<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Kevin Warsh&rsquo;s No-Win Bind
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Kevin Warsh might rue the day he put himself in contention for the job of Federal Reserve chair.
He won Senate confirmation yesterday, 54-45. The only Democrat to vote yea was Pennsylvania&rsquo;s John Fetterman.
Mainstream media coverage focused on the narrow vote, in contrast to years gone by when Jerome Powell and Janet Yellen commanded more bipartisan support. Yesterday&rsquo;s vote &ldquo;reflected how tensions with the White House have dragged the Fed deeper into the political fray,&rdquo; as The Wall Street Journal sees it.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> That&rsquo;s not even half the story: &ldquo;Warsh is stepping directly into one of the most dangerous policy environments in decades,&rdquo; says Paradigm macro maven Jim Rickards.
As you know, Donald Trump wants the Fed to lower short-term interest rates. Presumably Warsh wants to accommodate the president&rsquo;s wishes &mdash; in contrast with Fed hawks who want to leave rates alone or even raise them.
Unfortunately for Warsh, the most recent inflation and job numbers &ldquo;give the Fed&rsquo;s hawkish wing exactly what it wants,&rdquo; Jim tells us.
As mentioned here on Tuesday, the official inflation rate has sailed up to a three-year high of 3.8%. And the headline number for new jobs during April was a healthy 115,000.
From the standpoint of conventional monetary policy there&rsquo;s no reason to cut rates at the next Fed meeting a month from now.
And even if Warsh wants to cut, he&rsquo;s one of only 12 members of the Fed&rsquo;s Open Market Committee; he has to persuade at least six other members to see things his way.
&ldquo;The hawks will argue the labor market remains resilient,&rdquo; Jim says. &ldquo;They&rsquo;ll say inflation risks tied to war-driven energy prices are still elevated. They&rsquo;ll warn that cutting rates prematurely could ignite another inflation wave.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;That leaves Warsh trapped between economics and politics before he even settles into the chairman&rsquo;s office,&rdquo; Jim goes on.
&ldquo;If he pushes aggressively for cuts, critics will immediately accuse him of doing the White House&rsquo;s bidding. Every move will be scrutinized through the lens of political influence. Once markets believe monetary policy is being dictated politically rather than economically, trust erodes quickly.
&ldquo;But Warsh faces the opposite danger as well,&rdquo; Jim goes on.
&ldquo;If he moves too cautiously&hellip; if he delays cuts and sounds overly concerned about inflation&hellip; he risks disappointing the very political coalition that helped elevate him to the position in the first place.
&ldquo;That creates a no-win scenario.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Especially in light of the fact that &ldquo;Warsh isn&rsquo;t inheriting a normal inflation cycle. He&rsquo;s inheriting stagflation risk,&rdquo; says Jim.
It&rsquo;s that awful 1970s combination of economic stagnation and inflation at the same time. Inflation is roaring again this year &mdash; and the job market isn&rsquo;t nearly as healthy as the headline numbers suggest. For instance, temporary employment is weakening; when businesses need to cut payroll, temps are usually the first to go.
Warsh now owns &ldquo;a policy trap unlike anything we&rsquo;ve seen in decades,&rdquo; Jim concludes.
&ldquo;Markets initially may celebrate his arrival. Wall Street generally likes the idea of lower rates. Risk assets tend to rally whenever investors believe monetary easing is coming.
&ldquo;But markets may be underestimating how difficult it will be for Warsh to actually deliver those cuts.&rdquo;
Bottom line: &ldquo;This isn&rsquo;t simply a personnel change at the central bank. It&rsquo;s the beginning of a political, economic and monetary collision that could shape markets for years to come.&rdquo;
And we&rsquo;ll aim to keep you ahead of the curve.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Markets Today: Bad Signs, Good Signs
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> While the U.S. stock market is at all-time highs, something disturbing is happening beneath the surface.
One day recently, the S&amp;P 500 set a record close. But at the same time, less than 60% of the index&rsquo;s 500 component stocks exceeded their 50-day and 200-day moving averages.
&ldquo;It has happened only a handful times in the past,&rdquo; says Paradigm trading pro Enrique Abeyta &mdash; &ldquo;all of them between Dec. 21, 1998, and March 22, 2000, the end of the internet bubble.&rdquo;
No, that&rsquo;s not a sell-everything signal. Because on the other hand, last week the S&amp;P notched a weekly close above its upper Bollinger Band for the first time in over a year.
&ldquo;The Bollinger Band,&rdquo; Enrique tells us, &ldquo;is a technical signal measuring distance from moving averages.&rdquo;
What just happened has happened only a few times before &mdash; and 100% of the time the S&amp;P was higher both nine months later and one year later.
Put it all together and Enrique says we have a valuable signal for market timing &mdash; &ldquo;good/great for the next year but then watch out below!&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Speaking of good/great, the S&amp;P just surpassed the 7,500 mark for the first time &mdash; up over three-quarters of a percent on the day.
The Nasdaq&rsquo;s gain is even stronger, now just 25 points away from 26,700. And for once, the Dow is more or less keeping pace &mdash; back over 50,000 for the first time since February.
Paradigm readers have racked up a slew of winners over the last 24 hours&hellip;
<ul>
<li>Enrique&rsquo;s Breaking Profits readers have collected 300% on Credo Technology &mdash; one of his first recommendations when this entry-level newsletter was launched last year</li>
</ul>
<ul>
<li>PRO-level readers of Rickards&rsquo; Strategic Intelligence bagged 63% gains on a long-term holding in Seabridge Gold</li>
</ul>
<ul>
<li>Chris Cimorelli&rsquo;s 10X Trade Club readers bagged a fast 291% playing Apple call options and another 284% with calls on a Chinese internet ETF</li>
</ul>
<ul>
<li>On the bearish side, Rickards&rsquo; Crisis Trader readers collected 336% in less than a month playing put options on Tractor Supply.</li>
</ul>
The big economic number today is retail sales &mdash; up 0.5% from March to April, on par with Wall Street&rsquo;s expectations. Of course, that&rsquo;s skewed by rising gasoline prices; back those out and the jump is a more modest 0.3%. Which is even more disappointing when you realize these numbers are not adjusted for inflation.
