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Trump first.

Protests in India against electoral fraud

TLDR: The executive branch (headed by Modi) captured the previously autonomous Election Commission and installed their puppet bureaucrat at the top and started a campaign to remove millions of people from the voter rolls, migrant workers, minorities were disproportionately affected and the purge helped BJP ‘win’ several elections since 2023.

Recently it came out that the other two bureaucrats out of three who run the Election Commission disapproved of the manner in which voters were purged, calling it illegal and claimed orders were issued without their approval. Since then there has been widespread protests calling for the withdrawal of the puppet installed by Modi. The cops have been particularly ruthless (some love the fascistic regime, others ‘just following orders’). One of the top cops likely SAed journalists who were documenting the protests, they’ve been surveilling the protestors, removing their name tags while detaining them etc. The protestors range from liberals to leftists.

The executive has lost political legitimacy because of these protests. Judges who have been quiet are speaking out, many bureaucrats have been sending internal info to the opposition. There are definitely cracks in the Modi regime. Trump’s actions certainly hasn’t helped. The stock market is doing poorly because of many factors such as Iran war, Trump’s tariff threats, lack of demand because of austerity further contributing to unpopularity among the top 5-10% ‘middle class’ who were mainly Modi supporters before.

The national statistics agency, known as INDEC, reported that the share of Argentines living below the poverty line jumped four percentage points from 28.2% in the second half of 2025. Extreme poverty, or indigence, rose from 6.3% to 7.5%.

their own gov is saying it.

https://www.indec.gob.ar/ftp/cuadros/sociedad/EPH_metodologia_22_pobreza.pdf

they use basic food basket compared to household income.

The yields are higher because markets expect Fed to keep rates high or hike the rates (because Fed thinks rate hikes fix supply shocks by magic and markets know how the Fed reacts), so the existing bonds reprice accordingly.

Very good reason to stop issuing long term bonds. Even now only 18% of total Treasuries are 10Y or above in duration.

Interest payments are a component of the Federal Government fiscal statement. Since the Federal Government runs a deficit, it by identity adds money to private sector.

Here u go for reserve balances:

If the interest rate earned on our short maturity Treasury assets is very close to the interest we pay on reserves, then our interest earnings from the Treasury are simply passed through to the banks. In this sense, our balance sheet is just another way to transfer interest payments on Treasury securities from the Treasury to the banks.

https://www.federalreserve.gov/newsevents/speech/waller20250710a.htm

And for Treasury part:

Finally, a third channel works through interest income effects. Higher interest rates raise government interest payments, boosting income for private bondholders. If not offset by higher taxes or reduced transfers, this income transfer supports aggregate spending. Unlike the valuation channel, which reduces aggregate demand and reinforces disinflation, the interest income channel weakens both the output contraction and the disinflation from rate hikes, with larger debt stocks boosting these offsetting effects.

https://www.bis.org/publications/aer-2026/high-public-debt-shifting-financial-markets

All mainstream econ only. Here’s a bit heterodox one, ofc Brazil’s case is much more extreme than the U.S.

Brazil has had, since the middle 1990s, one of the highest real interest rates in the world, yet not one of the lowest inflation rates. By the end of that decade, an inflation targeting regime (ITR) was introduced. Real interest rates have remained extremely high for international standards, while macroeconomic performance has been dismal on the same grounds. This article argues that these results can be explained by, among others reasons, pressures from the rentiers to frame monetary policy in a way to sustain very high interest earnings in a context where inflation is not very sensitive to monetary policy instruments. Under the ITR, the interest rate seems to have been kept above what would be required to maintain low inflation under normal conditions (even if one assumes a demand-pull inflation, which is not necessarily the case), with a potentially negative impact on growth and employment. This is interpreted as an indicator of monetary policy ineffectiveness. On the empirical ground, this article compares interest rate, inflation, unemployment, and real output growth for Brazil with both ITR and non-ITR countries selected by judgment sampling.

https://redfame.com/journal/index.php/aef/article/view/3710

Hyperinflation is usually interpreted as a result of the monetary financing of serious fiscal imbalances. Here, a fiscalist alternative is explored, in which inflation explodes because of the fiscal effects of monetary policy. Higher interest rates cause the outside financial wealth of private agents to grow faster in nominal terms, which in fiscalist models calls for higher inflation. If the monetary authority responds to higher inflation with sufficiently higher nominal interest rates, a vicious circle is formed. The model is particularly advantageous for hyperinflations in which most of the fiscal action concentrates in the interest bill on public debt and debt rollover, rather than seigniorage or primary budget deficits. Brazil in the late 1970s and early 1980s serves as a motivating case.

https://faculty.wcas.northwestern.edu/lchrist/papers/Tight Loose.pdf

Of course the argument often made is that propensity to consume out of this interest income is low, but there is just so much money at the top 10% that the channel becomes an effective stimulus directly increasing consumption. Also, in case of developing countries, interest income has much higher propensity to be exchanged for foreign currencies in the foreign exchange market, especially debt held by foreigners (particularly important since these countries have currency pegs).

For example, let’s say you are the Iranian government, and the U.S. has just sanctioned your country. This leads to an immediate disruption in the flow of resources from the rest of the world into your country. What should your central bank do? The good answer is obvious: set rates at 0% or below 5% (even 5% is unnecessary). But if you do that, all the financial hoards become less valuable. Is that bad? Your country is under sanctions; you can’t create stuff from money, so the hoards should be less valuable. But certain people at your central bank want certain people to maintain most of their claims on real output, so they raise rates to double digits and claim it’s being done to control inflation. Now, those people’s hoards are doubling in nominal terms even as wages decrease. Money supply keeps increasing and inflation feeds rate hikes which feed inflation, in the most regressive way.

