:41pm 1788313292

Excellent post Lou, I enjoy your contributions.

Although I don't agree with the link's view about a world growth of 3% leading to a doubling of consumption in 23 years. Why? Because GDP is measured in fiat $, and the amount of $ in circulation improves dramatically over time and it devalues. This whole discussion is false IMO. If GDP grows at say 3% pa, and fiat expansion also grows at 3% (I suggest that number is much higher) and inflation also grows at 3% pa (again I suggest real inflation is about double this), then REAL GDP is nil, zero.

by Let me be Frank | 2nd Sep 26, 6:06pm 1788329179

Your metrics are wrong...it matters not what the measure is if the necessaries are unavailable...or unavailable to enough

by Snow | 2nd Sep 26, 9:39am 1788298752

Have you adjusted any part of your portfolio to suit?

by profile | 2nd Sep 26, 10:11am 1788300671

Get in to the coffin sector.

"At this writing, over 50 countries and places around the world are net-mortality societies: basically, all of East Asia and most of Europe. In 2025, East Asia witnessed three deaths for every two births. The same was true for Europe in 2024 (and it may be a little higher when the 2025 numbers are finalized).

But net-mortality societies are now scattered around the rest of the world, too—including in Southeast Asia (e.g., Thailand) and Latin America (e.g., Cuba and Uruguay), even soon, perhaps, off the coast of Africa, in Mauritius.57 Already over a quarter of the world’s people live in this net-mortality zone—and we can expect that fraction to grow inexorably in coming years."

by danicriss | 2nd Sep 26, 10:13am 1788300838

Isn't this a false dichotomy?

Less deaths due to better healthcare and even lesser births due to abysmal economic conditions for young families doesn't mean more coffins. But does result in a larger demographic collapse, which you're pointing to

by Yvil | 2nd Sep 26, 10:11am 1788300716

Yes, I am mostly in Gold (as insurance) and in commodities, mainly oil.

by Time Lord | 2nd Sep 26, 10:10am 1788300643

September is the month. Plenty of symbolism pointing towards a retaliatory assassination attempt incoming...

by mfd | 2nd Sep 26, 11:06am 1788303994

Much as I wouldn't mourn Trump, it's hard to imagine any replacement reacting to the assassination of a US President with anything other than fury and vengeance. I will hope you are wrong and perhaps natural causes will intervene to free the world from this particular brand of lunacy instead.

by danicriss | 2nd Sep 26, 10:14am 1788300866

It looks like we could get the answer very, very soon

Join the list of doomsayers

Can you please elaborate on what does that "collapse" look like? How does it start? US Govt default? Cascading Chinese companies defaulting? Cascading Chinese local governments defaulting?

How does it progress?

It's cheap to write a one liner apocalyptic premonition post, but please explain instead of fear mongering. I have enough of that one click away if I want it

by Yvil | 2nd Sep 26, 10:26am 1788301592

I don't have the time nor the will to write in detail the workings of a collapse, but in short I see credit defaults GFC style but with the extra problem of the US's debt to GDP ratio being more than double today, so the government is much less able to bail out failing companies. Layoffs will follow but still sticky inflation will remain because it's not demand driven but due to the oil supply shock, (pay attention to the price of diesel, not petrol) = stagflation. Central banks will have no choice but to resume printing fiat (whether they call it QE or by another name) which will lead to a serious USD and fiat currency devaluation.

by Snow | 2nd Sep 26, 10:43am 1788302622

The Corporate Default Paradox: Markets Are Underpricing Credit Risk

As always it'll be the timing. Might still be a bit of water to go under the bridge but things certainly aren't heading in the right direction.

by powerdownkiwi | 2nd Sep 26, 11:22am 1788304940

Collapse Now and Avoid the Rush : the best of the Archdruid Report : Greer, John Michael : Free Download, Borrow, and Streaming : Internet Archive

Some of us have applied a lot of thought to this - collapse of a growth-requiring System operating within boundaries, was always inevitable.

So the thing to do is imagine life-options beyond that point and ask how to align yourself before the wave breaks? Yvill identifies energy, but via shares. I did too, but planted a forest, built a passive-solar house, went off-grid. Real/local vs remote/distant.

The other thing is to foster local relationships - surplus energy allowed us to live alone, more or less. For a short while, that surplus fooled some into thinking they didn't need to contribute to society at all. That won't work in the future - Dunbar's Number is a powerful argument.

by powerdownkiwi | 2nd Sep 26, 12:33pm 1788309199

They're talking End Times now

Vance on End Times - be very concerned

by Time Lord | 2nd Sep 26, 2:51pm 1788317482

A mask off moment because it’s too late to do anything about it.

