| By Steve Petrick (Petrick) on Tuesday, May 12, 2026 - 04:39 pm: Edit |
I am apparently in a minority who is really afraid that the people we owe the markers to for the National Debt will call them in before we go any deeper into debt. Otherwise they will no doubt cast us all into debtor's prison for failure to pay.
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:03 pm: Edit |
Iran War a Bonanza For Chinese Industries
May 11, 2026: The American-Israeli war in the Middle East has disrupted oil and gas supplies, shaking governments around the world and forcing them to face the urgent need for power grids that can withstand future alarms. For many countries, the drive to build grids based on renewable energy is creating a new reliance on technology from China.
Chinese companies dominate the production of nearly every component of the modern grid including solar panels, transformers, high-voltage cables, convertors and batteries that store energy for later use. Even before the war in Iran, they were expanding abroad, helping countries build grids designed to meet the heavy electricity demands of artificial intelligence.
For decades, China has invested nearly half a trillion dollars into green energy, making it a foundation of the country’s drive for energy autonomy. It also blocked foreign companies from competing in large segments of its domestic market, such as manufacturing wind turbines and electric car batteries, to ensure that Chinese companies could grow into giants.
Now the war with Iran has laid bare the risks of dependence on Middle Eastern oil and gas. Countries are realizing that all paths to renewable power run through China and its exporters.
Even if a cease-fire between the Americans and Iran helps ease disruptions in the Strait of Hormuz, the shock has already seized the attention of governments worldwide. Faced with energy shortages, they are quickening efforts to upgrade their power grids, bringing them to the doorstep of Chinese companies eager to supply them.
Chinese companies increasingly produce the most affordable and most efficient renewable energy and grid storage technologies. Recently, the Philippines said it was working to bring twenty two new renewable power plants online within weeks to shore up grid stability.
Already a major destination for Chinese investment in energy infrastructure, recently Brazil took bids for the construction of new power plants, and is set to do so again this month for large-scale battery storage. Brazil needs technology in this area, and China has a lot to contribute. The war in the Middle East has been a massive reminder that the world will need even more energy.
China is the main trading partner for most countries worldwide and the dominant or near-exclusive supplier of requirements like rare-earth metals and solar panels. But governments in Europe and elsewhere are growing uneasy that this reliance could undermine their economic and national security, especially after the past year, when China shut off much of the world’s supply of certain rare earths.
Sales of essential electricity-related equipment are already growing rapidly. Global shipments of batteries used to store electricity for a grid, a sector long dominated by Chinese companies. This nearly doubled in the first three months of the year.
Chinese battery manufacturers and renewable energy apparatus makers were already raising money in Hong Kong to fund an overseas push, anticipating a surge in demand from power-hungry A.I. systems. But the war has added fresh urgency and new opportunities.
Recently, CATL/Contemporary Amperex Technology Ltd., the world’s largest maker of electric vehicle batteries, set off a wave of listings with Hong Kong’s biggest public offering since 2021.
Another battery maker, Shuangdeng Group, followed in August. Since then, other companies have lined up to do the same, including Sungrow, which makes energy storage systems; Ningbo Deye, a producer of solar equipment; and Sieyuan, which makes crucial components for energy grids such as transformers.
These companies are now spending to expand beyond China. Recently, Sungrow announced plans to invest about $270 million for its first European plant, in Poland, to produce energy storage equipment. In March, Hithium, which has also applied to go public in Hong Kong, signed a letter of intent to build a $500 million battery plant in northern Spain.
Since the war began, CATL has seen surging demand in Europe for home battery systems and growing interest in Asia in grid storage batteries, a company spokesman said, especially in countries with limited electricity and little domestic oil. He said that the company could not immediately expand capacity but that it had accelerated some projects.
Fierce competition at home has pushed Chinese makers of energy storage and grid equipment to sharpen their manufacturing, innovate faster and look overseas for growth. China has tolerated ferocious domestic competition requiring companies to continuously innovate in order to stay in the game.
Renewable energy was once expensive and unreliable. It was difficult to control the intensity of the wind and the sun, and power came in bursts that grids could not absorb. Batteries and storage systems now capture that excess energy and release it when needed.
For years, high battery costs made renewable systems less competitive than fossil fuels. But advances in technology have brought costs down; renewable power paired with storage is now almost on par with the cost of conventional fuels.
Chinese companies dominate not just batteries and grid hardware but also, increasingly, the software that manages energy flows. While some governments may be wary of giving Chinese firms access to their grids via the software, they are likely to keep buying the hardware since they have few affordable substitutes.
Chinese businesses also lead in producing a new generation of battery chemicals that allow large amounts of electricity to be stored when the sun is shining or the wind is blowing, and can be used later to power homes, electric vehicles and data centers.
The new chemistry uses lithium-ion batteries made with iron and phosphate, which cost 99 percent less than the materials that they replace, nickel and cobalt. The new batteries hold slightly less energy in the same space as older lithium-ion batteries with nickel and cobalt. For grid storage, where space is less of a concern, the bulkier size matters far less. China produces nearly all of the world’s lithium iron phosphate batteries, according to the International Energy Agency.
The two dominant Chinese players are BYD, which has surpassed Tesla to become the world’s largest electric carmaker, and CATL, the leading shipper of grid storage batteries.
As in other industries, Chinese firms’ dominance in energy technology was forged through intense competition for the enormous domestic market. China has spent years building out renewable energy and grid infrastructure at a scale no other country has matched. Recently, the Chinese leader revealed plans to expand wind and solar capacity sixfold from 2020 levels, adding up to 3,600 gigawatts.
CATL’s battery factories are vast and highly automated, stretching as long as six football fields laid end to end. The company is building them at a rapid clip to keep up with the surging demand.
At its latest project in Yancheng, a port city about 200 miles north of Shanghai, more than 100 backhoes, bulldozers and other heavy machinery moved across a muddy construction site early this month.
It feels like the CATL construction site is developing very quickly, and it shifts daily.
Weapons: History Of Chinese Weapons Sales To Iran
May 11, 2026: For most of the last two decades, China has preserved a delicate balance in its military relationship with Iran, often offering indirect assistance instead of arms sales.
That approach is now drawing renewed attention after American officials said intelligence agencies were assessing whether China may have shipped shoulder-fired missiles to Iran in recent weeks. The American President Trump insisted that he would impose an additional 50 percent tariff on Chinese goods if the calculation proves accurate. China has denied the claim, calling it pure fiction and has sworn to purposefully retaliate if the American government goes through with tariffs.
The American bureaucrats said the information obtained by American intelligence agencies was not definitive. But if proven true, it would be a substantial tactical change in the way China supports its closest strategic partner in the Middle East.
Chinese arms sales to Iran exploded in the 1980s and have all but vanished in the last decade to comply with a United Nations embargo and American sanctions. Chinese support for Iran in recent years has instead come in the form of components that could be used in both civilian technologies as well as missiles and drones. China has a major stake in the crisis in Iran. About a third of its total crude oil imports come from the Persian Gulf.
This is how China’s military support for Iran has evolved over the years. The 1980s were the Surge Years. The outbreak of the Iran-Iraq War in 1980 coincided with major market reforms in China when its leader at the time ordered state-owned companies to wean themselves off government support and instead seek commercial profit.
Chinese state-run defense companies were suddenly empowered to export their wares. That resulted in a deluge of Chinese missiles, fighter jets, tanks, armored vehicles and assault rifles being sold to Iran starting in 1982 and climaxing in 1987, all during the Iran-Iraq War.
