China’s Quiet Gains During US-Israel War On Iran

China’s Quiet Gains During US-Israel War On Iran

Hamza Zaman via RealClearDefense,

The Iran conflict continues to protract despite President Trump’s assumption of a quick and easy victory.

The goals of regime change and the decimation of the Iranian ballistic missile program remain unfulfilled, and the closure of the Strait of Hormuz further adds to the strategic qualms of the Western powers.

The GCC states are also facing significant damage to their services industry, transport infrastructure and energy sector.

While both sides suffer great losses in this protracted conflict, America’s biggest geopolitical rival – China – seems to be gaining palpable economic and strategic benefits from the ongoing conflict in the Middle East.

Iranian strikes on GCC energy infrastructure, in retaliation for Israeli strikes on Iranian oil refineries and gas infrastructure, sent shockwaves through global energy supply chains. This resulted in supply chain disruptions, shortages, rationing and price hikes. These energy supplies are traded in U.S. dollars and constitute a discernible source of demand for the U.S. dollar. The closure of the Strait of Hormuz further amplifies supply chain disruption, forcing buyers to choose alternative sources, including Russia. Iran’s announcement of a safe passage for oil tankers in exchange for payment in Yuan is being hailed as a direct assault on the primacy of the U.S. dollar and the petrodollar system.

The outcome of these events is the diminution of the U.S. dollar’s hegemony and the rise of the Chinese Yuan. China continues to purchase discounted oil from Iran in Yuan, and the procurement of Russian oil will also be in non-USD denominations. The fall of the U.S. dollar will accentuate China’s rise as a major competitor of the U.S.. China is already vying for a common BRICS currency, and its efforts will intensify in the future, as the U.S. dollar continues to weaken. The war in the Middle East presents an opportunity for the Chinese Yuan to accentuate China’s geoeconomic rise.

China’s observation of Operation Epic Fury provides its military with an opportunity to gather ample data on American military tactics and strategies. It also provides China with insight into the capabilities and limitations of American weapon systems. The downing of American fighter jets, including F-15E Strike Eagles, KC-135 Stratotanker, F-35A and Q-9 Reapers, as well as the destruction of radars and limitations of American air defense systems in the Middle East, is an opportunity for the Chinese military to evaluate its military arsenal and reassess its own capabilities and limitations vis-à-vis American military prowess.

With the help of artificial intelligence and machine learning, the Chinese military would analyze these weapon systems and military strategies and create real-life war-like simulations for the Chinese military with precise data. The destruction and limitation of the American military assets will also persuade global vendors to pursue Chinese combat-tested alternatives from the May 2025 Pakistan-India War, thus augmenting Chinese defense exports.

Strengthening Rare Earth Leverage against American Military Industrial Complex

The involvement of the U.S. in another war in the Middle East has the American military industrial complex up and running. Given the intense bombardment, fast-paced depletion of its air defence interceptors and the destruction of radars, the U.S. is expected to swiftly replenish its arsenal. However, the U.S. reliance on China for rare earth minerals – essential for the American military industrial complex – indicates that the U.S. strategic autonomy is compromised. In response to the Trump administration’s tariff war and ban on advanced chips exports to China, China meticulously weaponized rare earth minerals, effectively defying the actions of the Trump administration. In the wake of the Iran conflict, the Trump administration’s dependence on China for its rare earth needs magnifies, actively putting China in an advantageous position.

The Chinese government can tactfully play its cards, forcing the U.S. to continue the exports of advanced chips to China as well as completely abolish the exorbitant tariffs on Chinese products.

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The Debt Spiral That Ends in Dollar Destruction: 6 Hard Truths America Can No Longer Ignore

The Debt Spiral That Ends in Dollar Destruction: 6 Hard Truths America Can No Longer Ignore

Nick Giambruno

“Whenever governments are granted power to purchase their own debt, they never fail to do so, eventually destroying the value of the currency.” – Ron Paul

Let’s take a step back and look at the big picture so we can assess the US government’s financial situation, where it’s likely headed, and what these trends could mean.

