With the beginning of the American Revolutionary War at the outbreak of Lexington and Concord, two truths about the Revolution already stand out clearly. One is that the Revolution was genuinely and enthusiastically supported by the great majority of the American population. It was a true people’s war against British rule. The American rebels could certainly not have concluded the first successful war of national liberation in history, a war against the world’s greatest naval and military power, unless they had commanded the support of the American people. As David Ramsay, the first great historian of the American Revolution, put it in 1789: “The War was the people’s war…the exertions of the army would have been insufficient to effect the revolution, unless the great body of the people had been prepared for it, and also kept in a constant disposition to oppose Great Britain.1 ”

A second truth that emerges is the egregious fallacy of the view endemic among historians of all ideological persuasions that there is a large and necessary dichotomy between political or moral principle and economic self-interest. Historians friendly to the Revolution have insisted that the Americans fought for political freedom, for independence, for constitutional rights, or for democracy; critical historians maintain that the fight was merely for economic reasons, for defense of property and trade against British interference. But why must the two be sundered? Why may not a defense of American liberty and property, of political and economic rights, be conjoined? The merchants rebelling against the stamp tax, or sugar or tea taxes, or restrictions of the Navigation Laws, were battling for their rights of property and trade free from interference. In doing so, they were battling for their own property and for the rights of liberty at the same time. The American masses, similarly, were battling for all property rights, for their own as well as those of the merchants, and acting also in their capacity as consumers fighting against British taxes and restrictions.

In short, there need be no dichotomy between liberty and property, between defense of the rights of property in one’s person and in one’s material possessions. Defense of rights is logically unitary in all spheres of action. And what is more, the American revolutionaries certainly acted on these very assumptions, as revealed by their essential adherence to libertarian thought, to political and economic rights, and always to “Liberty and Property.” The men of the 18th century saw no dichotomy between personal and economic freedom, between rights to liberty and to property; these artificial distinctions were left for later ages to construct.

Ideology and the State

From our conclusions that the American revolutionaries commanded the loyalty of a large majority of the colonists and that they saw no dichotomy between liberty and economic rights, and therefore between ideology and economic interest, we may proceed to some broader speculations on the role of ideology as compared to economic interest in the various actions of political history. In particular, we contend that the primary motivations will tend to differ between two classes of political actions, between actions of the State in expanding its power over the populace and actions of the populace in moving or rebelling against State power. We contend that the actions of the former will tend to be primarily motivated by economic interest, while the latter will tend to be primarily motivated by more abstract ideological or moral concerns.

Let us see why this should be so. The essence of the State through history is a minority of the population, constituting a power elite or a “ruling class,” governing and living off of the majority, or the “ruled.” Since a majority cannot live parasitically off a minority without the economy and the social system breaking down very quickly, and since the majority can never act permanently by itself but must always be led by an oligarchy, every State will subsist by plundering the majority on behalf of a ruling minority. A further or corollary reason for the inevitability of minority rule is the pervasive fact of the division of labor: the majority of the public must spend most of its time going about the business of making a daily living. Hence, the actual rule of the State must be left to full-time professionals who are necessarily a minority of the society.

Throughout history, then, the State has consisted of a minority plundering and tyrannizing over a majority. This brings us to the great question, the great mystery, of political philosophy: the mystery of civil obedience. From Étienne de La Boétie to David Hume to Ludwig von Mises, political philosophers have shown that no State—no minority—can continue long in power unless supported, even if passively, by the majority. Why then do the majority continue to accept or support the State when they are clearly acquiescing in their own subjection? Why does the majority continue to obey the minority?

Here we arrive at the age-old role of the intellectuals, the opinion-molding groups in society. The ruling class—be they warlords, nobles, bureaucrats, feudal landlords, monopoly merchants, or a coalition of several of these groups—must employ intellectuals to convince the majority of the public that their rule is beneficent, inevitable, necessary, and even divine. The leading role of the intellectual through history is that of the Court Intellectual, who, in return for a share, a junior partnership, in the power and pelf offered by the rest of the ruling class, spins the apologies for State rule with which to convince a misguided public. This is the age-old alliance of Church and State, of Throne and Altar, with the Church in modern times being largely replaced by secular intellectuals and “scientific” technocrats.

When State rulers act, then, to use and aggrandize State power, their primary motivation is economic: to increase their plunder at the expense of the subject and the taxpayer. The ideology that they profess, and that is formulated and spread through society by the Court Intellectuals, is an elaborate rationalization for their economic interests. The ideology is the camouflage for their loot, the fictitious clothes spun by the intellectuals to hide the naked plunder by the Emperor. The economic motive behind the ideological garb of the State is, then, the heart of the issue.

Antistatists’ Preoccupations

But what of rebellions against State power—those infrequent but vital situations in history when the subjects rise up to diminish, whittle away, or abolish State power? What, in short, of such great events as the American Revolution or the classical liberal movements of the 17th and 18th centuries? Of course, an economic motive exists here too, in this case, that of defending the private property of the subjects from the depredations of the State. But our contention here is that, even when conjoined as in the American Revolution, the major motive of the opposition, or of the revolutionaries, will be ideological rather than economic.

The basic reason for this assertion is that the ruling class, being small and largely specialized, is motivated to think about its economic interests 24 hours a day. The manufacturers seeking a tariff, merchants seeking to cripple their competition, bankers looking for taxes to repay their government bonds, rulers seeking a strong State from which to acquire revenue, and bureaucrats wishing to expand their empire are all professionals in statism. They are constantly at work trying to preserve and expand their privileges. Hence the primacy of the economic motive in their actions.

But the majority has allowed itself to be misled largely because its immediate interests are generally diffuse and hard to observe, and because they are not professional “antistatists” but people going about their business of daily living. What can the average person know of the arcane processes of subsidy, taxation, or bond issue? Generally, he is too wrapped up in his daily life, too habituated to his lot after centuries of State-guided propaganda, to give any thought to his unfortunate fate. Hence, an opposition or revolutionary movement, or indeed any mass movement from below, cannot be primarily guided by ordinary economic motives. For such a mass movement to form, the masses must be fired up, must be aroused to a rare and uncommon pitch of fervor against the existing system. But that requires an ideology. Only ideology, guided either by a new religious conversion or by a passion for justice, can arouse the interest of the masses (in the current jargon, “raise their consciousness”) and lead them out of the morass of daily habit into an uncommon and militant activity in opposition to the State.

This is not to say that an economic motive—for example, defense of their property—does not play an important role. But to form a mass movement in opposition means that they must shake off the habits, the daily mundane concerns of several lifetimes, and become politically aroused and determined as never before in their lives. Only a commonly held and passionately believed-in ideology can perform that role. Hence our conclusion that a mass movement such as the American Revolution must have been centrally motivated by a commonly shared ideology.

