Egyptian Army Holds Billions In Secret Cash As Country Misses Debt Deadline

Via Middle East Eye

Egypt's armed forces in December rejected government pleas to help ease the debt crisis despite holding more than Egypt's total foreign debt in secret reserves, senior banking and government officials told Middle East Eye. The claims underscore mounting concerns over the opaque role of Egypt’s military in the economy at a moment of acute fiscal stress, as the government struggles to meet debt obligations amid shrinking foreign currency reserves and tightening domestic liquidity. 

Egypt was expected to pay about $750m in loan repayments to the International Monetary Fund (IMF) by the end of December but failed to meet the deadline. As a last resort, it was agreed "in principle" for the instalment to be deducted from Egypt’s upcoming IMF tranche, with interest added, official banking sources told MEE.

However, the precise terms of the arrangement remain unclear, with both the Egyptian government and the IMF keeping the details out of the public domain. "The government sought to borrow three trillion Egyptian pounds ($63.7bn) by December, but domestic banks refused, citing limited liquidity," a senior banking official said, speaking on condition of anonymity for security concerns. "With no other borrowing options available, the government turned to the armed forces."

Egyptian special forces soldiers, via AFP

The official added that the head of the military’s Financial and Administrative Authority rejected the request, even after the issue was raised with the defense minister.

"Prime Minister Mostafa Madbouly in December called Minister of Defence Abdel-Megeed Saqr, urging him to help cover the latest IMF loan instalment, but the plea was firmly refused," the official, who spoke to MEE in late December, added.

It was not clear why Madbouly did not extend the same request to President Abdel Fattah el-Sisi, who is the supreme commander of the armed forces and who is presumed to have direct control over the reserves. Egypt’s debt obligations to the IMF include SDR 264 million ($377.8m) in December and SDR 194 million ($277.6m) in January.* Broader external debt obligations for the year 2025 exceeded $60bn.

The banking official also claimed that the country’s military holds a sizable amount of dollar reserves, which are inaccessible to civilian authorities. The official provided an estimate that exceeds Egypt’s total external debt of $161bn. MEE is not citing the exact amount because it could not independently corroborate the banker’s information. 

The senior banker, who has direct oversight of government accounts, claimed that the military funds are "real and physically held" inside the country’s two main state-run banks, the National Bank of Egypt and Banque Misr, yet "remain entirely beyond the reach of civilian authorities".

“These funds are physically held in Egyptian banks and it is impossible to dispose of them or use them to repay debts," the official told MEE.

The official argued that the military apparatus could "theoretically" cover Egypt’s external and domestic debts and resolve the ongoing hard-currency crisis, but would not relinquish control of the economy. According to the official, the exact volume of military projects and details about the funds remain off limits and are subject to no oversight, known only to President Sisi and the army's top brass.

An Egyptian presidential source also cited a similar number, and confirmed the presence of army deposits in the two banks, without elaborating further. This is a significant allegation that shines a light on the opaque nature of the Egyptian army’s financial resources. 

Egyptian banks do not provide details of clients to the press. The Egyptian army does not disclose the military’s financial records, which remain beyond civilian oversight. 

In November, local banks extended 1.5 trillion Egyptian pounds to the government to cover more than $350m in loan instalments, leaving little room for further lending. Madbouly in late December told reporters at a press conference that his government was due to “reduce debts to unprecedented levels” by the end of the year.

State-affiliated media meanwhile floated the idea that a “surprise” and “bombshell” announcement would be made by the prime minister “within days” with respect to the reduction of debts. But no major announcements in this regard were made by the end of the year.

Previous interventions

The banking official told MEE that the armed forces intervened financially during a severe dollar shortage in 2022 that left imported goods stuck offshore because importers could not access the hard currency needed to pay port fees.

“At the time, the military injected $10 billion to resolve the crisis, a move the prime minister publicly framed as an emergency measure, though he only hinted at the army’s intervention without direct mention,” the senior official recalled. “Repeated proposals for the military to contribute to repaying Egypt’s mounting external debt, or even a small portion, were firmly rejected. Officials were instructed not to raise the issue again under any circumstances,” the official added.

“This stance persists even though a significant portion of Egypt’s debt burden is linked to arms purchases or investments from which the military has financially benefited,” the official explained. “Even suggestions that the armed forces should repay loans taken out in their own name were dismissed,” they explained.

A troubling chart from Egypt. The graph shows Egypt’s savings-to-GDP ratio, decimated by inflation, pound devaluation, and falling real wages. pic.twitter.com/1YbjY6YFgQ

— The Big Pharaoh (@TheBigPharaoh) January 11, 2026

A second senior official at a state bank, familiar with discussions around the debt crisis, told MEE that “the military had rejected repeated proposals to contribute, even partially, to Egypt’s external debt repayments, including offers for the armed forces to pay down loans taken in their own name.”

“Every time the idea was floated that the military could help with debt, even by covering its own obligations, it was shut down,” the second official added.

Gold revenues

The military’s grip on the Egyptian economy dates back to the mid-20th century, following the July 1952 revolution, when army officers overthrew the monarchy. Its economic role expanded significantly after the 2011 uprising, when the Supreme Council of the Armed Forces (SCAF) assumed control following the ouster of long-time autocrat Hosni Mubarak.

The situation intensified under President Sisi, who assumed power in 2014 after leading a coup that removed Egypt’s first democratically elected civilian president, Mohamed Morsi. Since then, the military has steadily expanded its presence in construction, agriculture, and other civilian sectors, justifying its reach as a means to deliver major national projects and secure economic stability.

The military’s revenues, which are not subject to civilian oversight, have been driven by a vast network of companies and investments operating across nearly every sector of the economy, with military-owned firms dominating much of Egypt’s import and export activity and generating substantial profits.

Additional income comes from land sales, real estate projects, and large-scale infrastructure schemes, including toll gates on major highways, whose daily revenues, amounting to millions of pounds, are channeled directly into military accounts. “Almost all aspects of the country’s economy are now controlled by the military,” the first senior banking official said.

“The military carries out multi-billion-dollar imports of strategic and essential goods, which are then supplied to the government at a profit,” the official added. “The proceeds flow directly into military-controlled bank accounts that civilian authorities cannot access.”

Even when the state faces acute cash shortages, the official said, government borrowing remains entirely separate from military holdings. The armed forces are the only entity permitted to export certain goods, including rice, despite a government ban on its export. The Egyptian army is also believed to control about 50 percent of the gold industry, the official said. 

A 2014 law grants the Ministry of Defense authority to approve mineral exploitation and levy fees on all mining operations, with the overwhelming majority of extraction sites in military-controlled zones.

Together, these exports generate hundreds of millions of dollars each month, the official said, all deposited directly into military accounts. Military-owned and state-run firms benefit from tax exemptions, access to prime land, and army conscripts as cheap labour, all while operating with very limited financial transparency.

“Keep in mind that the military receives 50 percent of the output from Egyptian gold mines, with the proceeds going directly to it,” said the source. “This is important because it represents a significant contributor to the military’s dollar-denominated income.

“The value of gold revenues accruing to the armed forces is approximately $500 million annually. This is in addition to the importation of raw gold, its reprocessing, and re-export, which generates revenues amounting to billions of dollars annually. “The military is, of course, the entity responsible for deciding on or directly importing gold, whether directly or through intermediaries. In both cases, it is the beneficiary.”

In July, the IMF warned in a damning report that Egypt’s military-controlled economic model is crippling private sector growth, deterring investors, and keeping the country in a cycle of debt and underperformance.

The international lender also noted that military-owned firms continue to enjoy “preferential treatment,” including tax breaks, cheap land, and privileged access to credit and public contracts.

On December 23, the IMF said it had reached the staff-level agreement with Egypt on the fifth and sixth reviews of its Extended Fund Facility, a move that could unlock around $2.5bn in new financing, alongside a further $1.3bn under the fund’s Resilience and Sustainability Facility, pending approval by the IMF’s executive board. 

The reviews were combined to give Egyptian authorities more time to meet key programme targets under the expanded $8bn loan agreed in March 2024, which was designed to stabilise an economy hit by high inflation and foreign-currency shortages. While the IMF said recent stabilization efforts had delivered gains, it reiterated that structural reforms, particularly the divestment of state-owned assets and a reduction in the state’s role in the economy, must be accelerated.

*Special Drawing Rights (SDRs) are IMF reserve units that act like a common “value measure” countries use and can be swapped into real currency when needed (SDR = $1.43 on 13 January).

Tyler Durden Tue, 01/13/2026 - 20:35

Newsom Scrambles To Keep Billionaires In California, Vows To Kill Wealth Tax

After a swath of billionaires publicly announced they are leaving the state of California over a proposed wealth tax, Governor Gavin Newsom went into a full blown panic - vowing to stop the proposed tax and "do what I have to do to protect the state." 

In an interview with the NY Times, Newsom said that he has been working 'relentlessly' behind the scenes to kill the proposal.

"This will be defeated — there’s no question in my mind," he said of the measure he has long opposed over concerns that it would stifle innovation in the state - as a growing list of tech CEOs have thrown their hands in the air and rage-quit the state over mounting plans to separate them from their wealth. 

The plan in question - being driven by the SEIU-United Healthcare Workers West union - would require Californians with a net worth north of $1 billion to pay a one-time tax equal to 5% of their assets, and would apply retroactively to anyone who was living in the state as of Jan 1. Affected taxpayers could spread their payments across five years beginning in 2027. 

According to the union, the tax is necessary to make up for deep cuts to health care signed into law last year by President Trump - which include reductions in Medicaid, ACA subsidies, and food subsidies. The union is demanding that California spend 90% of the new tax money on health care, with the rest devoted to food assistance and education. 

The union's Chief-of-Staff, Suzanne Jimenez told the Times; "The governor is focused on the wrong problem here," adding "The problem is not just about the preferences of 200 ultrawealthy individuals. The problem is millions will lose health care, and that’s really the problem we’re trying to solve."

California is on a path to self-destruction. Hollywood is already toast and now the most productive entrepreneurs will leave taking their tax revenues and job creation elsewhere.

And then the Democrats highlight @CAgovernor Newsom as a great leader. Crazy. https://t.co/bFyLhARrNn

— Bill Ackman (@BillAckman) December 27, 2025

The state's nonpartisan Department of Finance warned in a joint review that the tax would likely deliver tens of billions of dollars in one-time funds for the state, but it could lead to hundreds of millions or more in annual losses from billionaires leaving to avoid the tax. 