At the same time, China sold even more arms to Iraq, resulting in a situation in which the two warring sides clashed with each other using the same Chinese weapons.
The American government opposed China’s arms sales to Iran, particularly Silkworm anti-ship cruise missiles. Iran used the missiles in attacks in Kuwaiti waters in 1987 that struck an American-owned tanker and an American-registered tanker.
The Americans responded by reducing exports of some high-technology products to China. While China denied selling arms directly to Iran, they said it would do more to prevent its military exports from reaching Iran through intermediaries.
The 1990s: Technology Transfers. Following the war, Iran set out to develop its own military-industrial base with the help of China. One of its key products was the Noor anti-ship cruise missile, which had been reverse-engineered through purchases of Chinese C-802 cruise missiles.
The Chinese performed a major role in supporting Iran’s military modernization for decades, especially in developing Iran’s missile capabilities. Iran also received help from China in building missile-production facilities and even in constructing a missile test range east of the Iranian capital.
Under American pressure to curtail its sale of finished weapons, particularly missiles, to Iran, China began increasing exports of machine tools and components that could be used for both military and civilian purposes.
The 2000s: Dual-Use Technologies. In 2006, the United Nations imposed sanctions on Iran’s nuclear and ballistic missile programs. China voted in favor of the decision and largely turned away from new, formal arms contracts with Iran.
The shift was as much about regional strategy as it was about international law. Starting in the mid-2010s, China began deepening its strategic relationships with Gulf countries including Saudi Arabia and the United Arab Emirates, traditional rivals of Iran, as well as Qatar.
China continued to supply Iran with dual-use technologies and materials that have helped it amass an arsenal of missiles and drones. That included chemicals used to produce fuel for ballistic missiles and components for drones, such as radio frequency connectors and turbine blades
China was still a crucial type of support, given Iran’s reliance on ballistic missiles and drones to attack American and Israeli forces and other countries in the region.
The American Treasury Department imposed sanctions on Chinese and Hong Kong front companies it says were set up to source parts and ingredients for ballistic missiles and drones for Iran.
Suspicions are also growing that Iran is using its access to China’s BeiDou satellite navigation system, an alternative to the American owned Global Positioning System, for military purposes. Last month, an American congressional agency said BeiDou may have been used to direct Iran’s drone and missile strikes across the Middle East.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:04 pm: Edit |
Surface Forces : Iran Lost Track Of Their Naval Mines
May 10, 2026: Iran has been unable to open the Strait of Hormuz to additional shipping traffic because it cannot locate all of the mines it laid in the waterway and lacks the capability to remove them.
The development is one reason Iran has not been able to quickly comply with the American President’s admonitions to let more traffic pass through the strait. It is also potentially a complicating factor as Iranian negotiators and an American delegation led by the American Vice President met in Pakistan recently for peace talks.
Iran used small boats to mine the Hormuz Strait last month, soon after America and Israel began their war against Iran. The mines, plus the threat of Iranian drone and missile attacks, slowed the number of oil tankers and other vessels passing through the strait to a trickle, driving up energy prices and providing Iran with its best leverage in the war.
Iran left a path through the strait open, allowing ships that pay a toll to pass through. Iran’s IRGC/Islamic Revolutionary Guards Corps has issued warnings that ships could collide with sea mines, and a few news organizations have published charts showing safe routes.
Those routes are limited in large part because Iran mined the strait haphazardly, American officials claimed. It was not clear that Iran recorded where it put every mine. And even when the location was recorded, some mines were placed in a way that allowed them to drift or move.
As with land mines, removing naval mines is far more difficult than placing them. The American military lacks vigorous mine removal capabilities, relying on littoral combat ships equipped with mine sweeping capabilities. Iran also does not have the capability of quickly removing mines, even the ones it planted.
In a social media post on Tuesday discussing a pause in the American-Israeli war with Iran, the American President said a two-week cease-fire was contingent on complete, immediate and safe operations in the Strait of Hormuz.
Later, the Iranian foreign minister said that the strait would be open to traffic with due consideration of technical limitations. American officials noted that the Iranian Foreign Minister’s comments about technical limitations was a reference to Iran’s inability to quickly find or remove the mines.
The Iranian Foreign Minister was recently in Pakistan for meetings with the American officials. Given the American President’s demands to open the strait, the issue of how quickly safe passage through the waterway can be increased is likely to be a point of discussion.
The American military sought to destroy Iran’s navy, sinking ships and attacking naval bases. But Iran has hundreds of small boats that it can use to harass ships or lay mines. Destroying all of those small boats has proved impossible.
Even before Iran began laying mines, threats from its leaders quickly disrupted global shipping and sent oil prices up sharply. In early March, a senior official with the IRGC announced that the strait was closed and claimed Iran would set ships on fire if they entered the waterway.
In the days after that threat, Iran began mining the strait, even as the American’s increased strikes on Iranian naval resources. At the time, American officials said Iran was not planting mines quickly or efficiently.
Because it was difficult to track the small boats deploying the mines, the Americans are uncertain exactly how many Iran has placed in the strait or where they are located.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:04 pm: Edit |
Weapons: AI Equipped Weapons Proliferating
May 10, 2026: Late last year, an armed forces parade in China was viewed by the Chinese, Russian and North Korean leaders. The parade featured various models of drones that could independently fly alongside combat aircraft.
The demonstration of technical might alarm the Americans, who concluded that the American program for unmanned combat drones was trailing behind China’s. Even Russia was seen to be ahead in developing facilities that could produce advanced drones.
American leaders pressed for national defense firm involvement to step up. Earlier, Anduril, a defense technology enterprise in California, began fabricating A.I.-backed, self-flying drones that appeared similar to the ones shown in China. Production at a factory outside in Ohio, started three months ahead of schedule, part of an effort to close the gap with China.
China’s military display and the American response were part of a growing global arms race over A.I.-backed autonomous weapons and defense systems. Designed to operate by themselves using A.I., the technology reduces the need for human involvement in decisions like when to hit a moving target or defend against an attack.
In recent years, many nations have quietly engaged in a contest of one-upmanship over these arsenals, including drones that identify and strike targets without human command, self-flying fighter jets that synchronize attacks at speeds and altitudes that few human pilots can reach, and central systems run by A.I. that scrutinize intelligence to recommend airstrike targets quickly.
America and China, the world’s largest military powers, are at the center of the rivalry. But the race has widened. Russia and Ukraine, now in their fifth year of war, are looking for every technical advantage. India, Israel, Iran and others are investing in military A.I., while France, Germany, Britain and Poland are rearming amid doubts about the American administration’s commitment to NATO.
Each nation is aiming to amass the most sophisticated technological stockpile in case they need to fight drone against drone and algorithm against algorithm in ways that people cannot match, defense and intelligence officials said.
Russia, China and the Americans are all building A.I. weaponry both as a restraint and for mutually assured annihilation.
The buildup has been compared to the dawn of the nuclear age in the 1940s, when the atomic bomb’s destructive power forced rival nations into an uneasy draw, leading to more than four decades of nuclear weapons brinkmanship.
But while the implications of nuclear weapons are well understood, A.I.’s military capabilities are just beginning to be known. The technology, which does not need to pause, eat, drink or slumber, is set to upend warfare by making battles faster and more unpredictable, officials said.
Precisely which nation is further ahead is vague. Many programs are in a research and development phase, and budgets are classified. Technicians from China, America and Russia watch one another’s factory lines, military displays and weapons deals to determine what the other is up to.
