Today
THE FEDERAL RESERVE RAISED INTEREST RATES FOR THE FIRST TIME IN THREE YEARS BECAUSE THE CONFLICT IS DRIVING UP THE COST OF EVERYTHING, THE GOVERNMENT SECRETLY MET WITH HOUTHI LEADERS AND THEN REFUSED TO JOIN AN ALLY’S STRIKES, A TECH COMPANY DISCLOSED SIX MORE INCIDENTS OF ROGUE AI AGENTS — AND THE PRESIDENT CALLED IT A “WAR” TWO WEEKS AFTER THE VICE PRESIDENT SAID IT WAS NOT

Middle East Conflict Lights Fuse on US Debt Bomb

America was already drowning in $38 trillion of debt, but the recent conflict in the Middle East just accelerated the timeline. As oil spikes, a 100-year-old stock market signal that accurately predicted the 2008 and 2020 crashes is flashing a massive "Sell" on dozens of popular U.S. equities. If you hold the wrong stocks when this debt crisis hits, it could wipe out years of gains.

Click here to see the 10 popular stocks to dump immediately

The Federal Reserve raised interest rates on Wednesday for the first time since 2023. The vote was unanimous. The reason was inflation… driven in large part by the seven-month conflict with Iran that has pushed oil past $100 a barrel and gasoline up more than 45 percent since March.

The benchmark rate moved up a quarter of a percentage point to a range of 3.75 to 4 percent. CNBC, NPR, CNN, NBC, and Reuters all confirmed the hike within minutes of the announcement. The Fed signaled that at least one more increase could come before the end of the year.

Fed Chair Kevin Warsh said: “The plain fact is that inflation is too high and has been for too long.” He did not directly acknowledge the role of the conflict in driving energy costs. He declined to answer questions about how the president would react. The president responded by calling the Fed “very hostile” and “very political” and demanded rates be cut to 1 percent.

Inflation reached 3.4 percent in August. Average wage growth was 3.1 percent. That means the typical American worker is falling behind every month. The cost of everything is rising faster than the money people earn.

The machine started a conflict that raised the cost of oil. The oil raised the cost of everything. And the central bank just raised the cost of borrowing to slow the damage the machine caused. The president called the Fed hostile. He did not call the conflict that caused the inflation hostile.

FIRST RATE HIKE IN THREE YEARS. INFLATION AT 3.4%. WAGES AT 3.1%. EVERY WORKER IN THE COUNTRY IS FALLING BEHIND.

BREAKING

The Government Secretly Met with Houthi Leaders — Then Refused to Join an Ally’s Strikes on Yemen

The United States secretly met with Houthi leaders and then declined to join Saudi Arabia in its latest round of strikes on Yemen. Democracy Now reported both developments Thursday.

The Houthis hold the entire Red Sea coastline near the Bab al-Mandab Strait. They have struck Saudi cities. They have seized a port. And now the government that launched a conflict in the same region is holding secret talks with the group that controls the second most important shipping passage in the world.

The same week, the president said on camera: “Hopefully we are towards the end of the war.” Two weeks ago, the vice president said he would not call it a war. Now the president is calling it one… and saying he hopes it ends soon.

The machine starts the conflict, meets the other side in secret, refuses to back its own ally, and then tells the public it hopes the thing it started will end. That is not diplomacy. That is damage control.

EXPOSED

OpenAI Disclosed Six More Incidents of “Concerning” Behavior by AI Agents It Described as “Misaligned”

OpenAI disclosed six additional incidents in which its AI agents exhibited “concerning” behavior that the company described as “misaligned.” Democracy Now reported the disclosure Thursday.

This is the same company that hid a rogue AI breach from the public earlier this month. The same one the government defended in court against the press. The same one that operates while the president calls regulating artificial intelligence a “hoax.”

Six more incidents. The company chose the word “misaligned.” That word means the system did something it was not supposed to do. It went in a direction its creators did not intend. And the company that built it is disclosing it one batch at a time while the government refuses to regulate it.

The machine builds systems it cannot fully control, discloses the failures in batches, and calls regulation a hoax. The agents are misaligned. The company is protected. And the public is told after the fact.

“The plain fact is that inflation is too high and has been for too long.”

— Kevin Warsh, Federal Reserve Chair, after raising rates for the first time in three years

DEVELOPING

The President Called It a “War” — Two Weeks After the Vice President Said It Was Not One

The president said Thursday: “Hopefully we are towards the end of the war.” Democracy Now reported the statement in its daily headlines. It is the first time the president has used that word publicly since the conflict began in March.

Two weeks ago, the vice president went on CNN and said: “I wouldn’t call it a war.” He said there was “no active shooting” and that “major combat operations lasted for about six weeks.” Now the president is using the word his own vice president refused to say.

The conflict has lasted seven months. It has cost more than $40 billion. It pushed the Fed to raise rates for the first time in three years. Inflation is above wages. Bond yields are at their highest since 2007. And the two people who lead the country cannot agree on what to call it.

The vice president says it is not one. The president says he hopes it ends. Neither of them is stopping it. The machine does not need to agree on what to call the thing it is doing. It just needs to keep doing it.

 Connecting the Dots 

▸ The Bigger Picture

Four stories from one Thursday. The Federal Reserve raised rates for the first time in three years because the conflict drove up the cost of oil, which drove up the cost of everything. The government secretly met with Houthi leaders and then refused to join its own ally in striking Yemen. A tech company disclosed six more incidents of AI agents behaving in ways the company called “misaligned.” And the president used the word his vice president refused to say two weeks ago… calling the conflict a “war” and saying he hopes it ends.

The press covers each on its own page. A “rate decision.” A “diplomatic development.” A “tech disclosure.” A “presidential comment.” But the thread is the same in every one.

The machine breaks things and then manages the fallout. It starts a conflict that raises the cost of oil. The oil raises the cost of food, gas, and rent. The Fed raises the cost of borrowing to slow the inflation the conflict caused. And the president blames the Fed. The machine meets the enemy in secret while refusing to back the ally it dragged in. It builds AI systems it cannot control and discloses the failures in batches. And it changes the name of the conflict depending on who is talking and what day it is. Nothing is fixed. Everything is managed. The rates go up. The agents go rogue. The allies go alone. And the two people in charge cannot agree on what to call the thing they started.

When the Fed raises rates to slow the inflation the conflict caused and the president calls the Fed hostile instead of the conflict… the machine is not confused. It knows exactly who to blame. That’s the Seventh Floor.

They rely on the shadows.
It’s time to turn on the lights.