Notable billionaires who have left California or announced plans to leave include:

• Elon Musk
• Larry Page
• Sergey Brin
• Peter Thiel
• David Sacks
• Andy Fang (DoorDash Co-founder)

"This is what I feared, and it’s come true," Newsom told the Times. 

Even Reid Hoffman, co-founder of LinkedIn and a Democratic mega-donor who funds questionable left-wing causes, called out S.E.I.U.-U.H.W's proposed billionaire tax. He wrote on X that this is a "horrendous idea" that might force tech founders and executives to flee the state.

"The proposed CA wealth tax is badly designed in so many ways that a simple social post cannot cover all of the massive flaws. One well-documented example is the horrendous idea to tax illiquid stock in the proposal. Poorly designed taxes incentivize avoidance, capital flight, and distortions that ultimately raise less revenue," Hoffman wrote on X earlier this week.

Meanwhile, business leaders across the state are raising money to oppose the wealth tax - setting the stage for a serious showdown if it reaches the ballot. 

According to Ron Lapsley, president of the California Business Roundtable, the proposal "would undermine our economy, decimate the state budget, drive investment out of the state and ultimately make everyday life more expensive for working families."

Supporters of the tax, on the other hand, have begun collecting the nearly 900,000 signatures they'll need to place the measure on the ballot. 

Tyler Durden Tue, 01/13/2026 - 20:10

Tether's Role In Venezuela, Iran Highlights The Duality Of Stablecoins

Authored by Brian Quarmby via CoinTelegraph.com,

Recent turmoil in Venezuela and Iran has again put the spotlight on the duality of stablecoins, with the US dollar-backed assets such as Tether acting as both a savior for embattled citizens and a tool for blacklisted entities to evade sanctions. 

Both Venezuela and Iran have been catching headlines at the beginning of 2026 amid political uncertainty and civil unrest. With both facing a host of sanctions, inflation, political instability, and a cost-of-living crisis, crypto and stablecoins have become an important part of the ecosystem. 

Iran’s stablecoin entanglement

Iran has seen protests erupt across the country over the past two weeks in response to worsening economic conditions and the Iranian rial tanking to record lows against the US dollar.  

The situation has escalated from local demonstrations to widespread protests across Iran, with thousands arrested and hundreds reportedly killed. Amid this backdrop, the Iranian government also moved to cut off domestic internet access on Thursday. 

Crypto and stablecoins have become an important tool for citizens in Iran, given that the Iranian rial has been plummeting in value against the US dollar for decades.

Tron-based Tether (USDT) is reportedly the most utilized asset in the country, with citizens using the asset to hedge inflation and systemic risk.  

Broader adoption took a hit in 2025, however, with a hack on the country’s biggest exchange and a significant number of Tether blacklistings. Meanwhile, the government also set an annual limit on stablecoins in late September, allowing citizens max holdings of $10,000 and max purchases of per person $5,000. 

But stablecoins have also been used by sanctioned entities. A report from blockchain analytics firm TRM Labs on Friday indicates that since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has allegedly moved over a $1 billion worth of stablecoins via two “UK-based front companies” called Zedcex and Zedxion. 

The report claimed that despite the two firms publicly presenting themselves as individual firms, they have been quietly functioning together “as financial infrastructure for the IRGC.”  

“In practice, they operate as a single enterprise embedded within a broader Iranian sanctions evasion ecosystem, moving value across borders, currencies, and jurisdictions on behalf of one of the world’s most heavily sanctioned military organizations,” TRM Labs said. 

“A key figure in this network is Babak Zanjani, a longtime Iranian sanctions-evasion financier previously sanctioned for laundering billions in oil revenue on behalf of regime entities, including the IRGC,” TRM Labs added.  

Venezuela is closely entwined with USDT 

Similar to Iranians, Venezuelans have also adopted USDT to protect themselves against economic uncertainty, as the Venezuelan bolivar has plummeted over the past decade. 

A severe lack of trust in banks has reportedly seen USDT so widely adopted that everyday people use the asset to pay for all kinds of everyday services, opting to set up crypto wallets instead of using bank accounts. 

“It’s how you pay your landscaper and how you pay for your haircut. You can use tether basically for anything,” 71-year-old Venezuelan crypto entrepreneur Mauricio Di Bartolomeo told the Wall Street Journal on Saturday, adding: 

“Stablecoin adoption has gone so far into Venezuela that even without having regulated venues where you can buy and sell them, people still choose to go for stablecoins as opposed to using the local banks.”

The WSJ also highlighted that USDT is highly utilized by Venezuela’s state-run oil company, Petroleos de Venezuela. The firm reportedly started demanding payments directly in the stablecoin to avoid sanctions that were first imposed back in 2020. 

The company is estimated to accept 80% of all its oil revenue via Tether and frequently uses the asset to settle incoming and outgoing payments.

Tether uses blacklists to fight sanction evaders

The WSJ report adds that Tether has been fighting this by cooperating with the US government to blacklist “dozens of wallets” tied to the domestic oil trade. 

According to data compiled in a Dec. 5 report from AMLBot, Tether blacklisted around $3.3 billion worth of funds between 2023 and late 2025, with $1.75 billion of that sum being frozen Tron-based USDT. 

Over the weekend, the firm reportedly added to the figure by freezing $182 million worth of Tron-based USDT across five wallets; however, this has not been confirmed to be related to Venezuela or Iran. 

Source: @0xG00gly

Cointelegraph has reached out to Tether for comment.

Tyler Durden Tue, 01/13/2026 - 19:45

South Korea Seeks Death Penalty For Ex-President Yoon's Botched Martial Law Attempt

South Korea's special prosecutor has called for the death sentence for former President Yoon Suk-yeol in his rebellion trial, according to Yonhap. Closing arguments have been made in his trial in a Seoul court as he stands accused of being the "ringleader of an insurrection".

Yoon's botched attempt in December 2024 to impose martial law in South Korea lasted a mere hours but plunged the country into political turmoil and chaos. He was soon after impeached from office by parliament and was arrested pending trial.

Getty Images

Seeking the death penalty seems ultra-harsh, but it's actually in keeping with South Korean criminal code, under which leading a rebellion carries three possible penalties: capital punishment, life imprisonment with hard labor, or life imprisonment without compulsory labor.

Prosecutors allege that he ordered military and police forces to seal off the National Assembly in an effort to prevent lawmakers from entering the building where they would overturn the martial law decree.

Importantly, South Korea has not carried out an execution since 1997 - so if Yoon is eventually executed (though would likely be some kind of drawn out appeals process), it would send a chilling and strong message to current and future leaders.

In 1996, ex-President Chun Doo-hwan, who ruled from 1980 to 1988, was sentenced to death for rebellion, high treason, and corruption stemming from his role in the 1979 military coup and the violent suppression of the Gwangju uprising in 1980.

His sentence was later commuted to life imprisonment by appellate courts, including the Supreme Court. He was ultimately pardoned in 1997 by then-President Kim Young-sam as part of a 'national reconciliation' initiative.

And in the years running into the 2010s there was this litany:

Chun's successor, Roh Tae-woo, was also tried in 1996 on charges of rebellion and corruption. He initially received a 22-year prison sentence, which was later reduced to 17 and a half years. Like Chun, Roh was pardoned in 1997.

Former President Lee Myung-bak, who served from 2008 to 2013, was convicted of corruption and abuse of power and sentenced to 15 years in prison. He was later pardoned in 2022 by President Yoon Suk-yeol.

President Park Geun-hye, who held office from 2013 to 2017, was impeached, as was Yoon Suk-yeol. In 2018, she received a 24-year prison sentence on corruption charges, before being pardoned in 2021 by President Moon Jae-in.

This is why, after the South Korean political system had somewhat stabilized in the last several years compared to over two decades ago, Yoon's declaration of martial law was such a shock to Koreans, and to the West.

Amnesty International condemns it...

No one is above the law, but seeking the death penalty for former South Korean President Yoon Suk Yeol is a step backward.https://t.co/x9flcVi10x

— Amnesty International USA (@amnestyusa) January 13, 2026

Prosecutors in their arguments have alleged the former president had been motivated by a "lust for power aimed at dictatorship and long-term rule". They told the court: "The greatest victims of the insurrection in this case are the people of this country," they told the court.

"There are no mitigating circumstances to be considered in sentencing, and instead a severe punishment must be imposed," the prosecutors said.

Tyler Durden Tue, 01/13/2026 - 19:20

Michigan County Clerk Discovers 239 Non-Citizens Selected For Jury Duty Over 4-Month Period, With 14 Registered To Vote

Authored by Debra Heine via American Greatness,

Macomb County Clerk Anthony G. Forlini announced Monday that noncitizens have been appearing in the Michigan county’s jury pool “at an alarming rate” and many of them are registered to vote. The data indicates that many noncitizens have potentially sat on juries and/or illegally voted in elections.

During a press conference in the courthouse jury room in Mount Clemens, MI, Forlini stated that an internal review of the county identified 239 noncitizens selected for jury duty over a four-month period from September 5, 2025, to January 8, 2026.

The jury pool is drawn from the Michigan Secretary of State’s driver’s license database, which does not consistently flag citizenship status, allowing noncitizens—such as lawful permanent residents with green cards—to be included.

Forlini, who is running for Secretary of State, emphasized that noncitizens are ineligible for jury duty under Michigan law.

Upon cross-checking the 239 noncitizens against the state’s Qualified Voter File (QVF), Forlini’s office found that 14 had been registered to vote at some point, with three individuals appearing to have cast ballots, including one who voted multiple times.

This was just one county in Michigan over a four month period.

“We need to bring these issues to light, we need to be able to show a light on this and say, ‘Hey, there’s a problem,’” Forlini said. “Secretary of State offices need to verify all applications against federal databases. I think this is critically important.”

He said the three noncitizens who voted have been referred to county Corporation Counsel for consideration of felony charges.

The clerk expressed concern that the current system relies on self-reporting, meaning noncitizens could serve on juries without being identified, potentially compromising the integrity of the judicial process.

He also highlighted that Michigan’s automatic voter registration process, which registers individuals when they apply for a driver’s license unless they opt out, may contribute to the issue, particularly if applicants do not understand the citizenship checkbox on the form.

“Non-citizens are coming through at an alarming rate. Our jury service summons are based on random draws from the driver’s license bank. Frequently non-citizens slip through because citizenship was not flagged in the Secretary of State database,” Forlini stated.

He called for improved data sharing between state and federal databases to enable more reliable citizenship verification.

“We must find a way for the Driver’s License database to confirm citizenship. Many times there may be a language barrier, and applicants do not understand what they are signing. If this is not addressed, we risk compromising our jury trials and our elections,”  Forlini said.