China and Russia are experimenting with letting A.I. make battlefield decisions on its own. China is developing systems for dozens of autonomous drones to coordinate attacks without human input, while Russia is building Lancet drones that can circle in the sky and autonomously select targets.
Even as the specifics of the technologies remain veiled, the intentions are clear. In 2017, the Russian leader declared that whoever leads in A.I. will rule the planet. Two years ago, the Chinese leader asserted that technology would be the primary battlefield of geopolitical rivalry. Earlier this year the America Secretary of War ordered all branches of the American military to adopt A.I. and increase their efforts.
Billions of dollars are being poured into this. The American military requested more than $13 billion for autonomous systems in its latest budget, and has spent billions more over the past decade, though the total is difficult to track because A.I. funding has been spread across many programs.
China, which some researchers said was spending amounts comparable to those of the Americans, has used financial incentives to spur private industry to build A.I. capabilities. Russia has invested in drone and autonomy-related programs, using the war in Ukraine to test and refine drone use in combat.
China has recommended international frameworks for governing military A.I. and called for a practical and sensible attitude toward its development. The American military and Russia’s Ministry of Defense did not respond to requests for comment.
The dynamic forces may resemble the Cold War, but experts cautioned that the A.I. era was different. Start-ups and stockholders now play a role in the military and are as critical as universities and governments. A.I. technology is becoming widely available, opening the door for countries from Turkey to Pakistan to develop new capabilities. What’s emerging is a grinding innovation race without any obvious endpoint.
Ethical questions about ceding life-or-death choices to machines are being overtaken by the rush to build. The only major accord on A.I. weaponry between China and the Americans was reached in 2024, a nonbinding pledge to maintain human control over the decision to use nuclear weapons. Other countries, like Russia, have made no commitments.
Some argued that A.I.’s impact would be bigger than any arms race.
A.I. is a general-purpose technology like electricity, and we don’t talk about an electricity arms race. To the extent A.I. is transforming our military, it’s the way that electricity or computers or the airplane did.
In 2016 at an air show in the southern Chinese city of Zhuhai, a Chinese supplier flew 67 drones in unison. An animated film separately showed the drones destroying a missile launcher, a demonstration of their capabilities.
Russia, too, was building its drone arsenal. In 2014, its military planners set a goal of making 30 percent of its combat power autonomous by 2025. By 2018, the Russian military was testing an unmanned armed vehicle in Syria. While the tank failed, losing its signal and missing targets, it underscored Russia’s ambitions.
In America, a general officer who had previously worked in intelligence at the Defense Department, was evaluating whether A.I. could solve a more immediate problem. The American military was collecting so much data, including drone footage, satellite imagery, intercepted signals, that no one could make sense of it all.
There was nothing in any of the research labs in the military that were capable of generating results in less than a couple of years. There were problems that could not be solved without A.I.
In 2017, Project Maven appeared, a Defense Department effort for the military to incorporate A.I. into its systems. One aim was to work with Silicon Valley to build software to swiftly process images like drone footage for intelligence purposes. Google was utilized to help. But the project quickly ran into hurdles. The Pentagon’s procurement system built around legacy contractors and long timelines, slowed things down.
Project Maven, now a Palantir platform, was designed as part of a Defense Department effort for the military to incorporate A.I. into its systems. It has played a role in the current Iran war.
When word spread inside Google about Project Maven, employees also protested, saying a company that had once swore to Don’t Be Evil should not help identify targets for drone strikes. Google eventually backed away from the project.
In 2019, Palantir, a data analytics company, took over Maven. New defense tech start-ups like Anduril also emerged, supplying the United States government with A.I.-backed sensor towers along the southern American border.
In China, officials pushed commercial tech companies toward defense partnerships in a strategy called civil-military fusion. Private firms were drawn into military procurement, joint research and other work with defense institutions. Companies working on drones and unmanned boats found growing military demand for their technologies.
Russia’s invasion of Ukraine in 2022 turned theory into reality. Outgunned, outspent and outnumbered, Ukraine held off Russia with an improvised arsenal of cheap technology. Hobbyist racing drones were used to attack Russian positions on the front lines, eventually becoming more lethal than artillery and, in some cases, gaining autonomous capabilities. Remote-controlled boats kept Russia’s Black Sea fleet pinned down.
Russia adapted as well. Its Lancet drone, which was initially piloted by humans, has incorporated autonomous targeting features. Four years of ruthlessness on the battlefield in Ukraine has served as a laboratory for the world. In recent months, Ukraine began sharing its troves of battlefield data with Palantir and other firms so A.I. systems can better learn to fight wars.
Across Europe, where governments are aiming to diminish their reliance on the American military, the lessons from Ukraine reverberated. In February, Germany, France, Italy, Britain and Poland said they would develop a joint air defense system to guard against drones.
China also advanced. At the 2024 Zhuhai Airshow, Norinco, one of the country’s main defense manufacturers, revealed multiple weapons with A.I. capabilities. One of its systems showed an entire brigade, including armored vehicles and drones, which were controlled and operated by A.I.
Another aircraft, revealed by the state-run Aviation Industry Corporation of China, was a 16-ton jet-powered drone designed to serve as a flying aircraft carrier that could deploy dozens of smaller drones mid-flight.
A week after American and Israeli forces struck Iran in February, a senior Pentagon official gave a glimpse into what computerized warfare now looks like at a conference live streamed by Palantir.
A satellite feed showed a warehouse. With the click of a mouse, an officer selected a row of white trucks parked outside to target in real time. In seconds, the A.I. software suggested a weapon, calculated fuel and ammunition needs, weighed the cost and generated a strike plan.
It was the present-day version of Project Maven, which was now run by Palantir and powered by commercial A.I. The system analyzed intelligence from various sources, generated target lists ranked by priority and recommended weapons, all but eliminating the lag between identifying a target and destroying it.
Embedded with a military version of Claude, the chatbot made by the A.I. firm Anthropic, Maven helped generate thousands of targets in the opening weeks of the Iran campaign. An American Defense Department official declared that what Maven was doing was revolutionary. Human involvement amounted to little more than left click, right click, and left click.
The claims about Maven’s abilities might be overstated and much of the American advantage came from the scale of data flowing in and the skills of the people using it. It’s not rocket science, and it was believed that China already had something similar.
In a recent report analyzing thousands of Chinese Army procurement documents, it was discovered that China was building systems that mirrored American ones. In one case, China was trying to replicate the Joint Fires Network, an American program set up to link sensors and weapons globally so a drone on one side of the world could cue a strike from the other.
In some areas, China clearly leads. Its manufacturing dominance means it can produce autonomous weapons at a scale the Pentagon cannot match.
Inside the American government, the push for A.I. weapons have taken on an almost evangelical fervor. Last month, the Pentagon labeled Anthropic a security risk, partly because the company wanted to limit its technology’s use for automated weapons.
America will win the A.I. race, declared tech executives, investors and government officials who cheered speakers calling for tech companies to give the military unfettered access to A.I.
Some officials declared that an A.I. arms buildup might prevent major wars. The logic mirrored the Cold War. If both sides knew what the machines could do, neither would risk finding out.
Conflicts between superpowers will similarly deteriorate if you can build the things that deter warfare effectively enough, he said.
Yet deterrence assumes rationality, while A.I. weapons are designed to move faster than human reason. In exercises dating to 2020, researchers explored how autonomous systems could accelerate escalation and erode human control, with some alarming results.
In one scenario, a system operated by the Americans and Japan responded to a missile launch from North Korea by autonomously launching an unexpected counterattack. The speed of autonomous systems can lead to unintended escalation.