Meanwhile, not much news we can see yet from the Trump-Xi meeting in Beijing &mdash; other than Xi making clear that the issue of Taiwan could bring the two superpowers into conflict. (Three years ago your editor <a href="https://paradigmpressroom.com/post/no-blood-for-chips">made the case</a> that there&rsquo;s nothing about Taiwan worth risking American blood and treasure over.)
Treasury yields are backing down but the 10-year note is still over 4.45% and the 30-year bond remains above 5%.
In the commodity complex, U.S. oil futures are down slightly but still over $100. Gold is back below $4,700 and silver is off over two bucks to $85.14.
Bitcoin is rallying, just shy of $81,000 again while Ethereum sits at $2,284.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />FDA Follies
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In Washington, FDA commissioner Marty Makary just got the heave-ho &mdash; for the wrong reasons, in the eyes of our biotech expert Ray Blanco.
Makary resigned under pressure yesterday &mdash; &ldquo;pushed out over his decisions regarding vapes and abortion pills,&rdquo; says Ray.
And not for rejecting a string of promising drugs that would have helped desperate and dying patients.
&ldquo;That tells you what the political priority structure is,&rdquo; Ray tells us. &ldquo;But the FDA has always been a mess.
&ldquo;In 1992, FDA Commissioner David Kessler said the quiet part out loud: &lsquo;If members of our society were empowered to make their own decisions&hellip; then the whole rationale for the FDA would cease to exist.&rsquo;
&ldquo;We had the man running the agency, on the record, stating that the entire institution depends on patients not being allowed to choose.
&ldquo;That principle is why a dying cancer patient can't access a therapy that might save them. It's also why a healthy adult couldn't decline a vaccine they had questions about during COVID. It&rsquo;s the same architecture.
&ldquo;A 2018 analysis in Cancer Medicine, authored by oncologists at the University of Ottawa, MD Anderson, and UCSD, calculated what FDA delays actually cost. The finding: One life-year is lost in North America for every 2.2 minutes of approval delay. Worldwide, one life-year every 12 seconds.
&ldquo;Makary made things worse because he doubled down on denying lifesaving therapies.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Alas, Makary&rsquo;s departure doesn&rsquo;t change what Ray calls &ldquo;the fundamental anti-freedom-to-choose architecture that is the FDA&rsquo;s reason to exist.
&ldquo;Moreover the denial machine he created remains in place&rdquo; &mdash; led, Ray says, by Katherine Szarama, a Makary pick still serving as acting director of the FDA&rsquo;s Center for Biologics Evaluation and Research.
&ldquo;She wrote the policy that produced the recent gene and cancer therapy rejections before she joined the agency.
&ldquo;I predict biotech will rally when she&rsquo;s replaced.&rdquo;
Stay tuned&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief, Pulse of the Nation Edition
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We present the following both for its entertainment value &mdash; and as a revealing window into attitudes and resentments here in these United States&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2mbU6mhXA0pp6JpNkIORDo/824399954276b0c784afd04bebdb7448/FMF-Issue-051426-1.jpg" alt="Comedic Relief" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: AI Regulation (and More)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;The idea of the Federal Death Authority (FDA) being in charge of AI is a joke. Right?&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/ai-speeding-toward-a-brick-wall">Tuesday&rsquo;s edition</a>.
[To be clear, the Trump administration is talking about FDA regulation as a model for AI regulation. Which is just as concerning. But go on&hellip;]
&ldquo;I remember the story published after the death of FDA regulator <a href="https://en.wikipedia.org/wiki/John_Nestor">John Nestor</a>, and his habit of getting on the Washington beltway and immediately moving to the left-most lane while slowing his car down to 55 because &lsquo;that's the speed limit.&rsquo; Also the fact that his reign of uselessness was marked by not approving any new drugs.
&ldquo;That's exactly what's needed for great innovations!&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Regarding AI, believing restraint in a capitalist model is a part of the equation is laughable to me,&rdquo; counters another reader &mdash; &ldquo;not to mention (fill in your favorite foreign adversary) will stop at nothing to shove their AI advances up America&rsquo;s ass. Our adversaries&rsquo; advances in AI scare me more than the monsters shepherding AI in the U.S.
&ldquo;Each day I look forward to The 5. I don&rsquo;t necessarily agree with all you share, but it always gives me a lot to think about and I always believe you try to deliver objective perspective. Thank you.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The discussion of AI regulation Tuesday prompted our final correspondent to say that &ldquo;Dave, your skepticism about Trump has been validated.
&ldquo;His idiotic Iran war seems to have completely changed his America First trajectory. It has also started making him afraid of the bogeyman. He &lsquo;lost&rsquo; the 2020 election in large part because he did not follow his instinct relative to COVID and shutdowns. He got fooled into getting into this war by those that were good at playing on his hubris. Now we are stuck, and our kids will be in the crosshairs if Trump can't get comfortable taking an L here.
&ldquo;But he's now second-guessing himself on other things, like AI, and stopped thinking in terms of USA first. He's now in this &lsquo;make the world a better&rsquo; place, which is where every stupid president has been politically, except maybe Reagan. And look how America has suffered.
