Wednesday, November 4, 2026

Iran: The Story The West Does Not Want You To Know


August 1953 Mohammed Mosaddegh, arrested after CIA/M16 coup

The Story The West Does Not Want You To Know

By Lim Tean*

 

I will be honest about why I wrote this article.

 

Across my social media platforms, I encounter daily a particular brand of ignorance that I find increasingly impossible to ignore. Iran is dismissed as a crazy country ruled by medieval mullahs, its people caricatured as fanatics who chant “Death to America” for no coherent reason. And from that caricature flows a conclusion that should horrify any person of conscience — that it is therefore perfectly justifiable for America, Israel, or any other country to bomb Iran, kill its people, and destroy its infrastructure.

 

This is not analysis. It is the recycling of propaganda as a substitute for thought. And it has real consequences — because populations that are kept ignorant of history can be mobilised to support atrocities committed in their name.

 

Iran is not a cartoon. It is one of the world’s oldest and most sophisticated civilisations. And its anger at America is not irrational. It is the entirely rational response of a people to whom history has been profoundly, systematically unjust.

 

Let me show you why.

 

The Original Theft

 

To understand Iran today, you must begin not in 1979, but in 1908.

 

In that year, on the sun-baked plains of Khuzestan, workers drilling for the Anglo-Persian Oil Company struck black gold at Masjid-i-Suleiman — the first great oil discovery in the Middle East. The Anglo-Persian Oil Company, which would later become the Anglo-Iranian Oil Company and ultimately British Petroleum — the BP that today trades on the London Stock Exchange as a pillar of corporate respectability — had found the resource that would not merely enrich its shareholders, but change the course of world history.

 

The discovery was not merely commercially significant. It was strategically transformative. Winston Churchill, as First Lord of the Admiralty, had made the fateful decision to convert the Royal Navy’s warships from coal to oil before the First World War — giving Britain’s fleet superior speed and range, but making it utterly dependent on a secure oil supply. Iranian oil did not merely enrich British shareholders. It powered the British Empire’s ability to wage and win the greatest war in human history. The Iranian people received almost nothing in return.

 

For decades, Britain extracted Iran’s oil under terms of stunning inequality. Iranian workers toiled in dangerous conditions for poverty wages. Iranian communities near the oilfields lived without electricity, running water, or basic sanitation — while British staff enjoyed swimming pools, clubs, and comfortable salaries. The Iranian government received a pittance in royalties, and was denied even the right to audit the company’s accounts. Iran’s greatest natural treasure was being systematically looted, and the Iranian people knew it.

 

A man arose who decided to say: enough.

 

Mosaddegh and the Crime of Democracy

Mohammed Mosaddegh was everything the West claims to want in a Middle Eastern leader. He was democratically elected. He was secular. He was a constitutional lawyer steeped in European liberal tradition, who had studied in Paris and Neuchâtel. He wore suits, not robes. He believed in parliamentary democracy, the separation of powers, and the rule of law.

 

In 1951, as Prime Minister, he did something unforgivable. He nationalised the Anglo-Iranian Oil Company, returning Iran’s oil to its rightful owners — the Iranian people. The Iranian parliament voted for it unanimously. The Iranian street erupted in celebration. For the first time in their modern history, Iranians dared to believe that the wealth beneath their feet might actually benefit them.

 

Britain was apoplectic. The Americans were alarmed. And so, in August 1953, the CIA and MI6 launched Operation Ajax — one of the most consequential covert operations in modern history. They bribed Iranian generals, hired thugs to create street chaos, spread disinformation, and toppled the democratically elected government of a sovereign nation. 

 

Mosaddegh was arrested, tried, and spent the rest of his life under house arrest. He died in 1967, never having been broken, never having recanted — a man of extraordinary dignity whose only crime was wanting his country’s wealth to belong to his country’s people.

 

In his place, the West reinstalled Mohammed Reza Shah Pahlavi — and handed him SAVAK, one of the most feared secret police forces in the world, to keep his people in line.

 

This is the original sin. This is where the story truly begins.

 

The Shah’s Gilded Cage

The Shah that America restored and sustained was not a moderniser, whatever his propaganda claimed. He was a man of spectacular vanity and profound disconnect from his own people.

 

Consider this extraordinary fact: Mohammed Reza Shah held his coronation not once, but effectively twice. He had been on the throne since 1941, but waited until 1967 — twenty-six years — to hold his formal coronation, because he felt the circumstances had never been grand enough for a ceremony befitting his self-image. When he finally crowned himself, in a ceremony of breathtaking opulence, ordinary Iranians watched from a distance that was not merely physical.

 

But the coronation was merely a rehearsal for the true performance of imperial delusion — the celebrations at Persepolis in October 1971.