Proof the "conspiracy theories" were in fact realities...

by murray86 | 3rd Sep 26, 7:31am 1788377474

Unbelievable! What a moron. Does he even understand what he has just admitted? By any measure he's essentially talking about the end of this world as he knows it. The deaths of billions of people. that

Blind faith, a requirement of the church (all of them) is dangerous. I go so far as suggesting they're going against God's will.

by LouB | 2nd Sep 26, 9:24am 1788297898

Disclaimer: i have never worked in the financial sector and really have no understanding of things like bonds and derivatives - once a friend tried to enlighten, describing derivatives as bets on bets ....on bets, I happil went back to pruning my apple orchard. So I openly acknowledge my ignorance/naivety in this field.

I've noted recent commentary regarding push back against AI data centres in the USA and that it is a growing hot button issue for the approaching mid term elections. Also that the big corporations pushing for data centre expansion are competing directly with central governments for investment funds (borrowing) pushing up credit costs for all concerned but particularly for governments that can only fund servicing and repayment from tax take.

So, in light of the pressure on AI data centre developers 'back home' are these big players looking to exploit countries like NZ to achieve their global dominance aspirations? Sort of like ....okay we can't crap in our own back paddock any more, so let's find some other naieve contry where we can pop a quick dump before they catch up?

Then there is the question in my mind: what percentage of AI is expected to produce anything tangible? Yes I've heard of speeding up medical and pharmaceutical discovery times. But I've also heard of AI generated arguments before courts that are a crock of the proverbial alluded to above. I have also heard it will also automate, or partly so, mundane business processes (like the mooted amalgamation of government departments - requiring a big investment in digital systems and AI, undoubtedly exporting considerable licencing fees to offshore entities). What will that cost? Head count reduction aka reduction in employment opportunities? Sleeker, faster, processing times of bureaucratic compliance, spitting out machine driven decision that are considered inherently flawless, when there is growing evidence that is not the case. And of course if you are on the wrong end of an error (e.g. recent benefit entitlement errors) what bureaucratic nightmare will be required to seek correction/redress? Human judgement remains a vital element in decision-making, to my mind. Will those wise heads exist in organisations any more? It was a 1970s allegorical catch phrase 'rage against the machine? But by 2030(?) will that indeed be literal?

I reckon, if you have the skills to weild a nail gun, pipe wrench, spanner, excavator, drive a truck, connect a wiring system, etc, you are pretty safe (as long as clients have the means to pay) in this new look, digitally controlled future. If a paper shuffler, or thinker, I'm not so sure.

by KKNZ2025 | 2nd Sep 26, 10:15am 1788300931

"We can have billionaires, or we can have democracy. We cannot have both,"

https://www.abc.net.au/news/2026-09-02/the-nerd-reich-silicon-valley-fascism-war-on-democracy-abc-2026/107091034

by powerdownkiwi | 2nd Sep 26, 11:25am 1788305143

A famous religion-instigator once talked about rich-men and the eye of a needle.

I suspect he was talking about arrogance and attitude vs conscience (later powermongers twisted it re pie in the sky when you die).

But bottom-line, the only sustainable-throughput format is long-term egalitarianism; all else draws resources down too fast.

by Colin Maxwell | 2nd Sep 26, 12:11pm 1788307906

MEANWHILE IN HORMUZ

The Disconnect in Trump's Rhetoric

Of course the truly terrifying paradox is that if conventional strikes were completely decimating the enemy as claimed, there would be no strategic need for Trump to repeatedly issue existential threats about "the biggest attack of all waiting in the wings."

This contradiction is why many analysts interpret his statements as a dangerous rhetorical escalation.

The "Madman" Strategy: Proponents of this view argue the extreme language is a deliberate psychological tactic to make adversaries believe he is volatile enough to use nuclear weapons, hoping to force a total surrender without actually ordering a strike.

The Risk of Miscalculation: Critics counter that regardless of Trump's personal intentions - IOWs, using apocalyptic rhetoric during a live conflict increases the risk that an adversary will assume a nuclear strike is imminent and launch a preemptive escalation of their own.

The concern is not just about whether the administration is telling the truth, but that hyperbole in nuclear 'diplomacy' can easily lead to catastrophic miscalculation by either side.

Mario discusses the dangeous recent escalations with Larry Johnston right at the beginning of the link...

https://www.youtube.com/watch?v=6v-mxxP8mIc