Spear Phishing, Drone War and The Election

“War is the continuation of politics by other means.”

–Carl von Clausewitz

We were preparing to release our latest interview with Grey Swan contributor John Robb, when a few news items crossed the transom.

Over the weekend, the Trump campaign announced that “foreign sources hostile to the United States” had accessed some private communications and documents from its network using AI modules.

A Microsoft report corroborated, announcing hacker groups connected with the Iranian government “sent a ‘spear phishing’ email in June to a high-ranking official on a presidential campaign.” The report continues:

They’ve laid the groundwork for influence campaigns on trending election-related topics and begun to activate these campaigns in an apparent effort to stir up controversy or sway voters—especially in swing states. [And] launched operations that Microsoft assesses are designed to gain intelligence on political campaigns and help enable them to influence the elections in the future.

Microsoft added that an Iranian group has been launching covert news sites targeting US voter groups on opposing ends of the political spectrum:

One of the sites, called Nio Thinker, caters to left-leaning audiences and insults former president Donald Trump, calling him an “opioid-pilled elephant in the MAGA china shop” and a “raving mad litigiosaur.”

Another, called Savannah Time, claims to be a “trusted source for conservative news in the vibrant city of Savannah” and focuses on topics including LGBTQ+ issues and gender reassignment. The evidence we found suggests the sites are using AI-enabled services to plagiarize at least some of their content from US publications.

The cynic presumes the worst.

In our “wag the dog” scenario, we immediately suspected the “news” had been pounced on by the Trump campaign because the “honeymoon” period of Kamala Harris and Tim Walz trying to rally the Democratic base was stealing headlines from their own post-assassination-attempt, Republican National Convention, and JD Vance announcement buzz.

Either way, another news report from the Associated Press indicates, “U.S. Defense Secretary Lloyd Austin has ordered a guided missile submarine to the Middle East and is telling the USS Abraham Lincoln aircraft carrier strike group to sail more quickly to the area, the Defense Department said Sunday.”

As we track government spending, the national debt cresting $35 trillion, and the real motives for conflict in Ukraine, Israel and all across the Middle East, the motives for various details get murky.

“We’re in a networked world,” we’ve only recently noted to Mr. Robb. “Can the U.S. even win a forever war? Or is it just perpetually expensive.”

His response was not very encouraging. John Robb:

The US has been trying to manage the global situation for quite a while and has been doing a relatively bad job of it.

Top-line governments and nation-building stuff tend to backfire and haven’t yielded the results that we wanted. But now we see something relatively more dangerous. We’re already on an almost inevitable course towards conflict with China and Russia and most of Asia.

During the buildup, China has been producing a lot of drones.

They have the capacity to produce millions per month. And right out of the starting gates and they could use those drones to supply groups like the Houthis that are hard to attack because they are relatively remote.

Yet, the Houthis can use those drones or any group like that could use those drones to erect aerial denial blockades of sea air and land upwards of 500 to a thousand miles distant from their location.

Seems like a minor detail, but moving a submarine into the Mediterranean capable of launching long-range cruise missiles is an escalation – during a critical election already besieged with AI-induced “misinformation”… well, it’s caught our attention.

We’ll reveal more of our wide-ranging discussion with John tomorrow. His insights into “netwar” are alarming, at best.

So it goes,

Addison Wiggin,

Grey Swan

P.S. While watching JD Vance speak on C.B.S.’ Face the Nation this weekend, we came up with this suggestion for the Republican strategists: One up Harris and Walz by having Trump drop out of the race and grab all the headlines during the Democratic National Convention.

Trump has already remade the RNC in his image. They’d just need to throw in a new VP candidate and a couple aggressive debates. Vance is far more articulate about policy than either Trump or Harris.

Heh. Thoughts? Send them here: addison@greyswanfraternity.com

“War is the continuation of politics by other means.”

–Carl von Clausewitz

We were preparing to release our latest interview with Grey Swan contributor John Robb, when a few news items crossed the transom.