 

To mark the 2,500th anniversary of the Persian Empire, the Shah staged a spectacle that remains one of the most extraordinary acts of self-aggrandisement in modern political history. Heads of state and royalty from across the world were flown in. A tent city of fifty lavish pavilions was constructed in the desert near the ruins of Persepolis, the ancient Achaemenid capital. 

 

The tents themselves — along with virtually everything else — were imported from France. Maxim’s of Paris catered the meals. Guests dined on quail eggs stuffed with caviar, crayfish mousse, and roast lamb, washed down with vintage Bordeaux. Iranian culture was largely absent from a celebration ostensibly honouring Iranian civilisation. The Iranian people were spectators at a party thrown in their name, to which they were not invited.

 

The estimated cost was anywhere between $100 million and $300 million — at a time when millions of Iranians lived in poverty, lacking clean water, adequate healthcare, or basic education.

 

The Iranian people drew their conclusions.

 

Khomeini’s Rational Revolution

When Ayatollah Khomeini offered the Iranian people his theory of velayat-e-faqih — the guardianship of the Islamic jurist — and proposed an Islamic Republic as the vessel for a new Iranian order, he was not offering them theology alone. He was offering them dignity. He was offering them the promise that Iran’s sovereignty, Iran’s resources, and Iran’s future would belong to Iranians — not to the Shah’s court, not to Western oil companies, not to American strategic planners in Washington.

 

The Iranian revolution of 1979 was a mass movement of extraordinary breadth. Secular nationalists, leftists, intellectuals, bazaar merchants, students, and the religious poor all marched together. They had different visions of what would come after — but they were united in what they were marching against. A corrupt, repressive monarchy sustained by American power and serving American interests, which had delivered neither freedom nor prosperity to its own people.

 

When the American Embassy was seized and diplomats taken hostage, the West erupted in outrage. But behind that act was a simple, searing Iranian fear — that America would do in 1979 what it had done in 1953. That Washington would organise another coup, reinstall the Shah, and extinguish the revolution. The hostage crisis was many things — chaotic, counterproductive, damaging to Iran’s own interests — but it was not irrational. It was the desperate act of a people who had already been betrayed once by American power and were determined not to be betrayed again.

 

When America Armed the Man Who Gassed Iranian Children

If the 1953 coup was the original sin, the Iran-Iraq war was the confirmation — the moment that removed any remaining doubt in Iranian minds about what American power truly meant for their people.

 

In September 1980, Saddam Hussein’s Iraq invaded Iran. It was an act of naked aggression against a revolutionary government that was still finding its footing, launched with the tacit encouragement of Washington, which viewed the chaos of revolutionary Iran as an opportunity to be exploited. The war that followed lasted eight years. It consumed perhaps one million lives. It was one of the bloodiest conflicts of the twentieth century’s second half — and it has been almost entirely erased from Western historical memory.

 

What has been even more comprehensively erased is America’s role in sustaining it.

 

As the war ground on and Iranian forces began pushing back Iraqi advances, Washington made a decision of breathtaking cynicism. It could not allow Iran to win. 

 

And so America began providing Saddam Hussein with satellite intelligence on Iranian troop positions, military equipment, and — most damningly of all — with the precursor chemicals for the weapons that Saddam would use to commit one of the most documented war crimes of the modern era.

 

Saddam Hussein used chemical weapons against Iranian forces on a massive scale — mustard gas, tabun, sarin. Thousands of Iranian soldiers died in agonising chemical attacks. And Washington knew. American officials knew that Iraq was using chemical weapons. The intelligence community reported it. And the Reagan administration made a deliberate policy decision to continue supporting Saddam regardless — because an Iranian victory was deemed strategically unacceptable.

 

The most haunting chapter came not on a battlefield but in a Kurdish village. In March 1988, Iraqi forces attacked Halabja with chemical weapons, killing thousands of Kurdish civilians — men, women, and children — in a single day. It was the largest chemical weapons attack against a civilian population in history. And even then, Washington’s response was muted, carefully calibrated to avoid jeopardising its strategic relationship with Baghdad.

 

Iranian mothers who lost sons to American-supplied chemical weapons are still alive today. Iranian veterans who survived those attacks carry the physical scars — destroyed lungs, ravaged skin, broken bodies — into old age. Iran has never forgotten. Iran will never forget.

 

And yet Western commentators express bewilderment at the “Death to America” chant.

Consider for a moment what that chant actually represents, stripped of its theatrical staging. It represents the voice of a mother whose son was gassed with chemicals whose precursors passed through American hands. It represents the voice of a nation that had its democracy stolen in 1953, its resources plundered for decades before that, its revolution encircled and sanctioned, and its sons killed in a war that America prolonged deliberately to prevent Iranian victory.