Now, with price-level changes at 70%, the risk-free rate on the Iranian rial is still 25%. You might say that’s a negative real return. But 25% still doubles their nominal claim in three years for no reason. Why do their hoards deserve more protection than workers’ wages? They are doing nothing; even if they labored in the past (most did not), they aren’t doing anything to deserve it right now amidst war and sanctions. They are getting free money without giving up liquidity.

Point is, if you want to make bonds useful you have to make it completely illiquid, non-negotiable (i.e. non-transferable), not have it be legally recognized as collateral and only pay cash very slowly or at the end (called zero coupon). Risk free rates provided by the Central Bank and most sovereign bonds are exact opposite, its money for nothing.

I believe he wants ZIRP to make stocks go up. Though, in reality it is very interest payments that hold up the stock markets. The COVID era stock market boom for instance wasn’t merely because of ZIRP and QE, but because Government spent a ton of money, some valid others very regressive. AI stock boom occurred despite high interest rates and Iran war uncertainty, it was in significant part fueled by interest payments.

Rate cuts do immediately boost stock prices because it changes the discount rate. However, it lowers future flows (lower interest payments), so in medium-long term its not very good for stock market, unless the Congress accommodates rich peoples’ hoarding desires with higher spending (that is much more politically charged and risky). The thing about rate hikes is people don’t see it the same way as Congressional appropriations.

The risk free return in this case is for each currency. Each currency has its own risk free rate. It’s not risk free in goods terms. Nothing is. Gold for example is only risk free in gold terms, there’s no guarantee you could get bread for certain amounts of gold.

Risk free rate is as if you could get more gold simply by holding gold (via magic let’s say), kinda absurd, you can see how this itself could feed into prices. Pretty good argument for why it should be zero.

Of course, workers can be provided with special instrument which provide 8% rates if its illiquid, the 8% is the reward for not spending during a supply shock. But bonds aren’t illiquid, not even the 30Y ones are, you can sell those at a haircut, banks lend (create new money) against it. Short term ones have no capital loss risk. It’s money without giving up anything right now.

For USD, the rate on Fed or short term Treasuries is the risk free rate. For CNY, it’s Chinese Central Govt bonds. For GBP, it’s gilts. etc.

So, the rich want a return that’s high enough to counter price changes and have extra on top. Of course, prices on certain goods can rise above others so real return can be lower, but the Fed is trying to make sure hoarders retain purchasing power. This changes relative beneficiary of the national output in favor of financial wealth hoarders.

Should be obvious to readers here, but the real reason why the Fed hiked rates is not much to do with consumer inflation or anything related to Treasury yields, it’s that:

1. Interest Payments on government debt and reserve balances add income to the private sector and in many cases this income puts further upwards pressure on prices. This is a basic income on wealth in proportion to their private wealth. Since the rich own most financial wealth, it’s a very obvious transfer to the rich.

2. It helps the rich have a real risk free return on their financial asset hoards. Real in the sense that as supply shocks and monopoly price powers erode purchasing power of wages, the rich get a return on top of increase in the price level.

3. It helps the rich countries bid away goods from poorer countries. High interest rates act as an import subsidy, atleast temporarily. Of course, no rate hike can create more aggregate goods in the international market, not everyone can be net importer of oil and fossil fuels. But you can change the distribution of commodities, it costs the U.S. nothing to pay foreigners in USD and using its privilege it extracts more stuff others would’ve gotten otherwise.

In the aggregate, no country can get more crude or natural gas by hiking rates. It only changes relative winners.

Other things to note:

1. There’s nothing natural about hiking interest rates. Interest rates are a policy variable (the Government essentially sets it) in a modern floating exchange rate economy.

2. The bond yields on long term bonds move due to expectations of future central bank and short rates and capital loss risks (since rate hikes makes existing bonds less appealing). Note that there is no default risk in this equation, default risk only applies to private debts in non sovereign currencies.

3. The bundling of real issues like supply shock induced rise in fuel and commodity prices along with a policy choice one like the Fed rate hike is a deliberate ploy by the neoliberals.

Canada isn’t doing shit. They are too busy exporting commodities to its colonizer.

A Canadian Government that cared would do a combo of export restrictions and export tariffs against the U.S.

Also, EU is busy killing themselves, there is not as much demand for Canadian goods there as the U.S.

supply is probably very low i’m guessing, putting upwards pressure on bond prices (upto a limit since DCF anchors price well for bonds). another component would be that these assets are a good way for Chinese institutions (like banks) to get USD exposure more easily than buying USTs or equivalent ETFs (because of capital controls).

ECB raises rates to 2.5% to ensure rich people retain their wealth as real wages drop. Very little to do with controlling inflation.

Will they do austerity to join Eurozone and give up fiscal policy space?

A tale of two economies – Greece and Iceland

external constraint DPRK had faced for decades due to the US sanctions loosened in part due to Ukraine war, allowing them to obtain more resources from abroad.

deleted by creator

Yea they thought they were like American financial sector (market depth, free Gov money etc) with single stock leveraged etfs. Nope.

damn even a threat makes him scared? Zohran explicitly said he doesn’t have foreign policy powers to target Bibi specifically in the speech. #SoyRight

Nothing ever happens with sovereign bond interest rates is a pretty good heuristic. They’re gambling on whether the Fed will raise rates (or keep it at current level for long time).

Trump doing anti-treatlerism once again. He understands that US is exploiting Canada for its resources and giving to Canada US$ claims in return only enriching the capitalists and leaving the country poor in material terms.

yep definitely, the movement is not just CJP now. the Gov plan to co-opt the public anger against them and redirect it towards CJP failed.