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President Trump's Iran agreement remains under pressure after a fresh round of retaliatory strikes by the U.S. in and around the Strait of Hormuz. Iran allegedly targeted a commercial cargo ship with attack drones, U.S. forces responded by striking Iranian missile, drone, and radar sites.

So the ceasefire is shaky but it seems …..

Against that backdrop, last night, American Conservative executive director Curt Mills and Will Chamberlain of the Article III Project joined prolific author Michael Malice to debate whether Trump struck the right deal, whether preserving stability in the Strait of Hormuz justifies the concessions to Tehran, and what the agreement means for the factional battle within the Republican party… also Israel :)

Below were the highlights for those short on time:

Voting Dems over Neocons in ‘28

The Iran war (and how a deal pans out) will have an effect on the future of the Republican Party, but the old guard retaking power could simply leave millions done with voting…

Mills said he supported Trump because he represented "a different type of conservatism," warning that if the GOP simply reverts to "Jeb Bushism, Scott Walkerism, Mitt Romneyism," then "I'm just not that interested in the project."

Chamberlain challenged Mills' past comments about voting for Ro Khanna over Marco Rubio, calling the idea "crazy" and accusing Mills of "enabling communists." Mills responded that if Republicans nominate "the absolute worst nominee for my interests," such as Rubio or Ted Cruz, while Democrats nominate "the only one that I feel like is responding and speaking plain English," then "yeah, I would consider it,” which Chamberlain deemed  “insane."

pic.twitter.com/OMmAQa0FH7

— ZeroHedge Debates (@zerohedgeDebate) June 27, 2026

Side Debate: Deport Mehdi Hasan?

Chamberlain argued strongly for denaturalizing and deporting foreign born “commies,” namely Mehdi Hasan, Ilhan Omar, and the like.

Recently naturalized citizens who are hostile to the United States, he said, should lose their citizenship, saying, "Communism is where everything has its limit."

Hasan may suck, Mills countered, but he’s not a communist."Do you think Mehdi Hasan is a Marxist-Leninist... who has deep opinions about Trotsky versus Stalin?” Mills added that deporting legal residents over heated political disputes is a dangerous path and against the “American Spirit”.

Chamberlain still held that Hasan is "extraordinarily hostile to America and its interests... I think that he should be deported. He's a British Islamist." 

pic.twitter.com/DwsxHVHSUe

— ZeroHedge Debates (@zerohedgeDebate) June 27, 2026

We highly recommend the full debate included below. Also feel free to watch on YouTube or listen on Spotify.

https://t.co/PgdhEZ2LUX

— zerohedge (@zerohedge) June 26, 2026

Last Thursday, in the aftermath of Apple's biggest one day plunge since Liberation Day, and second biggest single-day drop ever...

.... when the company lost over a quarter trillion dollars in market cap after the company's unprecedented price increase announcement  which for some products was as much as 50% as Apple decided to pass on soaring component costs to consumers, following similar moves from other consumer electronics companies....

...  and which Apple blamed on "unsustainable" prices by the memory cartel - namely SK Hynix, Samsung, Micron and Sandisk - who have been flooded with unprecedented demand from hyperscalers (freshly funded with hundreds of billions in newly-issued investment grade debt) we predicted that "China's memory makers are waiting by the phone" for a disgruntled Tim Cook to call, demanding bulk, cheaper RAM.

*APPLE SHARES CLOSE DOWN 6.1% IN BIGGEST DROP SINCE APRIL 2025

China's memory makers are waiting by the phone

— zerohedge (@zerohedge) June 25, 2026

To be sure, Apple wasn't alone: just hours later Microsoft also announced it was raising Xbox prices, in effect launching an avalanche of memory-driven price increases across the industry, now that it has been normalized to pass on soaring memory prices to consumers.

This, in turn, takes place following a series of reports - initially on this website almost a month ago which showed that the recent surge in core inflation is largely due to runaway chip/memory prices as Apple has since confirmed...

At what point does Trump start raging at soaring memory prices

PPI Electronic Components is pulling entire core index higher pic.twitter.com/v9ufHmx0gG

— zerohedge (@zerohedge) June 11, 2026

... followed last week by the WSJ also joining the chorus by reporting that "the Data-Center Boom is sparking a third wave of inflation."

Fast forward to this morning when with AI stocks tumbling as "check/capex payers", including AAPL, get crushed, while "check/capex receivers" soar...