&ldquo;Trump is turning out to be a RINO, as they all end up being, save for a few, e.g., Massie. So discouraging.
&ldquo;If even our greatest hopes turn out to be like Trump is turning out to be, there is no hope. I believe we will be a full communist state within 10 years. Between the libertarians that do nothing except root for the unobtainable, the RINOs that all perform the role of fisherman, i.e., giving a little line here and there to reel in the conservative fish, and fascist leftists, we are doomed.&rdquo;
Dave responds: And people call me cynical!
As long as you brought it up&hellip; the special interests&rsquo; long knives are out for Thomas Massie, with his primary election in Kentucky&rsquo;s Fourth Congressional district next Tuesday.
&ldquo;Don&rsquo;t believe the BS last-minute accusations and betting market shifts,&rdquo; says the comedian and podcaster Dave Smith. &ldquo;These are obvious signs of a concerted effort.&rdquo;
&ldquo;Our country hangs in the balance,&rdquo; adds Clint Russell of the Liberty Lockdown podcast. &ldquo;Thomas Massie may be our last line of peaceful defense.&rdquo;
I&rsquo;d like to think Russell is engaged in hyperbole here &mdash; but I fear he might be on to something.

FMF-Issue-051426-Featured

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Paradigm Pressroom’s 5 Bullets is a daily e-letter covering the economy and the markets, reaching 120,000 paying subscribers of the renowned financial publishing firm Paradigm Press.

Paradigm Pressroom's 5 Bullets

Kevin Warsh’s No-Win Bind

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />AI Speeding Toward a Brick Wall
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> If you care about American competitiveness in the AI space, today&rsquo;s Bullet No. 1 won&rsquo;t be easy reading.
Twice last week, we took note of a major change of heart on the part of the Trump administration. The power of Anthropic&rsquo;s new Mythos model &mdash; supposedly unearthing major vulnerabilities in nearly every operating system and web browser &mdash; sparked fears within the West Wing of a major AI-enabled cyberattack.
Thus an executive order of some sort is in the works that will result in much more government oversight of the sector.
In addition, Team Trump is doubling down on a Biden-administration scheme in which major AI firms share their models with the feds before they&rsquo;re released to the public.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Gone are the freewheeling days of 2025 in which Silicon Valley expected Trump and crew to keep their hands off AI.
&ldquo;We&rsquo;re going to make this industry absolutely the top,&rdquo; said the president last summer. &ldquo;We can&rsquo;t stop it with politics. We can&rsquo;t stop it with foolish rules and even stupid rules.&rdquo;
That was then, this is now: During a recent interview on Fox Business, Kevin Hassett &mdash; director of Trump&rsquo;s National Economic Council &mdash; fleshed out what the coming executive order might look like.
&ldquo;We&rsquo;re studying possibly an executive order to give a clear road map to everybody about how this is going to go and how future AIs that also potentially create vulnerabilities should go through a process so that, you know, they&rsquo;re released in the wild after they&rsquo;ve been proven safe, just like an FDA drug.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Seriously? The FDA is the model for AI regulation?
For decades, the entire purpose of the FDA has been to impose an extensive and costly regulatory regime &mdash; protecting well-capitalized Big Pharma firms that have the resources to shoulder the costs, while freezing out any upstarts.
Of course, it&rsquo;s all sold to the public as necessary for our safety. That&rsquo;s even though the system still allows disasters to come to market like fen-phen (a combo of weight-loss drugs) and Vioxx (a painkiller). Both caused major heart problems and were ultimately withdrawn.
An &ldquo;FDA of AI&rdquo; would send the industry quickly hurtling toward a brick wall.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> This isn&rsquo;t the first time an agency notorious for stifling innovation and progress has been cited as the model for AI regulation.
In May of 2023, about six months after ChatGPT became a phenomenon, we took note when OpenAI chief Sam Altman was hauled before Congress for a hearing.
He shamelessly played to the sensibilities of his audience at that moment &mdash; begging for government regulation and licensing on the grounds that AI might be used to propagate &ldquo;misinformation.&rdquo;
&ldquo;We&rsquo;re going to face an election next year,&rdquo; he said. &ldquo;And those models are getting better.&rdquo;
One senator suggested a good template for AI regulation would be the Nuclear Regulatory Commission. Altman said the &ldquo;NRC is a great analogy&rdquo; for the sort of regulation he supports.
Reality check: The NRC all but killed off nuclear power in this country: Since the 1970s, construction time for new plants ballooned from four years to 14&hellip; while plans for 60 reactors were scrapped.
Gee, those 60 reactors might&rsquo;ve come in handy right around now when AI needs more electricity and the utility industry can&rsquo;t keep up with the demand. (More about that in Bullet No. 4 today.)
But again, OpenAI was and is an entrenched incumbent in the AI space; it&rsquo;s in Altman&rsquo;s interest to use the heavy hand of government to strangle any up-and-coming competitors.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Adopting an FDA-style regulatory regime for AI would represent a shocking policy reversal by the Trump administration, and a major about-face on how America has approached software, online speech and digital commerce,&rdquo; says a statement from Neil Chilson at the Abundance Institute and Adam Thierer at the R Street Institute.
The new developments this month mark &ldquo;a startling turn&rdquo; from Trump&rsquo;s previous stance &ldquo;where he allowed tech companies to do what they wanted without hardly any government oversight,&rdquo; the Brookings Institution&rsquo;s Darrell West tells MarketWatch.
Then again, it&rsquo;s not altogether surprising: The major advocate for the hands-off approach was venture capitalist David Sacks &mdash; who left his post as the administration&rsquo;s AI and crypto czar in March.