 

If any Western nation had suffered a fraction of what Iran has suffered at the hands of a foreign power, that chant would be taught in schools as an anthem of righteous resistance. It would be celebrated in films and memorialised in monuments. Instead, because it is directed at American power, it is presented as evidence of Iranian irrationality. The arrogance required to sustain that position is staggering.

 

47 Years of Punishment

Since 1979, the United States has imposed on Iran some of the most comprehensive and punishing sanctions ever inflicted on any nation in modern history. Sanctions on oil. Sanctions on banking. Sanctions on technology. Sanctions on medicine. Sanctions that have impoverished ordinary Iranians, denied patients access to life-saving drugs, and strangled an economy of 93 million people.

 

And surrounding Iran on all sides — in the Gulf, in Iraq, in Afghanistan, in the Arabian Peninsula — America has built a vast archipelago of military bases, projecting power and telegraphing threat. Iran has been encircled, economically strangled, and subjected to covert warfare including the assassination of its nuclear scientists on its own streets.

 

Throughout all of this, Iran has survived. It has adapted. It has built regional influence through patient statecraft, cultivating allies across Lebanon, Iraq, Syria, and Yemen. It has advanced its nuclear programme not out of theological ambition but out of the entirely rational calculation that the only nations America does not attack are those that possess nuclear deterrence.

Justice Delayed

 

When analysts speak of America’s strategic defeat in its confrontation with Iran, they reach for the language of geopolitics and military balance. But there is another language that must be spoken — the language of history.

 

For 47 years, a people of ancient civilisation, extraordinary intellectual depth, and justified grievance have been punished for the crime of reclaiming their own sovereignty. They were punished for Mosaddegh’s ghost. They were punished for daring to say no to a superpower that had grown accustomed to treating the Middle East as its private strategic estate.

 

The “Death to America” chant that so offends Western sensibilities did not emerge from the Quran. It emerged from Operation Ajax. It emerged from SAVAK’s torture chambers. It emerged from Persepolis while children went hungry. It emerged from sanctions that killed patients who could not obtain medicine. It emerged from chemical weapons whose precursors passed through American hands. It emerged from a history that the West has studiously refused to confront — because confronting it would require acknowledging that the rage it provokes is not irrational.

 

It is the entirely rational response of a people to whom history has been profoundly, systematically unjust.

 

Understanding this does not require endorsing every act of the Islamic Republic. It requires only honesty — the willingness to read history as it actually happened, rather than as Western convenience has chosen to remember it.

 

Iran is not a cartoon. It is a civilisation. And civilisations have long memories.

 

Much of the historical foundation of this piece draws on two remarkable books that I commend to every serious reader: Michael Axworthy’s Revolutionary Iran — Axworthy served as Head of the Iran Section at the British Foreign Office before becoming one of the foremost academic authorities on modern Iran — and Scott Anderson’s Shah of Shahs. They changed how I understand this civilisation. They may change how you understand it too.

 

The picture below is of Mohammed Mosaddegh, August 1953- at the moment of his arrest in a coup plotted by MI6 and the CIA

 

*Lim Tean is the founder and Secretary General of the People’s Alliance for Reform (Singapore) 

Tuesday, November 3, 2026

Israeli Occupation Forces Continue To Attack Palestinian Journalists in West Bank

Israeli soldier shares a dehumanizing photo of the arrest of Palestinian journalist Marah Awad


Andy Worthington*

Nov 2 2026

An Israeli soldier has shared a dehumanizing photo of the Palestinian journalist Marah Awad, blindfolded and handcuffed, after soldiers raided her family home in Beit Ummar, north of Hebron, on October 26.

 

According to her brother Hamouda, Israeli soldiers broke into the home in the early hours of the morning, violently ransacked it, and, after confirming Marah’s identity, asked her, “What do you write about Israel?”, accused her of incitement against the occupying regime, seized her phone and computer, and then tied her hands, blindfolded her, and took her to an unknown location. She is one of around 40 Palestinian journalists, mostly from the West Bank, who are currently held in Israel’s grotesque torture prisons for Palestinians.

 

Marah’s arrest took place during ten days of Israeli aggression in Hebron (Al-Khalil) and the surrounding area, which came to an end today. Over 3,300 people were displaced, schools were closed, homes were destroyed, and the entire area was placed under military lockdown, following an attack on a military checkpoint on October 23 in which two Israeli soldiers were killed. 

 

Over the course of its brutal ten-day occupation, approximately 540 homes were appropriated and used as military barracks by Israeli forces, while at least 115 Palestinians were arrested.

 

*Andy Worthington is a Journalist, activist, photographer, singer & songwriter, based in London UK. He is recognized as an authority on Guantánamo.  His website is here.