Ideology for the Masses

How then do the masses of subjects acquire this guiding and determining ideology? By the very nature of the masses, it is impossible for them to arrive at such an opposition or revolutionary ideology on their own. Habituated as they are to their narrow and daily rounds, uninterested in ideology as they normally are, it is impossible for the masses to lift themselves up by their own bootstraps to hammer out an ideological movement in opposition to the existing State. Here we arrive at the vital role of the intellectuals. It is only intellectuals, the full-time (or largely full-time) professionals in ideas, who have either the time, the ability, or the inclination to formulate an opposition ideology and then to spread the word to the mass of the subjects. In contrast to the statist Court Intellectual, whose role is a junior partner in rationalizing the economic interests of the ruling class, the radical or opposition intellectual’s role is the centrally guiding one of formulating the opposition or revolutionary ideology and then spreading the ideology to the masses, thereby welding them into a revolutionary movement.

An important corollary point: in weighing the motivations of the intellectuals themselves, or even of the masses, it is generally true that setting oneself up in opposition to an existing State is a lonely, thorny, and often dangerous road. It would usually be to the direct economic interests of the radical intellectuals to “sell out,” to be co-opted by the ruling State apparatus. Those intellectuals who choose the radical opposition path—who pledge, in the famous words of the American revolutionaries, “their lives, their fortunes, and their sacred honor”—can scarcely be dominated by economic motives. On the contrary, only a fiercely held ideology, centering on a passion for justice, can keep the intellectual to the rigorous path of truth. Hence, again, the likelihood of a dominant role for ideology in an opposition movement.

Economics vs. Ideology

Thus, it turns out to be true that statists tend to be governed by economic motivation, with ideology serving as a smokescreen for such motives, while libertarians or antistatists are ruled principally and centrally by ideology, with economic defense playing a subordinate role. Through this dichotomy, we may at last resolve the age-old historiographical dispute over whether ideology or economic interests play the dominant role in historical motivation.

We can now see why the Beard-Becker “economic determinist” model of human motivation, a dominant school of American history in the 1920s and 1930s, so fruitful and penetrating when applied to statist actions of the American government, fails signally when applied to the great antistatist events of the American Revolution. The Beard-Becker approach sought to apply an economic determinist framework and specifically a framework of inherent conflict between various major economic classes to the American Revolution. The vital flaws in the Beard- Becker model were twofold. First, they did not understand the necessary primary role of ideas in guiding any revolutionary or opposition movement. Second, they did not understand that there are no inherent economic conflicts in the free market; without government intrusion, there is no reason for merchants, farmers, landlords, et al. to be at loggerheads. Conflict is only created between those classes that rule the State as against those exploited by the State. Not understanding this crucial point, the Beard-Becker historians framed their analysis in terms of the allegedly conflicting class interests of, in particular, merchants and farmers. Since the merchants clearly led the way in revolutionary agitation, the Beard-Becker approach was bound to conclude that the merchants, in agitating for revolution, were aggressively pushing their class interests at the expense of the deluded farmers.

Explaining Away Ideas

But now the economic determinists were confronted by a basic problem: if indeed the revolution was against the class interests of the mass of the farmers, why did the latter support the revolutionary movement? To this key question, the determinists had two answers. One was the common, mistaken view that the Revolution was only supported by a minority of the population. A second answer was that the farmers were deluded into such support by the “propaganda” beamed at them by the upper classes. In effect, these historians transferred the analysis of the role of ideology as a rationalization of class interests from its proper use to explain State action to a fallacious use in trying to understand anti-state mass movements. In this approach, they relied on the jejune theory of “propaganda” pervasive in the 1920’s and 1930’s under the influence of Harold Lasswell: namely, that no one sincerely holds any ideas or ideology and therefore that ideological statements cannot be taken at face value but must be considered only as insincere rhetoric for the purposes of “propaganda.” Again, the Beard-Becker school was trapped by its failure to give any primary role of ideas in history.

After World War II, as part of the general “American celebration” among the American intellectuals of that era, the newly dominant “consensus school” of American history demonstrated that the Revolution was indeed supported by the majority of the population. Unfortunately, however, under the aegis of such major consensus theoreticians as the “neoconservatives” Daniel Boorstin and Clinton Rossiter, the consensus school moved to the truly absurd conclusion that the American Revolution, in contrast to all other revolutions in history, was not really a revolution at all, but a purely measured and conservative reflex against the restrictive measures of the Crown.

Under the spell of the American celebration and of a post-World War II hostility to all modern revolutions, the consensus historians were constrained to deny any and all conflicts in American history, whether economic or ideological, and to absolve the American republic from the original sin of having been born via revolution. Thus, the consensus historians were fully as hostile to ideology as a prime motive force in history as their enemies, the economic determinists. The difference is that, where the determinists saw class conflict, the consensus school maintained that the genius of Americans has always been to be unfettered by abstract ideology of any kind and that instead they have met every issue as ad hoc, problem-solving pragmatists. Thus, the consensus school, in its eagerness to deny the revolutionary nature of the American Revolution, failed to see that all revolutions against State power are necessarily radical and hence “revolutionary” acts, and further that they must be genuine mass movements guided by an informed and radical ideology.

Revolutionary History

Fortunately, however, the most recent and now dominant school of historiography on the American Revolution—that of Professor Bernard Bailyn—brings radical ideology, and radical libertarian ideology at .that, into the forefront of the causes of the Revolution. Against the hostility of both of the older schools of historians, Bailyn has managed, in scarcely a decade, to win his way through to become the leading interpreter of the Revolution. Bailyn’s great contribution was to lay out for the first time the truly dominant role of ideology among the revolutionaries and to stress that, not only was the Revolution a genuine revolutionary and multiclass mass movement among the colonists, but also that it was guided and impelled, above all, by the ideology of radical libertarianism: hence what Bailyn happily calls the “transforming libertarian radicalism of the Revolution.”

In a sense, Bailyn was harking back to an older generation of historians at the turn of the 20th century, the so-called Constitutionalists, who had also stressed the dominant role of ideas in the revolutionary movement. But Bailyn correctly saw that the mistake of the Constitutionalists was in ascribing the central and guiding role to sober and measured legalistic arguments about the British Constitution, and, secondarily, to John Locke’s philosophy of natural rights and the right of revolution. Bailyn saw that this interpretation missed the major motive power of the Revolutionaries: Constitutional legalisms, as later critics pointed out, were dry-as-dust arguments that hardly stimulated the requisite revolutionary passions and, furthermore, neglected the important problem of the economic depredations by Great Britain, while Locke’s philosophy, though ultimately highly important, was too abstract to generate the passions or to stimulate widespread reading by the bulk of the colonists. Something, Bailyn rightly felt, was missing: the intermediate-level ideology that could stimulate revolutionary passions.

Bailyn found that missing ingredient in the radical libertarian Lockean English writers of the 19th century—especially Trenchard and Gordon of “Cato’s” Letters. These writers applied and transformed Lockean natural rights theory into a radical, passionate, and explicitly political libertarian and anti-British framework. Trenchard and Gordon, and the other influential libertarian writers, clearly and passionately set forth the libertarian theory of natural rights, went on to point out that government in general, and the British government specifically, was the great violator of such rights, and warned also that Power—government—stood ever ready to conspire to violate the liberties of the individual. To stop this crippling and destructive invasion of Liberty by Power, the people must be ever wary, ever vigilant, ever alert to the conspiracies by the rulers to expand their power and aggress against their subjects. It was this spirit that the American colonists eagerly imbibed, and that accounted for their “conspiracy view” of the English government, a view that such historians as Bernhard Knollenberg have shown was basically correct, since, after 1760, such conspiracies were all too real. Thus, what some historians have derided as the “paranoia” of the colonists turns out to be not paranoia at all but an insightful apprehension of reality, an insight that was, of course, fueled by the colonists’ libertarian understanding of the very nature and essence of state power itself.

