Trump Suggests NYC Mayor is Being Blackmailed into Supporting Open Borders

Ken Silva
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Trump Suggests NYC Mayor is Being Blackmailed into Supporting Open Borders

(Ken Silva, Headline USA) GREENVILLE, SC—Doubling down on his previous assertions that he can win New York in the 2024 presidential election, Donald Trump suggested Tuesday that New York City Mayor Eric Adams might be blackmailed into supporting the Biden administration’s open-borders policy, which has wrought havoc on the Big Apple.

Trump made his comments during a town hall event with Fox News host Laura Ingraham in Greenville, South Carolina.

The former president said he believes he can win New York due to the mass migration that has overwhelmed the area, with thousands of illegal immigrants sleeping on the streets.

Trump noted that Adams had been a vocal opponent of Biden’s border policy last year, until he became the target of a Justice Department probe into his political fundraising.

Trump was referring to the FBI’s raid last November of Adams’s top fundraiser, Brianna Suggs. It was revealed shortly thereafter that the FBI seized Adams’s cell phone and other personal devices during that raid.

The FBI is investigating potential illegal campaign contributions from the Turkish government to the Adams campaign, a violation of federal law, according to the New York Post. But just a month before that investigation was made public, Adams was decrying the toll immigration was taking on his city—making comments such as, “New York City has reached capacity and we don’t want to turn your aspiration for dreams into a nightmare.”

“I’m not even blaming the mayor. I think the mayor was told to take a back seat because they came after him like they’re going to indict him, and now he’s gone quiet. These are fascists, they’re terrible people. So I’m not blaming him,” Trump said of the situation.

Trump also reiterated his intent to campaign in New York.

“We have nine months left, but I’m going to see about Madison Square Garden, and we’re going to go to South Bronx and Queens and other areas,” he said.

Ingraham noted that Joe Biden defeated Trump by 23 points in 2020. But a recent poll from Siena showed the current President only up by 12 points ahead of Trump, she said.

Meanwhile, Adams has resorted to playing the race card as his poll numbers slump and his legal woes mount.

“Stand up, stand up, they need to see you. Have you ever seen this much chocolate lead in the city of New York?” Adams reportedly said at his own town hall earlier this month.

“And then go down the line, look who’s here,” Adams pleaded, before adding: “This is representative of the city. That’s why people hate me. You’re trying to figure out, why the hating on me?”

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

NYTimes Admits White House Hectored It over Negative Coverage of Biden’s Age, Polling

Contributing Author
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NYTimes Admits White House Hectored It over Negative Coverage of Biden’s Age, Polling

(Headline USA) The publisher of the New York Times admitted this week that the White House has been “extremely upset” with the publication’s coverage of President Joe Biden’s age and poor approval ratings.

Biden’s team has reportedly sparred with the Times on multiple occasions in recent months. In January, for example, a meeting between Times editors and Biden’s reelection campaign reportedly “did not go well” after Biden’s allies began criticizing their coverage of the president.

Semafor claimed the Biden campaign “invoked a spreadsheet laying out areas where the team believes their reporting has fallen short,” and used the meeting as an “opportunity to tell them what they’re getting wrong.”

Biden’s officials were also reportedly frustrated with the outlet’s “coverage of former President Donald Trump,” arguing that the media had been “too focused on his legal troubles and haven’t paid enough attention to some of his incendiary recent statements on the campaign trail.”

White House officials weren’t the only ones delusional about the Grey Lady’s warped coverage, however.

In a conversation with the Reuters Institute for the Study of Journalism on Monday, Times publisher A.G. Sulzberger sought to assuage concerns that the left-leaning paper was biased in its coverage toward Trump by claiming that the Times had been equally critical of Biden.

“We are going to continue to report fully and fairly, not just on Donald Trump but also on President Joe Biden” Sulzberger said, falsely claiming that the paper reported fairly on Trump. 

Ample evidence has shown the Times colluded with intelligence officials to push bogus narratives about Trump, including the Russia hoax, and that it has oftentimes been openly hostile and needlessly adversarial toward him.