Capitalism and the State. Is it Really All Trump's Fault?




Richard Mellor
Afscme Local 444, retired
HEO/GED
5-17-26


The System Is the Problem

Every political crisis produces its villains. Today, the dominant figure in that story is Donald Trump without doubt a distasteful, degenerate human being. The anger directed at him is understandable. But there is a danger in making any single individual the center of our analysis. When we do, we lose sight of something more important: the system that produced him, that accommodates him, and that will outlast him.


This is not an accident. In the political struggles between different factions of the ruling class, the focus on individuals is actively welcomed because it is a useful distraction from the root cause of the crises we face. That root cause is not a person. It is the system of production we call capitalism.


What capitalism actually is

In a capitalist system, the means of producing the necessities of life — factories, land, technology, financial institutions — are owned by a small group of private individuals. What sets those forces of production in motion is not the needs of society, but profit. The machine turns on when there is money to be made. It turns off when there isn't — regardless of what people need.


Marx explained it beautifully: "A schoolmaster is a productive labourer when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation." *


The point is simple: under capitalism, what matters is not what is produced or who benefits — it is whether the owner of the operation turns a profit. Education, healthcare, housing, food — all of it is subordinated to profit and the accumulation of capital.


What exactly is the state?

In my youth, had someone asked me to describe the state I would have said simply that it is the government.; I had never given it much thought. We are accustomed to thinking of government as a neutral institution — a referee that stands above competing interests in society and serves the common good. This is a comforting idea. It is also wrong.  

The modern state is not neutral. It is an organ of class rule and the ruling class in our situation are capitalists and we live in a capitalist or bourgeois democracy. Its laws, its institutions, its police, its courts, its military — all of these have been shaped over time to protect and reproduce the existing order: the order in which a small class of people own the productive wealth of society and the rest of us work for them. 

This does not mean that every politician is consciously conspiring, or that nothing can be won through political struggle. It means that the state, as a structure, exists to manage the affairs of the class that owns and controls the economy; Marx wrote in 1848 that, “The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.”

When we watch the battles between the Republicans and Democrats (the two major capitalist parties) over which party gets to govern society for the next four years, we are witnessing different factions of the ruling class compete for control of the state apparatus, we are watching a fight over who manages the system, not a fight over whether the system should continue. When it comes to the working class, they are united against us.

Contradictions, not villains

This brings us back to the question of crisis. Capitalism is an exploitative system, and suffering, poverty, war, hunger etc. is integral to it. As capitalist crisis intensifies, we are told the cause is greed, incompetence, or the moral failings of particular leaders. If only we had better people at the top, the story goes, things would be different.


But greed is not a cause. It is a feature. Capitalism does not merely tolerate the single-minded pursuit of profit — it requires it. A business that fails to compete and accumulate will be swallowed by one that does. If individuals can’t pay for health care they don’t get it. If less developed nations, (the former colonies plundered by the advanced capitalist states) can’t afford the costs of infrastructure development, sewage, drinking water, etc.; they don’t get it. 


In the global competition between nations, there is no such thing as fair trade. Trade disputes and tariffs are actual wars. When the competition becomes acute. When capitalist states cannot resolve disputes over trade and markets, they go to war. Both WW1 and WW2 were a product of the competition between nation states over resources, markets and global plunder.The system produces this scenario but the capitalist education system and mass media blames it on individuals.


The real causes of crisis are structural. Capitalism contains internal contradictions — built-in tensions between the drive to accumulate and the limits of what any society can absorb — that periodically produce exactly the kind of economic and political instability we are living through now. These crises will recur, under different leaders, with different villains, until the structure itself is changed.


Why this matters

None of this means that individuals don't matter, or that who holds power is irrelevant. It means that changing the individuals without changing the system is not a solution — it is a reset that leads back to the same place.


Understanding that the state is an instrument of class power, and that crises are produced by the system rather than by the moral character of its managers, is not pessimism. It is clarity. And clarity about the nature of the problem is the first condition for doing something about it.

* Marx Capital, Vol 1 Chap. 16 Absolute and Relative Surplus Value

Monday, November 2, 2026

Michael Roberts and Jack Rasmus: The Twilight of American Imperialism


Richard Mellor

Marxist economist, Michael Roberts interviews Jack Rasmus about his latest book; The Twilight of American Imperialism. This is a fascinating discussion about the decline of US imperialism on the world stage and its causes. It is a short discussion packed with information about the decline and the level of it. 

It would be incorrect to refer to this decline as a collapse but a gradual decline that is, as the speakers point out, cased by the inability of the Empire to fund its operations, similar to the cause of the decline of the Roman Empire in the 4th Century.