“One possibility is to take advantage of new breakthroughs in linking several databases, where one database is able flag another database for actual citizenship verification.,” he added.

The issue has drawn bipartisan attention, with former Secretary of State Candice Miller and state Representative Joe Aragona supporting calls for legislative review.

A member of the Macomb County Clerk’s office, however, stated during the press conference that Michigan Secretary of State Jocelyn Benson’s (D) office said “we’re not gonna touch this” when presented with evidence of non-citizens on jury pool and voter rolls.

Benson, who is running for governor of Michigan, has refused to turn over unredacted voter data to the Department of Justice (DOJ), arguing that “nobody—not the president, the DOJ or any other federal agency has the right to your sensitive, private voter information.”

Critics have pointed out that Benson has had no problem with sharing complete voter roll data with non-governmental organizations like the Electronic Registration Information Center (ERIC) and Rock the Vote, suggesting inconsistencies in her privacy claims.

The Justice Department has sued 23 states and Washington, D.C., for failing to comply with its requests for voter roll data.

Harmeet Dhillon, the Assistant Attorney General for Civil Rights at the U.S. Department of Justice, asserts that access to full voter registration data is essential for ensuring election integrity, preventing vote dilution, and verifying that only eligible citizens are on voter rolls.

“Why won’t they cooperate and let us help them clean up the rolls?! What else are they hiding?!” Dhillon posted on X, Monday evening.

Tyler Durden Tue, 01/13/2026 - 18:55

Google's Vietnam Bet Highlights New Era In Electronics Manufacturing

Google is preparing to start building its most advanced Pixel phones in Vietnam this year, according to Nikkei Asia, a move that reflects the broader effort by U.S. tech firms to reduce their reliance on China. Apple is pursuing a similar strategy in India as both companies work toward more geographically balanced supply chains.

Sources say Google will handle the earliest and most sensitive stages of production for its Pixel, Pixel Pro and Pixel Fold models in Vietnam, while the more affordable Pixel A line will continue to be developed in China. These early production stages, known as new product introductions, involve extensive engineering work, long testing cycles and major investments in manufacturing tools. For suppliers, being selected to participate is seen as a major endorsement of their technical capabilities.

Nikkei says that although Google and Apple have spent years trying to expand manufacturing outside China, they have continued to rely on Chinese facilities for these initial development phases because few other countries have the same depth of experience and infrastructure.

Recent geopolitical and trade tensions, especially surrounding U.S. tariff policy, have added urgency to these efforts. Apple has already increased production capacity in India and Vietnam.

"The goal is to achieve functionality, compatibility and reliability suitable for mass production. If NPI fails, then it means there will be no new product for the year. But thankfully, such a thing has never happened so far," a source with an Apple supplier said.

Because of the stakes, Apple is now considering running the same development process in both India and China at the same time, despite the enormous cost.
"Take Apple for instance, NPI at a site will require the company to station some 200 to 300 engineers at the supplier's plant. The amount of investment is incredible," said another person familiar with Apple’s supply chain.

If these initiatives succeed, both companies would be much closer to building complete smartphone supply networks outside China. Google already produces large volumes of premium phones in Vietnam and carries out some technical checks there, suggesting the transition is achievable.

Still, obstacles remain. Chinese authorities have tightened controls on the export of production equipment and on the movement of specialized workers, complicating expansion efforts in countries like India and Vietnam.

"There are so many types of production equipment, testing equipment [that] are made in China and yet it is difficult to export them to another country as Beijing does not want its manufacturing sector being hollowed out ... We will just have to be patient," one supplier source said.

Lori Chang of Isaiah Research explained that most supply-chain diversification begins with basic assembly work and only later moves into deeper development functions.

"The critical significance of NPI lies in establishing product definitions, testing standards, and stable mass-production capabilities, serving as a key indicator of a supply chain's ability to operate independently," she said, adding that long-term cost concerns, geopolitics and tariffs are all pushing companies to rethink where they build their products.

Both Google and Apple declined to comment.

Tyler Durden Tue, 01/13/2026 - 18:30

Schools Increasingly Consider Rewarding Teachers For Results, Not Seniority

Authored by Aaron Gifford via The Epoch Times (emphasis ours),

In several states and hundreds of local school districts, traditional teacher salary structures based on years of service are being replaced by merit and pay-for-performance models.

An instructor teaches a Spanish lesson at Franklin High School in Los Angeles on May 25, 2017. Robyn Beck/AFP via Getty Images

The success of the Dallas Independent School District’s ACE (Accelerating Campus Excellence) program, implemented in 2016 and credited with improvements in math and reading scores, prompted many districts and state education departments to revise teacher pay due to stagnant or declining academic achievement and high teacher turnover, according to state officials.

The Houston Independent School District, which the state took over due to poor student performance, will begin rating and paying teachers based on their effectiveness, not years of service, in the 2026-2027 academic year, district officials told The Epoch Times. It will be the largest school district in the nation to do this.

Houston teacher salaries will range from $64,000 to $101,000, and those with unsatisfactory ratings can be fired. The annual evaluation process also authorizes the district to reduce pay if a teacher’s performance diminishes from year to year, according to guidelines released last year.

The purpose of this change is aimed not only at improving student outcomes but also at recruiting and retaining good teachers, leveraging state grants, and driving equity across campuses, according to the guidelines.

“It’s a very strong strategy,” Heather Peske, president of the National Council on Teacher Quality, told The Epoch Times, adding that her research determined that bonuses above $5,000 are usually effective.

Texas-Sized Idea Catches On

The Dallas school district’s teacher and principal evaluation and compensation system is based on student achievement metrics, such as test scores, as well as student survey responses.

A 2025 analysis of the program by the Hoover Institution at Stanford University noted that, in addition to improved academic performance compared to other large urban school districts in Texas, teacher turnover decreased and was concentrated mainly among those who received low ratings.

“While such sweeping changes may appear blunt from a distance, a close look at the Dallas reforms shows they were carefully planned to guard against evaluation inflation, the arbitrary treatment of teachers, and strategic responses such as teaching to the test,” the report said.

The Lone Star State followed Dallas’s lead and created the Teacher Incentive Allotment program in 2019. So far, 809 school districts have participated in the program to pay high-performing teachers bonuses, and an additional 190 have submitted letters of intent to sign on in 2026, the Texas Education Agency said in an emailed response to The Epoch Times. Higher amounts are provided to those working in low-income and rural schools, and additional education reform measures passed by the legislature last year provide billions of dollars more for teacher salaries, with bonuses of up to $36,000 annually.

Arkansas launched its Merit Teacher Incentive program ahead of the 2024-2025 academic year. Teachers are eligible for up to $10,000 in annual bonuses, according to the state’s Division of Elementary and Secondary Education website.

Utah’s five-year pilot program, Excellence in Education and Leadership Supplement, launched last year. Participating districts provide $2,000 performance bonuses to teachers rated in the top 11 percent to 25 percent, $5,000 to those in the top 6 percent to 10 percent, and $10,000 to the top 5 percent, according to the legislation.

Tennessee lawmakers passed bipartisan legislation last year that allows school districts to differentiate annual teacher salaries by merit and value for certain specialties, such as chemistry or special education. Adam Lowe, the Republican state senator who sponsored the bill, said the goal is to reward and retain excellent teachers who would otherwise move to neighboring states.

“We crafted the plan intentionally to be flexible at the local level,” Lowe told The Epoch Times. “But it’ll require some bravery from school boards.”

Washington, D.C., public schools initiated a teacher evaluation process in 2009 and more recently introduced a bonus structure. Under that IMPACT program, evaluations are based on student achievement, observations of instruction, student survey responses, and teacher contributions to schools beyond their core duties.

Highly rated teachers in the nation’s capital can earn up to $25,000 in annual bonuses and $3.7 million over the course of their careers, according to the D.C. district website, which notes that through this initiative, the district has retained 93 percent of highly effective teachers and incentivizes the best to teach in high-poverty schools.

State legislators considered but declined to pass similar teacher pay-for-performance measures in Connecticut, Florida, Indiana, South Dakota, and Oregon, according to the National Council of State Legislatures.

Collective Bargaining Complications

In a typical school district that has a contract with a teachers’ union, a new teacher must perform well enough to pass a probationary period, but beyond that—if they adhere to their district’s minimum work expectations and behavior requirements—their job doesn’t hinge on student achievement, said Maxford Nelsen, research and government affairs director of the Freedom Foundation, a conservative policy center that also helps teachers and other workers opt out of union membership.

“A merit-based system where you can measure performance is the way most of the world operates,” Nelsen told The Epoch Times. “But it’s so unusual in public education that everyone views it as a crazy phenomenon.”

Texas and other states that don’t require collective bargaining agreements with public school teachers have an easier time implementing merit-based pay, Nelsen said. South Carolina prohibits collective bargaining in taxpayer-funded entities. Public sector collective bargaining requirements are more common in blue states, including California and New York, but Ohio is an exception.

Colorado, by contrast, doesn’t have a state law but allows school districts to decide on collective bargaining mandates, Nelsen said, adding that teachers’ unions still exist in states without the mandate, acting as advocacy groups instead of labor organizers.

He said union contract salary schedules are typically centered on preserving equity and rewarding seniority.

“The union interest is in the maximum number of employees and pay, and minimizing accountability on the job,” he said. “They consistently oppose any kind of pay-for-performance or merit systems. Ordinarily, a union is going to object to any unilateral change, even a positive one.”

Union Stance on Merit Pay

The American Federation of Teachers did not reply to a request for comment, but its website lists dozens of resolutions opposing merit-based pay dating back decades.

“Most public employees have insufficient control over their work and output to hold them responsible for less than superior performance when, in reality, they are working with systemic factors that are beyond their control,” a 2000 resolution reads.

The National Education Association’s (NEA) 2025 handbook states that “any system of compensation based on an evaluation of an education employee’s performance” is inappropriate.

The NEA’s most current nationwide salary listing notes that average teacher pay ranges from $55,086 a year in Mississippi to $103,379 in California.

Prioritizing Performance Over Credentials

The National Council on Teacher Quality found that 90 percent of large U.S. K–12 districts pay teachers more for having a master’s degree, and nearly one-third of the states mandate that credential for a permanent position even though there’s no proof of its effectiveness in classrooms.

American education would be better served by dropping master’s requirements or incentives and spending that money to retain good teachers, Peske said.

“Too many states and districts rely on a salary structure that rewards seniority and degrees instead of effectiveness and outcomes for kids,” she said.