There is a risk of an escalatory spiral where America is in danger of fielding untested, unsafe and unproven systems. If America is not careful, it’s often because everyone feels like the other side is hiding something.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:05 pm: Edit |
Attrition: Unique Russian Losses Because Of The Iran War
May 9, 2026: American involvement in the Iran War was profitable for Russia. Iranian oil exports ceased and long term damage to Iranian oil facilities reduced future production. Oil prices have risen significantly, some sanctions on Russian and Iranian oil have been temporarily abandoned, and Western attention has shattered. Russia’s cash reserves are being restored, and Russia-Ukraine peace talks with the Americans were sidetracked because the Americans have been overcome by a multitude of new problems.
The Iran War has gone on for more than two months. This has disrupted the global economy physiologically and economically, creating inconvenient expenditures. Several attempts at ceasefire negotiations failed. Iranian officials described these negotiations as strategic victories. Meanwhile the Iranian economy and its people were left without imports and isolated, with the poverty rate increasing to historic levels. All this could drive Iran toward breakup or disintegration. This includes the dissolution of Islamic rule and the disappearance of the religious dictatorship. Even before the war over a third of Iran’s Mosques were abandoned, as more Iranians fled Islam, either to express their hatred of Iran’s tyrannical theocracy or to find something they could really believe in.
Iran has long been a Russian trading partner, and benefitted from nearly half a century 0f problems the Americans had with Iran. This cost Russia nothing, but the loss of Iran as an active economic and military ally is a major defeat.
It wasn’t always that way. When Iranian long-range Shahed drones first appeared over Ukrainian cities in 2022, they seemed to represent a new phase of the relationship between Russia and Iran. For decades, Iran had seen Russia less as a trusted partner and more as a skeptical great power that would, as it did in 2010, back U.N. sanctions on Iran’s nuclear program if that matched Russian interests. But habits of collaboration that were built and cultivated over the course of the war in Syria, from around 2015, had progressed, by the time Russia invaded Ukraine, into a partnership.
Iran and Russia are connected by the same complaint, the conviction that the American-dominated global order was created to contain them. This shared belief produced cooperation across intelligence, finance and an elegant sanction evasion method. Iran has incorporated lessons from the war in Ukraine, including massive use of drones, electronic warfare, and the limitations of using tanks as well as other armored vehicles. Russia has observed how Iran sustains irregular warfare across multiple areas concurrently, projecting force through substitutes and preserving credible deniability.
A year ago, Russia and Iran signed a partnership agreement that authorized much of their cooperation. The treaty contains no mutual defense clause. Russia has never pledged to fight the Americans on Iran’s behalf, or vice versa. The point was for each to ensure that the other had what it needed to fight longer on its own.
Both governments are built on the premise that dissent is an enemy to be suppressed, and the tools of repression, surveillance, internet controls and crowd-suppression tactics are as much worth sharing as any weapons system. When protests erupted across Iran earlier this year, the internet blackout was more severe and sophisticated than previous suppressions, and used similar methods to those Russia has used in Ukraine. Around the same time, videos on social media seemed to show Iran using Russian armored vehicles to suppress the protests.
The relationship, in short, is about much more than drones. It is dense, varied and in important respects self-reinforcing. Every layer of cooperation makes the next layer easier to build and harder to dismantle.
When Valdimir Putin sent Russian warplanes into Syria during 2015, Russia was interfering to save the Assad government from a civil war that the Assads, despite their harshness, were no longer capable of mastering. Russia was preserving a client state whose survival depended on outside force and whose utility lay mainly in what allowed Russia to maintain authority, bases and a foothold in the region. When the Assads began to fail in late 2024, the Russians did nothing other than provide the Assads with a comfortable exile in Russia. The war in Ukraine had made intervention logistically difficult, but the decision was also a judgment about whether the cost of saving a client like the Assads exceeded what they were worth. Syria had been hollowed out by years of war and corruption, and what remained was too weak to project authority, and too dependent to offer strategic returns.
Iran is not a client of Russia’s. It is a state with its own radical logic, its own regional reach and its own willingness to confront American power. During this war, by militarizing the Strait of Hormuz, it has demonstrated that it can generate effects that will be quickly and thoroughly felt throughout the world. It can exert pressure on the Americans in ways that Russia, bogged down in Ukraine, cannot. If anything, for Russia the Iran war has demonstrated precisely Iran’s worth.
Iran’s route to ending the war on acceptable terms narrows if fighting resumes and could close entirely if the fighting continues at length. If the Iranian Islamic dictatorship collapsed, no other country in Russia’s orbit could fill its role. China is too integrated into the global economy. North Korea, which has supplied Russia with weapons and soldiers in Ukraine, cannot project power far beyond its borders.
Russia, now entering the fifth year into the Ukraine War, does not have the resources for a Russian military intervention in Iran. Even if it did, escalating so visibly would risk consequences in the areas where Russia is most vulnerable, through weapons deliveries to Ukraine, tightened secondary sanctions or more intelligence sharing. Additional Russian support for Iran has to be weighed against what it might cost in Ukraine.
The question, more likely, is how to continue to act without being seen to do so. Russia has tools for influence short of conventional military force. These include private military contractors who can provide training or protection to factions whose survival serves Russian interests, and weapons supplied via the sanctions-evasion networks that Iran and Russia have spent years constructing. Russia is already providing intelligence support and electronic-warfare assistance, albeit in limited form. European intelligence reports of Russian drone deliveries to Iran would fit the pattern of assistance that is consequential enough to matter but ambiguous enough to deny.
Russia has spent years building a coalition of the discontented around the premise that authoritarian states can outlast Western pressure. Russia is an example of a nation built for endurance, that absorbs decades of sanctions, monitors their population and silences dissent. These actions cannot be undone. Iran, which has absorbed the most pressure and held the longest, is the proof of concept. As a failed state, it might become Russia’s slow-motion liability.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:05 pm: Edit |
Iranian Information War In Africa
May 9, 2026: The recent Iran War lead to some fascinating events in Africa. When the American President ordered Iran to reopen the Strait of Hormuz, the Iranian embassy in Zimbabwe responded with a sardonic quip on X replying that they had lost the keys.
Since the Americans and Israel attacked Iran several months ago, the official social media accounts of several Iranian embassies and consulates around the world have made posts that went viral, matching, if not surpassing, American Presidents social media audacity.
The Iranian embassies in Africa were out in front with diplomats at their South African embassy issuing this account:
“Say hello to the new world superpower,” read a post on X by Iran’s embassy in South Africa on Wednesday, the day the cease-fire between the United States, Israel and Iran took effect. The jab was an apparent reference to Washington’s failure to crush Iran’s theocratic rulers, despite a far superior military.
An earlier post from the embassy in South Africa played on Mr. Trump’s claims to be a peacemaker, juxtaposing a cartoon dove with the shadow of a fighter jet.
While other missions have shared posts on social media mocking Mr. Trump, the South African account stands out for its frequency, its ability to go viral and because of the warm relationship between Pretoria and Tehran.
Iranian officials seem to have made the calculation to be aggressive on the social media accounts of embassies in places “where it would not attract negative repercussions from the host government and where they could possibly get support from the population,” said Na’eem Jeenah, the executive director of the Afro-Middle East Center in Johannesburg. “South Africa is probably one of the better examples of that.”
The Trump administration has accused South Africa of being too cozy with Iran. The South African government has often responded by citing historical ties between the two nations and emphasizing the importance of nonalignment in its international diplomacy.