Sacks, an original member of the &ldquo;PayPal mafia&rdquo; with Peter Thiel and Elon Musk in the 1990s, told Bloomberg he&rsquo;d &ldquo;used up&rdquo; his 130 days as a special government employee not subject to Senate confirmation. (In reality, he was pushed out days after saying the administration should &ldquo;declare victory and get out&rdquo; of the Iran war.)
Investment implications?
<a id="2"></a>
On the one hand, regulation favors all the big incumbents &mdash; both publicly traded ones like Microsoft and Google and the still privately held ones like OpenAI and Anthropic. On the other hand, a lack of up-and-coming competition makes the big incumbents fat and lazy, limiting their profit potential. They become better for short-term trades than long-term investments.
This story is just beginning. We&rsquo;ll stay on top of it in the months ahead&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Oil: Reality Reasserting Itself?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Maybe the paper price of oil is moving closer to the real-world price of physical barrels.
U.S. futures are up another 4% today, now over $102 &mdash; back to where it was a week ago, before <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition">the alleged &ldquo;scoop&rdquo; by Axios reporter Barak Ravid</a> about the White House &ldquo;getting close to an agreement with Iran on a one-page memorandum of understanding to end the war.&rdquo;
To hear the mainstream tell it, the jump yesterday and today is a function of Trump now pouring cold water on the prospects for a deal, or even for the cease-\fire to hold up.
But really&hellip; is he going to restart the war just before he meets with Chinese President Xi Jinping? (Trump lands in Beijing tomorrow.)
More likely that the price of crude futures is coming into closer alignment with the price of &ldquo;wet&rdquo; barrels for delivery to customers. We&rsquo;ve mentioned regularly that this real-world price is closer to $140 or higher &mdash; and we&rsquo;ve also described <a href="https://paradigmpressroom.com/post/the-cia-and-the-oil-price">the long history</a> of how oil futures are manipulated for political ends.
Reality might be starting to assert itself.
Meanwhile, the real-world impacts continue to mount. The following tweet from the owner of an oil-change franchising outfit went viral last night: We present it as a public service announcement in case you missed it.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3ykGJmLSaS1YfgwPQDzG2g/5b9cd804c781a6e244a587247ea3c344/FMF-Issue-051226-1.jpg" alt="Costa Tweet" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> At the same time the mainstream is finally catching up to what we&rsquo;ve been telling you for weeks&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3b4k5OuipD7VQqX0vA5uB9/b624d8d3c7034a0828f07fae0a610295/FMF-Issue-051226-2.jpg" alt="WSJ Tweet" width="540px" />
Ummm&hellip; we mentioned the supertanker&rsquo;s arrival a week ago today.
And that was on top of Byron King&rsquo;s previous exposes in this space &mdash; one of them <a href="https://paradigmpressroom.com/post/about-that-iranian-proposal/#3">over a month old!</a> &mdash; about the dire situation in California thanks to the fact the state is not connected to any major U.S. pipelines and thus relies on imports from the Persian Gulf region.
Byron tells us this week the situation would be even worse were it not for an influx of tankers arriving from the Gulf Coast via the Panama Canal &mdash; more in the last two months than during all of 2025, in fact.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The big market-moving story today is the release of the official April inflation figures.
They clocked in more or less as expected &mdash; up 0.6% month-over-month and 3.8% year-over-year. That&rsquo;s the fastest annual pace since May of 2023. Inflation has clearly broken out of the 2.4&ndash;3.0% range where it oscillated from mid-2024 until just before the war began.
With that, nearly every major asset class is selling off&hellip;
<ul>
<li>The S&amp;P 500 is down nearly 1% to 7,344. The Dow&rsquo;s loss is narrower, the Nasdaq&rsquo;s steeper</li>
</ul>
<ul>
<li>Treasury prices are falling, sending yields higher &mdash; the 10-year note back over 4.4% and the 30-year bond over 5%. (Generally these levels have triggered some sort of conciliatory announcement from the administration about the war, the better to calm down the bond market. We&rsquo;ll see&hellip;)</li>
</ul>
<ul>
<li>Gold is down nearly $80 to $4,655 and silver down nearly 3% to $83.56. (In fairness, silver needs a rest&hellip;)</li>
</ul>
<ul>
<li>Crypto is languishing, with Bitcoin sinking back toward $80,000 and Ethereum at $2,260.</li>
</ul>
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Mood on Main Street
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The vibe on Main Street amid the war is similar to the vibe amid the tariff drama just over a year ago.
The National Federation of Independent Business is out with its monthly Small Business Optimism Index. The April reading is 95.9 &mdash; basically unchanged from March, marking two straight months below the index&rsquo;s long-term average dating back to the mid-1970s. Similar numbers emerged in April 2025 after the fright brought on by the president&rsquo;s &ldquo;Liberation Day&rdquo; announcement.
&ldquo;Inflationary pressures continue to be a challenge for Main Street,&rdquo; says NFIB Chief Economist Bill Dunkelberg. Gee, ya think?
That said, inflation does not top the portion of the survey where respondents are asked to identify their single-most important problem. Instead &ldquo;quality of labor&rdquo; is back on top for the first time in six months; 18% of respondents say good help is hard to find.
&ldquo;In our rural northern California area,&rdquo; says a retailer, &ldquo;qualified/skilled/knowledgeable help is nonexistent. Unskilled is nonexistent.&rdquo;
&ldquo;I&rsquo;m on a livestock farm,&rdquo; says a Tennessee business owner, &ldquo;and it is impossible to find help. Any warm body expects $20 per hour for what should be a minimum-wage job.&rdquo;
&ldquo;It is difficult to find qualified auto technicians that want to progress in this field,&rdquo; says a response from New York.