Tyler Durden Tue, 01/13/2026 - 18:05

Fentanyl Deaths Fall As Evidence Points To China Crackdown Trump Long Advocated

A sharp decline in U.S. overdose deaths appears increasingly tied to a disruption in the global fentanyl supply chain - an outcome that new research suggests may stem in part from intensified pressure on Chinese chemical suppliers.

The findings, published Thursday in Science, enter a long-running debate over what finally reversed a drug crisis that pushed annual overdose deaths above 100,000 during the Biden administration. Fatalities began falling in mid-2023 and dropped more sharply thereafter, a trend that has continued under Donald Trump, who has long-framed fentanyl trafficking as a national-security threat and used tariffs, border enforcement and overseas interdictions as leverage.

While public-health officials have pointed to billions spent on addiction treatment, naloxone distribution and domestic law enforcement, the research places renewed emphasis on a crackdown by Beijing - specifically, efforts to prevent fentanyl from being manufactured at all.

The paper concludes that the illicit fentanyl market experienced a significant supply contraction, “possibly tied to Chinese government actions,” citing falling purity in seized drugs, reduced seizure volumes and online reports of shortages. The findings align with arguments long advanced by Trump and his advisers: that pressuring China’s chemical sector was central to choking off supply.

“This demonstrates how influential China can be and how much they can help us - or hurt us,” said Keith Humphreys, a co-author of the study and a former White House drug policy adviser under President Barack Obama.

U.S. law-enforcement agencies have for years scrutinized China’s role as a key supplier of precursor chemicals used by Mexican criminal organizations to synthesize fentanyl. During Trump’s first term, Beijing agreed to classify fentanyl-related substances, though traffickers adapted by shifting to precursor chemicals instead.

Since 2023, however, Chinese authorities have shut down some chemical suppliers and tightened oversight. The Drug Enforcement Administration, in its latest annual drug intelligence report, said China-based suppliers are increasingly wary of selling internationally - evidence, the agency said, that enforcement pressure is having an effect.

According to the CDC, estimated U.S. drug deaths fell in 2024 to about 81,700, with roughly 49,200 involving synthetic opioids such as fentanyl. While 2025 data are not yet available, researchers believe the downward trend is continuing.

The timing remains contested. Formal U.S. - China cooperation was announced ahead of a November 2023 summit between Joe Biden and Xi Jinping, months after overdose deaths had already begun to fall. Researchers acknowledge the mismatch but suggest Chinese enforcement may have begun quietly before the agreement was made public.

Some analysts remain skeptical. Vanda Felbab-Brown of the Brookings Institution noted that U.S.–China relations were strained at the time, making unpublicized cooperation less likely.

Still, multiple indicators point in the same direction. The study found fentanyl purity in DEA seizures declined alongside falling deaths, while online forums such as Reddit showed a surge in reports of fentanyl shortages beginning in mid-2023. Canada, which relies on similar precursor supply chains but employs very different domestic drug policies, saw a parallel decline in deaths.

“What’s really striking is that parallel across the two countries, even though the two countries have very different domestic policies,” said Jonathan P. Caulkins of Carnegie Mellon University.

China’s government says its enforcement campaign has produced “remarkable results,” citing hundreds of company closures and the removal of large volumes of chemical advertisements. The White House has credited Trump’s border enforcement, trade pressure and overseas interdictions with reducing the flow of fentanyl precursors.

Taken together, the evidence suggests that pressure on upstream chemical suppliers - an approach Trump emphasized long before it gained broader acceptance - played a larger role in the fentanyl decline than many policymakers once assumed.

Tyler Durden Tue, 01/13/2026 - 17:40

92% Of Employed Americans Have Cut Back On Spending As The Standard Of Living In The US Crumbles

Authored by Michael Snyder via The Economic Collapse blog,

The headline of this article is not a misprint.  The reason why “affordability” has become the number one issue for U.S. voters is because most of the population is being absolutely crushed by the rising cost of living.  

Just look at how much you are paying for electricity compared to five years ago.  And just look at how much you are paying for food compared to five years ago.  Housing costs have risen to absurd heights, property taxes have become absolutely insane in many areas of the country, and health insurance premiums have more than doubled for millions of Americans.  It isn’t just a coincidence that so many people are bitterly complaining about the cost of living these days.  The truth is that most of the country is experiencing very real pain.

Of course it isn’t an accident that this has happened.  Our politicians have borrowed and spent 28 trillion dollars that we did not have since Barack Obama first entered the White House in January 2009, and I warned that all of this money would create rampant inflation.

On top of that, the Federal Reserve has pumped trillions of dollars that were created out of thin air into the financial system since 2008.  That has helped the stock market hit record highs, but it has been one of the factors that has made the cost of living unbearable for the rest of us.

The very foolish decisions that our leaders have been making have had dramatic consequences.

Our standard of living is crumbling right in front of our eyes, and now a brand new report is telling us that 92 percent of employed Americans have been forced to cut back on spending…

For millions of Americans, staying financially afloat now means difficult trade-offs. As the price of everyday necessities continues to rise faster than wages, new data shows workers are cutting back wherever they can – often at the expense of savings, overall financial security and even essential needs.

That is the picture emerging from Resume Now’s 2026 Cost-of-Living Crunch Report, a national survey of 1,011 employed Americans, which has found that only 17 percent of Americans feel financially secure enough to cover essentials and save money. Nearly two-thirds of respondents cited everyday essentials as their biggest financial burden. What’s more, a remarkable 92 percent said they have cut back on spending, including on items many would previously have considered non-negotiable.

Please notice that only “employed Americans” were asked about the cost of living.

More than 100 million U.S. adults are not working at all.

For those that do not regularly follow my work, yes that is an accurate number.  The vast majority of U.S. adults that are not working are considered to be “not in the labor force” by the federal government.

Another survey that was conducted at the end of December found that 70 percent of Americans consider the cost of living where they live to be “not very affordable” or “not affordable at all”…

American consumers aren’t feeling great about the economy or their own financial situation, with the phrase “affordability crisis” dominating headlines and political campaigns over the last few months.

The majority — 70% — of Americans surveyed in a Marist poll of over 1,400 adults taken in December, say that the cost of living in their area is not very affordable, or not affordable at all, for the average family.

This is the result of decades of incredibly bad economic policy.

The purchasing power of our money has been steadily declining, and now 65 percent of employed Americans are struggling to even afford everyday essentials…

Sixty-five percent of the survey respondents said that affording everyday essentials was a top contributor to their financial strain.

Jared Kessler, founder of Forex Broker, said the concentration of stress around essentials is a key indicator that the problem runs deeper than any short-term financial shocks. “It is clear, based on this data, that we are experiencing a real cost-of-living crisis as opposed to an immediate inflationary response to the COVID-19 pandemic,” he told Newsweek.

Read that last sentence again, because it is so true.

We are in the midst of a nightmarish cost of living crisis that never seems to end.

At this stage, 60 percent of employed Americans “could only cover three months or less of expenses if they were to lose their job”…

Sixty percent of respondents said they could only cover three months or less of expenses if they were to lose their job, leaving little room for error in the event of layoffs, illness or other events that could impact their financial standing. For many, even routine expenses are being trimmed.

Most of the country is living right on the edge.

Nobody can deny this.

And consumer sentiment rapidly moved in the wrong direction in 2025…

Between January and November last year, consumer sentiment among the lowest and middle terciles of American household income fell 29.8% and 27.6%, respectively, while the country’s highest third of earners suffered a steeper 32.1% decline.

Our politicians in Washington shouldn’t have been borrowing and spending so much money all these years.

But they did.

And we should have never allowed ourselves to go 38.4 trillion dollars in debt.

But we did.

Many of us ranted about the bad decisions that were being made for years.

But most of the population didn’t listen.

Sadly, as I pointed out in a previous article, we have now reached a point where “affordability” has become the number one issue for U.S. voters…

A University of Michigan poll published in December shows that high prices remain a pain point for consumers. About 46% blame high prices for poor personal finances — among the highest shares since the series started in the late 1970s.

Consumers’ views of their current financial situation in December “collapsed” into negative territory for the first time since July 2022, the month after pandemic-era inflation had peaked, according to a poll published Tuesday by the Conference Board.

Overall, 65% of U.S. households say the cost of living has gotten worse or much worse in the past year, according to a recent Politico poll.

Previous generations handed us the keys to the greatest economic machine that the world had never seen.

And we went out and wrecked it.

50 years ago, the U.S. economy was so dominant that it would have taken stupidity on an epic scale to cause it to fail.

But somehow we managed to do it.

Even though our standard of living is in the process of collapsing all around us, most Americans are still working hard and are “effectively trying to muscle through this”…

“What we’re seeing is there is still inflation pressure across the system, particularly in the retail environment, and consumers, through our research tell us that they are effectively trying to muscle through this,” Will Auchincloss, Americas retail sector leader at EY-Parthenon, says. “They’re trying to buy what they’ve always bought or want to buy, but in the face of higher prices.”

Most of us want to continue to live the way we did before, but we simply do not have enough money to do it.

So U.S. households are piling up tremendous amounts of debt.

In fact, U.S. household debt recently hit an all-time record high of 18.59 trillion dollars…

Americans’ household debt levels – including mortgages, car loans, credit cards and student loans – are now at a new record high, according to data released Wednesday by the Federal Reserve Bank of New York.

Total household debt reached $18.59 trillion from July through September of this year, up by $197 billion from the previous quarter.

Of course the federal government is an even bigger offender.

The U.S. government is now 38.4 trillion dollars in debt, and it is being projected that number will be well above 40 trillion dollars before the end of this year.

For more than a decade I warned about what would happen if we kept going down this road, and now it has happened.

We are literally committing societal suicide.

The next time you feel like screaming while you are paying your bills, you might want to remember who got us into this mess in the first place.

*  *  *

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.

Tyler Durden Tue, 01/13/2026 - 17:15

Musk Offers Free Starlink As Iran Protests Endure Internet, Comms Blackout

Now amid a days-long internet blackout which stretches to last week, Iranians are being offered free Starlink satellite service by Elon Musk's SpaceX. 

"SpaceX has waived the Starlink subscription fee in Iran, so people with receivers in the country can access service without paying, according to Ahmad Ahmadian, executive director of the US group Holistic Resilience, which works with Iranians to secure Internet access," Bloomberg reports Tuesday."A person familiar with Starlink’s operations confirmed the free ser vice, while asking not to be identified because the information isn’t public," the report says further.