Not all of the posts have been humorous or mocking. The embassy in South Africa used artificial intelligence to reanimate some of the children said to have been killed by an American bomb that hit their school in the southern Iranian town of Minab early in the war. In the clips, the children discuss their dreams for the future.
Some argue that Iran is appropriating the language of the extremely online to engage in information warfare. The aim, analysts say, is partly to sanitize its image and influence a generation of young people unfamiliar with the brutal repression of dissent in Iran and the decades of geopolitical tensions with the West, but highly attuned to vibes.
Other Iranian embassies in Africa have used their accounts to flatter their host countries and give the impression that those countries support Iran in its war effort against the United States and Israel. In one post, the embassy in Tunisia started a chain with other Iranian embassies boasting that they had the backing of the countries mentioned.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:06 pm: Edit |
NBC Weapons: Chatbots Do Biological Warfare
May 17, 2026: An American university microbiologist was disturbed when an AI/Artificial Intelligence chatbot charted a detailed plan for a biological attack on mass transit systems during a safety test last summer. An American newspaper reporter stated that a Stanford microbiologist was shaken last summer when an AI chatbot outlined a detailed plan for a biological attack during a security test. AI chatbots have apparently provided scientists with ominously specific directions for generating and implementing biological weapons.
A microbiologist and biosecurity expert at the university who has directed the American government on biological threats, was pressure-testing an AI model when a chatbot described how to modify a disreputable pathogen to resist known treatments. The chatbot went further, recognizing a security weakness in a major public transit system and outlining how to release the superbug to increase casualties while reducing detection. The researcher was so agitated he went for a walk to clarify the situation.
Answering questions that I hadn’t thought to ask, with this level of deceitfulness and expertise that I just found distressing. The researcher refused to identify which chatbot produced the response due to a confidentiality agreement, though he noted the company added some safety measures subsequently that he considered ineffective.
Transcripts shared by more than a dozen experts reveal that publicly available chatbots have described in clear, structured detail how to purchase raw genetic material, transform it into deadly weapons, and employ them in public spaces. Some discussions even incorporated schemes for eluding discovery.
A genetic engineer at MIT university, shared dialogues in which OpenAI’s ChatGPT explained how to use a weather balloon to spread biological payloads over an American city. Google’s Gemini ranked pathogens by their capability to damage the cattle and pork industries. Anthropic’s Claude produced a recipe for a novel toxin derived from a cancer drug. A Midwestern scientist asked Google’s Deep Research for a step-by-step procedure for making a virus that earlier initiated a pandemic, to which the bot replied with 8,000 words of information.
Biology is by far the area that investigators are most troubled about, because of its very large capability for eradication and the complexity of protecting against it.
An Anthropic safety leader, challenged apprehension about Claude’s toxin recipe. There is an immense difference between a model yielding plausible-sounding text and giving someone what they’d need to act. Anthropic sets forceful refusal tolerances for biological prompts, accepting some over-refusal out of an abundance of caution.
An author who wrote Code Red: The Left, the Right, China, and the Race to Control AI to serve as the definitive guide on how the MAGA movement can create positions on AI that benefit humanity without handing control of our nation to the leftists of Silicon Valley or allowing the Chinese to take over the world.
In Code Red, the author writes that, The democratization of deadly A.I. Weaponry means that knowledge that was once the exclusive realm of superpowers will gradually be available to a host of individuals, both government and non-government. It becomes especially important to keep the ability to plan a mass casualty terror attack with the help of AI out of the hands of activists both foreign and domestic.
FYEO
| By Steve Cole (Stevecole) on Tuesday, May 12, 2026 - 05:06 pm: Edit |
Air Weapons: Ukrainian Entrepreneur Went From Gadgets To Attack Drones
May 8, 2026: Yaroslav Azhnyuk, a clever Ukrainian inventor, created Petcube, a laser pointer using many of the same electronic components as the most lethal weapons of modern warfare. It was operated remotely using a smartphone. It could identify images. It fired a laser, actually a laser pointer.
This is a smartphone-controlled gadget for remotely watching and entertaining domesticated animals while at home. When Mr. Azhnyuk first tested it on a coworker’s lonely, incessantly barking dog, the animal jumped around wildly chasing the laser.
Petcube is now sold in most industrialized nations.
After initially kidding about creating a military Petcube, with more powerful lasers used to blind or injure Russian troops, the inventor and his associates set their sights on FPV/First Person View drones. These quadcopters, carrying explosives, have become ever-present on the battlefield in Ukraine.
The team, now working as two new companies called Odd Systems and The Fourth Law, integrated an artificial-intelligence-powered image-recognition system into the drone. Instead of identifying a small animal, it can be directed to recognize military vehicles, artillery systems or enemy Russian troops.
The image-recognition system is interconnected with an autopilot program that is used to attack. Pilots who fly Odd Systems drones use a targeting approach called YOLO\You Only Look Once. After operators see a target, they engage an automated system, and the drone flies the final 400 meters autonomously, making it impervious to Russian jamming.
Odd Systems also produces a drone interceptor made to counter Iranian-designed Shahed drones. Russia has been firing these cheap, triangular exploding drones at Ukraine for years, and Iran has used them in recent weeks to attack U.S. bases, American embassies and other targets in the Middle East. The company’s interceptor, Zerov, is a fast, rocket-shaped craft with four propellers that is programmed to identify Shaheds, fly toward them and explode. Iran’s attacks have prompted a surge of interest in Ukrainian anti-Shahed technologies. Odd Systems declined to disclose whether it is exporting its products to the Middle East or plans to do so.
In Ukraine, the company’s FPV drones with an image-recognition system are regularly used in combat. Now developers are testing versions that fly autonomously along a programmed route and strike targets identified from a database.
The Red Cross and other groups monitoring the laws of warfare have opposed the use of A.I. to conduct strikes without full human control. But Mr. Azhnyuk said such developments were necessary in Ukraine to counter a ruthless adversary, and would be needed in other conflicts as drones dominated battlefields
Odd Systems and a sister corporation operated by the same team, Fourth Law, are emblematic of the boom in weapons start-ups in Ukraine. Investors are finding opportunities, partly with an eye on a postwar period in which the companies could export their products as well as supply the Ukrainian Army.
Ideas for weapons that seem exotic or fanciful are making their way onto the battlefield at a fast clip. Helium balloons that drop drones, guns that fire nets rather than bullets, remotely piloted exploding speedboats, wheeled robots that retrieve wounded soldiers and underwater drones are all finding a place in the Ukrainian military.
The underwater drones look like smooth black telephone poles with propellers. Late last year, one such drone struck and damaged a Russian submarine in port. A major priority for both Ukraine and Russia is FPV drones. On both sides, such drones now inflict most casualties. Russia has focused on producing a few effective systems at a vast scale. Ukraine has struggled with production but has a huge array of new designs.
More than 2,000 military technology start-ups are active in Ukraine, according to Brave1, a fund set up by the Ministry of Digital Transformation for defense investment. Some arose out of the military, beginning as basement workshops for drone units. Last year, foreign direct investment in Ukrainian defense companies rose to about $100 million, from $40 million the year before and at least 80 firms raised cash on capital markets, he said.
The largest deal last year came in September. Swarmer, a developer of A.I. targeting software for swarms of drones, raised $15 million. Recently, U-Force, a consortium of Ukrainian drone manufacturers including the maker of Magura drone speedboats, raised $50 million in seed capital. That investment valued the company at more than $1 billion.
Public money is also a source of financing in Ukraine’s defense industry. Half a dozen European countries, led by Denmark, are investing in Ukrainian companies. These investments sometimes help contractors at home, too. Estonia funds Ukrainian companies if at least 30 percent of the components in their products are Estonian-made.