Thus, in the deepest sense, the American Revolution was a conscious majority revolution on behalf of libertarianism and against power, a libertarian ideology that stressed the conjoined rights of “Liberty and Property.” The American Revolution was not only the first great modern revolution, it was a libertarian revolution as well.

Adapted from Chapter 72 of Conceived in Liberty: Vol III. Originally published in Reason, July 1976.

• • Iran’s use of cluster munition warheads successfully penetrated Israel’s multi-layered air defense systems, striking targets in West Jerusalem, Beit Shemesh, and Haifa.

• • Israel’s War Ministry announced Iron Dome upgrades in June 2026 following “operational lessons learned” during the U.S.-Israeli war on Iran.

• • Iranian hypersonic missiles with decoy capabilities overwhelmed Israeli defenses using swarm and saturation tactics.

• • Israel faces critical shortages of ballistic missile interceptors, with U.S. officials anticipating depletion as Iran exploits vulnerabilities.

• • The Iron Beam laser system, delivered in December 2025, remains not yet operational, with at least 14 batteries required for a significant defensive impact.

When the Iron Dome failed

On 28 February 2026, the calculus of Middle Eastern warfare shifted dramatically when Iran launched approximately 650 ballistic missiles directly at Israel in a single barrage. This assault, part of the broader U.S.-Israeli war on Iran, demonstrated what military analysts had long warned: Israel’s vaunted multi-layered air defense system, including the Iron Dome, Arrow and David’s Sling networks, could be overwhelmed by saturation attacks. Iranian forces employed cluster munition warheads that dispersed dozens of submunitions mid-air, allowing sophisticated weapons to penetrate Israel’s defensive arrays and strike infrastructure in West Jerusalem, Beit Shemesh, and Haifa’s Bazan oil refinery. The attack killed at least nine civilians and wounded dozens more, fundamentally challenging assumptions about Israeli military invincibility.

The evolution of the Iron Dome

The Iron Dome system, developed by Rafael Advanced Defense Systems with significant U.S. funding, began operational deployments in 2011. Designed specifically to intercept short-range rockets and artillery shells, it achieved success rates exceeding 90% against primitive Hamas and Hezbollah rockets. However, Iran’s advanced ballistic missile arsenal, particularly the Khorramshahr missile capable of carrying cluster warheads dispersing up to 80 submunitions, represented an entirely different threat category. The 2008 Convention on Cluster Munitions, which neither Israel nor Iran signed, banned such weapons for signatory states due to their indiscriminate nature.

The saturation strategy: How Iran overwhelmed Israeli defenses

Iran’s tactical approach exploited fundamental limitations in Israeli air defense architecture. During the war, Hezbollah launched FPV drone strikes specifically targeting Iron Dome batteries, claiming successful hits. More critically, Iran’s use of cluster munitions forced Israel to fire dozens of interceptors to neutralize single incoming threats. According to missile expert Tal Inbar, intercepting cluster munitions presents unique challenges: an interceptor must strike the carrier vehicle before dispersal, after which interception becomes virtually impossible. This created an unsustainable economic equation, with each Iranian missile costing perhaps hundreds of thousands of dollars while requiring millions in Israeli interceptors.

The interceptor shortage crisis

By March 2026, reports emerged that Israel faced critical shortages of ballistic missile interceptors. While Israeli Foreign Minister Gideon Saar denied these claims, U.S. officials reportedly anticipated depletion. U.S. Vice President JD Vance acknowledged during a White House press briefing that “two-thirds of the defensive weapons” over three months came directly from the United States. Israel’s war minister later warned that long-term force buildup was “dangerously behind schedule.” The economic strain proved severe: a single day of sustained Iranian attacks could cost Israel billions of dollars in munitions, a pace Washington’s defense industrial base cannot maintain indefinitely.

Upgrades and persistent vulnerabilities

On 30 June 2026, Israel’s War Ministry announced the completion of an “extensive series of tests” to upgrade the Iron Dome, including the limited deployment of the Iron Beam laser system. However, an Israeli senior military officer cautioned in May that coverage remains partial, with at least 14 batteries required for significant defensive impact. The Iron Beam, delivered in December 2025, remains not yet declared operational. These upgrades incorporate “operational lessons learned” from the Iran war but cannot address fundamental vulnerabilities: Iran retains thousands of missiles capable of sustained attacks, while Israel’s interceptor stockpile remains finite.

A strategic reckoning

The events of 2026 represent more than a military engagement; they signal a fundamental shift in regional power dynamics. Iran demonstrated the capability to deploy hypersonic missiles with complex decoy systems that bypass Israeli defenses while simultaneously draining interceptor stocks. The cluster munition attacks, which experts at Amnesty International condemned as “flagrant violations” of international law, exposed technical vulnerabilities that no upgrade cycle can fully address. Israel now faces an uncomfortable reality: its air defense systems, once considered impenetrable, can be overwhelmed by sustained saturation attacks. The limited supply of Patriot missiles and other interceptors cannot sustain prolonged conflict against Iran’s vast arsenal. As both nations calculate their next moves, the strategic message from Tehran remains clear: there is nothing you can do to stop us indefinitely. For Israel and its allies, the question is not whether their defenses can hold, but how long they can afford the cost of trying.

Sources for this article include:

TheCradle.co

TheGuardian.com

RoyalNews.tv

The DR Congo has officially started a trial of potential treatments for the species of virus behind the current deadly Ebola outbreak in the Democratic Republic of Congo. The strain, called Budibugyo, has been difficult to treat since it is not the more common Zaire strain.

The World Health Organization (WHO) has announced that the first patient in the trial has been enrolled, according to a report by the BBC. The current trial is sponsored by the WHO, Chief Tedros Adhanom Ghebreyesus said on Thursday.

There are currently no approved vaccines or treatments for the Bundibugyo virus species of the disease, which is highly infectious and spreads through contact with bodily fluids or incorrect handling of the deceased.

The testing will include using two antiviral drugs on patients. While speaking to reporters from the WHO headquarters in Geneva on Thursday, Ghebreyesus said: “Even without approved therapeutics, people are recovering from this disease, but of course, we could save many more lives with safe and effective therapeutics in our toolkit.”

DR Congo’s Health Minister, Dr. Samuel Roger Kamba, agreed with the WHO chief. He said the launch “represents a significant step forward, offering renewed hope to patients, their families, and affected communities”.

The situation has been declared a public health emergency by the WHO, which says there have been 1,460 confirmed cases in DR Congo, with 150 suspected cases and 452 deaths, as of July 1st. According to the WHO, 213 people have recovered.