Hyperscalers vs Chips pic.twitter.com/qtYEDM8lQ7

— zerohedge (@zerohedge) June 25, 2026

... the abovementioned Chinese memory makers did not have long to wait, and overnight the FT reported that Apple is lobbying the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon as put on a blacklist because of alleged connections to the People’s Liberation Army. 

As we expected, the iPhone maker has been waging a lobbying campaign to get the White House’s blessing in order to ease the financial pressure of the rise in memory chip prices. A person told the FT that Apple approached the commerce department more than a month ago, but the tech company has been targeting other officials across the administration and allies in Washington.

Apple is not barred from buying chips from China's DDR giant CXMT, or YMTC, another Chinese memory chipmaker which focuses on NAND memory and has been growing its market share aggressively, having caught up to Sandisk, and set to become the world's 3rd largest maker of flash memory as soon as this quarter 

But the Pentagon has put both companies on its Chinese Military Company blacklist. The so-called 1260H list contains dozens of Chinese groups with alleged ties to the PLA that undermine US national security.

Securing CXMT as a memory supplier would help remedy a situation in which the tech giant is being squeezed by its own suppliers, a position in which Apple has never been before .

The lobbying campaign comes after President Donald Trump met his Chinese counterpart Xi Jinping in Beijing last month. Ahead of the summit, and in the months ahead of their previous meeting in South Korea in October, the US has held back from introducing new technology-related export controls that would affect Chinese companies.

As the FT notes, the Pentagon’s 1260H list creates reputational risk for companies, but in most cases it has no legal ramifications. We said as much just hours earlier when we said that those "worried about Chinese memory roadblocks by the US govt to ease memory inflation forget Trump undid 40 years of Iranian sanctions to lower the price of oil." And now that oil price inflation is contained, Trump has memory-driven cost-push inflation to fix ahead of the midterms, and whether he wants to or not, the only option his Admin has - besides imposing a price ceiling on memory (which may still come) - is to agree with Apple's request.

Last year, when memory prices were far lower and domestic producers did not have their customers by the throat with record chip prices and chip inflation was not yet the biggest driver of core prices, the commerce department added CXMT to a package of Chinese groups it intended to place on a trade blacklist called the “Entity List”. But the White House told it to hold off on new export controls because the administration was in the middle of tough negotiations with China to try to reach a truce in the trade war.

In any case, the FT notes that it remains unclear if Apple would get any guarantee from the administration, especially a promise that the US would not later put CXMT on the Entity List. Trump last year agreed to let Nvidia sell advanced H200 chips to China, a move many of his officials opposed.

In February, the Pentagon updated the 1260H list before withdrawing it within an hour. Several people said it was removed because the White House was angry that someone at the Pentagon had taken CXMT and YMTC off the list. When the Pentagon re-released it this month, both of the Chinese memory chip manufacturers had been reinstated.

“Apple choosing to partner with a Chinese military company would be a grave mistake,” John Moolenaar, the Republican chair of the House China committee, told the FT. However, he expect that the Republican will rapidly change his tune once there is public outcry in a the next few weeks against soaring electronic component prices, which will ultimately be blamed on runaway memory costs. 

“Helping the [Chinese Communist Party] succeed in its plans to dominate critical supply chains will make our country’s tech industry and economy more dependent on China at a time when we must build secure tech supply chains with our allies,” Moolenaar said, seemingly unaware that by not using Chinese components, he is allowing South Korea's memory cartel dictate not only US inflation but also the country's monetary policy, now that even Fed officials are pointing to AI/memory prices as key inflation drivers.

• *KASHKARI: INFLATION DRIVEN BY SUPPLY ISSUES, INCLUDING AI-BUILD

Readers may recall that back in 2022 - when the world's faced another major surge in chip and component prices due to the logistical nightmare following covid - Apple faced a backlash when it considered buying memory chips from YMTC for iPhones to be sold in China. Marco Rubio, who was then the top Republican on the Senate intelligence committee, told the FT that “Apple was playing with fire”. Back then Rubio added that Apple would be “subject to scrutiny like it has never seen from the federal government” if it proceeded to procure YMTC chips. However, back in 2022, memory hadn't emerged as the biggest source of rising core inflation. It has now, and should Rubio refuse to pivot on his position, he would promptly become the target of public ire over surging consumer goods prices. 

Yet even with Tim Cook, and soon all other US consumer electronics products makers pushing hard for alternative memory sources, the memory lobby won't give up easily on the (temporary) oligopolistic position the commodity makers have achieved. “It makes no sense for the administration to decouple America’s reliance on critical minerals from China, only to approve new dependencies in a field as critical as AI,” said Michael Sobolik, a security expert at the Hudson Institute. 