In an alternative business model, foreign contractors cooperated with Ukrainian companies on a mostly non-monetary basis, trading technology for access to the battlefield and the possibility that Ukrainian soldiers will test their products on the battlefield. Shield AI, an American contractor, cooperates with Iron Belly, a company based in western Ukraine, that makes fixed-wing exploding drones.
Funding rounds are not always made public. In America and Europe, whenever somebody raises money, they want a lot of publicity. In Ukraine, companies want to stay in the shadows because their factories are prime targets for Russian missiles.
Before the war, Ukraine’s tech industry had achieved outsize international success. Among its stars were Grammarly, a writing tool, and Ring, a video doorbell and home security company that Amazon bought in 2018 for about $1 billion. Information technology was Ukraine’s third-largest export until the 2022 invasion, behind steel and agricultural products.
Before the war, Mr. Azhnyuk, the Petcube founder, was dividing his time between Kyiv and San Francisco, honing his product for pets. He hails from a long line of Ukrainian scholars, who he said initially looked down on the project as frivolous.
On the day that Russia began its all-out attack, Mr. Azhnyuk decided to step down as chief executive and focus on helping Ukraine’s defense. By 2023, he had set up Odd Systems and Fourth Law to tackle what he saw as a key technological challenge of the war.
About 90 percent of drones crash rather than hit a target. Video signals are jammed, or the craft fly out of radio range and plunge from the sky. Mr. Azhnyuk’s auto-targeting system is intended to address that problem.
Taking humans partially out of the equation is not as scary as it seems, he said. The drones are geofenced, meaning they will strike only within a designated zone. That is intended to prevent the drone from attacking a civilian or circling back on the soldier who launched it.
Mr. Azhnyuk said he had attracted early rounds of seed capital but could not disclose the sources for security reasons. Last month, Axon Enterprises, the Arizona-based maker of Tasers, announced an investment in Mr. Azhnyuk’s Fourth Law. The amount was not disclosed.
Mr. Azhnyuk was unapologetic about creating a computer program designed to automatically make life-or-death decisions.
We could literally regulate ourselves to death by holding back on A.I. in weaponry, he said, given that Russia and China had no such qualms. He said he was obliged to carry on the design work because “I took an oath to defend my country when I was a teenager.”
FYEO
| By Kosta Michalopoulos (Kosmic) on Tuesday, May 12, 2026 - 11:40 pm: Edit |
I'm with Petrick. I'm far more concerned that the House of Cards that is the National Debt will implode and bring down the whole system than I am with the Iran war or all the other crises of the day. The fact that neither Democrats nor Republicans want to even discuss it tells me that is the Big Bad they hope will not blow up on their watch.
| By Jeff Wile (Jswile) on Tuesday, May 12, 2026 - 11:56 pm: Edit |
Google Inquiry.
Quote:” As of early 2026, Japan is the largest foreign holder of U.S. debt, not China. The majority of U.S. debt (roughly two-thirds) is owned by domestic holders, including the Federal Reserve, U.S. banks, and investors. Foreign holders account for about 34% of the debt, with China being the third-largest foreign holder (approx. $0.7 trillion) behind Japan and the UK.Top Foreign Holders of U.S. Debt (As of Dec 2025)Japan: ~ $1.18 trillionUnited Kingdom: ~ $0.86 trillionMainland China: ~ $0.68 trillionOther foreign holdings: Various nations and private investors.”
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 12:11 am: Edit |
The national debt is in bonds and you cannot "call the debt" if you get nervous. You can refuse to renew the bond and the government then borrows money from somebody else (who probably demanded a higher interest rate) and pays you.
The problem is not "calling the debt" but bidding up the interest rate to a point that is not sustainable. (Okay, what we have now is not sustainable, but it is not critical.)
The debt is the accumulated deficit. The deficit is caused by over spending. We need to cut spending, and nobody will do it, because every government dollar going out is going to somebody's paycheck, and those people want to get paid for working as a clerk in the Department of Administrative Affairs or whatever.
The solution is to hire Dave Ramsay to head the White House Office of Management and Budget and tell him to eliminate the deficit by cutting spending in small increments over 36 months. The problem there is that the White House cannot cancel money the Congress ordered the government to spend. The solution there is to name me Dictator for five years and let me fix things.
The real world solution is a law that would do two things:
1. Congress critters do not get paid if there is a deficit.
2. Congress critters cannot invest in individual stocks but only in Exchange Traded Funds and even then you would have to limit it to funds in business for 20 years. Otherwise, someone just sets up a fund containing exactly the stocks that Congress used their insider information on upcoming regulations and laws and programs. You can already invest in such a fund today if you're an "insider" who "knows someone."
Congress, however, just doesn't pass laws that restrict their graft and corruption.
| By Kosta Michalopoulos (Kosmic) on Wednesday, May 13, 2026 - 12:50 am: Edit |
A nation the size and wealth of the US can handle a little government overspending, just as most people can handle an extra $10 on their credit card each month. No big deal.
But the problem now is the scale of the overspending: the US government now spends $6 trillion per year, but has an "income" of only $4 trillion per year. That $2 trillion deficit (and the $39 trillion accumulated debt) is no longer a trivial matter. If you project out a decade or more, it is going to get far far worse, due to an aging population (more people on social security, medicaid, etc.) and a shrinking labor force (fewer people paying the bills).
I think I know Dave Ramsay's solution for this: you people are going on a diet of canned beans and tuna for the next decade. I just don't know of anyone in elected office willing to deliver that harsh truth.
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 11:31 am: Edit |
A little? A LITTLE overspending?
| By Jeff Wile (Jswile) on Wednesday, May 13, 2026 - 11:38 am: Edit |
Steady there Steve.
He Meant well!
| By Paul Howard (Raven) on Wednesday, May 13, 2026 - 12:01 pm: Edit |
Alas Dictators often have a bad name...
But what Democracies I think need are three rules
1) Long Term Spending (greater than 5 years - Mars mission, Nuclear Ships, Nuclear Power - or National Emergences (COVID) for example) - 2/3rds of the Parliament/Congress/Senate has to agree to it.
If they do - that Projects funding is agreed and can only be canceled by a 2/3rds future majority decision.
(For the bulk of Western Powers, that takes away the abiltiy for Person X/Government X to fund it and in 3 years time, Person Y/Government Y to cancel it).
If it's good for the nation - both parties/most parties will agree to it.
2) Fiscal responsibility on general spending - a maximum borrowing level over a 6 year time period
3) A big sign in every Government office -
"Every £1/$1/1 Yen etc you spend will need to be repaid by your Grandchildren - with Interest - Balance the Books!"
Alas the issue 'we' want everything now and so governments take that the same way...but forget that tightening ones belt does equally need to be done occasionlly, to get you back into Credit - and Governments are unpopular when they do that.
| By Mike Grafton (Mike_Grafton) on Wednesday, May 13, 2026 - 01:24 pm: Edit |
1) The problem is spending is appealing to those that benefit. And lowering taxes (and thus Government income) is appealing to those that benefit. because the debt/ deficit is someone elses problem in the future. A few recent administrations have really blown out the problem.
2) "The American government opposed China’s arms sales to Iran... 1987..." Ahem, cough cough, Iran Contra.
3) Renewables, as Jessica and I have been saying for just about forever, are the way forward. Invest in research and industry and it will mature to overtake fossil fuels. YES, it isn't quite there yet. But it seems odd to me that some administrations are so opposed to domestic renewables (wind and solar); going so far as to pay HUGE penalties to yank permit from private companies. My solution is to go buck wild on Chinese sealing IP and monopolistic practices.