Observation #1: It’s Politically Impossible To Cut Spending

Among the biggest expenditures for the US government are so-called entitlements like Social Security and Medicare.

It’s unlikely any politician will cut entitlements. On the contrary, I expect them to continue growing.

That’s because tens of millions of Baby Boomers—about 22% of the population—will enter retirement in the coming years. Cutting Social Security and Medicare is a sure way to lose an election.

The interest on the federal debt is already the second-largest federal expenditure. In a matter of months, it’s set to exceed Social Security and become the biggest expenditure.

With the most precarious geopolitical situation since World War 2, National Defense—another large expenditure—is unlikely to be cut. Instead, defense spending is all but certain to increase. President Trump has proposed increasing it from $917 billion to $1.5 trillion. The ongoing war with Iran guarantees military spending has nowhere to go but up, way up. The Pentagon has requested an additional $200 billion for starters for the Iran war.

Different types of healthcare and welfare programs also make up a considerable part of the federal budget and are unlikely to be cut.

In short, efforts to reduce expenditures will be meaningless unless it becomes politically acceptable to make chainsaw-like cuts to entitlements, national defense, and welfare while reducing the national debt to lower the interest cost.

In other words, the US would need a leader who—at a minimum—returns the federal government to a limited Constitutional Republic, closes the 128 military bases abroad, ends entitlements, kills the welfare state, and repays a large portion of the national debt.

However, that’s a completely unrealistic fantasy. It would be foolish to bet on that happening.

Here’s the bottom line.

The government cannot even slow the spending growth rate, let alone cut it.

Expenditures have nowhere to go but up—way up.

Observation #2: Ever-Increasing Debt Is the Only Way To Finance Deficits

When faced with a choice, politicians always choose the most expedient option.

In this case, that means issuing more debt rather than making tough budget decisions or explicitly defaulting.

Consider the recurring debt ceiling farce in the US Congress, which has been raised over 100 times since 1944.

In any case, don’t count on increased tax revenue to offset these increases in federal expenditures.

Even if tax rates went to 100%, it still wouldn’t be enough to stop the debt from growing.

According to Forbes, there are around 902 billionaires in the US with a combined net worth of about $6.8 trillion.

The US federal government spent around $7 trillion in FY 2025, and will almost certainly spend a lot more in FY 2026 and beyond.

Even if the US government confiscated 100% of billionaire assets through a wealth tax, it wouldn’t cover even a single year of current federal spending.

And even after confiscating all billionaire wealth, the US government would still have to borrow more than $200 billion to cover FY 2025 spending.

Here’s the bottom line: increasing taxes, even to extreme levels, isn’t going to change the trajectory of this unstoppable trend—even slightly.

The truth is, no matter what happens, the deficits will not stop growing, nor will the debt needed to finance them.

The growth rate is not even going to slow down. It’s going to increase.

That means interest expense on the federal debt will continue exploding higher.

Observation #3: Over Half of US Treasury Debt Matures by 2028

This year, nearly $10 trillion of US Treasuries will mature.

And every bond that comes due has to be refinanced at today’s much higher rates—locking in substantially larger interest costs for years. What used to roll over quietly can now only be rolled over at roughly double the interest cost seen in 2022.

That’s what the chart below is really showing: the easy-money era is over. The “free money” party ended, and now the bill for the last round of stimulus has to be carried—and paid.

More than half of America’s debt will mature by 2028.

Every time US debt is refinanced at higher rates, it adds interest costs to the deficit—costs that have to be financed with even more debt issuance, compounding the problem.

It’s worth noting that about $6.6 trillion of the $9.6 trillion maturing this year—roughly 69%—are short-term T-bills.

That’s typical in a debt crisis. As demand for long-term bonds weakens, investors gravitate to short-term instruments like T-bills instead of 10-year notes and 30-year bonds.