Word of this comes after earlier the same day President Trump encouraged Iranians to mount a coup and attack government buildings and institutions. In a serious escalation of his Iran rhetoric, Trump posted to Truth Social earlier, "To all Iranian patriots: keep protesting. Take over your institutions if possible. And save the names of the killers and the abusers that are abusing you."

Source: Wana News agency

What started as economically-driven protests in Tehran marketplaces last month threatens to become a full-blown insurgency targeting police and government buildings, amid some reports that over 100 security personnel have died.

Western press accounts have focused on the allegedly hundreds of protesters killed, with some highly dubious sources on Tuesday going so far as to claim 12,000 demonstrators have been killed.

But what hasn't been a focus is that semi-official Tasnim News Agency is claiming that at least 109 security personnel have lost their lives.

"The servicemen were martyred after swarms of violent rioters attacked them by firing bullets and hitting the law enforcement forces with various weapons," said the commander of the special forces General Masoud Mosaddeq, as quoted in the outlet.

Various external forces have tried to hijack the protests, amid Israel's Mossad also boasting its agents have infiltrated and are influencing events on the ground. So obviously, there's a raging info war of competing narratives - just like with the Syria and Libyan regime change wars before.

Starlink will supposedly help video from on the ground get out of the country, but such info could also be driven by foreign NGOs (or else foreign governments). The Wall Street Journal freshly reports:

With the government shutting down the internet and throttling phone services, Iranians are leaning heavily on Elon Musk’s Starlink service to share videos of growing protests and the regime’s escalating crackdown with the world.

But Iran has intensified efforts to jam the service, which is banned in the country, and users are being hunted.

Over the weekend, authorities began searching for and confiscating Starlink dishes in western Tehran, said Amir Rashidi, director of digital rights and security at Miaan Group, a U.S. nonprofit opposed to internet censorship.

“It’s electronic warfare,” Rashidi said. He said disruptions are worst in parts of Tehran where protests are taking place and in the evening, when the demonstrators gather.

The battle over information—while secondary to the confrontations taking place nightly in dozens of cities across Iran—has potentially serious consequences. President Trump has threatened to intervene in response to a crackdown by the regime.

But this can go the other way as well. Plenty of videos have surfaced which purport to show Iranian security officers being assassinated, beaten or stabbed by anti-government crowds.

Potomac, Maryland-based Clown Prince Reza Pahlavi has explicitly called for violent attacks on IRIB media facilities and its staff

He’s also called for targeting (read: killing) any government worker who does not quit their job and join the regime change riots https://t.co/5W9t4zP9WP

— Max Blumenthal (@MaxBlumenthal) January 13, 2026

According to Iranian state news outlet Press TV, President Masoud Pezeshkian accused US and Israeli intelligence agencies of training armed units, with that training happening both inside and outside the country. If outside governments are directly aiding the agitators, it wouldn't be the first time that technique was used in an attempt to impose regime change on Iran. In 1953, US and British intelligence engineered a coup d'etat that ousted Iran's democratically-elected prime minister, Mohammad Mosaddegh. "Operation Ajax" involved the use of CIA-funded Iranian agents and "rented" crowds of anti-government demonstrators.

Tehran is likely to seize on these reports of SpaceX offering free Starlink access and assistance, in order to further accuse the West of waging a covert campaign aimed at destabilizing the Iranian government. Well and this covert foreign-backed campaign is probably already in full swing.

Tyler Durden Tue, 01/13/2026 - 16:50

Fraud, Failure, & The Cost Of Not Demanding Assimilation

Authored by Kathy Barnett via The Epoch Times,

Minnesota did not wake up one morning and suddenly become a hub for fraud.

What Americans are witnessing—large-scale welfare and child care fraud, weak enforcement, political paralysis, and rising public anger—is not random. It is the predictable downstream result of decades of policies made by people who would never have to live with the consequences and who faced few personal costs for getting it wrong.

(L–R) Minnesota Rep. Kristin Robbins, Minnesota Rep. Walter Hudson, Minnesota Rep. Marion O'Neill Rarick, and former special counsel at the U.S. Department of Justice Brendan Ballou testify during a House Oversight Committee hearing on Capitol Hill in Washington on Jan. 7, 2026. Brendan Smialowski/AFP via Getty Images

To address this moment honestly, several truths must be held at the same time, without flinching and without allowing the conversation to be deliberately mischaracterized.

First, the fraud is real.

Millions of taxpayer dollars were stolen. Oversight failed. Warnings were ignored. Accountability has been slow, evasive, or nonexistent. Individuals who committed fraud should be prosecuted. And when offenders are not U.S. citizens, deportation is not cruelty; rather, it’s the lawful consequence of violating the terms under which residency was granted.

Second, the public anger is real and rational.

Anxiety Rooted in Reality

Americans are not imagining their fears.

They are anxious about artificial intelligence displacing jobs, the expansion of H-1B visas amid stagnant wages, declining educational outcomes, extensive wars, and a cost of living that continues to rise. They are frustrated by leaders who campaign on reform yet deliver very little, even when they control the White House, Congress, and key agencies.

When citizens who work hard, pay taxes, and follow the rules see millions of dollars siphoned off through fraud, and then watch political leaders stall, evade responsibility, or gaslight the public, anger is inevitable.

That anger is not racism. It is a response to betrayal.

This Is Not About Race—but It Is About Culture

This is where the conversation is often intentionally distorted.

Exposing fraud in Minnesota is not about race or the color of anyone’s skin. But it is about ethnicity, culture, and behavior, as well as the refusal to speak honestly about assimilation.

Ethnicity is not skin color. It is a shared set of cultural norms, values, beliefs, and behavioral patterns. And yes, the fraud in Minnesota appears to be highly concentrated within a specific ethnic community, one originating from a country defined by state collapse, clan rule, tribal allegiance, and chronic instability.

That observation is not a moral judgment. It is a sociological fact.

Culture Matters in a High-Trust Society

Somalia has been a failed state for decades. It is not governed by durable institutions, but by informal clan networks and survival incentives shaped by chaos.

When large numbers of people from such an environment are resettled into a high-trust society—one built on compliance, enforcement, and shared civic norms—without firm assimilation requirements, the outcome should not surprise anyone.

In addition to being exploited by malevolent political actors and nongovernmental organizations seeking power or funding, some Somali communities resettled from high-chaos environments can consolidate into self-contained enclaves, effectively recreating aspects of a failed state within a high-trust American society. In such settings, tribal loyalties may replace civic obligation, informal networks may supplant the rule of law, and a weak cultural or moral attachment to America can make fraud against public systems easier to rationalize.

Chaos does not disappear when it crosses a border. It adapts.

Why Assimilation Must Be a Mandate

America is a high-trust society. It functions because a broad majority of its citizens share common expectations about responsibility and fairness. Americans work hard, pay taxes, and accept obligations alongside rights. They expect the rules to apply evenly and believe that although the system is imperfect, it is meant to reward honesty, effort, and compliance with the law.

That social compact only holds when political elites, their allies, and newcomers are held to the same standard as everyone else. Specifically, newcomers are expected—clearly and unequivocally—to assimilate into those norms rather than recreate the conditions they left behind. A high-trust society cannot endure if parallel systems replace civic obligation or if cultural norms hostile to rule-based governance are permitted to take root without consequence.

Compassion without assimilation is not compassion. It is negligence.

Accountability Without Collective Guilt

None of this implies collective blame. Collective guilt is imprecise and counterproductive, and it conveniently absolves policymakers, bureaucracies, and nongovernmental organizations that designed, enabled, or ignored systemic failures.

What is required instead is a disciplined framework that distinguishes between identity and conduct, as well as between population and policy. Individuals who committed fraud must be prosecuted. Noncitizens who committed serious fraud must face deportation as a matter of law. And the policymakers and institutions that enabled, ignored, or shielded such behavior must also be held accountable.

Blaming an entire community resolves nothing. At the same time, refusing to acknowledge clear and repeated patterns of behavior resolves nothing either. Accountability loses meaning when it is either indiscriminate or absent.

The Choice Ahead

The path forward is not complicated, but it requires resolve.

If the national response is to deny the problem, credibility is lost. If the issue is collapsed into race, clarity is lost. If public anger is redirected away from those with authority and toward identity groups, failure becomes permanent.

Leadership requires refusing all three.

This is not about hatred. It is about standards. It is about the law. Either a society enforces the rule of law or it allows each person to live according to whatever seems right to him. It is not about exclusion; it is about assimilation. And it is not about scapegoating; it is about accountability, both upward and downward.

If America wants to stop absorbing chaos, it must confront the decisions that created it, enforce the laws already on the books, quickly hold wrongdoers accountable, and insist that anyone who wishes to live here fully join the moral and civic order that makes the country work.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Tue, 01/13/2026 - 16:25

SEC Chair: "Remains To Be Seen" Whether US Will Seize Venezuela's Reported Bitcoin

Authored by Turner Wright via CoinTelegraph.com,

Paul Atkins, chair of the US Securities and Exchange Commission (SEC), said it “remains to be seen” what actions the US government might take regarding Venezuela’s reported Bitcoin holdings, while stressing that such decisions would fall outside his remit.

In a Monday interview with Fox Business’ Stuart Varney, Atkins responded to reports claiming that Venezuela holds up to $60 billion worth of Bitcoin, though several analysts said they were unable to verify these claims. The SEC chair said it “remains to be seen” what action, if any, the US would take if it had the opportunity to seize the reported 600,000 BTC. 

“I leave that to others in the administration to deal with — I’m not involved in that,” said Atkins in response to a question on whether the US would “take those Bitcoin off ‘em.”

Reports of Venezuela’s Bitcoin holdings surfaced after US forces, at the direction of President Donald Trump, captured then-President Nicolás Maduro last week and removed him to the United States to face criminal charges in New York. 

As of the time of publication, blockchain analysts and intelligence platforms had not confirmed the reported $60 billion in crypto, but the Maduro regime had previously been involved with aspects of the industry.

For example, the country launched an oil-backed digital currency in 2018.

Senate to hold market structure markup on Thursday

Atkins’ remarks came a few days before the US Senate Banking Committee is scheduled to hold a markup on the Digital Asset Market Clarity Act, or CLARITY.

House of Representatives lawmakers passed the bill in July, and it has been under review in the Senate for months, likely slowed by a 43-day government shutdown in October and November.

Banks and some crypto companies have also expressed concerns about provisions dealing with stablecoin rewards within the draft bill, and many Democrats are reportedly calling for stronger ethics guardrails and clarification on decentralized finance.

The bill could be delayed amid campaigning for the 2026 midterm elections and another potential government shutdown at the end of January. However, early drafts of the legislation showed lawmakers were attempting to give the Commodity Futures Trading Commission more authority to regulate digital assets.