Sulzberger himself has reportedly admitted in private conversations to embracing an anti-Republican double-standard in the paper’s coverage.

Biden, meanwhile, “is a historically unpopular incumbent and the oldest man to ever hold this office,” Sulzberger conceded.

“We’ve reported on both of those realities extensively, and the White House has been extremely upset about it,” he said. 

Despite Sulzberger’s claim, the Times has only recently hopped on board the Biden-bashing bandwagon, with its criticism becoming something of a newsworthy event in and of itself.

The precipitating event appears to have been the release of a damning special-counsel report by Robert Hur which suggested the 81-year-old president’s onset of dementia was more severe than previously reported.

The report presented something of a catch-22, offering Biden’s senility as the primary justification for avoiding criminal charges in his mishandling of classified documents.

Sulzberger insisted that concerns about Biden’s age were not “even” with Trump’s legal battles, all of which have muscled their way through the justice system on the flimsiest of merit using outlandish legal theories and rationalizations stretched to maximum capacity.

“They are different. But they are both true, and the public needs to know both those things,” Sulzberger magnanimously proffered. “And if you are hyping up one side or downplaying the other, no side has a reason to trust you in the long run.” 

Nevada’s Error-Ridden Voter Histories Raise Serious Election-Integrity Concerns

Jacob Bruns
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Nevada’s Error-Ridden Voter Histories Raise Serious Election-Integrity Concerns

(Jacob Bruns, Headline USA) The state of Nevada said it had identified technical issues that led to errors appearing in online voter histories, leading some to wonder if longstanding suspicions about rampant mail-in ballot abuse in the state had inadvertently been confirmed.

Las Vegas resident Daphne Lee, a Republican, told the Review–Journal that she checked online after hearing about the issue and found that her entire family’s mail-in ballots had been reported as counted in the state’s recent GOP primary, although none had participated.

Nevada Secretary of State Cisco Aguilar’s office released a statement Sunday admitting to the mistakes, KRNV reported.

According to the statement, officials “became aware of possible technical issues related to the vote history of individuals who did not participate in the Presidential Preference Primary.”

Many Nevadans opted instead to participate in the GOP caucus, which was officially recognized as the state’s nominating contest by the Republican National Committee and frontrunner Donald Trump. The primary, which took place two days prior, notably resulted in a decisive win for “none of these candidates” over runner-up Nikki Haley.

A spokesman for the Nevada secretary of state’s office blamed the reporting errors on individual counties still working to change over to new systems.

“The legacy systems used by a number of the counties require additional steps be taken to ensure that voters who did not return their ballot do not have vote history; some of those steps were not taken, which resulted in inaccurate data,” the spokesman said.

Aguilar’s office released an updated statement Monday night, expressing confidence that the erroneous voter history errors would be resolved soon.

According to the updated statement, the mistakes had no bearing on the recent election results.

“It is important to note that vote history is generated separately from election results,” the statement said. “Results on SilverStateElection.NV.gov and county canvasses of the votes are unaffected and accurate.”

The state planned to work overtime leading up to the June primaries in order to “remove the need for these outdated processes,” it added.

Nevada Gov. Joe Lombardo, a Republican, also blamed county-level officials for not adapting quickly enough to the latest ballot-counting innovations.

He noted that the secretary of state’s office was “working diligently to resolve the issue with their website.”

Naturally, Republicans, who have gotten the short shrift in the state in the past, were worried by the “irregularities” heading into the consequential 2024 election.

“We take these reports very seriously,” Nevada GOP Chairman Michael McDonald wrote in a statement addressing the ongoing issues.

“The cornerstone of our Republic is the trust and confidence of the American people in the electoral process,” McDonald added. “Any indication of irregularities must be thoroughly investigated to ensure the integrity of our elections.”

Prior to Lombardo’s election, while under Democrat control, Nevada passed one of the most expansive mail-in voting plans of all the states ahead of the 2020 election.

Not only did the state automatically send ballots to all active voters on its rolls, but it also permitted controversial ballot harvesting that permitted third parties to collect and return multiple ballots.