Marburg Outbreak In Uganda Threatens Ebola Containment

Other issues have compounded, making it difficult to contain this outbreak. A Marburg virus case popped up in Uganda, and deep-seated conflicts are displacing people, causing health authorities to lose track of contacts. People also appear to be afraid of being diagnosed, so they hide to avoid isolation and confinement.

“People Are Hiding” During Ebola Outbreak, Making Containment Difficult

The oceans on our planet have never been this hot, and this is causing explosive weather throughout the world. Record high temperatures are being set all over the northern hemisphere; we are witnessing absolutely crazy storms, and gigantic wildfires are erupting at a blistering pace.

We have never experienced anything quite like this before, and it is going to be very difficult for farmers to grow crops in these unpredictable conditions. It feels like we are living through a Hollywood disaster movie, but of course, what we have been through so far is only just the beginning.

A lot of people are blaming the crazy weather on the “Super El Niño” that began a few weeks ago.

But it isn’t just a “Super El Niño” that we are facing.

According to Google, an El Niño occurs as a result of warmer surface temperatures in the equatorial waters of the Pacific Ocean…

El Niño is a naturally occurring climate phenomenon characterized by unusually warm ocean surface temperatures in the central and eastern equatorial Pacific. During an event, standard trade winds weaken, causing warm water to shift toward the Americas instead of Asia, altering global weather patterns.

In 2026, we will certainly see extremely warm surface temperatures in the equatorial waters of the Pacific Ocean.

But that is just part of the story.

Right now, we are actually experiencing a worldwide ocean heat wave.

In fact, last month ocean surface temperatures reached the highest level ever recorded…

Temperatures on the ocean surface hit a record high in June, European scientists warned Wednesday, fueling fears of more dangerous heat waves this summer and fanning concerns over the escalating global climate crisis.

Two separate services under the European Union’s Copernicus earth observation program — the Copernicus Climate Change Service and the Copernicus Marine Service — announced they had both independently confirmed the record temperatures.

This is very alarming news.

According to the Copernicus Marine Service, the average ocean surface temperature actually reached a level of 20.98 degrees Celsius…

Global average sea surface temperatures in June were 20.98C, beating the previous records of 2023 and 2024, according to the European Union’s Copernicus Marine Service.

I am particularly concerned about the massive heat wave that we are witnessing in the northern Pacific.

On beaches all along the west coast, the consequences of this heat wave are clearly visible…

Within minutes of walking on a San Diego beach, marine ornithologist Tammy Russell found the feathered carcasses — one after another.

Some were mixed in with washed up kelp. Others were under rocks.

Each month, scientists and volunteers conduct surveys of dead seabirds and find what Russell describes as a grim assessment of the impact of a massive marine heat wave that has lingered for months off parts of the California coast.

The reason why so many seabirds are starving to death is that the little critters that they normally eat in the ocean are all being wiped out by the heat wave…

Many seabirds, including California brown pelicans, loons and grebes, starved to death in recent months as record-setting ocean temperatures decreased the band of cold, nutrient-rich surface water where krill, anchovies and sardines thrive near the shore, said Russell, a postdoctoral scholar at the University of California, San Diego, Scripps Institution of Oceanography.

“We’ve been seeing cormorants walk to shore and then just die within the hour. I mean one time it happened within 15 minutes, and I’ve never seen that before,” Russell said. “That has been heartbreaking for me and we’re seeing this happening across the whole coast.”

What we have been witnessing in recent weeks is absolutely insane.

It all started on June 17th when the Memorandum of Understanding was signed.

That was the day when Tropical Storm Arthur formed, and that was the day when Tropical Storm Arthur made landfall.

It devastated communities all the way from Texas to the East Coast.

According to AccuWeather, it is estimated that it caused somewhere between 4 and 6 billion dollars in total damage…

Tropical Storm Arthur, which dumped more than of 20-inches of rain in some spots across the Gulf this week, caused an estimated $4-6 billion in total damage and economic loss, according to a preliminary estimate from experts at AccuWeather. Flooding, property and infrastructure damage, hundreds of flight delays, financial losses from extended power outages, and business interruptions contributed to the economic impacts from the storm.

This was a truly historic storm, and the amount of rain that it dumped was absolutely astounding…

• 31.56 inches of rain in Cottonport, LA

• 24.47 inches of rain in Plaucheville, LA

• 20.66 inches of rain in Simmesport, LA

• 15.75 inches in Carriere, MS

Since then, the U.S. has been getting pounded by storm after storm, and now a truly frightening heat wave is baking the eastern half of the nation…

The heat is on.

A prolonged, dangerous heat wave will continue to intensify across most of the central to eastern United States into the Fourth of July weekend, with both smothering humidity and searing highs that could approach records in the mid-Atlantic.

I have already written about this “mega heat dome” multiple times.

We are being told that approximately 230 million Americans will experience extreme heat over the course of this week…

Overall, about 230 million people, or roughly two‑thirds of the U.S. population, could be exposed to extreme heat this week, Weather.com warned.

“The extreme heat will peak Tuesday [June 30] through Thursday [July 2] in the Midwest and Mississippi Valley, shifting eastward into the Ohio Valley and East Coast Thursday [July 2] and into the weekend,” the National Weather Service said in an online forecast.

People will be running their air conditioning like crazy, and this will put a tremendous amount of stress on our power grids.

In anticipation of what is coming, the Trump administration has just issued an emergency order for the largest power grid in the entire country…

The Trump administration has declared a power emergency for the nation’s largest energy grid in advance of a dangerous heat wave that threatens to strain electricity infrastructure.

The emergency order issued by the Energy Department Tuesday authorizes power plants in the PJM Interconnection LLC region, which serves 67 million people across 13 states, to operate at maximum levels and exceed some environmental requirements.

A second Energy Department order authorizes the use of backup generators in the PJM region “as a last resort,” PJM said. Both orders run until 11:59 p.m. New York time July 3.

Let us hope that the power grids do not fail.

Because if they do, many could end up dead.

In fact, a woman in Mississippi just died from the heat after she collapsed in her own garden…

A Mississippi family is left grieving after the blistering heat caused an elderly couple to collapse in their garden, leaving a loving wife and mother to die in the dangerous temperatures.

Martha ‘Irene’ Van Egmond, 83, was in her garden on Saturday when she fell in a flowerbed and passed away from hours of intense heat exposure, as her grieving husband desperately tried to help her up.

Conditions have been even worse in Europe.

Spanish authorities are telling us that more than 1,000 people died during the recent heat wave that hit that country…

Spain has also revealed the devastating toll of the recent heatwave, with officials saying more than 1,000 people died from heat-related causes in June.

At least 1,028 people died of heat-related issues during the heatwave, the public Carlos III Health Institute said.

What a nightmare.

When things are this hot, it is really easy for wildfires to erupt.

As I write this article, 16 massive wildfires are raging all across the state of Colorado…

Sixteen wildfires were burning across Colorado as of Monday night, Colorado Gov. Jared Polis said, spurring several state emergency declarations across the state.

One of those declarations was in Mesa County in response to the deadly Snyder Fire, which reached more than 30,000 acres Tuesday morning. Polis also authorized the state’s National Guard to support response efforts.