After labor quality cited by 18%, taxes were right behind at 17% and inflation at 16%. Everything else was 10% or less.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Power Grid: Level 3 Alert
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. electric utilities are operating under a rare Level 3 alert &mdash; the highest level issued by NERC, the North American Electric Reliability Corporation.
The reason &mdash; &ldquo;data centers unexpectedly dropping load or oscillating demand rapidly, creating reliability concerns,&rdquo; reports the industry website Utility Dive.
In its own words, NERC warns that utilities &ldquo;generally did not have sufficient processes, procedures or methods to address emerging computational loads.&rdquo;
Don&rsquo;t get the wrong idea: We&rsquo;re not necessarily staring at widespread blackouts this week. But the organization is ordering its member utilities to take seven steps toward stabilizing the grid and report back on their progress by Aug. 3.
Context: Even before AI burst on the scene in late 2022 we were warning the grid was increasingly unstable. Too many coal and nuclear plants were being retired, and there wasn&rsquo;t nearly enough solar and wind capacity coming online to take their place.
AI data centers took a situation that was already urgent and made it dire.
Later this month, NERC will be out with its annual &ldquo;Summer Reliability Assessment&rdquo; &mdash; identifying which parts of the country will be most vulnerable to rolling blackouts in the event of a severe heat wave. We&rsquo;ve been monitoring this report regularly since 2022, so stay tuned&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Hantavirus
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A couple of readers took the time to write after your editor sounded an early alarm <a href="https://paradigmpressroom.com/post/spacex-partners-with-rival">in yesterday&rsquo;s edition</a> about hantavirus, with an eye toward the events of COVID six years ago&hellip;
&ldquo;A point of clarification on that British Army team parachuting onto Tristan da Cunha,&rdquo; says one of our regulars &mdash; &ldquo;it has nothing to do with any containment protocols. Remote island with no airport.&rdquo;
&ldquo;As a board-certified practicing industrial hygienist,&rdquo; says another reader, &ldquo;I feel the hantavirus fears are way overblown and not comparable to a highly communicable respiratory virus like COVID.&nbsp;
&ldquo;Hantavirus is caused by rodent feces that have become dried on surfaces, and through mechanical processes have been able to become airborne and then inhaled. (Even though rare varieties have some ability for person-to-person transmissibility &mdash; such cases still require very close contact between individuals &mdash; and therefore population spread is very limited.)
&ldquo;Appreciate your insights and articles &mdash; even though I sometimes disagree &mdash; I always find your stuff interesting to read.
&ldquo;Keep up the good work &mdash; and thanks for helping us to be better investors.&rdquo;
Dave responds: Thanks to both of you for the input. To be clear, I brought it up yesterday not with an eye toward the actual threat but toward the suspiciously alarmist media treatment. After <a href="https://paradigmpressroom.com/post/covid-9-11">the tyranny and trauma imposed on this land during 2020</a>, I think the wariness is warranted.
One of my must-follows on X in recent weeks is Calvin Froedge, founder of the Marhelm shipping data platform. He says he lost friends in January 2020 when sounding an early alarm about a &ldquo;novel coronavirus&rdquo; emerging in China&rsquo;s Hubei province.
He says he is not ready to sound a similar alarm now. But he&rsquo;s on alert for evidence suggesting hantavirus was subject to gain-of-function research developing a strain that can be easily spread through coughing and sneezing.
That evidence has not emerged yet&hellip; but under the circumstances, it&rsquo;s wise to keep an eye out.
At the very least, it&rsquo;s been discouraging and disquieting this week to look up at my screens of international news channels &mdash; and once again be greeted by the sight of WHO chief Tedros Adhanom Ghebreyesus.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4QzdM03vQ4vQ0Z3e7CYune/e4eae8176215b3b377b89a3419250c9c/FMF-Issue-051226-3.jpg" alt="Tedros Interview" width="540px" />
Really, I&rsquo;d have been happy to go through the rest of my life never seeing that guy again&hellip;

FMF-Issue-051226-Featured

AI Speeding Toward a Brick Wall

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />SpaceX Partners With Rival
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the surface, the story is only mildly interesting.
Anthropic, the company behind the Claude AI platform, announced a deal last week with SpaceX.
"We're partnering with SpaceX to use all the capacity of their Colossus One data center," said Anthropic head of product Ami Vora.
That&rsquo;s the big one located in Memphis &mdash; so big that Elon Musk made sure to install its own on-site power plant fed by natural gas, so it would be less of a burden on the local power grid.
The agreement will help Anthropic meet the exploding demand for its services.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But the story gets more interesting when you realize Anthropic and SpaceX are competitors.
Recall that Musk merged his AI venture called xAI into SpaceX earlier this year.
When Colossus One went into service in July 2024, its initial task was to train up xAI&rsquo;s chatbot Grok. Now Anthropic gets access to all that computing power in Memphis.
So why would they be striking up a partnership like this?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> That&rsquo;s where the story gets most interesting.
Here&rsquo;s what SpaceX said in its announcement of the partnership: "As part of this agreement, Anthropic also expressed interest in partnering to develop multiple gigawatts of orbital AI compute capacity.&rdquo;
We first started telling you about data centers in space last November. If people are getting sick and tired of data centers being built in their neighborhoods and driving up electric bills &mdash; and they are &mdash; what can the AI industry do?
Well, the industry can put data centers in orbit. The advantages are unbeatable &mdash; 24/7 solar power that doesn&rsquo;t compete with homeowners and businesses for scarce electricity back on Earth.