The rules assured that Clark County—home to Las Vegas and by far the largest and most corrupt of all the Nevada counties—had the power to effectively decide its statewide elections.

However, as the county’s former sheriff, Lombardo was able to prevail in 2022, ushering in hope that he could reform its shady election system and make the Silver State, once lorded over by corrupt Senate Majority Leader Harry Reid, competitive once more for Republicans.

According to recent polling averages, Trump currently enjoys a commanding lead of 7 percentage points over Democrat President Joe Biden in the state.

However, Republican senatorial candidate Adam Laxalt was likewise running comfortably ahead of incumbent Democrat Catherine Cortez Masto in the 2022 midterms, only to find his razor-thin Election Day victory overturned by late-arriving mail-in ballots.

Headline USA’s Ben Sellers contributed to this report. 

Biden Bungles Response to Question about Newsom Replacing Him

Luis Cornelio
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Biden Bungles Response to Question about Newsom Replacing Him

(Luis Cornelio, Headline USA) President Joe Biden appeared to dismiss persistent rumors suggesting that California Gov. Gavin Newsom, D-Calif., might take over the Democratic presidential candidate due to concerns about the incumbent’s mental faculties. 

As Biden departed Tuesday for a three-day fundraising trip to California, a reporter queried whether Newsom should “stand by” for a potential DNC emergency.

“You’re going to California. Is this about coming up with a Plan B for 2024?” a reporter asked. “Does Gavin need to stand by?”

Biden seemed to sidestep the question, flashing a bright white smile. Instead, Biden retorted nonsensically: “Are you ready? Well, I’m looking for— I’m looking at you. We’re looking at you.”

As the reporters spoke over each other, seemingly vying to ask a question, Biden interjected by announcing imminent Russian sanctions in response to the contentious death of Russian opposition leader Alexei Navalny. 

While these sanctions could exacerbate an already delicate global stage, Biden is grappling with a laundry list of scandals rocking his 2024 re-election bid. Immigration, inflation, an impeachment inquiry, low polls and questions about his age are among these challenges. 

Notably, some observers have considered Newsom, a younger and charismatic Democrat, as a potential replacement for the Biden 2024 ticket. 

Despite Newsom consistently denying any aspirations for a presidential bid, the Democratic governor has fielded questions about such a scenario. 

In January, Newsom declared there was no chance of him running for the Democratic ticket. Simultaneously, he hailed Biden as a “man of character” with “a record of accomplishments.”

He added, “I’m old school. Talk about loyalty, I’ll go to the ends of the earth for this guy, I really would. I’m not making that up.”

During a GOP presidential debate in September 2023, Newsom deflected Fox News host Sean Hannity’s inquiries about accepting the DNC nomination. 

“Yes or no, will you ever, ever accept the Democratic nomination to run for president in 2024 under any circumstances at all? That’s a yes or no,” Hannity asked, to which Newsom replied: “No. Biden is going to win this reelection.”

Texas May Be the Last Line of Defense in Soros’s Scheme to Control Airwaves

Jacob Bruns
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Texas May Be the Last Line of Defense in Soros’s Scheme to Control Airwaves

(Jacob Bruns, Headline USA) Globalist oligarch George Soros is on the verge of acquiring Audacy, one of the largest radio-show networks in the United States—a network that claims to be able to reach over 200 million people—according to bankruptcy filings reported last week by the New York Post.

The radio network, which includes more than 200 individual stations, recently filed for Chapter 11 bankruptcy in the Southern District of Texas. In response, Soros Fund Management bought hundreds of millions of shares of its debt for 50 cents on the dollar.

The acquisition, ahead of the 2024 election, would continue to expand on the far-left political donor’s growing media empire—which is known to include stakes in the failing Vice Media website, roughly two-dozen local Maine newspapers and at least 18 formerly conservative Spanish language radio stations.

It also could silence scores more conservative broadcasters, warned the David Horowitz Freedom Center’s Front Page Mag.

“[W]hile Audacy is not an inherently conservative company, it owns a number of talk radio stations,” wrote FPM’s Daniel Greenfield.