It’s the same pattern you see in emerging-market crises. The market shortens maturities as conditions deteriorate. Only a fool would want to lend a bankrupt government money for the long term.

Observation #4: An Ever-Growing Interest Expense Fuels the Debt Spiral

Annualized interest on the federal debt exceeds $1.2 trillion and is surging higher. That means more than 23% of federal tax revenue is going just to service interest on the existing debt.

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Iran’s hackers go to war

Iran’s hackers go to war

Jacob Judah

As missile sirens wailed over Israel earlier this month, thousands of Israelis received texts claiming to be from their military, encouraging them to download a fake shelter app, which could have stolen reams of personal data. 

Others received a mass text saying: “Netanyahu is dead. Death is approaching you and soon the gates of hell will open before you. Before the fire of Iranian missiles destroys you, leave Palestine.” 

The messages, cyber security experts say, are the most visible end of a vast war being waged in the far reaches of the internet between Iran, Israel and the US, and their online sympathisers.

They may use keyboards instead of rifles but Iran’s hackers, who have fought Israel in the digital shadows for years, are among the most battle-hardened soldiers Tehran can call on.

“The Iranians are throwing everything they have at this,” said Chris Krebs, who as a former director of the Cybersecurity and Information Security Agency (CISA) was one of the most senior civilian US cyber security officials. 

“It is all hands on deck,” Krebs said. “If their cyber operators are breathing, then they will be on their keyboards.”

Their aims vary wildly, from sowing fear to causing chaos, hoovering up intelligence and isolating missile targets. In the murky world of cyber warfare it is hard to tell who even has the upper hand.  

But winning in cyber space has become so critical to shaping perceptions and damaging enemy morale that Iran has invested heavily in efforts to pierce American and Israeli firewalls. 

Iran has three different levels of cyber operators, whose boundaries are often blurry, analysts and former officials said.

The most experienced are run directly by the Islamic Revolutionary Guard Corps and Iran’s Ministry of Intelligence. They maintain a dizzying array of front organisations, used to introduce plausible deniability for attacks and issue public threats.

Iran also hires semi-autonomous hacking proxies, cybercriminals and contractors. Finally, volunteer hacktivists have also regularly mobilised behind Tehran.

Its operatives are believed by various governments and cyber experts to have doxxed Israel-based employees of a large US defence contractor, hacked the emails of politicians in Albania — which hosts an Iranian opposition group — and infiltrated a Polish nuclear research centre. Much of its most sensitive espionage is likely to have gone unreported.

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Iran threatens 18 huge companies with 'destruction' – employees told 'stay away'

Iran threatens 18 huge companies with 'destruction' – employees told 'stay away'

Eliana Nunes

Iran's IRGC has named 18 companies it says are 'involved in terrorist operations' and warned employees to leave their workplaces immediately to 'preserve their lives'

Iran's most powerful armed force has branded 18 big companies "terrorist spy companies" and declared them "legitimate targets".

The Islamic Revolutionary Guard Corps (IRGC) said a number of American multinational companies in the technology and industrial sectors - including Google, Apple, Intel and Boeing - are "involved in terrorist operations", in a statement carried by Iran's semi-official Tasnim News Agency. Of the 18 companies listed, only two are non-American and owned by entities in the UAE.

"We advise the employees of these institutions to immediately distance themselves from their workplaces to preserve their lives," the statement published on Tuesday afternoon said. "These companies should expect the destruction of their respective units in exchange for each terror act in Iran, starting from 8pm Tehran time on Wednesday, April 1st."

Companies listed by IRGC

1. Cisco 
2. HP 
3. Intel 
4. Oracle 
5. Microsoft 
6. Apple 
7. Google
8. Meta
9. IBM 
10. Dell
11. Palantir
12. Nvidia 
13. JP Morgan 
14. Tesla 
15. General Electric
16. Spire Solutions (a UAE-based cybersecurity solutions and services provider)
17. G42 (a UAE-based artificial intelligence company)
18. Boeing

On Monday, US President Donald Trump threatened widespread destruction of Iran’s energy resources and other vital infrastructure, including desalination plants, if a deal to end the war with Tehran is not reached "shortly".