Over the weekend, the Trump campaign announced that “foreign sources hostile to the United States” had accessed some private communications and documents from its network using AI modules.

They’ve laid the groundwork for influence campaigns on trending election-related topics and begun to activate these campaigns in an apparent effort to stir up controversy or sway voters—especially in swing states. [And] launched operations that Microsoft assesses are designed to gain intelligence on political campaigns and help enable them to influence the elections in the future.

Microsoft added that an Iranian group has been launching covert news sites targeting US voter groups on opposing ends of the political spectrum:

The cynic presumes the worst.

“We’re in a networked world,” we’ve only recently noted to Mr. Robb. “Can the U.S. even win a forever war? Or is it just perpetually expensive.”

His response was not very encouraging. John Robb:

The US has been trying to manage the global situation for quite a while and has been doing a relatively bad job of it.

Top-line governments and nation-building stuff tend to backfire and haven’t yielded the results that we wanted. But now we see something relatively more dangerous. We’re already on an almost inevitable course towards conflict with China and Russia and most of Asia.

During the buildup, China has been producing a lot of drones.

They have the capacity to produce millions per month. And right out of the starting gates and they could use those drones to supply groups like the Houthis that are hard to attack because they are relatively remote.

Yet, the Houthis can use those drones or any group like that could use those drones to erect aerial denial blockades of sea air and land upwards of 500 to a thousand miles distant from their location.

We’ll reveal more of our wide-ranging discussion with John tomorrow. His insights into “netwar” are alarming, at best.

So it goes,

Addison Wiggin,

Grey Swan

Heh. Thoughts? Send them here: addison@greyswanfraternity.com

In one refrain from our book Empire of Debt, we warned that late-stage credit systems always suffer the same fate: the debasement of money disguised as growth. Ray Dalio said the quiet part out loud in an interview yesterday:

“If you depreciate the money, it makes everything look like it’s going up.”

Which is precisely why the markets get jittery at the top. And why politics are as wacky and polarized as they have been.

In New York, Mayor Zohran Mamdani is demanding higher taxes on the rich to plug budget holes left by former Mayor Adams. He wants billions from Albany. Governor Hochul has yet to weigh in.

In California, Sergey Brin, Eric Schmidt, and other Silicon Valley billionaires are backing a new pro-business PAC to fight a proposed 5% wealth tax on the state’s 200 richest residents. Larry Page has already moved to Florida. The line to Nevada is forming.

Ray Dalio, again, with the map:

“When governments run large deficits and the debt is no longer bought willingly, they have two choices: raise taxes and cut spending, or print money. Those that can print, do. Those that can’t, fall apart.”

Populist politics surge. Moderates vanish. Scapegoating begins. The wealth gap widens until it becomes an impassable chasm.

The S&P 500 topped 7,000 for the first time yesterday, adding to its stack of all-time highs this year and continuing the trend set in 2025.

But… those highs are measured in dollars. When priced in gold, which topped $5,500 — also a historic number— this morning, stocks are actually at a 12-year low.

Trump is trying to force two converging economic events that haven’t aligned like this in over 40 years.

The first is the cost of borrowing. After the fastest rate-hiking cycle in decades, rates are rolling over. Trump wants them at 1%. Jerome Powell’s term ends at the Fed on May 15. The path is being cleared for a true believer in lower interest rates to take his spot.

The second is the cost of living. Oil has fallen from $95 to just over $60 in a year. Gas is averaging $2.88 nationally. And because oil feeds into everything — shipping, food, plastics — falling prices cascade across the economy. The capture of Venezuela’s Nicolas Maduro is not a coincidence. Venezuela is one of the leading exporters in the OPEC block of oil producers.

A push for lower interest rates, jawboning by Trump administration officials, and concerns over U.S. debt levels are giving the dollar a good thrashing.

Dollar-denominated assets, from global commodities to U.S. stocks — even competing fiat currencies — will see prices rise versus the U.S. variety until this trend shifts.