One former official warned the US risked losing another industry by letting Apple buy memory from a group that receives Chinese subsidies. “Trump can show the courage to keep American memory alive for our security and our competitiveness or pour it down the drain so [Apple chief executive] Tim Cook can squeeze out a few more points of margin.”

It wouldn't surprise us if the "unnamed former official" is on South Korea's payroll because while China is still a modest actor in the memory space, the actual giants are all located in South Korea: Apple relies on US chipmaker Micron in addition to South Korea’s Samsung and SK Hynix for the DRAM memory used in its devices.

Meanwhile, in advance of a historic flood of orders that could send its market cap soaring, we reported that China's DRAM giant CXMT has received regulatory approval to list in Shanghai for the largest mainland IPO since 2022 as the Chinese national champion positions itself to challenge the DRam incumbents. The IPO of its domestic NAND peer, YMCT, is set to follow just weeks later 

Oh, and for those confused what happens when a commodity price surges, the post-covid case study should serve well: in 2023, DRAM prices because of a supply glut. This was a boon for buyers such as Apple, which was able to secure massive amounts of cheap inventory. 

But the AI boom of the past three years has seen a reversal in fortunes for the memory suppliers. As hyperscalers spent hundreds of billions of dollars for AI infrastructure, demand for advanced DRam — known as HBM — has led to a protracted shortage of traditional memory for consumer electronics. 

However, now that the market has shown it will no longer reward ridiculous amounts of hyperscaler capex spending - a U-turn from the market's reaction function for much of the past year - especially now that most of the big chip spenders no longer generatepositive cash flow and forced to issue billions in new debt for every incremental order of memory...

... in the end it won't be Trump that decides the fate of memory prices: it will be hyperscalers' own shareholders who will eagerly punish their management teams for incremental capex spending, forcing these companies to come up with new and creative ways to use and optimize existing Ram (likely in the form of many more Software-driven TurboQuant moments) to come up with more efficient and faster models.

In any case, after soaring into the stratosphere for the past year courtesy of all Hyperscaler free cash flow and hundreds of billions in on and off balance sheet debt, the party is finally ending and the memory bubble is about to burst. 

Ukraine announced Saturday that it used its Flamingo cruise missiles overnight to strike Russia's Titan-Barrikady weapons plant, which reportedly manufactures parts for its powerful Oreshnik missile.

The military plant is in Volgograd, formerly Stalingrad, which is a major industrial city in southwest Russia. Writing on X, President Zelensky described it as a "major industrial complex" where Russia "produces artillery systems and specialized military equipment, including components for missile launch systems."

"Every Russian defense facility involved in the war against Ukraine is a legitimate target for our long-range strikes," he wrote.

The Associated Press reports, "Volgograd Gov. Andrei Bocharov confirmed an attack on a business in the region’s Krasnooktyabrsky district, saying 10 people had been wounded and taken to a hospital. He said production facilities at the site were damaged but did not identify the company."

Additionally, "Ukraine's state security service said Saturday morning that Ukrainian forces also struck an oil pumping facility in Russia’s Vladimir region that supplies fuel to Moscow, for the second time this month."

But on the other side of the border, Ukrainian media reports that Russia was also busy with now nightly airstrikes:

Russian forces targeted production facilities belonging to the Naftogaz Group, Ukraine's largest national oil and gas company, in the Poltava and Kharkiv regions.

The barrage of attacks included 129 drones, of which 113 were destroyed or jammed by Ukrainian forces, Ukrainian media reported.

The Russian overnight attacks on Ukraine killed two people and injuring more than 20, according to state officials.

At a moment much of the globe's attention remains fixated on Iran and the fate of energy shipping through the largely blocked Strait of Hormuz, the Ukraine war is rapidly escalating.

Footage shows Ukrainian FP-5 Flamingo cruise missile launches and precision strikes on the Titan-Barrikady Plant in Volgograd, Russia.

Titan-Barrikady, officially known as JSC Federal Scientific and Production Center "Titan-Barrikady," is responsible for producing heavy… pic.twitter.com/xTYF2k2dLy

— OSINTWarfare (@OSINTWarfare) June 27, 2026

Ukrainian leadership has issued some astounding stats on the escalation on its side of the border:

Russia attacked Ukraine with 1,400 drones and 1,500 guided bombs

President Volodymyr Zelensky stated on Saturday, June 27, that Russian forces deployed approximately 1,400 attack drones, 1,500 guided aerial bombs, and 19 missiles of various types, including ballistic missiles, against Ukraine over the past week.