Order this book here

The book covers the period from the early 1990's to the present Trump Administration and, if the discussion above is anything to go by, will be easily accessible to the working class reader interested in the causes of the events that are occurring in the world today. 

Both authors feel confident that if the Democrats are successful in the Mid-Terms it will not significantly affect US foreign policy and it could be worse. As Jack Rasmus points out, " the Deep State" controls foreign policy.

As readers on this blog know, I publish and most of Michael Roberts economic writings, and blogs at https://thenextrecession.wordpress.com/

Jack Rasmus also has a blog here: https://jackrasmus.com/

Order the book:  The Twilight of American Imperialism

Sunday, November 1, 2026

Abdul El Sayed is Not a Capitalist.



Richard Mellor

 

I wanted to post the short version of this but could not find  a way of doing it.  Fortunately, I found this longer version and the comments I am responding to below are at the very beginning. I certainly have no interest in watching the rest of it as Fox is not a news channel and the woman is not a journalist. I do not support the Democratic Party and I'm certainly not a Republican Party supporter. I feel the utmost sympathy for Abdul El Sayed having to suffer the racism and religious bigotry being thrown at him in this country with the Orange thing in the White House leading the charge. If I lived in Michigan I'd vote for him just to stick it to these racist, nationalist market loving ideologues.

 

Anyway I am responding here to Abdul El Sayed's response to this Fox propagandist on whether he is concerned as a capitalist, about the rise of Democratic Socialism in the U.S. She means DSA and social democratic political views. He answers it with dignity but there is more that should be said.

 

This is how poor the political discourse is in the US not to mention the class consciousness. It's quite staggering. As far as I know, Abdul El Sayed is not a capitalist, he is a worker. He gets paid a wage for his labor power and he gets paid quite well for it. It costs a lot to produce a doctor. I think he is a public servant.

Given that he earns a good living, he may well put some of that capital to work and have some sort of side business therefore acting as a capitalist in some way. I don't know. But I worked with guys (I had a good union civil service job) who owned a couple of properties, some of them it was what their parents left to them when they died. So they were landlords. But their basis for survival was their jobs. We had good pay, the opportunity to work a lot of overtime and we had very good benefits by American standards, especially health care. These essentials were covered by the jobs we had and that we were public sector workers and we had a union. So they could play capitalists for a bit, having a certain amount of security.

But landlordism, a section of the capitalist class whose means of subsistence is based solely on owning shelter (homes), is different than a worker who has some spare capital, having a decent job, and earns enough to borrow money and buy a place they can rent out. Some workers might earn enough that the moneylenders will lend them money to buy two or three properties, maybe enough to quit their regular job. Then they join (albeit at the lower rungs), of that section of the capitalist class we call landlordism. But as soon as hard times hit, small capitalists like that can quite easily end up back among the ranks of the working class or the unemployed or indigent.

So what my co-workers meant when they said they were capitalists, was 
they support capitalism. And generally they meant as opposed to socialism or particularly communism which they believed was the system in the Soviet Union or China. Though neither of these states are or were communist.


Of course they support capitalism and the right of the boss to lay off workers until it was their jobs that were on the chopping block.

I don't fault Abdul El Sayed for responding the way he does, he is a doctor not a political person to my knowledge. I don't know if he knows much about Eugene Debs or Karl Marx but it is important to point out the lack of clarity in the US that has come about due to the failure of the heads of organized labor on the one hand coupled with the absence of a national working class party and the power of the mass media. 

Just because you vote for a capitalist party (we only have two options here and they are both capitalist parties) doesn't mean you're a capitalist. But, let's be honest, workers refer to ourselves a middle class here, well paid union workers anyway. That reflects the power of the capitalist class and their media in this country in the post world war 2 era, that we can call ourselves what we're not.

Thursday, October 29, 2026

US Threats Push Dependent Smaller States to Support the US Blockade on Cuba.



Trita Parsi*

Sad to see countries keep complaining about the lawlessness Trump is bringing to the international arena, but when push comes to shove, they not only don't dare to push back; they acquiesce to US pressure.

 

See, for instance, the annual resolution at the UNGA condemning the US's decades-long embargo on Cuba.

 

This resolution gets huge support every year. But this year, the US's strong-arming tactics moved the needle significantly in Washington's direction.

 

Support for the Cuban resolution fell from 165 countries in 2025 to 130 in 2026, while opposition rose from 7 to 17 and abstentions more than doubled, from 12 to 25.

 

Colombia, Slovenia, Trinidad and Tobago and the UAE went from voting for it to voting against it.

 

Bosnia and Herzegovina, Costa Rica, Czechia, Ecuador, Lithuania, and Morocco moved from abstention in 2025 to an outright NO vote in 2026.