By January, Musk himself was talking up orbiting data centers at the World Economic Forum in Davos, Switzerland: &ldquo;The lowest-cost place to put AI will be in space. And that will be true within two years, maybe three at the latest.&rdquo;
If Anthropic&rsquo;s needs are exploding to the point it needs access to Colossus One&hellip; space really is the next logical frontier. Anthropic needs Musk and SpaceX to make it happen &mdash; and Musk is happy to play ball.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />AI and Productivity: It&rsquo;s Happening
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s not just that demand for &ldquo;compute&rdquo; is exploding. &ldquo;We&rsquo;re starting to see real evidence that the compute is being used productively,&rdquo; says Paradigm analyst Zach Scheidt &mdash; &ldquo;rather than just being hoarded for the next training run.&rdquo;
Zach wears several hats in our firm &mdash; including as senior analyst for Altucher&rsquo;s True Alpha. He perked up last week when he saw the latest numbers on productivity from the U.S. Labor Department.
Bottom line: &ldquo;Workers are getting more done in fewer hours.&rdquo;
That means AI is no longer just a story about the prodigious amounts of capital that Microsoft, Meta, Google and Amazon are pouring into data centers.
Result: &ldquo;We're moving back toward &lsquo;buy ANYTHING AI-related at any price&rsquo; territory,&rdquo; says Zach.
&ldquo;That's the kind of environment where stocks tend to go higher than anyone expects, faster than anyone expects.&rdquo;
Yes, Zach is exercising caution. But for now, he says you have to respect the fact that &ldquo;earnings have been strong, capital spending continues to be robust and the AI cycle is showing no signs of slowing down regardless of what's happening overseas.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Still, &ldquo;the rally is narrowing and the rebound is being driven by the smallest number of stocks on record,&rdquo; says Zach.
Per the Financial Times, over half of the S&amp;P 500&rsquo;s gains in the past month came from only five names &mdash; Google, Broadcom, Amazon, Nvidia and Apple.
Result: SPY, the big S&amp;P 500 ETF, is surging. But RSP &mdash; the equal-weighted ETF where every stock makes up 0.2% of the total &mdash; is stalling out.
&ldquo;That tells me there&rsquo;s weakness under the hood,&rdquo; Zach says. &ldquo;Not enough to short the market on. But enough to keep us from getting too aggressive on the long side.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As a new week begins, the major U.S. indexes are all in the green &mdash; though not by much.
At last check the S&amp;P 500 is adding to Friday&rsquo;s record close &mdash; up a quarter percent and over 7,400. The Nasdaq&rsquo;s gain is more modest, but the index is nonetheless approaching 26,300. Once more, the Dow is the laggard, nearly flat at 49,640.
Congratulations are in order for Microcap Millionaire readers who on Friday bagged 363% gains with a tech industry play. (We&rsquo;re holding back on the name because the recommendation was to sell only half the position and let the rest ride.)
The big economic number coming this week is the Labor Department&rsquo;s official reading on inflation, due tomorrow.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />The War and the Virus
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. oil futures are up over two bucks to $97.62 now that Donald Trump has labeled Iran&rsquo;s response to U.S. peace terms as &ldquo;totally unacceptable.&rdquo;
[Update: Trump subsequently said the ceasefire is on &ldquo;massive life support.&rdquo; Now we&rsquo;re less than 50 cents away from $100.]
We won&rsquo;t thrash over the details. You can read them anywhere. Suffice to say the Strait of Hormuz is still all but closed. The impacts today include, but are not limited to&hellip;
<ul>
<li>The giant fertilizer producer Mosaic slowing production at two of its U.S. plants for lack of sulfur coming from the Gulf region (MOS also yanked its guidance for the rest of the year; shares are down 2.2% as we write)</li>
</ul>
<ul>
<li>South Korea imposing price controls on gasoline (with the predictable result of shortages)</li>
</ul>
<ul>
<li>India&rsquo;s prime minister asking citizens to resume working from home &mdash; as during the COVID era &mdash; to conserve fuel.</li>
</ul>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As long as we brought up COVID, we&rsquo;d better address hantavirus &mdash; just to get it on the record.
You&rsquo;ve probably heard the headlines: The passengers aboard that cruise ship where three people died have, for the most part, returned to their home countries: The Americans are being evaluated in Nebraska and Georgia.
The official line is that the risk to the public is &ldquo;very low.&rdquo; Which sounds reassuring until you remember that Dr. Anthony Fauci described the danger from COVID as &ldquo;just minuscule&rdquo; on Feb. 17, 2020. Barely a month later, he was practically ordering state governments to shut down bars, restaurants, gyms, etc.
And then there was this event on the world&rsquo;s most remote inhabited island&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3ndMLcE9dlu10HsmiUJDGW/97cac78bcf4738e25eba3f15d18c21b2/FMF-051126-1.jpg" alt="Parachute" width="540px" />
Tristan de Cunha is a British colony in the South Atlantic, home to 250 inhabitants. One of them was on the cruise ship in question, departing during a stop there.
The imagery of the paratroopers was stark and dramatic enough to remind at least one social media observer of the viral videos in early 2020 &mdash; people walking down the street and suddenly keeling over.
This is not a forecast that a new round of lockdowns is coming. But it would be foolhardy at this point to dismiss the notion out of hand.
With that, we&rsquo;ll move on&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Gold&rsquo;s Third Phase
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Gold sits at $4,723 as a new week begins &mdash; the highest in nearly three weeks &mdash; but still well below the nosebleed highs in January at $5,600.
Last week we got a gold update from both our macro maven Jim Rickards and Money &amp; Power editor Buck Sexton.