“[A]nd the talk radio format caters to commuters, early risers and working people,” he added, “which is to say conservatives.”

The only thing that could stop Soros’s bid to seize control of the network is the state of Texas, Greenfield noted.

Texas Attorney General Ken Paxton may have a chance to examine the bankruptcy deal before it goes through, particularly on the grounds that it might affect the Texas airwaves.

“Audacy’s reach includes Texas where it has at least one conservative talk radio station, KJCE which, along with local talent, broadcasts Sean Hannity, Dana Loesch and Frontlines of Freedom,” Greenfield wrote.

Thus, “… local officials can determine whether the bankruptcy deal and the subsequent Soros takeover will impact the Texas market and viewpoint diversity,” he added.

The Left has used a similar argument to stop conservatives from gaining control over their own media operations in the past.

In 2021, for instance, a Florida Latino radio station called Caracol 1260 AM was acquired by a group that included a number of conservative Hispanics.

In response, the Congressional Hispanic Caucus, a Democrat organization, sounded the alarm and alerted the Federal Communications Commission, which promptly blocked the sale.

“To win in 2022 this must stop!” former Rep. Debbie Mucarsel–Powell, D-Fla., argued at the time, alluding to the upcoming elections.

Of course, support from the Democrat-controlled FCC does not go both ways. In 2022, Republican Sens. Tom Cotton and Marco Rubio tried to protest Soros’s takeover of Radio Mambi, Miami’s flagship conservative station at the time.

The senators warned that “far-left ideologues are attempting to consolidate and expand their control over the media, so they can flood the airwaves with propaganda.”

Still, the FCC did nothing, allowing the takeover.

Paxton, who recently announced an investigation into another Soros-funded operation—the propagandist Media Matters, after it spread salacious rumors to try to smear Twitter owner Elon Musk as an anti-Semite—is unlikely to shy away from such an endeavor.

“Texas state officials have a duty to thoroughly scrutinize the parameters of the agreement, its local impact and any issues that may arise from the new role of the Soros organization and what its management role may be,” Greenfield wrote.

“… Some debt holders have already filed objections,” he said, “and while the matter is before a judge in a progressive part of the state, Texas officials do have some options that they can explore.”

Headline USA’s Ben Sellers contributed to this report.

Pro-Women’s Activist Riley Gaines Confident SCOTUS Will Take Up Title IX Case

Matthew Doarnberger
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Pro-Women’s Activist Riley Gaines Confident SCOTUS Will Take Up Title IX Case

(Matthew Doarnberger, Headline USA) Despite recent setbacks, activist Riley Gaines conveyed strong optimism that the U.S. Supreme Court would soon disallow biological men from competing in women’s sports.

“There’s a couple of big cases that I am excited for which will probably make it up to the Supreme Court,” Gaines told Newsweek. “The Supreme Court has never heard a Title IX case—it would be huge.”

The 1972 law for equal rights in education says that “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.”

However, pro-women’s advocates argue that radical leftists, led by the Biden administration, have now fundamentally subverted the law’s meaning and intent by adding “gender identity” and changing the definition of womanhood to include non-biological “females.”

“It’s very simple because Title IX is only, like, 37 words,” Gaines said.

“It’s not like it’s hard to interpret or understand,” she added. “It’s just being able to define that word sex … We’ve never struggled to define that word before.”

What progressives now see as a groundbreaking movement in civil rights would have been regarded by past generations as perversion or even sexual assault, she noted.

“If you look at this at the most basic level, we were not asked for our consent, we did not give our consent yet there was a naked man taking his clothes off inches away from where we were taking our clothes off,” she said. “I mean how else could you describe sexual harassment or sexual misconduct or sexual abuse?”

Although the Supreme Court has dodged the issue in at least two recent cases, Gaines said it stood a strong chance of accepting Soule v. Connecticut Association of Schools—a case brought by four former high-school track-and-field runners, including sprinter Chelsea Mitchell and the lawsuit’s namesake plaintiff, Selina Soule.

After being required under Connecticut law to compete against two transgender-identifying athletes who dominated the field of biological females, the plaintiffs argued that they were “denied medals, placements or advancement opportunities because of the male athletes competing in our events,” according to the Daily Mail.

