We know what’s coming and we are prepared.
🇺🇸 President Trump wants to switch to war economy in 2027 with massive increase in military spending and massive cuts to healthcare and other domestic agencies
Once a deficit hawk — he said in 2016 that he thought he could balance the budget in five years — Trump ended his first term with $7.8 trillion in added debt. His 2027 proposal is expected to give an update on 10-year deficit projections currently estimated at around $16 trillion.
The GOP's message for the Midterms will be focused on the "need" for a massive defense build up while the Democrats' message will be focused on affordability.
The fiscal 2027 budget will be the first time Trump puts his second-term governing agenda into one comprehensive document — with the numbers to back it up. The budget he released last year lacked detailed line-by-line spending targets and the economic assumptions necessary to project the long-term cost of his proposals.
Investors in US Treasuries will be looking to see if the debt and deficit levels rely on overly rosy economic numbers that predate the war in Iran, and whether they depend on spending cuts that have no realistic path to overcoming a Senate Democratic filibuster. Any increased doubts about the sustainability of US public debt could cause long-term Treasury yields to rise.
Projections released by the White House last September estimated that Trump’s tax and spending policies would halve the projected deficit over the next 10 years. But that number relied on tariff revenues that the Supreme Court decision upended, as well as lower interest rates and higher growth than many economists now expect.
Trump has said he will be seeking to boost defense spending to $1.5 trillion from less than $1 trillion in the current fiscal year. The details of how this massive increase will be spent are yet unknown.
Last year’s budget relied on a one-time boost to defense spending, using a legislative process known as reconciliation to pass $113 billion in new spending along party lines — on top of a bipartisan baseline of $848 billion.
Now the administration is looking for a much larger baseline increase in the defense budget. Trump hasn’t made clear whether the $1.5 trillion figure is just for the Pentagon operating budget, or also includes other defense line-items like military construction and nuclear weapon spending by the Energy Department. Nor has the administration detailed whether the increased spending would continue in 2028 and beyond.
There are also unresolved issues for the current fiscal year. The Pentagon has sent a $200 billion request for immediate spending to the White House to pay for the war against Iran. The White House budget office is evaluating that proposal, which Trump has not yet proposed to Congress.
Ukrainian forces have begun training and testing exoskeletons for battlefield use. Soldiers from the 147th Separate Artillery Brigade are using them in the Pokrovsk sector for both logistics and frontline operations. The goal is to reduce physical strain, especially when loading heavy artillery shells into howitzers without automatic loaders. Artillery crews can handle up to 1200 kg of ammunition per day, and early tests show that exoskeletons help them work faster and with less fatigue Above all, by improving the conditions for those soldiers on the front lines who handle such heavy loads, plus the stress of work. Seeking to reduce overall fatigue in the troops
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🇮🇷🇮🇱 - 14 wounded in Iranian missile strike in central Israel, according to Israeli media.
🇬🇧🇮🇶 - A drone struck British Castrol oil warehouses in Erbil, Iraqi Kurdistan, causing extensive damage.
🇮🇷🇮🇱 - Iran launched 9 missiles towards Israel this morning alone, with at least 3 of them being cluster missiles.
🇱🇧🇮🇱 - Over the past 12 hours, Hezbollah launched counterattacks in Khiam and Qantara, in the Nabatieh direction, southeast Lebanon. Hezbollah recaptured northern Khiam, with fighting ongoing for the south of the town. Hezbollah units also re-entered Qantara; frontline sources reported clashes in the center of the town last night.
🇱🇧🇮🇱 - 48 IDF soldiers have been wounded in clashes with Hezbollah over the last 24 hours in southern Lebanon, according to the Israeli Army.
🇱🇧🇮🇱 - "The Israeli army is barely catching its breath in southern Lebanon, and its resources are less than in the previous round of fighting," - Haaretz....
🇺🇸 Blue Owl Capital just disclosed that investors tried to pull 40.7% of one fund and 21.9% of another in a single quarter, and both funds gave the same answer, you can only have 5% back, and everyone else waits in line.
This is a bank run, not a normal withdrawal.
Wall Street spent the last decade selling millions of investors on something called semi-liquid private credit, higher yields, steady income and the promise you could get your money back every quarter if you needed it. What they buried in the fine print was what happens when too many people try to leave at the same time.
Analysts who have covered private credit for decades say nothing on this scale has ever been reported before at any major private credit manager.
These funds do not hold stocks you can sell on a Tuesday afternoon, they hold private loans to mid sized companies that cannot be liquidated quickly without destroying the price for every investor still trapped inside.
This product was originally designed for ...
🇺🇸🇮🇷🏦 - Iran is attacking the funding source of the US empire… the bond market
Their plan is quite simple: create a massive supply shortage, which will increase inflation and, as a result, drive surging interest rates that crash the US economy.
The US went into the war in pretty bad shape:
- Debt-to-GDP of over 120%
- Deficits of 6% of GDP
- Rising unemployment
But 1 month of Hormuz being closed made it worse:
- 10-year yield is up ~0.5%
- US endured the weakest Treasury auction in over 3 years
- With ~60% of auctions having a higher than expected yield
For every 1% increase in interest rates, interest expenses surge by ~$310B annually. And because the US government is mainly financed on the short end, interest rate increases directly translate into higher deficits.
Trump can declare victory as often as he wants, but if Hormuz remains closed, bond yields will spike and crush the US economy… dealing a devastating blow to an already declining empire.
🔗 Lukas ...