To the east, evacuations are in place for areas across Pueblo and Custer counties as the Aspen Acres Fire continues to be a threat. While weather conditions and firefighting efforts helped manage some of the fire growth Tuesday morning, high winds in the afternoon are a concern in the effort to keep it under control, Pueblo County Sheriff David Lucero said during a news conference.

Colorado has been gripped by a seemingly endless drought for months, and there is no end in sight.

Next door in Utah, 12 enormous wildfires have collectively burned almost 300,000 acres…

Last week in neighboring Utah, severe fire conditions drove the National Weather Service office in Salt Lake City to issue its first-ever “particularly dangerous situation” red flag warning for central and southern parts of the state.

Now, twelve fires encompassing nearly 300,000 acres are burning across across the state.

The Cottonwood Fire in southern Utah had grown to nearly 100,000 acres as of Tuesday night, an area bigger than Salt Lake City. It is only 5% contained, according to InciWeb data. Evacuations remain in place for the blaze, which officials say is likely the most destructive and expensive in state history.

This is not normal.

In fact, this is not even close to normal.

The giant wildfires are just one of the reasons why air quality alerts have now been issued in 10 different states…

A dangerous haze is creeping across parts of the US, threatening to turn ordinary summer activities into a health risk.

Millions of Americans across ten states are under air quality alerts as a combination of ground-level ozone, wildfire smoke and harmful particle pollution degrades conditions from the Northeast to the Southwest.

Officials in New York, New Jersey, Connecticut, Rhode Island, Pennsylvania, Maine, New Hampshire, Colorado, Arizona and California have issued advisories warning that the air could become unhealthy, particularly for sensitive groups.

We are not even in the heart of wildfire season yet.

What will conditions be like once we get to August?

Meanwhile, our planet has been shaking like crazy over the past couple of weeks.

Yesterday, the Gulf of California was shaken by a magnitude 6.0 earthquake…

A magnitude-6.0 earthquake was reported early Tuesday afternoon in the Gulf of California.

The quake, reported at 12:45 p.m., was centered northeast of La Paz on the Baja California peninsula and southwest of El Progreso, a port city on Mexico’s Yucatán Peninsula. Shaking was reported in Los Mochis, Culiacan, Zapopan and other areas.

Aftershocks of magnitudes 4.5 and 5.3 were reported later Tuesday afternoon.

Of course everyone is still focused on Venezuela because of the immense devastation that a pair of giant earthquakes caused there.

The official death toll has now risen to 1,943 as authorities attempt to find any survivors that are still alive…

Venezuela’s earthquake disaster entered a critical sixth day Tuesday as the official death toll climbed to 1,943, rescue crews raced to find survivors beneath collapsing rubble, and frustration deepened across the country over what many residents describe as a slow and inadequate government response.

There is one element of this story that I haven’t even discussed yet.

Shortly after the earthquakes, the skies over Caracas turned “a sinister blood-red”…

The skies over parts of Venezuela have turned a sinister blood-red just days after the region endured back-to-back deadly earthquakes.

Videos and photos taken from Caracas on June 30 captured the ominous scene, showing a sky glowing an intense crimson red as the sun dipped below the horizon.

Social media users questioned if the colored sky was linked to the deadly earthquake that had recently struck the region.

Images of the red skies are being shared like crazy all over social media.

Apparently this phenomenon can be caused “when sunlight interacts with particles in the atmosphere”…

The deep red glow, known in Venezuela as a candilazo, occurs when sunlight interacts with particles in the atmosphere under specific conditions, producing a fiery sunset.

Needless to say, the twin quakes threw an enormous amount of dust and debris up into the atmosphere.

And so that is probably why the skies turned red.

There have been at least 689 aftershocks following the twin quakes, but the good news is that aftershock activity seems to be dropping…

Rodríguez said 689 aftershocks have been recorded since the main quakes, though both their frequency and average magnitude appear to be declining – a cautiously positive sign, though not enough to rule out further dangerous seismic activity.

“We must remain relentless in the search for people who are alive,” Rodríguez said during a Tuesday press briefing. “We must keep hope alive that more survivors can still be found beneath the rubble.”

On top of everything else, it appears that there is now an outbreak of the Marburg virus in Uganda…

Uganda has reported a Marburg virus disease outbreak to the World Health Organization (WHO), even as the country is responding to a separate Ebola outbreak, according to STAT.

The Ugandan government has not publicly announced the Marburg outbreak, but the World Health Organization was formally notified Tuesday of at least one case, STAT reported, citing the agency.

A source familiar with the response told STAT that two Marburg cases had been detected as of Monday and that the outbreak appeared to be localized.

Like the Bundibugyo virus that is spreading in the Democratic Republic of the Congo, there is no cure for the Marburg virus.

So hopefully officials in Uganda will be able to contain this outbreak.

But whether this particular outbreak becomes something big or not, it is still my contention that it is just a matter of time before we witness more major global pandemics.

I am convinced that we have reached such a critical turning point in human history.

But for now, most people in the Western world continue to act as if the party will never end, and for the moment, ignorance is bliss.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com.  He has also written nine other books that are available on Amazon.com, including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”.  When you purchase any of Michael’s books, you help to support the work that he is doing.  You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter.  Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream, and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.

The Illusion of Reform

I have watched the machinery of federal health agencies up close, and the 2024 election was the last test. Robert F. Kennedy Jr. was given the chance to lead the Department of Health and Human Services with the full backing of President Trump, the Republican majorities in Congress, and a public desperate for change. Yet, after 18 months of trying to dismantle the deep state, the FDA, CDC, and HHS remain intact, and the pharmaceutical lobby has successfully stalled every meaningful vaccine safety reform ^[1].

This experience has convinced me that reform from within is structurally impossible. The system is not broken by accident; it is designed to harm the American people in order to protect the monopoly profits of Big Pharma and the power of bureaucratic elites.

I believe the illusion of reform is the most dangerous lie we tell ourselves. Every new administration promises to “clean up” the agencies, but the revolving door between regulators and the industries they oversee guarantees that nothing changes. As I have documented in interviews with constitutional attorney Jonathan Emord, the FDA has systematically suppressed truthful health information for decades to protect pharmaceutical monopolies ^[2]. The people running these agencies are not misguided civil servants; they are power-hungry actors dedicated to a mission of causing premature death to reduce government spending on entitlements and keep the sick-care industry profitable. The only honest conclusion is that these institutions cannot be reformed — they must be completely dismantled.

Agencies Built to Kill, Not Protect

Let me be blunt: the FDA operates as a terrorist organization that attacks natural medicine, and the CDC behaves as a bioterrorist organization that deliberately maximizes casualties. The evidence is overwhelming. Consider the CDC’s vaccine adverse event reporting system, which runs two separate databases — one for the public with incomplete data and a private back-end system that contains corrections and deaths that occurred after initial injury ^[3]. This is not incompetence; it is intentional fraud designed to hide the true toll of vaccine injuries. As Peter C. Gøtzsche documented in a Brownstone Institute article, the CDC and FDA systematically misled the American public about serious vaccine harms ^[4]. Their policies intentionally maximize casualties while suppressing natural medicine that could save lives.