The four, who have since graduated, have faced a long road with the support of the pro-Christian Alliance Defending Freedom—and may still have a ways to go before reaching the nation’s highest court.

In December, the full 2nd Circuit Court of Appeals reinstated the case en banc, allowing it to be heard before a federal district court, after it was earlier dismissed by a three-judge panel.

“I’m very hopeful this case in particular will be heard by the Supreme Court, which will be the first ruling we have on a Title IX case—which is huge right now considering what the Biden administration is doing to Title IX, which is a totally illegal administrative rewrite,” Gaines said.

“I think to get it into the Supreme Court would be monumental, and I’m looking forward to it,” she added.

Gaines, a former top swimmer at the University of Kentucky, become a champion of women’s-only competition following her own experience competing against transgender swimmer Lia Thomas in 2022, where the two tied for fifth place in the 200-yard freestyle race.

Thomas, who had been a mediocre male swimmer, also won the 500-yard freestyle race at the same meet.

Since becoming an activist, however, Gaines has, at times feared for her own life, she told Newsweek.

“I’ve been in situations now where … I was physically assaulted, I was held for ransom for four hours by these protesters, I’ve been spit on, I’ve had drinks poured on me, glass bottles thrown at me, I’ve been called the most obscene things you can imagine, I’ve had drones flying above my house, people showing up to my house, people staking outside my hotel room when they find out where I’m staying,” she said.

“At first it did really scare me, but I realized pretty quickly actually that that’s exactly what they’re trying to do—scare me and scare me into silence,” she continued.

However, “… even in the face of fear, I feel I’m someone who’s not going to back down from doing what I feel to be right and fair and moral and just.”

Headline USA’s Ben Sellers contributed to this report.

Secretary of State Warns Department Employees Against ‘Misgendering’

Matthew Doarnberger
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Secretary of State Warns Department Employees Against ‘Misgendering’

(Matthew Doarnberger, Headline USA) With U.S. embassies worldwide fearing the outbreak of global warfare involving China, Russia, Iran, Hamas and a whole host of adversarial nations now part of the BRICS alliance, Secretary of State Antony Blinken recently drew a firm red line on one issue that he considered to be non-negotiable.

On Feb. 5, Blinken sent a diplomatic cable instructing State Department employees of the not to make assumptions about a person’s gender based on their appearance or name, the National Review reported.

Such problematic assumptions, according to Blinken, could be harmful and exclusionary.

In the cable, titled “Modeling DEIA: Gender Identity Best Practices,” he advised against even using common terms like mother/father, son/daughter and husband/wife.

Instead, it identified more appropriate language such as “everyone,” “folks,” “you all”  “parent,” “child,” and “spouse” or “partner.”

A person’s “innermost concept of self as masculine, feminine, a blend of both, or neither … may or may not correspond with one’s sex assigned at birth,” said the memo, which appeared to plagiarize its definition of gender identity directly from the far-left Human Rights Campaign.

After imposing a mandate last May that State Department employees include their preferred pronouns embedded in their email signatures, Blinken’s memo went on to suggest that those pronouns could include “she/her, he/him, they/them, and ze/zir.”

More than one set of pronouns, or all pronouns should be acceptable according to this policy, the memo noted.

The State Department said last year that it would offer counseling to anyone hurt or upset following an email glitch that temporarily sent the wrong pronouns to staff members.

Advancing identity politics in government has been a top priority for the Biden administration—often to the detriment of its policymaking and decision-making.

The first two executive orders Joe Biden signed as president were focused on “Advancing Racial Equity and Support for Underserved Communities through the Federal Government” and “Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.”

Report: CIA Chief and 2020 Election Interferer Now Endorsing Nikki Haley

Ken Silva
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Report: CIA Chief and 2020 Election Interferer Now Endorsing Nikki Haley

(Ken Silva, Headline USA) Former CIA Director Michael Morrell—one of the 51 disgraced intelligence officials who called the Hunter Biden laptop story “Russian disinfo” ahead of the 2020 presidential election—is now endorsing virulent neocon and GOP presidential hopeful Nikki Haley.