The threat included Iran's Kharg Island, which Trump suggested US troops could seize in an interview with the Financial Times published the same day.

Trump reiterated on Monday that the US is negotiating with Iranian parliamentary speaker Mohammad-Bagher Qalibaf, but the former IRGC commander has denied that Iran is holding talks with the US, saying Pakistan-facilitated talks were merely a cover for American troop deployments.

Meanwhile, the US and Israel launched a new wave of strikes on Iran on Monday. Tehran struck a key water and power facility in Kuwait, while Saudi Arabia and the UAE intercepted Iranian missile attacks.

More than 1,900 people in Iran have been killed in US-Israeli strikes, and over 1,200 people in Lebanon have been killed in Israeli strikes. Nineteen people in Israel and 13 US military members, as well as a number of people on land and at sea in the Gulf region, have also been killed in the ongoing war. Millions of people in Iran and Lebanon have been displaced.

Ukraine's Backers Want Reduction In Long-Range Strikes On Russian Oil, Zelensky Says

Ukraine's Backers Want Reduction In Long-Range Strikes On Russian Oil, Zelensky Says

TYLER DURDEN

We've been highlighting the significant impact of the Iran war on developments in Ukraine, where the over four-year long war is showing no end in sight. Ukraine's President Zelensky has made clear his view that the current global focus on the Iran conflict has put Kiev in a weakened position.

Already, Ukraine's international partners are 'primarily' sending their anti-ballistic missile systems to the Middle East - with Ukraine 'forgotten' - Zelensky has recently said. But there's more, as the hits keep coming: Zelensky revealed Monday that some of Ukraine's backers have sent "signals" to scale back long-range strikes on Russia's oil sector as global energy prices have soared.

"Recently, following such a severe global energy crisis, we have indeed ⁠received signals from some of our partners about how to reduce our responses in the ​oil sector and the energy sector of the Russian Federation," Zelensky told journalists in a WhatsApp briefing, reported by Reuters.

This is perhaps what's behind his calling for an Easter holiday truce with Russia. He had on the same day that he told journalists about a potential pause on long-range attacks on Russian energy stated: "If Russia is ready to stop hitting Ukrainian energy facilities, we will not respond against their energy sector."

Zelensky just came off a tour of Middle East Gulf states, even amid Iran's ongoing retaliation in the region, while seeking Ukrainian security assistance. In recent days he met with the leaders of Saudi Arabia, the UAE, Qatar and Jordan.

Reuters notes of this, "Fresh from a four-day visit to the Middle East, Zelenskiy said that he had reached agreement with some countries in the region to provide energy support to Ukraine."

"Zelenskiy said at the weekend during his Middle ​East tour that he ​had reached a deal ⁠on diesel deliveries for a year to Ukraine, without providing further details," the report continues. "Diesel is vital for the functioning of the Ukrainian armed forces and ​the country's agricultural sector, the bedrock of the economy."

So indeed any new pause in tit-for-tat assaults on energy infrastructure would be a welcome reprieve for Ukraine as well.

One interesting aspect to the Reuters report is that while the US side hasn't commented, one unnamed source tries to inject that the 'signaling' on reducing or halting long-range strikes on energy is actually coming from Moscow:

A source familiar with the situation said U.S. officials had conveyed this message to their Ukrainian counterparts as part of their regular conversations, adding that the initial "signals" appeared to have come from Moscow.

And yet, even as Zelensky himself admits, Trump's easing of Russian oil sanctions has put the Kremlin in the driver's seat, in terms of energy leverage, at this crucial moment - also as the peace process and talks between Moscow and Keiv are non-existent.

In the meantime, amid waning support from the Trump administration, Zelensky has set his sights on greatly improving ties with the wealthy oil and gas monarchies in the Gulf.