In a statement published on Telegram, Zelensky noted that 15 Ukrainian regions were subjected to Russian attacks during the seven-day period. He highlighted that the cities of Kherson, Zaporizhzhia, Kharkiv, and Sumy faced near-daily bombardment.

But it also over the past week has sent projectiles into Russia in the thousands. Ukraine's asymmetric warfare strategy against Russia's much-larger and better armed military machine has put Kiev in significantly better position - in terms of potential negotiating leverage - than the status of a year or so ago.

Russian forces still have the upper-hand on the front line in the east, but the pain clearly being inflicted on Russia's economy can't be ignored at this point. There are reports of fuel shortages across dozens of regions and especially in Crimea over the past several days.

Multiple Ukrainian FP-5 “Flamingo” Cruise Missiles slam into the Moscow Institute of Thermal Technology’s “Titan-Barrikady” Defense Plant, which designs and produces parts for artillery and ballistic missile launchers, in the Southern Russian city of Volgograd. pic.twitter.com/pwTrnuHVL4

— OSINTdefender (@sentdefender) June 27, 2026

President Trump has lately suggested that Ukraine is doing well in the war, or at least much better than it once was. Kiev now feels the pressure to keep this narrative going, also so it can attract more and more weapons and intelligence help. But at some point Russia will feel it necessary to strongly reassert its red lines. This could come in the form of another massive escalation, and against 'decision-making centers'.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Milton Friedman’s famous one-liner that anchors half the inflation debates on financial television leaves out the part where the actual economics live. Once you put it back in, the doomist case gets a lot smaller.

Per Bylund recently wrote a sharp piece for The Daily Economy arguing that CPI and GDP have become Goodhart’s Law in action. When a measure becomes a target, it ceases to be a useful measure. He has a point, and we’ll come back to it. But the bigger problem with the inflation conversation isn’t really about CPI. It’s about the way the famous Milton Friedman inflation quote gets weaponized by people who almost certainly haven’t read past the comma.

The line you always hear is, “Inflation is always and everywhere a monetary phenomenon.” Full stop. Print money, get inflation, or corporations cause inflation. Then, the doomers grab a chart of M2 and a warning about hyperinflation.

That’s not what Friedman actually said.

What Friedman Actually Said

The complete sentence is,

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

That trailing clause changes everything.

The monetary doomists drop it because it complicates the bumper sticker. But “than in output” is where the real economics is.

Friedman was reasoning from the equation of exchange, MV = PQ. Money times velocity equals prices times real output. It’s an identity, not a theory. Where it gets interesting is when you ask which variable does the work. Friedman’s claim was that, over the long run, sustained changes in the general price level can come only from money growing faster than the economy’s productive capacity. Supply was already inside his framework. A collapse in output with steady money produces the same price effect as money growth with steady output.

So the “supply and demand drives inflation” intuition isn’t competing with Friedman. It’s living inside his model. The question is whether the imbalance persists, which depends on whether monetary policy accommodates it.

The Distinction Everyone Misses

Friedman drew a hard line between relative price changes and sustained inflation. That distinction is what gets lost in the modern debate.

When oil prices spike due to a war, consumers spend more on energy and necessarily less on everything else. Relative prices shift. Energy goes up, discretionary goods come under pressure. The general price level doesn’t have to rise unless monetary policy expands the money available to spend on everything. Without that accommodation, you get a one-time level shift in the price index, and then prices stabilize. That’s not inflation in Friedman’s sense. That’s a relative price adjustment.

This is why Friedman could call inflation “a monetary phenomenon” without being naive about supply shocks. He simply argued that supply shocks alone don’t produce sustained inflation. They produce volatility around a level. The trend in the level comes from the money side.

Here’s the problem with how this gets used today. Both the inflation alarmists and the cable news pundits flatten the distinction. The doomists see any money growth and forecast persistent inflation, ignoring that velocity might collapse and absorb the expansion. The pundits see any price spike and call it inflation, ignoring that without monetary accommodation, it’s likely to fade.

The 1970s are the clearest historical illustration of why both supply and money must be present for sustained inflation. Most people remember the decade as an “oil shock” story, but that’s only half right. CPI was already running hot before the 1973 Arab oil embargo and again before the 1979 Iranian revolution.