 

Then these countries went from supporting the resolution to abstaining:

 

Bahrain, Chile, Croatia, Germany, Greece, Guyana, Haiti, Honduras, Italy, Jamaica, Montenegro, Netherlands, Palau, Peru, Qatar, South Korea, Solomon Islands.

 

The main common denominator for these states that have abandoned their longstanding opposition to an illegal embargo is their vulnerability to and dependence on the US. As US foreign policy grows more aggressive and unforgiving, the cost of defying it on this vote has become too high. For some of the smaller states, this is understandable given their near-total dependence on the US. 

 

But this does not apply to states such as Germany, Italy, South Korea, and the Netherlands. They don't have this excuse. Their failure is beyond embarrassing. 

 

Germany is particularly noteworthy. Germany, for the first time, lost a bid earlier this year for an elected seat at the UNSC. This is particularly embarrassing for Germany since it has long sought a permanent seat on the Council. The overarching reason for this failure is the common view that Germany has abandoned international law - it insisted on it in Ukraine, but abandoned it in Gaza, Venezuela, and Iran.

 

Add Cuba to that list. Rather than restoring its standing, Germany dug a deeper hole for itself with this vote.

 

* Trita Parsi is a co-founder and Executive VP of the Quincy Institute. 

Michael Roberts: Asian AI bubble bursts

Asian AI bubble bursts

by Michael Roberts

It seems that the Asian AI bubble has burst. It all started in South Korea with the KOSPI stock market index plunging over 8% on 15 October. That just added to a huge fall in the Korean index of 41% from a peak of the Korean AI investment boom last June. The share prices of the two large Korean tech companies, SK Hynix and the mega Samsung Electronics, fell over 10% on that one day.

Now the bursting of the bubble has spread to China.  The STAR50 stock index, tracking key AI and chip firms, has dropped 40% since its July high, while the broader CSI 300 entered bear market territory after a 20% fall from June. When placed alongside Seoul’s $900 billion seven-day wipeout on October 15, nearly $1.4 trillion in ‘fictitious capital’ has been vaporised across the East Asian hardware supply chain in October alone. By fictitious capital, Marx meant the market value of stocks and bonds, which are claims on the value of real assets like machinery, software and components etc that companies have. It’s fictitious because it can be way out of line with the real value of assets owned and employed by companies to make profits.

In Asia, it has been retail investors (that’s households) who have been pitching into the stock market.  Household savings rates are high, especially in China, and the previous investor boom in Chinese real estate collapsed years ago. Buying AI stock is the latest craze to make a fortune. But now it seems that investors have decided that the price of investment in AI-driven Asian companies is well over the top.

SK Hynix and Samsung are key companies that supply the semi-conductor chips required to run advanced AI accelerators and data centres. For the past two years, Samsung and SK Hynix appeared to be making huge profits on chip sales exploiting extreme global demand for chips from cash-rich US tech monopolies badly needing more server memory for their AI projects. But these super profits now appear in jeopardy, especially after China’s CXMT unveiled a data centre server memory dramatically reducing the cost of chips. Korean stock market investors saw the writing on the wall – no more super profits.

CXMT’s break into the Korean share of the chip market doubled its global DRAM market share from 4% to 10% year-on-year in Q2 2026). But that had its own consequences for the Chinese stock market. Chinese and Asian AI labs have shifted towards so-called “open-weight” models (free to use). Falling chip costs has also meant falling prices for AI companies in China, where the competition has been intense. Capital had flooded so much into chip design, memory, and robotics that profit margins are disappearing.

So China’s speculative investors have got worried and CXMT itself has lost more than 25% of its stock market value. According to Goldman Sachs, AI-related stocks had swollen to 42% of China’s total equity market capitalisation and 57% of total trading turnover across China mainland A-shares and Hong Kong H-shares. Even after losing 40.4% of its value, the STAR 50 still trades at roughly 100 times trailing earnings (down from nearly 250x at its June/July peak), more than triple the US Nasdaq tech stock index.

As commentator Saad Zaidi explained, China’s rapid horizontal replication of AI hardware capacity has compressed profit margins across the entire East Asian supply chain, with loss of pricing power amid overcapacity. Caught in a pincer movement between faltering returns on downstream AI capital expenditure on one side, and China’s state-directed tech industry lowering profit margins on the other, the speculative bubble in East Asian hardware is visibly fracturing.

As Zaidi says, this follows Marx’s law of profitability, namely that any rapid rise in investment in technology will eventually weigh down profitability, unless it drastically raises the productivity of living labour across the wider economy. And so far, as I have shown before, total factor productivity (economic gains from AI innovation) have hardly risen. “The market is now waking up to the reality that upstream hardware valuations cannot stay detached from downstream profitability forever.” (Zaidi)

As I have shown before, this AI mania mirrors that of the 19th century investment in burgeoning railway technology. Then, railways were also seen as a powerful new technology that could transform transport and travel, and so boost productivity. This led to massive speculation in railway shares as company after company launched new rail lines across Britain during the 1840s and in the US in the 1870s. Eventually, investor concerns about overcapacity rail projects, along with increasing distrust of railroad securities, triggered crashes.

