"fascists"

Hi Global Recap readers,

With the arrest of the Telegram CEO Pavel Durov, two things became clear:

• Billionaires are not immune to arrest.

• The limits of freedom of speech, if any, need to be discussed.

This means: With calls for Elon Musk’s arrest and the current political climate aiming to put more stringent restrictions around freedom of speech, Elon Musk is not immune either—particularly when he labels a country’s government as “fascists.” 👇

🇦🇺 AUSTRALIA
Musk vs Australia

Australia’s Labor government is pushing for a new law to combat “misinformation.”

In response, Elon Musk has labeled the government “fascists” for the proposal.

Proposed Legislation

• The law could fine tech platforms up to 5% of their global revenue.

• Platforms must set codes of conduct to prevent “dangerous falsehoods.”

• A regulator will enforce standards and fines for non-compliance.

Complexities

This might sound reasonable at first, but the issue becomes complicated when defining “falsehoods.”

• As revealed by Meta’s CEO Mark Zuckerberg and the “Twitter Files,” the Biden administration pressured social media platforms to censor user content the government deemed as COVID “misinformation.”

• However, many of these so-called “conspiracy theories”—such as the lab leak theory, vaccine side effects, and natural immunity—later proved to contain some truth.

Musk’s Reaction

Musk, a self-proclaimed free-speech advocate, didn’t hold back.

• He responded to the news with one word: “Fascists.”

• His comment drew criticism from Australian lawmakers.

• Government Services Minister Bill Shorten mocked Musk’s shifting stance on free speech.

Government’s Stance

Australian officials are standing firm on the proposed law.

• Communications Minister Michelle Rowland emphasized transparency and accountability.

• Assistant Treasurer Stephen Jones argued against allowing harmful content under the guise of free speech.

Previous Clashes

This isn’t Musk’s first run-in with the Australian government.

• In April, X challenged a cyber regulator’s order to remove posts about a stabbing.

• Prime Minister Anthony Albanese called Musk an “arrogant billionaire” during the dispute.

📊 Poll

🇬🇧 UNITED KINGDOM
Banksy Artwork Stolen

I’m sure you’ve seen this artwork by the famous anonymous artist, Banksy.

It’s called “Girl with Balloon” and is one of his most iconic pieces, valued at around $355,000. It was on display at a London gallery, but it was stolen.

And now, the perpetrators have been arrested.

The Heist

Two men were arrested for stealing Banksy’s artwork.

• Larry Fraser, 47, and James Love, 53, were caught on surveillance video smashing the gallery’s glass door and snatching the artwork.

• The artwork was stolen from the Grove Gallery on Sunday night.

Recovery

The stolen artwork has been recovered and returned to the gallery.

• Police did not elaborate on how or where they found the artwork.

• The suspects appeared in court and are being held in custody until their next hearing on October 9.

Iconic Artwork

“Girl with Balloon” is one of Banksy’s most famous pieces.

• Originally stenciled on a wall in east London, it has been endlessly reproduced.

• A version of the artwork partially self-destructed during a 2018 auction, selling for $1.4 million before shredding itself.

• The shredded work, retitled “Love is in the Bin,” sold for $25.4 million in 2021.

🇺🇸 UNITED STATES
Interest Payments Surge

The US government has hit a new milestone, spending over $1 trillion on interest payments for its $35.3 trillion national debt.

• This is largely due to the Federal Reserve raising interest rates to 5.50% to combat inflation, though it has also placed a significant financial burden on the US at the same time.

• When will this eventually backfire on the US? How long can the US continue to kick the deficit problem down the road?

Record Interest Payments

• The Federal Reserve’s high benchmark rates have led to $1.049 trillion in debt service costs, a 30% increase from last year.

• Net interest payments, after subtracting government investment earnings, total $843 billion.

Budget Deficit Increase

The budget deficit surged in August, nearing $2 trillion for the year.

• The August shortfall was $380 billion, a stark contrast to the $89 billion surplus from the same month last year.

• The 2024 deficit is just shy of $1.9 trillion, a 24% increase from the previous year.

Federal Reserve’s Role

The Federal Reserve’s actions have influenced Treasury yields and interest rates.

• The Fed is expected to lower rates by a quarter percentage point next week.

• Treasury yields have tumbled, with the 10-year note yielding about 3.7%, down since early July.

🇨🇳 CHINA
China Delays Retirement

China is shaking things up with a new plan to delay the retirement age, starting January 1.

This change is set to roll out over 15 years, aiming to address the country’s aging population and pension crisis.

New Retirement Ages

China is pushing back retirement ages for both men and women.

• Men will retire at 63, up from 60.

• Women will retire at 55 or 58, depending on their occupation, up from 50 or 55.

Pension Period Extension

The minimum working period for pensions is also changing.

• Employees will need to work for 20 years to receive a monthly pension, up from 15 years.

• These changes will start in 2030.

Public Reaction

The announcement has sparked mixed reactions on social media.

• Some are relieved the changes aren’t more drastic.

• Others are worried about delayed pensions and job market strain.

Economic Context

China’s demographic challenges are driving these reforms.

• The elderly population is growing rapidly, with over 20% aged 60 and above.

• The pension system is under pressure, with forecasts suggesting it could run dry by 2035.

🇷🇺 RUSSIA
New Russian Kamikaze Drone

With the threat of World War III looming, Russia is ramping up its military capabilities by developing a new type of suicide drone.

Russia has started producing a new long-range attack drone called the Garpiya-A1, using Chinese engines and parts, which has been deployed in the war in Ukraine.

Production Details

The production of Garpiya-A1 began last year.

• More than 2,500 drones were produced from July 2023 to July 2024.

• The drones are made by IEMZ Kupol, a subsidiary of Almaz-Antey.

• The production site is a former cement factory in Izhevsk, Udmurt Republic.

Chinese Involvement

The new drone incorporates Chinese technology.

• The Garpiya uses Chinese engines and parts.

• The engines are produced by Xiamen Limbach in China.

• Chinese companies Juhang Aviation Technology and Redlepus Vector Industries supply parts.

Deployment and Impact

The Garpiya has already been used in Ukraine, causing significant damage.

• The drone has caused damage to critical infrastructure and resulted in casualties among both military and civilian targets.

• It marks a shift from Russia’s reliance on Iranian drones.

International Reactions

The use of Chinese components has raised concerns.

• NATO has called on China to stop supporting Russia’s war efforts.

• The US has warned Beijing over its support for Russia’s defense industry.

• China has stated it controls the export of items with potential military applications.