Journalists Lee Fang and Jack Poulson first reported Morrell’s endorsement Tuesday on Substack.

“Federal Election Commission records show that Morell, the former acting director of the Central Intelligence Agency, who served in senior intelligence roles under President Barack Obama and George W. Bush, gave the former South Carolina governor $1,000 in November,” they reported.

“Morell did not respond to a request for comment. We also asked whether he planned to formally endorse Ambassador Haley’s campaign through an opinion column, as he did for Hillary Clinton in August 2016.”

A  Judiciary Committee report last year found that Morrell was not only one of the “Dirty 51” who downplayed the Hunter Biden laptop story—he was one of the principle organizers of that group.

Judiciary Committee Chairman Jim Jordan, R-Ohio, specifically noted last year two connections between the Bidens and Morrell, as well as between the Bidens and Nick Shapiro, a former adviser to another Obama-era CIA director, John Brennan.

“It seems to me that one of the key players here was Michael Morell, that he was one kind of coordinating this, working this together,” Jordan said last year.

Morrell joins a host of unsavory characters to endorse Haley, including Jeffrey Epstein’s former banker, JPMorgan CEO Jamie Dimon.

Dimon reportedly endorsed Haley last November at a conference hosted by the New York Times’ DealBook franchise.

“Even if you’re a very liberal Democrat, I urge you, help Nikki Haley, too. Get a choice on the Republican side that might be better than Trump,” Dimon reportedly said.

Haley has presented herself as the GOP’s anti-populist candidate.

Among other positions, Haley has endorsed escalating U.S. involvement in the wars in Ukraine and the Middle East, removing caps on American corporations hiring foreign workers, and removing anonymity from the internet.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

Patriot Front Members Appeal Conspiracy to Riot Convictions

Ken Silva
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Patriot Front Members Appeal Conspiracy to Riot Convictions

(Ken Silva, Headline USA) Four members of the white nationalist group Patriot Front have appealed their misdemeanor convictions of conspiring to riot at an LGBT event in Idaho in 2022—raising numerous issues on appeal, including that they were denied exculpatory evidence.

The Patriot Front appellants—Devin Center, James Johnson, Forrest Rankin, and Robert Whitted—were sentenced to five days in jail after being found guilty last July. Their case stemmed from an incident where 31 Patriot Front members, including one identified as its founder, were arrested June 11, 2022, after someone reported seeing people loading into a U-Haul van like “a little army” at a hotel parking lot in Coeur d’Alene.

But after those initial convictions last July, the state’s case against the Patriot Front began to collapse.

In August, Judge Destry Randles dismissed charges against Patriot Front member Richard Jessop, finding that a prosecutor acted in “bad faith” by failing to provide the defendant with possibly exculpatory evidence.

Then, last October, Judge Randles dismissed the charges against Patriot Front leader Thomas Rousseau for the same reason.

The appeal filed last week by Center said that the exculpatory evidence included cell phone messages that would have shown they intended to act peacefully at the 2022 LGBT event.

“The contents of a cell phone that would have corroborated that Appellants had no intentions of committing the supposedly intimidating actions the State charged them with committing,” they said in their appeal.

The defendants also raised several other First Amendment-related issues in their appeals, arguing that their plans to counterprotest the LGBT event were constitutionally protected.

For instance, the state criminalized the fact that Patriot Front members wore masks to conceal their identities. But wearing masks to protests is a First Amendment-protected activity, the defendants said in their appeal.

“One of the State’s major themes at trial was that Patriot Front members, including Appellants, sought to protect their identities by wearing masks and uniforms and using a U-Haul to travel together,” they said.

“These steps, the State argued, supposedly implicated their intentions to engage in unlawful activity. A right to associate and express oneself anonymously, however, has long been recognized in First Amendment and free speech jurisprudence.”

Idaho prosecutors have yet to respond to the appeals.

As for the exculpatory evidence, former FBI agent Kyle Seraphin has explained that the FBI obtained Patriot Front members’ phones after the arrests.