In the UK, the mania reached its zenith in the 1840s. Marx noted then that, “in the railway swindle from summer 1844, railway investors apparently expected much higher than the average profit rate.” Marx called it the ‘great railway swindle’ to emphasise that the claims made by the railway companies for huge profits to be made were deliberately overstated (shades of US AI companies now). Investors naïvely poured capital into schemes that were significantly less profitable than they expected and and rail company directors had promised.

The question now is whether investor fears about overinvestment and declining prospects for profits from AI will spread to the heart of the AI mania: the US.  Competition from China’s free or very cheap to use and every improving AI models is eating into the potential profits of the US AI labs, OpenAI and Anthropic. All top five most popular models are now Chinese and, according to a WSJ report published last week, “approximately 45% of all tracked tokens now flow through Chinese models.”

As Torsten Slok at Apollo Capital has pointed out, despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech. “The bottom line is that the AI story will be decided in the S&P 493, not the Mag 7, and so far, there is no evidence that revenue growth or margins are improving outside the tech sector.”

And the profitability of the mega hyperscalers that are driving AI investment has been falling: in return for over a trillion dollars of capital expenditures they have seen their return on invested capital drop on a quarterly basis.

And there are signs that the US AI investor bubble may be leaking. Yesterday, the Alphabet (Google) share price fell 10% after it boosted its AI spending to more than $50bn in the third quarter, leading to a record ‘cash burn’ that spooked investors. Free cash flow (ie money available to invest) fell to minus $9.1bn in September compared to minus $5.9bn in the prior quarter. To back its spending spree, Alphabet has taken on tens of billions in debt and in June announced plans to raise about $85bn in its first share sale in more than two decades — a sharp reversal after years of buying back its own shares.

But the big test is coming: Anthropic is about to release shares to the public in order to raise $150bn, making the company’s market value equivalent to $1.5trn – a truly staggering market value for a company that makes no profit yet. As Anthropic put it in the prospectus to potential share holders: “We are at an early stage of our revenue growth, we have experienced rapid growth in recent periods, and our historical growth rates are not indicative of future performance or our ability to sustain or forecast future revenue growth. We do not expect our revenue will continue to grow at comparable rates, and we cannot assure you that it will continue to grow at all.”! It’s one big bet. 

The Trump/Epstein Affair Just Won't Go Away




Rachel Hurley


So, House Judiciary Democrats dropped a new 52-page staff report on the Epstein files this week - and I finally got through it. 


The report lays out what they call "the case against Donald Trump emerging in the Epstein files and DOJ's desperate efforts to cover it up." 

 

They're calling for an independent special counsel to dig into Epstein's co-conspirators and the DOJ's cover-up. They also say Trump's attorney general may have committed "criminal obstruction of justice."

 

The report accuses Trump of being "an active participant" in Jeffrey Epstein's abuse of young women and girls in the '90s. It also accuses the DOJ of covering it up.

 

It details new claims from Beatrice Keul, a former Swiss pageant contestant. She told committee staff that Trump raped her at New York's Plaza Hotel in 1993, and she called the assault "brutal."

 

The report also cites an FBI search that tied Trump and Epstein to a 2007 "exploitation of minors" case number. A whistleblower says documents linked to that case are being withheld.

 

It also points to a 2009 document that the DOJ blacked out. In it, Trump reportedly said Epstein was "never asked to leave" Mar-a-Lago. That contradicts his long-running claim that he kicked Epstein out.

 

There's a lot of other stuff in the report - and it also sheds new light on a rumor that won't die about how Donald Trump met his third wife.

 

Every love story has a "how we met" moment, and the Trumps' story starts in a model apartment on Varick Street in NYC.

 

I've written about Paolo Zampolli before - but if you're new here, he was an Italian modeling agent in the '90s. He put the young women he brought to New York in that apartment, and he's been in the Epstein and Trump orbit for decades.

 

The new report says one of those women was a Slovenian model named Melania Knauss.

 

Another was a 19-year-old Polish model who later went to work for Jeffrey Epstein. A third was an 18-year-old who told the FBI that Epstein raped her when she went to his house to give a massage.


All three women had the same agent, and they all lived at the same address.

 

The report also covers five women who say Trump raped or sexually assaulted them while Epstein was around - and that's what the press has focused on, as it should.

