It's fun getting back to this, since even someone with no physics knowledge at all can see how insane it is.
Something with Cd=0, can be dragged by friction?
Humber, how does the balloon interact with the ground? There must be some interaction, otherwise how does it orient itself to the movement of the Earth? Or does the earth's gravity drag the balloon backward?
It's your problem if you don't understand relative motion, and think the ground must be involved, if something is to go
backwards relative to
the air itself. Funny how you say upwind and downwind, isn't it, but don't see your error.
In other words, if I release a balloon at wind speed above a thick layer of clouds, how does it "know" which way the earth is moving, so that it can accelerate to below wind speed?
Who told you that things "know" or not? That is snake oil..
An object can, and has always been able to move in a medium, without reference to another. Known before Galileo....well before Galileo.
Let's say that medium is the wind. What if I first make a bogus claim to the motion of the Earth, and then later, in a support of a claim, tell you that "objects can't tell the Earth is there", I may be able to sell you some BS about things "not knowing", so that I may claim energy from the ground.
That was the original claim. The cart moved relative to the wind, and then to the ground, so the ground would be able to drive the wheels, and that you know was the claim that one was supposed "to get".
If I release it above a large river, is the wind direction with respect to which it will slow down relative to the earth or the water in the river?
Irrelevant. There is no force between the river and the balloon, so the river can't possibly influence it.