In my view, these agencies are staffed by people who are evil in the truest sense — they know the harm they cause and choose to continue it. The “Return of the Microbes” strategy pioneered by Dr. Fauci’s predecessor sought to reinstate microbes as feared progenitors of deadly diseases, thereby justifying endless vaccine programs ^[5]. The same mentality drives the CDC today: they target sick children and pregnant women for COVID vaccines despite mounting evidence of ineffectiveness and serious harm ^[6]. Meanwhile, the FDA’s advisory panels are stacked with members who have deep financial ties to pharma, as seen in the 17-0 vote to authorize Pfizer’s COVID vaccine for children ^[7]. These agencies are not protectors; they are predators feeding on public trust.

Why No Insider Can Fix It

Even if an informed person like RFK Jr. knows that vaccines are dangerous and that COVID was a scam, the system’s structural corruption makes lasting change impossible. We’ve all watched this unfold in real time over the last year or so. When Secretary Kennedy attempted to clean house by firing 17 members of the CDC’s Advisory Committee on Immunization Practices and cutting 10,000 jobs across HHS, the deep state fought back with a vengeance ^[8][9]. The biotech lobby circulated a memo explicitly stating that vaccines are necessary to maintain profitability and that critics like RFK Jr. must be eliminated ^[10]. The same pharmaceutical interests that profited from the pandemic have spent billions on lobbying to neutralize vaccine safety reform, using rigged polls to convince the White House that vaccine skepticism is political suicide ^[1].

Here is why this matters: the 2024 election was the last test. If Trump and RFK Jr. could not reform these agencies with a Republican Congress, no one can. The bureaucracy is a runaway train that accelerates toward catastrophe regardless of political leadership ^[11]. As I explained in my Health Ranger Report, the federal government has become a beast that resists all attempts to tame it ^[12]. The people who work there are committed to preserving their power and the profits of their corporate masters. They will never allow an insider to make lasting change because their entire existence depends on the status quo. The only honest answer is that reform is an illusion used to pacify the public while the system continues its murderous rampage across the landscape of America.

The Only Reform Is Collapse

I have argued for years that collapse is the only path to real reform. The current corrupt structure must fall for America to return to its founding principles of liberty, self-reliance, and honest governance. The U.S. government, under both parties, has become a machine that systematically poisons the food supply, mandates dangerous vaccines, and suppresses natural medicine. As I discussed with constitutional attorney Jonathan Emord and Dr. Robert Verkerk, the FDA has spent decades waging war on nutritional supplements and natural health products to protect drug company monopolies ^[13]. Until this entire edifice implodes, these agencies will continue to push deadly drugs, boosters, and poisonous processed foods to maximize death and suffering while draining taxpayer dollars.

Some people hope that new people running the same corrupt system can turn things around, but the evidence says otherwise. The Trump administration ordered a freeze on external communications at health agencies in January 2025, but that did not stop the FDA from firing Tracy Beth Høeg, a top drug regulator and vaccine safety advocate, in June 2026 ^[14][15]. The deep state does not care which party is in power; it serves itself. The only hope for a healthy America is the collapse of the entire federal health bureaucracy, followed by a return to decentralized, community-based medicine.

That collapse may come through economic crisis, a financial reset, or a popular uprising — but it is inevitable. The sooner we accept that, the sooner we can prepare for the new system that must rise from the ashes.

How to Nullify Their Power Over You

Since the federal health agencies cannot be reformed, you must practice decentralized living to escape their reach. That means rejecting their products, growing your own food, using natural medicine, and embracing self-reliance. Every time you say no to an FDA-approved drug or a USDA-recommended processed food, you protect yourself and undermine their terror regime. I have been advocating for this for over two decades. The Sovereign Health Revolution is not about waiting for politicians to save us; it is about taking back our health and our freedom one household at a time ^[16].

Concrete steps include learning to grow your own organic vegetables, using herbal remedies instead of pharmaceuticals, and building a community of like-minded individuals who share resources and knowledge. The best medical information today comes from uncensored AI engines like BrightAnswers.ai, which are trained on thousands of books and science papers that the FDA and CDC have tried to hide. You can bypass the entire sick-care system by educating yourself about nutrition, detoxification, and natural healing.

As I have said many times, the people who follow my work — avoiding vaccines, eating clean food, and stacking gold and silver — are healthier and wealthier than those who trust the government. The system wants you to be a passive consumer of its poisons. Refuse. Decentralize every aspect of your life, and you will have already won the most important battle: the battle for your own health and freedom.

Follow my podcasts and videos at BrightVideos.com or follow my social media posts at user “HealthRanger” at Brighteon.social

References

1. 1. The Secret Poll That Almost Killed Vaccine Reform. Midwestern Doctor. May 28, 2026.
   2. Jonathan Emord and Dr. Robert Verkerk Rally Behind RFK Jr.’s Fight for Health Freedom. NaturalNews.com. Finn Heartley. January 24, 2025.
   3. CDC Runs Two VAERS Systems — The Public Can Access Only One of Them. Children’s Health Defense.
   4. How CDC and FDA Defrauded the American Public about Serious Vaccine Harms. Brownstone Institute. Peter C. Gøtzsche. November 21, 2025.
   5. The Real Anthony Fauci: Bill Gates, Big Pharma, and the Global War on Democracy and Public Health. Robert F. Kennedy, Jr.
   6. CDC Targets Sick Children and Pregnant Women for COVID Vaccines in Controversial New Policy. NaturalNews.com. Finn Heartley. May 28, 2025.
   7. 17 Pharma Henchmen Who Voted to Experiment on Your Kids — and How to Shun Them. Children’s Health Defense.
   8. Health Ranger Report – Sec. Kennedy and CDC. Mike Adams. June 11, 2025.
   9. The Revolution Begins: HHS Mass Layoffs Are a Necessary Purge of Government Bloat. NaturalNews.com. Willow Tohi. April 5, 2025.
   10. Mike Adams Interview with Sasha Latypova. July 2, 2025.
   11. Health Ranger Report – Runaway Train. Mike Adams. June 9, 2026.
   12. HHS Deep State Operators Orchestrate Coup to Stop RFK Jr. from Dismantling Vaccine Fraud. NaturalNews.com. Lance D Johnson. October 31, 2025.
   13. Health Ranger Report: Jonathan Emord and Dr. Robert Verkerk Lay Out Strategy Against FDA Censorship. NaturalNews.com. Kevin Hughes. July 15, 2025.
   14. FDA Ousts Another Top Official: Who’s Behind the Shakeup — and Why? Activist Post. June 1, 2026.
   15. U.S. Health Agencies Ordered to Freeze Most External Communications. Children’s Health Defense.
   16. The Sovereign Health Revolution: RFK Jr.’s Plan to Take Back Health from Big Pharma. NaturalNews.com. Ramon Tomey. February 2, 2026.
   17. DPT: A Shot in the Dark. Barbara Loe Fisher and Harris L. Coulter.