Money supply growth had been excessive for years, and interest rates had been held too low. The oil shocks didn’t create inflation out of nothing. They pushed an already-loosened cork out of an already-pressurized bottle. Lacy Hunt has been making essentially this argument about the current setup, and he’s right to flag the parallel. A supply shock landing on top of loose money is the configuration that produces a sustained inflation problem. A supply shock landing on a disciplined monetary base produces a level shift that fades.

Money Has to Grow for the Economy to Grow

Here’s where the doomist case really starts to fall apart. The accusation is that “money printing causes inflation.” But in a modern fiat system, every dollar of money in circulation is debt. Either it’s a commercial bank loan that created a deposit on the other side of the ledger, or it’s government borrowing financed through the banking system. There is no third option.

The Bank of England’s 2014 paper, Money Creation in the Modern Economy, laid this out explicitly. Banks don’t lend out reserves. They create deposits when they make loans, and the reserves are created in parallel. So the entire monetary base is, in a real sense, debt that has to be serviced with growing nominal income.

That has a structural implication that most armchair monetarists miss. If money doesn’t grow, the economy can’t grow either. Real debts (fixed in nominal terms) become heavier as nominal income stagnates. Defaults cascade. Credit contracts. You get 1933, which is exactly what Irving Fisher described in his debt-deflation theory. The system is built to require expansion.

So when someone screams about M2 going up, the relevant question isn’t whether M2 went up. M2 has to go up. The relevant question is whether it went up faster than the economy’s productive capacity could absorb it. That’s the real Friedman test, and it’s a much higher bar than the doomists set.

“In a debt-based system, the question isn’t whether money grew. Money has to grow. The question is whether it grew faster than what the economy can produce.”

Velocity Is the Missing Variable

The other piece almost nobody talks about is velocity. MV = PQ has four variables, not three. And V, the rate at which money circulates through the economy, is wildly unstable. Ignore it, and you get inflation forecasts that look ridiculous in hindsight.

Consider the cleanest natural experiment we’ve ever had. From 2008 to 2020, the Federal Reserve expanded its balance sheet by trillions through three rounds of quantitative easing. The doomists screamed about hyperinflation for the entire decade. It never came. Why? Because velocity collapsed. Banks parked the new reserves rather than lending them. Consumers deleveraged rather than spent. The money sat still. M went up, but V went down by roughly the same amount, and PQ barely moved.

Then 2020 happened. The Fed expanded the balance sheet again, but this time the government also sent stimulus checks directly into consumer bank accounts. Supply chains broke. Workers stayed home. And velocity, instead of falling, recovered. You had money growing fast, money circulating again, and productive capacity disrupted, all at once. Inflation hit 9.1% by June 2022.

That’s the cleanest example we’ll ever get of why the simple “M2 up means inflation up” framework is incomplete. Inflation emerged when M, V, and the supply constraint on Q all moved in the same direction simultaneously. The doomists were wrong from 2009 to 2020 because they ignored V. The “transitory” crowd was wrong in 2021 because they underestimated how all three would compound.

And now here we are in 2026, with a setup that’s worth watching closely. The Fed restarted bill purchases earlier this year, calling it a technical operation to ease strain in the repo market. Whatever the label, bank lending has surged. Loans and leases are growing at a 10% annualized pace. Commercial and industrial lending is running closer to 20%. Money supply is accelerating again. This is no longer a 2009-to-2020 regime where money sits idle on bank balance sheets.

The money is being put to work, the velocity question is firmly on the table, and the Treasury’s pivot to short-term bill issuance is forcing the Fed to operate at the short end of the curve whether it wants to or not. That’s the setup Friedman would have flagged. Money plus velocity plus a fiscal-monetary configuration that looks an awful lot like accommodation.

The Composition of Credit Matters More Than the Quantity

Beyond velocity, there’s a second piece that the bumper-sticker monetarism completely misses. Where the credit flows matters as much as how much credit gets created.

A dollar lent to build a factory expands future productive capacity, but a dollar lent to fund a stock buyback inflates current asset prices without expanding the economy’s productive capacity. A dollar lent to a consumer for a vacation expands current consumption without leaving any productive residue. Same dollar, same “money creation,” very different downstream effect.

The Austrians, including the school from which Bylund writes, have a real point here that monetarists routinely flatten. When credit funds are invested in malinvestment rather than productive capital, you can have apparent “growth” that’s really just hollowing out the productive base while inflating asset prices. Most of the post-2008 era worked exactly like this. Credit aggregates exploded, but the flow disproportionately went into financial assets, real estate, and corporate balance-sheet engineering. Consumer prices didn’t move much. Asset prices went vertical. That’s not inflation in the CPI sense. But it’s also not “growth” in any meaningful sense either.