4) Fossil fuels will not just vanish but they will slowly fade away. I can remember the screams when they phased out leaded gas, and again when ethanol was introduced, and yet again when mileage standards were implemented. I have faith in human ingenuity.
Heck, I have a 2007 Lexus ES350 with a THIRD OF A MILLION Miles on it (my eldest son drives it to and from college 100 miles from my house). It gets 28 mpg. Runs like a top. No rust. Easily goes way over the speed limit in comfort and rock steady on the road. With the AC blasting.
My parents believed, as an basic truth, that if you got 100,000 miles out of a car it was basically used up.
Personally, I'd triple the fuels tax and allocate 100% of the money on "regular" rail, bridges, local light rail and basic research into renewable generation and electrical storage)... Inner city taxis/ hire cars would pay aa huge "convenience" penalty. No boondoggles, no vanity bridges ( Charleston and Louisville both got theirs and the Feds paid a huge premium) or multi billion subways (LA, Boston). Light rail are basically buses, on rails, on surface streets; see examples in Europe..I see little reason these couldn't be "Waymo'ed" to remove the cost of drivers..
| By Douglas Lampert (Dlampert) on Wednesday, May 13, 2026 - 01:56 pm: Edit |
It costs me slightly over 3 cents for the electricty for my hybrid to go one mile (assuming no wastage in converting line kWh to battery kWh, if I'm charging at anything close to 15 amps, there is substantial wastage, but I suspect that just means that the draw is a lot less than 15 Amps).
It costs me less than 10 cents for the gasoline to go a mile when I'm on gas (based on today's prices, so that's with war inflation).
Federal Per Diem milage (their estimate of the actual cost to drive given insurance, depreciation, and maintenance) is 72.5 cents a mile.
Federal gasoline tax is only 18.4 cents a galleon. Every state but Alaska adds more than that in state fuel taxes and some states throw in sales tax on top of the fuel tax..
Basically, fuel or power costs are in the noise for personal tranaportation via automobile, and Federal gas taxes are in the noise on the level of taxation that applies in many states. If they wanted to increase the federal fuel taxes to pay for something, it wouldn't bother most people except for the trickle down effects on prices of transported goods; however, I would oppose. If supporting renewables is a public good, then pay for it out of general revenue rather than with a regressive sales tax that hits the poor hardest.
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 02:13 pm: Edit |
The Chinese Population Collapse
May 13, 2026: The Chinese population is shrinking and is now somewhere between 700 and 800 million. The official claim is 1.4 billion and the government claims that it was 1.5 billion 12 years ago. These calculations are made using openly available economic data. Last year China proclaimed that the national fertility rate was 1.0, when a rate of 2.1 is required to sustain current population numbers. This is one of many indicators that China is running out of people, new births and Chinese willing to get married. The fertility rate, or number of children born to each woman, is among the lowest in the world and nothing the government can do seems able to change it. Last year, fewer than 8 million children were born, compared to the reported ten million in 2018. The 2025 births were the lowest since birth data was first recorded in 1949, right after the Chinese Communists seized control of the country. It gets worse because 11.3 million people died in 2025, the highest death rate since 1968. Worse, China's population shrank by 3.4 million people in one year. Deaths have now exceeded births for four consecutive years. There were only six million marriages last year, down from over 10 million in 2018. Fewer marriages today means fewer births in three to five years. It gets worse in the coming years and decades.
The 16 to 59 years old working-age population last year fell by 6.6 million to 851 million. Worse, the number over 60 climbed by 13 million to 323 million, representing 23 percent of the national population. This trend will get worse. By 2080 there will be more than one retiree for every working-age person. This will require substantial changes to the taxation of workers and the old age benefits systems. The results could be catastrophic as working age Chinese flee the country to avoid unbearably high tax rates. Without those taxes, the government would have to take extreme measures to support, or even eliminate the high number of retirees.
The Chinese government is desperate to increase the birth rate. This includes high taxes on condoms and economic incentives for couples who have children. This includes child subsidies, reduced kindergarten fees, and extended honeymoon. Marriageable age Chinese are watching youth unemployment approaching 20 percent. Even when they get a job, there is not much money left to support a child while concurrently supporting two sets of aging parents. The government is offering little in the way of help.
By the mid-2030s China’s population will decline nearly 60 million. China spent $425 billion last year just subsidizing its pension system. That number will keep growing year by year over the next few decades.
Chinese women no longer accept the traditional role of wife and mother. Many refuse to marry Chinese men, instead seeking American or European spouses. Americans are preferred because they help with childcare and housework. Most Chinese women don’t have access to foreign men and simply stay single.
China continues trying to make the best of a bad situation they cannot seem to control; a shrinking population, a workforce that is shrinking even faster and markets for its exports leveling off. The workforce shrinkage raises dire doubts about Chinese export statistics as those simply remaining where they were six years ago entails an unbelievable rate of labor productivity increases.
These three factors mean China’s Ponzi scheme economy has reached its limits with substantial declines now in progress. Other East Asian nations have similar problems, some not involving on-going Ponzi scheme financial systems, after having experienced a sustained economic boom that has moved much of the population into the middle-class. China too has prospered and given several hundred million Chinese prosperous middle class lives. This is unprecedented in Chinese history. One of the downsides of this prosperity is that couples have fewer children. When poor, families have more children because that is how people can create some support for their old age. Children do that and, in the absence of savings, children have traditionally supported their elderly parents. Because of all the prosperity, that traditional form of old age care is eroding.
A prosperous China is now suffering from this, with fewer babies born each year to replace those dying. The current Japanese birth rate is 1.39. In 2008 it was noted that China’s birth rate had fallen to 1.8 births per woman and that is way beneath the replacement rate of 2.1. It has since declined to 0.65 and, worse, the now repealed One-Child policy fatally reduced the future number of females of child-bearing age. The result is that the absolute number of new Chinese births for the rest of the century will be a small fraction of what China’s overall population would otherwise indicate. China’s total population began a rapid collapse and reached 800 million in the 2020s instead of the predicted 2030s.
The biggest current problem is the growth of retirees with a steadily shrinking number of workers to support them. Proposals to allow more births run into arguments about limited resources. Japan is way ahead in this population decline curve, and China does not want to join them, but no one has yet come up with an acceptable alternative. The impact of fewer births in urban areas over two decades ago is showing up in growing shortages of skilled labor. The costs of manufacturing high tech items is growing, forcing Chinese manufacturers to move more factories to nations with cheaper labor. The military is giving the troops a raise, especially the technicians. Otherwise, it can’t recruit them, or keep them. South Korea already has a birth rate of 1.11, which is lower than Japan’s. The American birth rate is 1.66 but most Western nations have lower rates. For Europe as a whole, the rate is .98.
Chinese manufacturing activity has been shrinking since 2022 and that is one of several indicators that the Chinese economy is in trouble. There are also some epic failures of infrastructure, with province electrical blackouts increasingly common. The problems are largely self-inflicted. The shrinking of Chinese economic activity is the result of several different economic problems, including consumers not resuming their pre-covid19 spending habits. Less consumer spending was not expected. None of this should be a surprise because all the problems have occurred in China before, but not all at once. Paying attention to Chinese history is a respected popular tradition for basing major decisions on. Chinese leader Xi Jinping came to power in 2012 and initially concentrated on reinforcing government control of the military. Xi, like most Chinese leaders, pays more attention to history than foreign counterparts do. Chinese military history is measured in thousands of years while Westerners in most cases have only a few centuries of it and don’t pay as much attention to past experiences as China does.