Explainer Infographic

According to a report by CBS News, Qatar and Pakistan said Thursday that “positive progress was made” during the indirect talks between the US and Iran in Doha, Qatar’s capital, “regarding issues related to the memorandum of understanding” that continued the Iran war ceasefire.

Former Trump national security adviser H.R. McMaster said that progress is being made only because the US lifted sanctions on Iranian oil and has floated unfreezing Iranian assets. The US ruling class says that the inflow of money into Iran made it possible for the indirect meetings to move forward on a path of progression.

“They’re getting the infusion of cash they desperately needed to get themselves up off the mat,” McMaster was quoted as saying. “The Iranians have come a long way because they’re getting everything that they wanted.”

McMaster, who is also a CBS News contributor, believes Trump’s initial decision to go to war with Iran was the right one.

But Iran had a warning for the US. Tehran said that the US and Israel should avoid launching any strikes as the country prepares for the state funeral of Supreme Leader Ayatollah Ali Khamenei, who was killed in airstrikes on the first day of the war. It only took a day for Iran to confirm Khamenei’s death.

Iran Has Confirmed The Death of Supreme Leader Ayatollah Ali Khamenei

Meanwhile, Trump praised the progress made during the talks, telling reporters that the “denuclearization of Iran is moving along well” and that “very good meetings” were held in Qatar as he and his vice president played down any suggestion of a return to all-out combat, according to a report by The Independent. 

A few days ago, the US and Iran exchanged strikes, and it appeared that any ceasefire deal was over. Both sides blamed the other for violating the agreement.

The US and Iran Exchange Strikes

“Local, state, and federal (CDC, FDA) public health authorities are investigating several clusters of cases in more than one state. Investigations to identify potential sources are ongoing,” according to officials.

The outbreak started back in May and has continued to spread. The United States Centers for Disease Control and Prevention (CDC) has acknowledged that there are likely far more cases that are going undiagnosed.

Cyclosporiasis is an intestinal illness caused by the microscopic parasite Cyclospora cayetanensis. Most healthy people will eventually recover from cyclosporiasis without treatment, although their illness may be prolonged.

Twenty people have been hospitalized during the current outbreak since early May, although no fatalities have been reported.

The illness from this parasitic infection typically causes explosive, watery diarrhea, along with a range of other gastrointestinal symptoms, including bloating, gas, stomach cramps, nausea, and vomiting. Some people also report fatigue and fever, while others develop no symptoms at all, accoridng to a report by RT. 

Is The Screwworm A Problem For The Meat Supply?

Symptoms appear about one week after exposure to the parasite. An infection occurs after consuming food or water contaminated with feces. Without treatment, the diarrhea can persist for over a month, dramatically impacting everyday life.

While this parasitic infection is treatable, it is not usually detected by laboratory tests. This means that many cases are going undetected, and the source of the infection is difficult for health authorities to pinpoint. The good news is that there is no evidence that the parasite is capable of human-to-human transmission.

Previous outbreaks have been linked to vegetables and fruits imported from Mexico, including cilantro, raspberries, sweet peas, lettuce, and basil.

Recommendations from the CDC include washing your hands regularly and rinsing leafy greens with cold running water.

McDonald’s Salad Parasite Outbreak Sickens 286 People In 15 States

Can Artificial Intelligence Cure “Incurable” Diseases?

The researchers at the University of Minnesota unveiled their work on artificial life on Wednesday. Kate Adamala, a synthetic biologist and professor at the university, called the synthetic cell “an incredibly wimpy organism” that currently does little more than “eat and occasionally make a daughter cell.”

The team built the cells from non-living chemical components rather than altering existing organisms. According to the project page, SpudCells contain 36 purified enzymes, a 90,000-base-pair genome spread across several DNA molecules, and a lipid membrane.

The cells work inside a chemical-rich liquid. They grow by merging with tiny ‘feeder liposomes’, which supply nutrients, enzymes and ribosomes needed to make proteins. Their genome carries instructions that help them copy DNA and divide. –RT

SpudCell is not considered living; it can only demonstrate actions similar to those of living organisms.

Adamala said she named the synthetic cell “SpudCell” partly to avoid naming it after herself and as a reference to Sputnik, the Soviet satellite whose 1957 launch marked the start of the space age. Sputnik V was also the name of Russia’s COVID-19 vaccine. 

Scarcity and the Machine: Opportunity Cost in the Age of Artificial Intelligence

SpudCell is still weaker than a living natural cell too, said Adamala, accoridng to a report by RT. This new research, however, could help scientists understand biology by building it from known parts, the scientist noted.

Because they are artificial, SpudCells depend on outside supplies and cannot build their own ribosomes. They do not control their own metabolism, and often pass on the wrong quantity of DNA when they divide. They also typically stop working after several generations.

Scientists have been working toward synthetic cell engineering for decades. This could become a “programmable chassis” for biological machines in the future. Coupled with the advancements in artificial intelligence, we could be looking at an increasingly less human future.

In his 6/23 Truth Social post (figure 1), President Trump noted that the prices paid by major American oil companies for foreign crude are falling much faster than the prices of their retail products, and suggested that there is something criminal about this that the Department of Justice (DOJ) needs to look into:

Figure 1: Trump Denounces Oil Price “Gouging”

Source: Truth Social

The political motivations for Trump’s grandstanding about oil prices are obvious—the financial interests of the vast majority of voters are much more strongly affected by the retail costs they pay for oil than by the earnings their stock portfolios receive from ExxonMobil, the Royal Dutch/Shell group, Chevron, Marathon, Valero, and Phillips 66. Since the days of the ancient Roman Republic, politicians have always garnered applause from the economically ignorant by denouncing supposedly wicked price “gougers” who “hoard” goods by refusing to sell them at the allegedly “fair” prices the public is used to. Trump sees an opportunity to gain such applause in this particular situation, and he is of the contemporary bipartisan school of unprincipled policy-making that never lets a crisis go to waste.

Moreover, Trump has been taking a lot of political heat for gasoline prices soaring due to his starting an unconstitutional war of aggression against Iran and then failing to keep the Strait of Hormuz open despite all his vain boasting about having destroyed Iran’s military forces. Everybody knows that Trump is personally responsible for triggering an enormous global oil supply shock and its resulting gasoline price spike, so, of course, Trump wants to shift as much of the blame as he can onto others. “Big Oil” companies have been demonized for well over a hundred years, so of course they make excellent fall guys to pin the blame on.

More thoughtful economists have long recognized that price “gouging” is not a bad thing, so Trump’s post seems like an excellent opportunity to explain, yet again, why prices behave the way they do during and after supply shocks and why consumers should welcome such moves.

The first thing to keep in mind is that the production of any good requires time, often with the good moving through multiple stages of production. In the case of oil, the raw liquid pumped out of the ground might need to be lightly processed (to remove corrosive sulfur contaminants, for example) and then loaded onto a global network of tankers and/or pipelines to deliver it to refineries, where the crude oil is then converted into gasoline and other petroleum products. These refined products then need to be transported to retail outlets, in some cases involving very long distances (as in the case of fuel for the California market, whose state government has foolishly compelled the closure of most of its local refining capacity, thus necessitating expensive imports of refined fuel from far-away places like the Bahamas, India, and South Korea).