FBI officials apparently wanted to search all those phones. However, the Supervisory Senior Resident Agent in Idaho refused to write a search warrant for the phones because a federal crime hadn’t been committed.

Seraphin said in November 2022 that FBI Headquarters removed the SSRA—the Idaho Tribune identified him as Special Agent Zach Schoffstall—from his position. And earlier this month, Seraphin said Schoffstall has been fired from the bureau.

“The @FBISaltLakeCity removed him from his position, gave him a penalty TDY, and brought in a ‘company woman’ who signed off on the Search Warrant and likely violated the Constitutional protections of no unreasonable search/seizure.”

Meanwhile, the Patriot Front’s legal troubles continue, as the group faces multiple civil lawsuits. In at least two of those cases, Patriot Front leaders have been accused of going “underground” to avoid being served.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

Another Inflation Signal: Producer Prices Unexpectedly Spike

Money Metals News Service
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Another Inflation Signal: Producer Prices Unexpectedly Spike

(Mike Maharrey, Money Metals News Service) I have argued that despite cranking up interest rates and running some assets off its balance sheet, the Federal Reserve has not done enough to beat inflation. And here’s another sign that inflation isn’t down and out.

Producer prices rose more than expected in January.

According to the latest data from the BLS, the Producer Price Index (PPI) increased by 0.3 percent. The projection was for a much smaller 0.1 percent gain. It was the biggest jump in wholesale prices since August.

On an annual basis, things didn’t look quite as bad. Headline PPI increased just 0.9 percent. But this number primarily reflects cooling producer prices over the last several months.

Excluding food and energy prices, core PPI rose by 0.5 percent. This was a big miss to the upside, with the mainstream expecting just a 0.1 percent increase.

On an annual basis, core CPI rose 2.6 percent.

PPI excluding food, energy, and trade services jumped 0.6 percent. That was the biggest one-month jump since January 2023.

The cost of services was the primary factor driving overall PPI higher. Prices for final demand services rose 0.6 percent while the index for final demand goods decreased by 0.2 percent, according to BLS data.

Producer prices are a canary in the inflation coal mine serving as a leading indicator for consumer prices.  Spikes in producer prices often spill over into the CPI down the road as businesses pass on at least some of their rising costs to customers.

One analyst quoted by Reuters warned this may not be a “one-off” report.

We would not dismiss strength in January services prices as a one-off phenomenon. This upward pressure can continue, especially for sectors like medical services that still face tight labor markets.

This report coupled with hotter-than-expected January CPI data was a gut-punch for markets desperate for the Fed to decrease interest rates.

On a monthly basis, consumer prices rose 0.3 percent, equaling the jump in prices in December. It was a steeper increase than the projected 0.2 percent. More alarming is the fact that consumer prices have gone up over half a percent (0.6 percent) in just two months.

Core CPI came in even hotter, rising 0.4 percent in January.

Looking at the bigger picture none of these numbers are anywhere near the 2 percent target. It’s clear inflation isn’t dead and buried.

As I have said, the Fed is between a rock and a hard place.

On the one hand, it can choose to stick to its guns, keep rates higher for longer, and bring down inflation. But that will almost certainly drag the economy into a crisis.

On the other hand, it can choose inflation and maybe rescue the economy. But even if it follows through with rate cuts in the hope of the mythical soft landing, it probably won’t work.

The truth is the damage has already been done. In fact, the damage was done well over a decade ago when the Fed chose to cut rates to zero and run multiple rounds of quantitative easing. This incentivized mountains of debt and created all kinds of malinvestments in the economy. It simply can’t continue plodding in a high-interest-rate environment. 

The most likely scenario is the economy will crash no matter what the Fed does with rates in the coming months. That will force the central bank’s hand. At that point, it will have no choice but to slash rates to zero and return to quantitative easing. In other words, it will be pushed to return to creating inflation even as the economy contracts. 

There’s a word for that — stagflation.

Mike Maharrey is a writer for Money Metals News Service and national communications director of the 10th Amendment Center. Follow him at twitter.com/mmaharrey10th.

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