Tyler Durden Tue, 01/13/2026 - 15:45

Trump Says Tech Giants Must Bear Cost Of Data Center Electricity, As Microsoft Joins OpenAI In Demanding Subsidies

We have been warning about this for months...

In one year, this will be the most popular chart on this site pic.twitter.com/h93gWXMoNL

— zerohedge (@zerohedge) August 11, 2025

... and months....

between exploding electricity bills and lack of jobs for grads, a new luddite revolution is coming - they will be burning down data centers within a year

— zerohedge (@zerohedge) August 25, 2025

... and now that even the deep state spies at the WaPo finally catching on...

5 months later https://t.co/reP3n5lhfp pic.twitter.com/5Lg5pPiXl4

— zerohedge (@zerohedge) January 6, 2026

... the future finally caught up to the present, and last week we noted that according to Bloomberg soaring retail electricity prices have become a political issue in several US states, especially in PJM, the Mid-Atlantic regional grid, which as we discussed recently, is woefully under-energized.

"eight out of the 13 US regional power markets are already at or below critical spare capacity levels." - Goldman https://t.co/YYAGUukfwR pic.twitter.com/eU4XPFAMrp

— zerohedge (@zerohedge) November 23, 2025

As Bloomberg said, paraphrasing us 5 months ago, "Power prices emerged as a a major campaign theme in off-year elections in New Jersey and Virginia in 2025, and will play a big role in 2026's upcoming national midterms and state elections."

This is just the start: as we discussed over a month ago, data center power demand could reach a staggering 106 GW in 2035.  For context, the US had about 25 GW of operating data centers in 2024 (according to Bloom Energy). Which means that unless all these data centers somehow find "behind the meter" sources of collocated power, electric bills will, pardon the pun, go nuclear. 

A July report from the Department of Energy estimated an additional 100 GW of new peak capacity is needed by 2030, of which 50 GW is attributable to data centers. Those facilities could account for as much as 12% of peak demand by 2028, according to Lawrence Berkeley National Laboratory.

Bloomberg's conclusion: "Affordability politics have mixed implications for climate (renewables are cheap, but some programs expensive), and for data centers, which take the blame for rising prices."

Overnight, Trump's staff appears to have read our post again, and in a late night post on Truth Social, the president - addressing American voter concerns about rising electricity prices - said his administration had been in talks with one of the largest energy hogs, Microsoft, to ensure that consumers “don’t pick up the tab” for enormous data centers.

In a Truth Social post, he added that while the data centers "are key" to the artificial intelligence boom, the "big Technology Companies who build them must ‘pay their own way.’"

He said that Microsoft would make “major changes,” but was not specific. 

A few hours later, on Tuesday morning, Microsoft unveiled an initiative to curb water usage at its US data centers and limit the impact on the general population from surging in power prices.

Microsoft said it will pay utility rates high enough to cover its power costs and work with local utilities to expand supply when needed for its data centers. It also pledged to replenish more water than its data centers consume, saying it would start publishing water-use information for each data center region in the U.S., along with its progress on replenishment.

"Especially when tech companies are so profitable, it's both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI," Microsoft Vice Chair and President Brad Smith said in a statement.

The company said on Tuesday that as part of its investment in Wisconsin, it is supporting a new rate structure that would prevent data center power costs from being passed on to consumers. Microsoft will also train local residents to fill construction and maintenance jobs at its data centers, as well as provide AI literacy training to communities.

Political leaders across the U.S. are urging a rapid expansion of data-center capacity and new power production to keep the country competitive in AI. However, local communities are voicing concerns over how the power-hungry facilities will impact their utility bills and use land, water and other natural resources in the region.

But before you get the false impression that Microsoft is actually doing something out of the goodness of its heart and is not seeking the highest possible IRR, last night Microsoft made its true intentions clear when it warned that US AI groups are being outpaced by Chinese rivals in the battle for users outside the west, as China combines low-cost “open” models with hefty state subsidies to gain an edge.

Brad Smith, Microsoft’s president, told the FT that the rapid adoption of Chinese AI start-up DeepSeek’s technology in emerging markets such as Africa underscores the competition American firms face around the world. 

Microsoft president Brad Smith says Chinese AI companies are undercutting US rivals because of state subsidies

“We have to recognize that right now, unlike a year ago, China has an open-source model, and increasingly more than one, that is competitive,” he said. “They benefit from subsidization by the Chinese government. They benefit from subsidies that enable [them] to basically undercut American companies based on price.”

Translation: the US has to subsidize its own AI companies (such as Microsoft wink wink) if it wants to defeat China in the new arms race. 

And while first OpenAI and now Microsoft are begging for US subsidizes and, eventually, bailouts of their AI businesses, China has already overtaken the US in the global market for so-called “open” AI models, which are often free to use, modify and integrate by developers. And, after a few years when instead of competing with China on the merits of technology the US hyperscalers are hoping for the US to eliminate Chinese competition, we fully expect China to overtake the US in closed models as well. 

Tyler Durden Tue, 01/13/2026 - 15:25

SBA Investigating $1.2 Trillion On Payments As Part Of Fraud Probe: Loeffler

Authored by Travis Gilmore and Jen Jekielek via The Epoch Times,

Federal officials are reviewing approximately $1.2 trillion in payouts to root out fraudsters, according to Kelly Loeffler, administrator of the Small Business Administration (SBA).

“Federal contracting and the fraud that happens within it in Washington, D.C., around these programs are probably the worst kept secret in Washington,” Loeffler said during an interview with “American Thought Leaders” host Jan Jekielek.

She highlighted patterns of fraud impacting the government, including the widespread abuse of the SBA’s 8(a) business development programs that offer funding for small businesses, including education and child care organizations, revealed in Minnesota

“It’s a huge cost to the American people when these programs are defrauded,” Loeffler said. “So, we have a whole path, we’re cracking down on that.”

An investigation looking back 15 years will include audits—the first in the program’s 45-year history, according to the administrator.

Approximately 7,000 borrowers—representing about $400 million in fraudulent payouts—were suspended in Minnesota last year.

Fraud Spread Nationwide

Officials will next use the investigative framework “to go state by state” and identify illegitimate payouts that were “very much driven during COVID,” she said.

Businesses asked to reduce operations—or shut down entirely, in some instances—were negatively impacted during the pandemic, which Loeffler said necessitated federal intervention.

“It was devastating, and would have been even more devastating had that federal assistance not come out,” she said. “And most small businesses were legitimate and used it for good, kept their employees on the payroll, and made a huge difference locally.”

Others saw the influx of federal benefits as a chance to reap rewards, which, combined with limited oversight, led to widespread abuse of the program, she said.

“There’s a certain group of actors that saw opportunity in disaster and defrauded the government,” Loeffler said. “What we know now is they come back to the trough.”

President Joe Biden’s administration forgave thousands of loans that were flagged as potentially fraudulent, she noted.

“They were not ever further investigated,” Loeffler said. “Those cases were closed; those loans were being forgiven.”

Federal investigators are now reviewing each loan to determine if further action is warranted.

“No more sweeping this under the rug,” Loeffler said. “We’re going to hold people accountable.”

Cross-Agency Cooperation

Fraud affects agencies across the federal government, with administrators from the Departments of Agriculture, Housing and Urban Development, and Health and Human Services, among others, increasing audits and review practices. Leaders are coordinating efforts to better identify problem areas and solutions.

Contracts for social and economic benefit programs funding 4,300 organizations are under scrutiny after improper payouts were discovered, according to the administrator.

“There’s a lot of fraud in those programs,” Loeffler said.

The SBA sent letters to individuals associated with the organizations last year, with responses due back this month. Anyone who fails to provide financial details and other requested information will face penalties.

“We are going to remove them from the program, and we are not going to operate programs that traffic in abuse, waste, and fraud, and we’re not going to traffic in DEI,” Loeffler said, referencing the diversity, equity, and inclusion policies that President Donald Trump has outlawed through executive action.

Investigating Debanking

Officials are also looking into debanking practices—where individuals and businesses are forced out of financial institutions for ideological or political purposes.

“We understand that debanking is a real thing in this country,” Loeffler said, highlighting SBA efforts to investigate the issue, with approximately 5,000 letters sent inquiring for more information.

Trump and Loeffler were among many other individuals who had accounts forcibly closed in recent years, she noted.

“There’s discriminatory actions that are being taken,” Loeffler said. “To use the banking system to be a choke point for disfavored political people is abjectly wrong, and the president is reversing that.”

Supporting Small Businesses

The SBA was founded in 1953 by President Dwight D. Eisenhower to guide small business development by providing access to capital through guarantees to lenders, consulting services, and opportunities to procure government contracts.

Loeffler said the Biden administration deprioritized the agency while overseeing a change in workforce logistics that saw approximately 90 percent of employees working from home.

“Well, particularly in the last four years, the SBA was dormant,” she said. “So sadly, our main street job creators saw a complete absence of the SBA.”

Trump’s focus on America first and reshoring manufacturing are an abrupt shift from prior administrations’ agendas, she said.

“Small businesses are really refueling our onshoring renaissance, along with President Trump’s policies,” Loeffler said.

Under her leadership, she said the agency is committed to guiding Congress toward deregulation and pro-business legislation.

“We’re here to empower the private sector and make sure that we’re getting out of the way, but yet making sure that they have the capital and the regulatory environment to build,” Loeffler said.

Humble Beginnings

A fourth-generation small farmer from Illinois, Loeffler’s path to Cabinet official started in the field at 8 years old.

The first college graduate from her family, she worked as a waitress in high school and college before launching her career as a financial analyst.

“I felt like, based on my financial acumen, I wanted to bring that to Washington, because I saw it completely absent when I was in the private sector, and being regulated and being told what we could and couldn’t do by people who didn’t know our business, didn’t understand free enterprise or fair markets or transparency or reporting or accountability,” Loeffler said.

“So that’s what I went to Washington to do, because I knew that as a farm kid, I owed it to every other young person who didn’t believe that the federal government understood them, that they had someone up there fighting for them.”

Tyler Durden Tue, 01/13/2026 - 15:05

2026 Will Be Breakout Year For Autonomous Driving And Humanoid Robots; Deutsche Bank

In a note out this week, analysts from Deutsche Bank led by Edison Yu said the global auto and mobility industry is entering a pivotal transition year, with 2026 shaping up as a major inflection point for both autonomous driving and humanoid robotics following the CES technology conference in Las Vegas.