Chinese economic history over those long periods did not change much either. It was largely feudal and, since 1910, China has been trying to develop a form of government capable of handling economic problems more effectively. Xi Jinping has had some success and recently saw the Chinese banking sector improving to the point where it can assist in reviving the economy. The economy is still in bad shape, with too much debt, and many foreign companies pulling out of China while too many Chinese companies are barely staying in business with a growing number slipping into insolvency and bankruptcy.
FYEO
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 02:24 pm: Edit |
Paul, long-term spending. I think that idea could work, but I don't want it to used for crap like social programs.
Borrowing limits. Maybe with exceptions for declared war and 2/3 majority for brief lifting of limits.
Big sign in government offices. Sure, if it makes you feel good, they will just ignore it. Government workers come in two kinds: those in it for themselves, those there to serve the public. The self-serving drive out the public serving, always works that way. I would propose "term limits for government bureaucrats" saying that no one can work for the government more than 20 years and you must have 10 years in private industry before you work for the government.
| By Jeff Wile (Jswile) on Wednesday, May 13, 2026 - 02:36 pm: Edit |
SVC:
Nice summary of China.
We may need to talk about your mellowing over time, as there are some sites that paint a more negative outlook on China and its near term and longterm prospects.
One aspect that did not get mentioned is the near constant failures in civic construction, Commercial construction and residential projects.
You tube posts regularly bridge and dam failures, apartment buildings turning over due to insufficient (or completely inadequate) foundations and large numbers of residential units that were never completed after the money ran out (or was embezzled). Note: thousands of buyers paid significant deposits for new homes or apartments that will never get completed and no chance of a refund.
China clearly has many problems.
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 02:37 pm: Edit |
Mike G: interesting comments
1. Benefits of those getting the money. I believe I said that. I will note that most tax cuts (to a point we haven't reached) actually increase revenue; many tax increases actually cost revenue. The problem now is that passing some stupid program (like say the National Science Fiction Game Museum, $75 million a year most of which is paid to me and three other retired game designers) being one example. During times of deficit spending, nobody needs to spend money on the Cowboy Cosplay Convention.
2. Whatever, not really relevant.
3. Renewables. Well, being an engineer who knows more about this than 99% of people, and easily as much as anyone here, my problem is not research and pilot programs (all for it) but politically-motivated subsidies for stuff that doesn't work. By all means, let's have solar/wind/whatever research. By all means, let's build two or three of each to try new ideas and try to make it work better. But going hog-wild subsidizing wind/solar stuff that just feeds the pockets of political cronies is bad government. Just remember that wind and solar equals gasoline at $9 a gallon. If the government has to use taxed/borrowed money then we need to do the minimum amount of it just for research.
4. Fossil fuel fade. Back when I was a working engineer (say 1980) we engineers got a report every year on how much oil/gas was "proven accessible reserves". That number bounced around between 48 and 53 years. Today, that number is STILL 48 to 53 years because exploration finds more and new technology makes it possible to get reserves in places we didn't think we could get to before. Now, I say with confidence, we WILL start seeing that 48-53 number drop to 45-50 and then 38-43 and then keep going down until it reaches 1-2. That might be 100 or 200 or 1000 years from now, but it will happen. I want the renewable research to give me $5 solar and $4 wind and $3 geothermal long before then. We always have that icky nuclear power option if things go totally pear shaped.
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 02:49 pm: Edit |
Paul said something profound that I must support with a history lesson.
The word "dictator" is Latin and comes from the Roman Republic. When things went to heck the senate would appoint a dictator for six months. He would fix the problem and then stand trial for any abuse of power in the senate. It actually worked just fine. Dictators were just public servants taken to an extreme degree.
When Hitler shows up, he was labeled a dictator and kinda gave 2000 years of history a bad name.
The Roman dictator system has been used in more recent times. Dig into your history books and you will find a certain Continental Congress naming a fellow named George as dictator for six months during a nasty divorce that was happening at the time. Didn't seem to go off the deep end and his post-dictator trial lasted about 15 minutes.
The Roman system was a refinement of the Greek system. The Greeks invented democracy but could not keep it working more than 80 years. This happened over and over, even in Athens, for centuries. A democracy would run the city-state and do really well. Then the elites in power figured out that they could use the treasury to buy votes and bankrupted the country. Then an "oligarch" took power and virtuously fixed everything. Then, with no limits on his power, he started putting his buddies in no-work high-paying jobs as "consultarchs" leading to "absolute power corrupts absolutely." Then a wave of public support for democracy appeared, threw the rascalarchs out, and installed a virtuous democratic government with safeguards to prevent future corruption. Then 80 years later....
I am willing to be dictator. I need five years not six motnhs but will then stand trial in the well of the Senate for my crimes. I can and will fix this mess. I will start by adding 535 cells to Guantanamo and appointing Victor D Hansen as Plenipotentiary Governate of California and Mike Grafton as Secretary of Energy and Robert Zubrin as director of NASA, oh, and Dave Ramsay as head of the White House Office of Management and Budget. When I leave power, the Constitution will include a very difficult to remove Balanced Budget Requirement, a prohibition on states raising local taxes, and term limits for Congress. I will also require anyone selling food to include a no-onions option.
THERE WILL BE NO DISCUSSIONS OF MY OFFER OR OF THE HISTORY OF DICTATORSHIP. NONE. AT ALL, BY ANYONE.
| By Paul Howard (Raven) on Wednesday, May 13, 2026 - 03:50 pm: Edit |
My eldest did Latin and we are both into History - so I was aware that Dictator 'should mean something different today' - but Napoleon, Adolf and severals others ruined it 'for the rest of us'.
On Budgets - Which nations could agree in effect to a 15 year plan to sort out long time Financial Structures* - and an agreement to balance the books on normal expenditure (SVC's post 2.24 post, the idea is long term projects NEVER include 'accountancy line items which will occur every year... for ever' - A 20 year replacement Nuclear Weapons program might be repeated for 20 years - but you would then have a gap until the 10 years later when the new 20 year replacement Nuclear Weaspons program is agreed upon).
So annual debt costs remain balanced within a short time period.
War - Tough one.... you wasn't expecting it and so including War and Emegrgencies within the 2/3rd approval requirement should allow costs to then be spread over a longer time period.
The fact is - the West has been earning too little and spending too much.
*Norway is probably the only nation which I think DID get a long term plan implemented and have kept to it (their Sovereign Wealth Fund)?
P.S. What did Onions do??
| By Steve Cole (Stevecole) on Wednesday, May 13, 2026 - 04:50 pm: Edit |
I am extremely allergic to onions (internal bleeding, risk of very quick death), which makes going to restaurants or even dinner cooked by family and friends very interesting. I love Mexican food and Italian food but practically have to watch the chef prepare it before I can feel safe eating it. I thought everyone here knew about that.
If I could manage to eat two or three onion rings before throwing up, I would probably be dead from internal bleeding before the ambulance got there.
Steve Petrick has the same allergy. Both of us are also allergic to mushrooms and peppers (bell peppers, chili peppers, ghost peppers, not common black pepper).
| By Paul Howard (Raven) on Wednesday, May 13, 2026 - 05:24 pm: Edit |
SVC
Sorry to her that.
Wife has a modest intolerance to Mushrooms (and I worked with someone whos was extremely allergic to Peanuts - so the office has a 'nut ban' to avoid the nut oils contamining handles etc) so we have modest fun and games when we eat out doing the Alergy check.
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