Now we turn to trading pro Enrique Abetya &mdash; who says gold&rsquo;s price action so far this year has developed in three distinct phases&hellip;
<ul>
<li>Overbought conditions. &ldquo;The market had reached a point where gold felt invincible&hellip; The setup became too consensus-driven, too extended and ultimately unsustainable in the short term. What followed was inevitable. A multimonth correction designed to burn off excess positioning, reset expectations and bring the market back into balance. That process is largely behind us now&rdquo;</li>
</ul>
<ul>
<li>Selling amid a crisis. Why did gold sell off when war broke out? &ldquo;Large holders of gold, particularly in regions impacted by the crisis, needed liquidity. With oil revenues disrupted and financial pressures building, they were forced to raise cash. And gold, one of the most liquid assets, became a source of funds&hellip; Coming on top of an already overbought unwind, this dynamic accelerated the decline. It extended the correction beyond what most investors expected. But it also created a dislocation. Because once that forces selling subsides, the underlying drivers of gold reassert themselves. This is the phase we are entering now.&rdquo;</li>
</ul>
<ul>
<li>Repairing the damage. &ldquo;As the liquidity-driven selling tied to the crisis fades, the natural buyers of gold begin to step back in. At the same time, the broader macro backdrop remains supportive. Inflation pressures are still present. Global debt levels remain elevated. Central banks continue to accumulate gold. Geopolitical uncertainty has not disappeared. If anything, those forces have become more entrenched.&rdquo;</li>
</ul>
&ldquo;That&rsquo;s why corrections like this tend to be temporary,&rdquo; Enrique concludes. &ldquo;They reset positioning, shake out weak hands,and ultimately set the stage for the next leg higher.&rdquo;
Enrique positioned readers of The Maverick in a gold miner just last week. And readers of his Breaking Profits are up 35% in less than two months on another gold name.
While gold is moving little today, silver is on a tear &mdash; up nearly five bucks and pushing $85 an ounce.
➢ Lest we forget, crypto is consolidating near recent highs &mdash; Bitcoin at $81,594 and Ethereum at $2,329.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> OK this is almost certainly photoshopped, but&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/OrYHZs8Lzt57XyKUFtdSq/88cef510bd30c8ca45c8feedf75ba1a8/FMF-051126-2.jpg" alt="Prophecy" width="540px" />

FMF-051126-Featured

SpaceX Partners With Rival

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Backlash! (Data Centers)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Lake Tahoe &mdash; home to gorgeous skies, clear waters, year-round recreation. And soon, no electricity.
OK, that&rsquo;s an overstatement. But the fact remains that &ldquo;Lake Tahoe doesn&rsquo;t know where its power will come from after next ski season,&rdquo; says a report at Fortune &mdash; &ldquo;and it&rsquo;s a major problem for the 49,000 residents who call the region home.&rdquo;
The Tahoe area is served by a small power company called Liberty Utilities. Liberty gets its power from NV Energy, a Berkshire Hathaway subsidiary serving most of Nevada. NV Energy just gave notice that it will cease furnishing power to Liberty Utilities after May 2027.
The power currently going to Tahoe will be redirected to&hellip; data centers.
As it happens, northern Nevada is one of the fastest-growing data center corridors in the country.
The situation in Tahoe hasn&rsquo;t turned into protests. Not yet, not there.
But elsewhere&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;I&rsquo;ve never seen anything like this backlash against AI and data centers,&rdquo; says the veteran energy journalist Robert Bryce.
&ldquo;Just to put it in context,&rdquo; he said last weekend on the Financial Sense podcast, &ldquo;in all of 2025, there were 49 rejections or restrictions of data centers in the U.S. &mdash; 49 for all 12 months. There have already been 79 in the first four months and one week of 2026.&rdquo;
Polling by Quinnipiac University shows that among Americans who oppose data centers in their communities, 72% are concerned about rising electricity costs&hellip; 64% are concerned about the water that data centers suck up for cooling&hellip; and 41% are concerned about noise.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Ground Zero for the data center backlash this month is Box Elder County, Utah.
On May 4, an overflow crowd showed up for a county board meeting &mdash; 600 people packing an exhibition hall at the county fairgrounds, another 300 outside.
On the agenda &mdash; an enormous 40,000-acre data center project called Stratos, requiring 9 gigawatts of electricity, about twice the electricity currently used in the entire state of Utah.
The atmosphere got so heated the board retreated to an inner room and streamed the proceedings to the crowd on Zoom.
Commissioners voted to green-light the data center. They said their hands are tied because the land in question isn&rsquo;t zoned &mdash; and that by giving their approval, they&rsquo;ll have more of a say in the process going forward.
Opponents still hope the process won&rsquo;t go forward at all. Yesterday, they took their case to the steps of Utah&rsquo;s capitol building in Salt Lake City.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2TW7rEF96KBVey7H1aVKKT/b31adb67916b826128c2ffc2ddbe5ae8/FMF-Issue-051526-1.jpg.png" alt="No Data Center Protest" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />One of the major investors in Stratos has become a lightning rod because of his celebrity status &mdash; Kevin O&rsquo;Leary of Shark Tank fame.
This week he tried to make his case during an interview with Tucker Carlson. It didn&rsquo;t go well.
At one point, O&rsquo;Leary tried to invoke &ldquo;capitalism&rdquo; and Carlson shot back, &ldquo;How is this capitalism? If taxpayers are paying for some of it, how is that capitalism?&rdquo; O&rsquo;Leary dodged the question and went off on a tangent about how red states like Florida are attracting people and business from blue states like New York.
<a href="https://x.com/FurkanGozukara/status/2054745428927635471" target="_blank" rel="noopener"><img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3YTxhdT9mac1hp4A4ODOOW/7e55dbd10738edd79ee9be11b282904f/FMF-Issue-051526-2.jpg" alt="Furkan Tweet" width="540px" /></a>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />But it&rsquo;s not just about the NIMBY (&ldquo;not in my backyard&rdquo;) effect. Something bigger is at work. The backlash is &ldquo;cultural,&rdquo; according to Bryce.