 

But there's a part on pages 11 to 14 that almost nobody is talking about. The story of how the President met his wife now has two possible matchmakers, and both of them show up in a congressional report about sex trafficking.

 

You've probably heard the first version.

 

Zampolli says he introduced Donald and Melania at a party he threw at the Kit Kat Club in September 1998. Melania tells the same story in her 2024 book. In April, she told reporters that Epstein didn't introduce her to her husband and that they met by chance at a party. Zampolli backed her up and said he'd tell Congress the same thing under oath.

 

The FBI has a different version.

 

In 2019, a woman who used to work for Epstein told the FBI that Epstein introduced Melania to Donald. That same FBI file says Zampolli was trying to buy a big modeling agency called Elite with Epstein. That part's true, by the way. In 2004, the two men teamed up to try to buy Elite's New York office, but the deal fell through.

 

Anyway - my biggest takeaway about Epstein introducing Melania to Trump is - if true - there’s a very good chance that he was gifting her to him. Extrapolate what you will from that.

 

The report says Epstein used to stop by Zampolli's agency when models were trying out for jobs. He'd flip through their photo books and look at pictures of girls in swimsuit bottoms. Which sounds like he was flipping through a to-go menu.

 

The report also says Zampolli had an affair with the 19-year-old model he'd signed before she went to work for Epstein. The DOJ blacked out that line before it released the file.

 

You might recall that Zampolli worked for the Trump administration at the time, so the DOJ was hiding a detail about one of its own guys. Democrats now say Zampolli and Trump "may have been co-conspirators," which means they may have helped Epstein commit his crimes.

 

Zampolli's name also comes up five years before the Kit Kat Club party.

 

Remember Beatrice Keul? She told congressional staff that at that 1993 pageant, Trump promised her a visa and said his friend "Paolo" would handle it.

 

A few minutes later, she says, Epstein walked up and called himself "Don's best friend." That's the same day she says Trump raped her in a suite at the Plaza.

 

Then there's Amanda Ungaro.

 

She was Zampolli's partner for almost 20 years, and they have a son together. She also says Epstein was the one who introduced the Trumps.

 

You might remember her name - cause she doesn't live in the U.S. anymore. The NYT reported that Ungaro was arrested in Miami on fraud charges last year, and then Zampolli contacted a top ICE official about her case. ICE picked her up before she could post bail, and the government sent her back to Brazil. Zampolli says he never asked ICE to do that. DHS says she was deported because her visa had run out.

 

The Trumps have kept Zampolli close for 30 years. The report says Trump put him on the Kennedy Center board because Melania asked him to. 

 

Then last year, Trump gave him a job as a special envoy, which is kind of like a traveling ambassador. Zampolli flew all over the world on the taxpayers' dime, and he even went to Hungary with VP JD Vance. 

 

Last month, a young Republican model sued him and said he drugged and raped her in 2023. On Oct. 15, after a nasty email fight with a top State Department official, he got fired.

 

That happened just 11 days before this report came out. Zampolli didn't seem too upset about it. "President Trump changed my life once," he said. "He just did it again."

 

But who knows how this will all play out now. If Dems win the midterms - I expect they will call Zampolli in for a little chat.

 

When Trump ran in 2024, he told people he'd release the Epstein files. Instead, he made his old defense lawyer, Todd Blanche, the AG. Blanche interviewed Ghislaine Maxwell, Epstein's partner in crime, and he stopped her three times when she started talking about a girl who had connected Trump to Epstein. And Blanche's DOJ blacked out an FBI file to protect a guy the White House fired anyway.

 

I'm hoping more people will finally have the same "aha" moment I had right after I graduated high school. That's when I walked into a bar and saw my high school crush making out with another guy. 

 

I’d heard a rumor or two while we were still in school - but I dismissed them because it wasn’t the reality I wanted.

 

When I saw it with my own eyes - I felt so dumb - not because he turned out to be gay - because I had failed to see something so obvious.  


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Sources

https://democrats-judiciary.house.gov/.../judiciary...

https://democrats-judiciary.house.gov/.../2026-10.hjc...

https://www.rawstory.com/donald-trump-jeffrey-epstein.../

https://newrepublic.com/.../democrats-50-page-report...

https://thehill.com/.../6172897-house-democrats-trump.../

https://www.thedailybeast.com/dems-plot-to-make-trumps...

https://www.thedailybeast.com/epstein-assistant-told.../

https://www.hawaiitribune-herald.com/?p=360040

https://gvwire.com/.../trump-friend-asked-ice-to-detain.../

https://keyt.com/?p=1491016

https://www.alternet.org/paolo-zampolli-fired/

https://www.tbsnews.net/node/1453396

https://whowhatwhy.org/.../eyes-on-epstein-the-story.../