| Did you know that the German military can’t shoot down a flying object in domestic airspace unless it’s above a military base? The rule, written into the country’s constitution after World War II, “was meant to prevent the kind of military overreach seen during authoritarian times, especially under the Nazi regime,” writes Katja Hoyer. Now, she says such restrictions make it hard to respond to modern threats (i.e. Putin’s drones), but Germany’s fragile political landscape means the rule probably won’t change anytime soon. The fear of sliding back toward authoritarianism isn’t just a German thing. Across the Atlantic, the US is having its own reckoning over how far presidential power can stretch — and how easily tools of security can become instruments of control. Consider President Donald Trump’s growing aggression toward blue cities, says Patricia Lopez. “Militarizing Immigration and Customs Enforcement, attempting to federalize National Guard troops and issuing threats to jail opponents — these are not the actions of a leader intent on improving public safety,” she writes. Today, Illinois Governor JB Pritzker compared the ICE crackdown in Chicago to Nazi Germany. Taken alone, such a parallel may seem unserious. Yet on the right, “the Hitler aesthetic” is praised by Young Republicans in private group chats and it’s being woven into the very fabric of ICE’s brand ethos. That such language is even a part of the conversation is a red flag, and only adds to what Patricia calls Trump’s “authoritarian flex.” “I grew up in Chicago. It is a brawny, boisterous city, proud of its immigrant heritage,” she writes. Yet thus far Chicagoans, like the Portlanders in banana and dinosaur costumes, have kept the violence to a minimum, choosing to “fight back” against ICE with whistles and car horns. “Such subversion is a hallmark of authoritarian states,” Patricia notes. She also notes how the president has made no secret that he wants Pritzker and Chicago Mayor Brandon Johnson behind bars — threats that must be taken seriously, given Trump’s penchant for going after his political foes. As the days go by and more horror stories emerge from the administration’s crusade — a 13-year-old boy in a detention facility, a pastor shot in the head with pepper balls while praying, ICE agents crashing a Spanish Mass — perhaps people will wake up to this dark reality. “I have repeatedly pointed out the Biden administration’s failings on immigration, and given the Trump administration credit for securing the border. Criminals who are here illegally should be deported,” Patricia says. “But frightened parishioners cowering inside a church? That’s an image from an authoritarian state — not something I want to see in the United States of America,” she concludes. Read the whole thing. Bonus Defense Reading: Trump is reconsidering where America draws its forward line of defense. — Hal Brands The “debasement trade” is having a moment — which is great news if you’ve been looking for a new phrase to sound smart (or mildly unhinged) at your next dinner party. Just mutter it confidently and watch heads turn. Is the food cold? Blame it on the debasement. Is the conversation dull? The great debasement could fix that. Sure, someone at the table might think you’re talking about a club in Bushwick called “Da Basement,” but that’s a risk worth taking. As for actually doing the trade? Proceed with caution. According to Marcus Ashworth, debasement is “a catchy term for all manner of investor hairpulling about runaway deficits and the dollar’s threatened primacy — and an apparent flight for refuge that means shunning sovereign debt and related currencies, and snapping up precious metals, crypto coins and other shiny stuff instead.” And you wanna know what Marcus thinks? It’s pretty much hogwash. Joe Weisenthal isn’t sold on the term, either. “If investors were, in fact, responding to fears of debasement, I would imagine they would be more excited about investing in a stock like Colgate-Palmolive. People are always going to need to brush their teeth after all, no matter what’s happening with deficits or monetary policy,” Joe wrote on Tuesday. Marcus suspects debasement is just a convenient talking point for hedge fund types like Ray Dalio, Ken Griffin and Jamie Dimon — people who have “an interest in talking up so-called momentum trades, where you bet that already overheated assets like gold will keep soaring,” he explains. In reality, the dollar is not in grave danger. Gold is surging, but that doesn’t mean it’s going to replace major securities markets and currencies. “Sensible central bank reserve managers won’t be swapping relative safety for assets at the top of a bull run,” Marcus says. And if they’re not going for gold, they’re certainly not going for Bitcoin: “While Bitcoin is regarded as some form of digital gold … its behavior during times of trade stress is totally different. During this year’s two biggest flare-ups over rare earths, in April and again in the last few days, gold has held steady or even rallied, while Bitcoin has tumbled,” John Authers writes. Given all that, the “debasement trade” sounds more like a meme than an actual movement. Be sure to say that at the dinner table! Bonus Hedge Fund Reading: Thames Water’s creditors need to cede ground now to pave the way for a bigger payback in future. — Chris Hughes | 