“We attended CES in Las Vegas last week and sensed a meaningful surge in enthusiasm and relevance,” the analysts wrote. “Vehicle autonomy (robotaxi + consumer L4), and most notably, humanoids took center stage at the show, illustrating the spread of AI to the physical world.”

They said they expect self-driving vehicles to move beyond pilot programs and into full-scale commercial deployment, while humanoid robots transition from research labs into early real-world use. “Overall, we predict 2026 is a year where self-driving cars increasingly transition from testing/validation to scaling, and humanoids move from lab experiments to small deployments.”

The analysts highlighted the emergence of a new humanoid robotics supply chain, with traditional automotive suppliers repositioning themselves to serve what could become a massive new market. “While early innings, we see suppliers trying to pivot toward the humanoid supply chain in hopes of enabling large volumes in the future.”

Nvidia continues to dominate the computing backbone of this ecosystem. “Nvidia continues to be the dominant onboard processor seemingly due to performance and ease-of-use,” the team wrote, noting that most major humanoid developers are relying on Nvidia’s Jetson Orin and Thor platforms.

They also described a major shift in how robots are trained, away from rigid programming toward systems capable of reasoning through complex tasks. “There is a concerted move away from ‘pre-programmed’ or ‘scripted’ actions toward vision-language-action (VLA) where the robot ‘reasons’ its way through a variety of tasks.”

Commercial deployment of humanoids is initially focused on narrow, task-specific roles. “In the near term, we think the ‘general purpose’ humanoid is mostly being funneled into specific use cases to prove commercial viability before truly going into the home,” the analysts said.

Cost reduction will be driven by scale. “Increasing volume to improve overhead absorption was cited as the main cost driver,” the report noted, adding that one company on the tour has already reduced unit costs from $200,000 to $100,000, with a roadmap toward $50,000 as volumes rise.

On autonomous driving, the analysts said robotaxi programs are now entering a new phase of momentum. “With Tesla launching Robotaxi in 2025, we expect further commercial momentum from multiple players in 2026,” they wrote, citing expansion efforts by Waymo, Amazon’s Zoox, and partnerships involving Mobileye, Volkswagen, Uber and others.

They also pointed to Nvidia’s new autonomous driving platform as potentially transformative. Nvidia is “attempting to make it easier for automakers to deploy high level capabilities at scale” by providing both the “brain” and the “skull” of autonomous systems, reducing the need for automakers to build full AI stacks from scratch.

Among suppliers, the team said companies such as Aptiv and Visteon are entering critical execution years as they roll out next-generation AI-powered vehicle systems. In the case of Visteon, the company is “effectively democratizing the software-defined vehicle,” extending advanced computing and connectivity features into lower-cost vehicles and emerging markets.

Taken together, the analysts concluded that CES 2026 marked a turning point for the industry, with artificial intelligence, robotics and autonomous driving shifting decisively from experimentation into early commercialization.

Tyler Durden Tue, 01/13/2026 - 14:45

Marxist Network Behind Pro-Maduro, Anti-ICE Protests Faces Congressional Scrutiny

Authored by Eva Fu via The Epoch Times,

After the U.S. capture of Venezuelan leader Nicolás Maduro sent shockwaves worldwide, activist groups aligned with Marxist ideology and sympathetic to Chinese communist causes staged protests in America.

The same network of groups that fueled anti-Israel protests and the June 2025 Los Angeles riots against Immigration and Customs Enforcement (ICE), has organized dozens of pro-Maduro and anti-ICE protests around the country.

One group, Answer Coalition, declared on social media an “emergency day of action” on Jan. 3.

The coalition’s national director, Brian Becker, after taking part in a New York protest, appeared in a segment on Chinese state media CGTN—a registered foreign agent with the Department of Justice—to condemn the U.S. move.

The United States, he said, “might be considered a rogue nation at this point.”

U.S. actions in Venezuela, he alleged, followed a pattern “where the U.S. demonizes … the leader of the targeted country, Gadhafi in Libya, Saddam Hussein in Iraq, Milosevic in Yugoslavia … and then the U.S. goes to war; carries out unilateral acts of aggression.”

The groups’ focus expanded to call for protests against ICE following the fatal shooting of a protester, Renee Nicole Good, in Minneapolis on Jan. 7.

The Party for Socialism and Liberation, another group in the network, on Jan. 9 shared a poster depicting President Donald Trump as holding cash in one hand and oil in the other, with an ICE agent kneeling next to him. The poster showed the two figures encircled by red fists—imagery often used by communist and anarchist groups.

The activities of the groups are now facing scrutiny in Congress, with lawmakers pointing to their connections to a pro-Beijing U.S. millionaire, Neville Roy Singham, who lives in Shanghai and has appeared alongside Chinese officials in at least one forum that promotes the regime’s agenda.

“He is definitely someone that is anti-American in ideology, and regardless of where you might stand, even on topics like Israel versus Palestine, is funding certain groups that actually sow discord in this country with no efforts to actually resolve the issues, only to get us to fight one another,” Rep. Anna Paulina Luna (R-Fla.) said at a House Oversight Committee meeting on Jan. 7.

She proposed a motion to subpoena Singham and hold him in contempt of Congress if he fails to answer it. The motion passed after a voice vote.

Luna, asked about the motion, noted that then-Sen. Marco Rubio (R-Fla.) and Sen. Lindsey Graham (R-S.C.) had pressed in July 2024 for investigation into the groups over concerns about “efforts by the Chinese Communist Party (CCP) and its allies to sow discord in the United States.”

The lawmakers at the time named 18 groups in the network they said may have violated the Foreign Agents Registration Act (FARA), a U.S. law requiring public disclosure for individuals and organizations advocating for foreign interests, over their alleged ties to Beijing. The list included Answer Coalition and The People’s Forum.

Rep. Anna Paulina Luna (R-Fla.) speaks at Turning Point USA's America Fest in Phoenix, Ariz., on Dec. 20, 2025. John Fredricks/The Epoch Times

Luna said she is following up on the matter.

“We have credible reason to believe that [Singham] is an unregistered agent of China in violation of FARA,” Luna told The Epoch Times.

There’s “absolutely a connection” between the network and “the anti-ICE riots that we saw in Los Angeles and across the country earlier this year, as well as the stuff happening in Minnesota,” she said.

It would be up to the Justice Department to decide the potential penalties if Singham doesn’t comply with the subpoena; regardless, the groups are done “playing their games,” she said.

Singham has sent money to the People’s Forum, one of the groups named by the lawmakers, according to a July 2024 Instagram post by the organization, which described Singham as “our friend,” and a “former Black Panther and life-long socialist.”

In October 2024, the Manhattan-based People’s Forum hosted a three-part course series on the Chinese Communist Party’s 75-year rule of China. The course descriptions said the regime’s founding in 1949 “ushered in a new era in China’s history” and praised Chinese socialism as a “unique model of socialist construction.”

A Jan. 6 X post from the organization proclaimed, “Our movement is fighting on all fronts,” including for “a free Palestine,” “to get ICE off our streets, and for socialism.”

The organization’s founder and executive director, Manolo De Los Santos, appeared at the World Trade Center on Jan. 8 with a bullhorn, leading a protest against ICE as Department of Homeland Security Secretary Kristi Noem held a press conference inside.

Some Venezuelans have said the protests against U.S. operations in Caracas don’t represent them.

“I think these are paid protesters probably from the CCP,” exiled Venezuelan Jorge Galicia, who fled political persecution in Venezuela in 2017, told The Epoch Times’ sister media NTD.

He said those who take part in the protests should go to Venezuela and see things for themselves.

“I have a really good friend who was put in prison by the Maduro regime in the middle of the night; they broke into his house,” Galicia said.

China and Venezuela have long maintained close relations. Maduro met with a Chinese delegation just hours before the U.S. raid in Caracas that captured him and his wife. He posted a video of their exchange online, saying it reaffirms the “strong bonds” and friendship between the two countries, a “relationship that stands the test of time.”

Rep. Michael Cloud (R-Texas) speaks on Capitol Hill in Washington on Jan. 8, 2026. Madalina Kilroy/The Epoch Times

Jiang Pinchao, a Chinese dissident and writer, told The Epoch Times that the U.S. military action jeopardized the interests of certain communist and communist-aligned groups, prompting them to “cause disruption” in an attempt to steer U.S. society in a direction that’s favorable to them.

“These interests are at odds with those of the U.S. So of course they will use all kinds of ways to interfere,” he said.

Lawmakers said that although America protects freedom of expression, the groups agitating for Maduro belong in a different category.

“Free speech for American citizens is different than foreign states filtering their money through NGOs and the like to sway elections and to sow chaos into our country—that cannot be allowed,” Rep. Michael Cloud (R-Texas) told NTD.

James Moylan, a Republican congressional delegate from Guam, said he considers the pro-Maduro protests “terrible.”

“There should be some restraints,” he told NTD. “We’re just trying to promote freedom, and they’re trying to kill it,” he said. “I think they’re communists.”

He said he sometimes sees such protesters on Capitol Hill.

“They’re right up into your face. I just feel for them. I wish they could just learn and understand,” Moylan said.

Cloud, who was at the Oversight Committee meeting, said he’s “all about continuing the investigation” into the foreign money. He said the committee will ensure “we’re turning off the spigots” on “these foreign influences that are coming to our country solely for the purposes of undermining our country.”

The Epoch Times has reached out to Singham, The People’s Forum, Party for Socialism and Liberation, and the Answer Coalition for comment.

Tyler Durden Tue, 01/13/2026 - 14:25

TradFi Trust & DeFi Dominance Favor Ethereum Over Bitcoin; StanChart

Standard Chartered's Geoff Kendrick raised his ETH forecasts in August 2025 to reflect Ethereum’s structural advantages, along with supportive regulatory developments and increased buying by ETFs and DATs.

The outlook has turned more nuanced since then.

In absolute terms, Bitcoin’s weaker-than-expected performance has prompted Kendricks to downgrade his BTC forecasts and push out our eventual USD 500,000 forecast to 2030 (also downgrading his ETH-USD forecasts for the next few years).

However, in relative terms, the SnanChart crypto guru thinks prospects for Ethereum have turned more positive.

He has therefore turned more constructive on ETH-BTC, seeing the cross eventually returning to the 2021 highs around 0.08...

Source: Bloomberg

Kendricks sees three main factors for ETH's outperformance:

1. Flows

We think flows – via ETFs and DATs – are less important for ETH than for BTC, as ETH has a strong use case and fundamentals, whereas BTC functions purely as a decentralised store of value. However, flows still matter – and while they have weakened overall, they are more constructive for ETH than for BTC at present.