The current AI capex boom is the live test of this framework. The bank lending surging through the financial system right now appears to be funding data centers, chip fabs, power infrastructure, and the related buildout. That’s productive credit by definition, as it expands future capacity to produce. If that’s what’s happening, the inflation impact of the recent money growth should be more muted than the simple M2 chart suggests, because Q is being expanded alongside M.

If, on the other hand, a large share of this credit is funding speculative valuations rather than real capacity, you get the Austrian outcome. Asset prices go vertical, productive capacity doesn’t expand to match, and the inflation eventually shows up either in consumer prices or in a brutal asset-side reversal. We won’t know which scenario we’re in for another year or two. But the framework tells you exactly what to watch. Track where the credit is landing, not just how much of it is being created.

How Different Schools Define Inflation

The reason these debates feel like everyone is talking past each other is that the underlying definition of inflation differs across schools. The table below lines up where each tradition starts and what it treats as the cause.

That last row brings us back to Bylund. His argument is that CPI and GDP have ceased to be useful measures because they’ve become policy targets. Goodhart’s Law in action. He’s not wrong about that. Price controls don’t fight inflation. They suppress the symptom (measured CPI) while worsening the disease, which is real shortages and capital misallocation. The 1971 Nixon wage-price controls are the textbook case. Government spending that produces no productive output really does inflate GDP without inflating wealth. The Soviet Union had impressive GDP growth on paper for decades before it collapsed because the “output” wasn’t producing things anyone valued.

So far, so good. But here’s where the critique runs into a wall. Bylund attacks the measures without proposing how policymakers, central banks, investors, or ordinary readers should actually operate without them. “Just understand the underlying concept better” isn’t operational. The Fed has to make decisions, allocators have to deploy capital, and investors have to make portfolio choices. You can’t run a $27 trillion economy on Austrian methodological purity.

Yes, CPI is flawed. Every serious economist knows it, but the answer isn’t to abandon measurement. It’s about using multiple measures rigorously, understanding their limitations, and triangulating. PCE, trimmed-mean CPI, sticky-price CPI, the Cleveland Fed’s median CPI, and M2 velocity-adjusted measures of money. These exist precisely because thoughtful people know any single number is insufficient. The “experts” Bylund attacks for treating CPI as ground truth are largely a strawman of cable news pundits and political talking points, not the actual analytical community.

What This Means for Investors

The bottom line is that both ends of the inflation debate are wrong in mirror-image ways. The doomists who quote Friedman as “money printer go brrr” stripped away the second half of his sentence, ignored velocity, and missed a decade of disinflation that should have updated their model. The CPI-is-everything crowd ignored the monetary side and got blindsided in 2021 by an inflation surge they kept calling transitory.

The synthesis that actually survives contact with the data is this. Sustained inflation requires money and velocity growing faster than productive capacity. In a debt-based system, money has to grow, so monetary expansion alone isn’t a signal of anything. The real signal is when the growth of money times velocity decouples from the growth of real output. That’s the Friedman test as he actually wrote it, and it’s still the right test.

For portfolios, this means that you should NOT:

• React to M2 data in isolation; look at M2 times velocity together.
• React to single CPI prints, look at the trimmed mean, and the sticky components.
• Assume government spending creates growth just because it shows up in GDP, ask whether it actually expanded productive capacity or just shuffled financial claims.
• Treat the measures as imperfect signals, not as ground truth, but don’t pretend you can invest without them.

There’s one more thing worth flagging for 2026. The Treasury is now funding a deepening deficit by tilting heavily toward short-term bill issuance, with the share of bills in total outstanding debt exceeding the 20% ceiling the Treasury Borrowing Advisory Committee recommends. When the borrower of last resort floods the short end of the curve, the central bank is pulled into providing liquidity there, whether it wants to or not.

That’s the textbook definition of fiscal dominance, and it’s the configuration that turns a discretionary central bank into an accommodator. Combine that with the bank lending surge and the AI-driven credit boom, and the relevant question for investors isn’t whether the Fed will tighten policy. The relevant question is whether the fiscal setup will leave the Fed any room to tighten in the first place.

That’s how you take Bylund’s Goodhart critique seriously without throwing out the analytical toolkit. And it’s how you read Friedman without becoming a caricature of him.