The second thing to keep in mind is that at many of these stages of production, it is possible to store the resulting outputs of the stage. Thus, as oil moves through the supply chain, any unusual fluctuations in the supply of inputs and/or the demand for outputs at a given stage can be buffered by increasing or decreasing that stage’s inventories. The effect of increasing the reserves stored at a given stage is to temporarily decrease the quantity of that stage’s outputs, thus temporarily driving output prices up relative to input prices. Likewise, drawing down reserves will increase that stage’s output quantities and thus drive prices down.

Keeping some of one’s product in reserve has a cost associated with it. Given a choice between selling a good now versus selling it in the future, storing the good for a future sale makes economic sense only if the price one expects to get in the future exceeds the present price by a large enough margin to cover the additional costs of storage, interest, insurance, etc., over the holding period. This incentivizes one to add to one’s inventory when demand becomes relatively slack or supplies become relatively abundant and to draw down one’s inventory when demand becomes relatively tight or supplies become relatively scarce.

This means that when a supply shock curtails outputs of an earlier stage of production, everybody anticipates that fewer goods will be moving through the supply chain to the consumer, and output prices of all the later stages will be higher. Goods that were previously stored in inventories at the later stages of production are now mobilized to take advantage of the higher prices. However, the very fact that reserves are being drawn down at later stages means that prices won’t soar quite as much as they would have without the drawdown of reserves. Consumers clearly benefit from the dishoarding that occurs while the shock is in progress, since it mitigates the price increases and meets their more urgent needs.

So what happens when the shock at the earlier stage is finally mitigated, and its outputs reappear in the marketplace? The price of outputs at the earlier stage will “fall like a rock” (to use Trump’s phrase), but the inventories at all the later stages have been somewhat depleted over the course of the shock. Producers at later stages of production will have to take advantage of these lower prices to rebuild their inventories, temporarily reducing the supply available to consumers and slowing down the rate at which the prices paid by consumers fall. This delayed fall of retail prices reflects, in part, the additional costs of refilling reserves along the supply chain to enable it to respond to future supply shocks and demand spikes.

This delayed fall of prices at the retail stage also reflects the fact that there is still a time lag between larger quantities of the outputs of earlier stages becoming available versus larger quantities of retail products becoming available. The resumption of crude oil shipments coming out of Hormuz does not instantaneously make more gasoline or diesel appear at your local gas station. Ships still have to cross oceans, refineries still have to process crude inputs, etc., before additional supplies become available to consumers at the final retail stage. Your local retail outlet still has to set prices that balance consumer demand against whatever supplies it has available, which must remain constricted for some time.

Using the DOJ to compel reductions in retail prices would inhibit the recovery of inventories to meet future supply shocks and perhaps cause short-term shortages that would require some form of rationing of the supplies available to consumers. Federally imposed price controls, rationing schemes, and heavy-handed regulation of domestic oil companies were a thing back in the 1970s; few of us old enough to remember the consequences of such policies would want to relive the experience.

The bottom line is that the market price system ultimately allocates scarce resources in line with the preferences of consumers. We may not like to confront unpleasant trade-offs between present and future needs that suddenly arise as a consequence of political blundering, but using further threats of force to intimidate or regulate producers only makes things more unpleasant for consumers. If anybody needs to be held accountable for increasing gasoline prices, it is the politicians who interfere with production, restrict commerce, and use military force to wreck global supply chains.

If you’re wondering why the Nasdaq is suddenly tumbling this morning, wonder no more…

Nasdaq moves lower after Meta announces it is to build a cloud business to sell its excess AI compute, weighing on cloud peers like AMZN, ORCL, MSFT and chip and memory names like NVDA, MU, INTO. As Bloomberg reports:

Meta, which has been rushing to secure expensive data centers and other infrastructure to fuel its own artificial intelligence ambitions, is forming a business to generate revenue from excess computing power sold to outside customers, according to people familiar with the matter, who asked not to be named as the details aren’t public.

One potential plan includes selling access to various AI models that are hosted on Meta’s existing AI infrastructure, an approach similar to AWS’s Bedrock offering, the people said.

Meta would run the data centers and chips that power the models, including its own Muse Spark models, and charge developers to access them.

The company is also considering selling access to “raw” computing capacity, akin to other so-called neocloud businesses like CoreWeave Inc., the people said.

…

Despite the complexities, Meta Chief Executive Officer Mark Zuckerberg has signaled to investors that he’s open to selling excess computing infrastructure, or even a so-called API service where customers would pay for AI usage — a business that’s usually measured in “tokens,” or the amount of data used and generated for a customer query.

“It’s definitely on the table,” Zuckerberg said during a call with shareholders in May.

“Almost every week there are different companies that come to us from the outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at.”

This move comes after SpaceX started leasing its ‘excess compute’ (which is struggling now that it has competition in selling ‘compute’):

…raising questions about the potential for cutting CapEx which has perhaps overshot token demand…

…did META just shatter the market’s central premise has been that compute is scarce…

As Goldman Sachs 1-Delta desk-head, Rich Privorotsky, has been warning:

“The market’s central premise has been that compute is scarce. If scarcity persists, prices should remain firm and justify continued capex. If supply rises and rental prices continue to drift lower, that is a direct challenge to the shortage narrative. The first place that pain shows up is hardware. 

ORNN H100 index rolling over last couple days worth watching.

The beneficiaries are the companies selling the complete platform and monetizing usage rather than simply selling picks and shovels. My working conclusion remains that hyperscalers are the structural winners through this phase. The first moment they demonstrate they can deliver equivalent output with lower spend, the market will reward them.

The bigger risk sits further upstream in the hardware and infrastructure stack where expectations remain built around persistent scarcity.”

Simply put, confessions of ‘excess capacity’ will crush the hyperbolic dreams of the CapEx cycle that underpins so much of the market’s recent incredible performance.

And the pivot to rewarding CapEx cutters begins…

“Lots of underperformance in hyperscalers. Everyone still appears convinced they must keep spending simply to remain competitive, while token cost compression/advent of neoclouds puts pricing pressure on core business. If token prices continue to compress alongside falling compute costs, the benefits may accrue to users faster than providers. Ironically, the first hyperscaler to signal that it can slow the pace of spending will likely see its share price rewarded.

If that happens, others will take notice.

That is the reflexivity that ultimately stalls the capex cycle… not a lack of demand, but investors deciding that incremental returns on the next dollar of spend are no longer attractive.

Watch hyperscalers share price as leading indicator.”

Don’t say you weren’t warned.

META shares are notably higher on the news…

Chipmakers are hurting…

The writing had been on the wall…

…and Premium Subscribers can read the full notes we have published over the past month here:

• Memory, Monetization, & Multiples: Goldman 1-Delta Desk Breaks Down The Key AI Debates (& The Most Important Chart To Watch)
• ‘How Far Can The Rubber Band Stretch?’: Goldman 1-Delta Desk Says ‘This Is The Breaking Point’
• Will ‘Rampart’ Wreck The Hyperscaler ‘To The Moon’ Narrative? Goldman 1-Delta Desk Deep-Dives

Buckle Up!