ETF inflows have stalled for both BTC and ETH in the past few months (Figure 2).

However, we think this is a temporary phenomenon rather than a change of direction (as we detailed in Bitcoin – Lowering our forecasts). Decision-making by investment committees takes time, so we expect the buildout of both the BTC and ETH ETF markets to take several years. Gold ETFs, the most relevant historical example, took about seven years after their November 2004 US introduction to reach a structural equilibrium that allowed flows to become more cyclical.

DAT buying of digital assets has mostly ended, in our view, following the late 2025 collapse in mNAVs (a valuation metric that divides corporate market cap by the value of digital assets held). DAT buying was enabled by mNAVs significantly above 1.0, which effectively allowed DATs to turn USD 1.00 into USD 1.50. However, a number of DATs now have mNAVs below 1.0, including MSTR (the largest BTC DAT) and SBET (the second-largest ETH DAT). These mNAVs failed to rise much even after MSCI announced on 6 January that it would not exclude DATs from its indices for now (mNAVs fell in October 2025 when MSCI announced its review on this topic).

However, BMNR – the largest ETH DAT – has seen its mNAV hold at around 1.1 or 1.2. As a result, it continues to buy ETH at a reasonably fast pace, as per Figure 3.

Indeed, BMNR now holds 3.4% of all ETH in circulation and remains on track to reach its publicly stated goal of 5%, the current pace of buying would suggest that this will be achieved by late Q1 or early Q2. Against this backdrop, DAT buying of ETH appears more sustainable than DAT buying of BTC.

2. Stablecoin, RWA and DeFi dominance

We are very bullish on prospects for stablecoins, tokenised real-world-assets (RWAs) and decentralised finance (DeFi) over the next few years. Specifically, we forecast that both stablecoins and RWAs will reach market caps of USD 2tn by end-2028, up from current levels of USD 308bn for stablecoins (source: Artemis) and USD 40bn for RWAs (source: The Block).

The majority of this will be done on Ethereum. Currently, 55% of all stablecoins and 52% of all RWAs are on Ethereum, according to data from Artemis and The Block (note that the RWA share excludes Figure’s private credit project on the Provenance blockchain – this is a one-off and is not indicative of future projects, in our view). We expect Ethereum’s shares to continue to grow as more TradFi activities move into the blockchain space, given that Ethereum is trusted in the TradFi world. Ethereum has been operating for over 10 years and its network has never gone down. While other blockchains may be faster or cheaper, reliability will always trump marginal speed and cost savings for TradFi operators, in our view.

We also see stablecoins as an important driver of Ethereum outperformance. The rapid increase in stablecoin transactions has helped push the total number of transactions on Ethereum to a fresh all-time high in recent weeks (Figures 4 and 5).

Without stablecoins, which now account for 35-40% of all transactions on Ethereum, this high would not have been reached.

A breakdown of blockchain ‘GDP’ also underscore the important role stablecoins are playing for Ethereum. On this measure (which adds up the fees earned by protocols from various sources), around 60% of 2025 activity on Ethereum was associated with stablecoin issuers – a far larger share than for competitors (Figure 6).

In addition to gauging blockchains’ sectoral exposure, the GDP measure can be compared to a blockchain’s market cap to create a P/E-type measure, allowing comparison both across different blockchains and over time (as shown in Figure 7).

This measure for ETH has been very stable at around 50 in recent years, suggesting that more activity – as measured by GDP – should result in a higher market cap.

3. Enabling greater activity

In June 2025, Ethereum co-founder Vitalik Buterin announced plans to increase ETH’s layer 1 throughput by 10x over two to three years. Since then, the Fusaka upgrade in December 2025 has enabled a further increase in both the gas limit (the amount of data that can be recorded per block) and the amount of ‘blobs’ per block (the amount of information that can be squeezed into each block, increasing total information per data recorded). Proactive steps are being taken to enable the planned 10x throughput increase (Figures 8 and 9).

Achieving this is critical to ETH price action. This, combined with a stable ‘P/E’ measure, accounts for most of the long-term price growth we forecast for ETH.

Other drivers of ETH price action

Another key premise of our constructive ETH-USD forecasts is our view that Bitcoin will reach a fresh all-time high (above USD 126,000) in H1.

This would defy expectations among some in the market that BTC is poised for further price declines at this stage of its ‘halving’ cycle; we believe the halving cycle is no longer relevant.

USD 126,000 is a long way from current BTC prices around USD 90,000; reaching that level would require US equities to remain strong, FOMC rate-cut pricing to increase, and the regulatory environment to improve.

Passage of the CLARITY Act is key in this regard; the legislation is currently moving through Congress and we expect it to pass in Q1.

Kendricks' bottom line: While they lower their ETH-USD forecasts for 2026-28, in line with the recent reductions in their BTC-USD forecasts; they expect ETH to outperform BTC, and remain positive longer-term

Tyler Durden Tue, 01/13/2026 - 14:05

Trump Admin Ends Temporary Protection For Somalis In US

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The Trump administration has decided to end temporary protection for Somali nationals in the United States, officials said on Jan. 13.

U.S. Secretary of Homeland Security Kristi Noem testifies before the House Committee on Homeland Security in the Cannon House Office Building in Washington on Dec. 11, 2025. Anna Moneymaker/Getty Images

“Temporary means temporary,” Homeland Security Secretary Kristi Noem told The Epoch Times via email.

“Country conditions in Somalia have improved to the point that it no longer meets the law’s requirement for Temporary Protected Status. Further, allowing Somali nationals to remain temporarily in the United States is contrary to our national interests. We are putting Americans first.”

There are 2,471 Somali nationals in the United States under the status, also known as TPS. Another 1,383 are in the country with pending TPS applications.

TPS is authorized by federal law for people from countries with conditions such as civil war that prevent the citizens from returning there safely. TPS for Somalia has been in place since 1991.

The Biden administration in 2024 extended TPS for Somali nationals until March 17, 2026. Department of Homeland Security officials at the time cited “the ongoing armed conflict and extraordinary and temporary conditions.”

“Somalia continues to experience widespread insecurity due to armed conflict involving state and non-state actors,” they wrote.

“The ongoing conflict, as well as other violence, has exposed civilian populations to ill-treatment, abuse, and displacement. Additionally, Somalia recently experienced intense flooding that damaged land and infrastructure, impeded efforts to address food insecurity, and exacerbated disease outbreaks. Significant barriers to the delivery of humanitarian aid persist.”

Noem previously terminated TPS status for nationals of multiple countries.

Federal judges have blocked some of those terminations, finding that they were arbitrary and capricious in violation of federal statute. The administration is appealing those decisions.

The ending of TPS for Somalis is the latest action by the administration in the wake of alleged fraud linked to Somali nationals.

On Jan. 7, for example, officials suspended assistance for the Somali government.

Billions of dollars were “stolen by really bad and deranged people,” President Donald Trump wrote on Truth Social on Jan. 13. He was defending how federal officers have been conducting immigration enforcement operations in Minnesota, which hosts a sizeable Somali population.

“For years, these corrupt, activist politicians have refused to protect Minnesotans and are now proposing illegal actions to keep their stranglehold on control and continue stealing from American citizens,” Noem said on X this week.

“We will root out this rampant fraud, we will arrest the criminal illegal aliens hurting Americans with impunity, and we will hold those who aid and abetted this criminality accountable.”

Tyler Durden Tue, 01/13/2026 - 13:45

Trump Admin And Taiwan Close To Finalizing Trade Pact; $100B In TSMC Plants Slated For Arizona

The Trump administration and Taiwan are in the 'final stages' of negotiations on a tariff agreement which would see the United States lower tariffs on the self-governing island's exports to 15% from 20%. 

U.S. President Donald Trump speaks inside the Oval Office at the White House in Washington, D.C., November 12, 2025. REUTERS/Kevin Lamarque Purchase Licensing Rights, opens new tab

In exchange, Taiwan Semiconductor Manufacturing Co (TSMC) would commit to build five new chip plants in Arizona - roughly doubling its manufacturing presence in the state, along with building two advanced packaging facilities, Bloomberg reports. 

The commitments are on top of existing plans for up to $165 billion in US investment by TSMC - a company which has come into recent focus as the world eyes China's next move in light of the Trump administration snatching Maduro (and effectively Venezuela) over drugs and oil. 

Given that a single fab costs roughly $20 billion to build in the US, TSMC's additional investment would likely top $100 billion - with completion dates for the four extra fabs occurring sometime in the 2030s, the report continues. 

In a Tuesday statement, the Office of Trade Negotiations in Taipei said that the two sides had arrived at a "broad consensus" on a trade, and are now in discussions to hold a concluding meeting, which would be sent to the legislature for review. 

Assuming a pact is signed, it would mark another trade win for Trump, while bringing Taiwan's levies from the US to the same level as neighboring Japan and South Korea. 

Trump administration officials including Commerce Secretary Howard Lutnick had laid out their expectations for Taiwan to promise significant additional investments by TSMC in chip production on US soil. Any agreement with Taipei risks provoking China, which claims the island as part of its territory — a view Taiwan rejects.

Taiwan has been trying to conclude a deal with the US before Trump meets Chinese leader Xi Jinping in China, according to a senior official in Taipei who declined to be identified discussing the sensitive issue. The US leader is expected to visit China in April. -Bloomberg

That said, the US Supreme Court could quickly make this exercise moot - or at least delay it, with a ruling set for as soon as Wednesday on the legality of Trump's tariffs (which, as we noted earlier, has workarounds).  

Tyler Durden Tue, 01/13/2026 - 13:25

Stellar 30Y Auction Stops Through, Sees Solid Foreign Bidder Demand

The last coupon auction of the first full week of 2026 was also the strongest one. 

Moments ago the Treasury sold $22BN in 30Y paper in a very solid auction: the sale priced at a high yield of 4.825%, just fractionally higher than the 4.773% in December, and also stopped through the When Issued 4.833% by 0.8bps.

The bid to cover was a solid 2.418, up from 2.365 last month, and the highest since June. 

The internals were also impressive, with foreigners buying 66.8%, up from 65.4% in December, and above the six-auction average of 63.7%. And with Direct Bidders awarded 21.3%, bit below the recent average of 23.9%, Dealers were left holding 11.95%, which was also below the recent average of 12.4%.

Bottom line: a very strong auction, which was also facilitated by today's surprisingly cool CPI report, which swung the long-end from an intraday high of 4.20% to a low of 4.15%, and was last trading at 4.165%.

Tyler Durden Tue, 01/13/2026 - 13:24