&ldquo;Ordinary people are looking at Big Tech &mdash; Amazon, Google, Oracle, Microsoft, Meta/Facebook, the rest&mdash;and they don&rsquo;t trust Big Tech. Our privacy is being taken, and I think people are looking at all this and saying, &lsquo;I can&rsquo;t fight these monster, multitrillion-dollar companies in the virtual world. But I can fight them, or even stop them, in my neighborhood.&rsquo; I think that&rsquo;s key.&rdquo;
Carlson tapped into that sentiment elsewhere in his episode this week &mdash; apprehensions about AI and what the power elite plans to do with it.
&ldquo;If you&rsquo;re rolling out what they&rsquo;re telling you, and clearly they believe, is the single greatest technological change in the history of human life on this planet&hellip; you&rsquo;d think one of your main concerns is does this change the relationship of the powerless to the powerful, the relationship of the citizen to the state for example?
&ldquo;But that doesn&rsquo;t seem to be Larry Fink&rsquo;s main concern. His main concern is how do we protect our investment?&rdquo;
Let&rsquo;s delve into this cultural backlash for Bullet No. 2&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />&ldquo;Rewiring the World&rdquo;... for an AI Dystopia?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />AI was a major topic earlier this month at the Milken Institute Global Conference in Beverly Hills.
Among the speakers was Larry Fink &mdash; CEO of BlackRock, the world&rsquo;s biggest asset manager.
After discussing Iranian drone attacks on data centers in the United Arab Emirates during the early days of the Iran war, Fink said, &ldquo;How do we make sure we&rsquo;re protecting those $50 billion, $75 billion investments? We have to relook at everything because of the role of drone warfare.
&ldquo;Right now we&rsquo;re looking at it internationally but one of my concerns is could it be a domestic terrorism, using a $3,000 drone?&rdquo;
You didn&rsquo;t have to look far to find online commenters who took those remarks to mean that Fink believes anyone who opposes data center construction might be a budding domestic terrorist&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4knJESwgMslb225Yx6Tz4f/f3905a802c4f73fade68c0c4004a70d4/FMF-Issue-051526-3.jpg" alt="No Data Shadow of Ezra tweet" width="540px" />
Also speaking on the panel with Fink was the legendary investor Bruce Flatt, sometimes called the Warren Buffett of Canada. He waxed enthusiastic about &ldquo;rewiring&rdquo; the world economy.
&ldquo;For the next 10 years,&rdquo; he said, &ldquo;we will be rewiring the global economy to lay the networks [of] cloud, artificial intelligence factories and data centers&hellip;
&ldquo;There will be $10 trillion from power, AI factories, data centers and fiber buildout laid to basically rewire the world for the new economy that&rsquo;s coming.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;That new economy is probably going to be our total enslavement, owning nothing and pretending to be happy so we don&rsquo;t get beamed every night,&rdquo; says the individual behind the Anonymous Conservative website.
&ldquo;Increasingly when I hear &lsquo;AI data centers&rsquo; now, I really hear &lsquo;Our mechanism of total surveillance and complete control which will never allow our power to be challenged in any way.&rsquo; 
&ldquo;Unfortunately, as the Covid episode and the migrant replacement show, they appear to have a strong desire to kill us, and presently are only restrained somewhat by a small fear of triggering resistance. It looks like AI data centers may remove that small fear.&rdquo;
OK&hellip; I&rsquo;m not saying I agree with that assessment. I&rsquo;m just saying that&rsquo;s the sentiment out there. Anonymous Conservative is an extreme manifestation of a vibe that resonates with a sizable swath of the population at large.
These issues &mdash; both the localized backlash against data center construction and the wider backlash against AI on privacy/surveillance grounds &mdash; aren&rsquo;t going away.
It&rsquo;s at this point I turn it over to you, dear reader. Is there a backlash where you live? Do you think it&rsquo;s warranted? Do you think it&rsquo;s overblown? Write and we&rsquo;ll share your responses next week: <a href="mailto:feedback@paradigmpressroom.com">feedback@paradigmpressroom.com</a>
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />The Disappointment Trade
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />It&rsquo;s one of those risk-off days in the market, across nearly every asset class. And for once, corporate media aren&rsquo;t falling all over themselves to find &ldquo;reasons.&rdquo;
&ldquo;S&amp;P 500 and Nasdaq fall, strained by tech pullback and yields spike,&rdquo; is the most that CNBC will venture.
Oftentimes there&rsquo;s no &ldquo;reason&rdquo; at all for a single day&rsquo;s trading action. But if there&rsquo;s one today, it might be this: Mr. Market was expecting some sort of grand bargain coming out of the Trump-Xi summit in Beijing &mdash; after which Chinese leaders would lean on their friends in Tehran to reopen the Strait of Hormuz.
But Trump is flying home with no such outcome.
Thus, the disappointment trade: U.S. oil futures are up nearly $3.50 to $104.59 &mdash; the highest all month. (Also, with the summit now over, Trump could conceivably resume the war later today after the markets close for the weekend. No one wants to be short crude under those circumstances.)
Rising oil prices translate to rising inflation expectations &mdash; which then translate to rising Treasury yields.
The yield on a 10-year note has sailed up to 4.58%, the highest in nearly a year. The 30-year bond is up to 5.12%, the highest since &mdash; yikes!
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3TMjoFem0j1V77QLSaJr8C/64b785cda7e952660b9560c023c9832b/FMF-Issue-051526-4.jpg" alt="Jim Bianco Tweet" width="540px" />
That&rsquo;s bond investors saying they want to be compensated for the risk of taking on Uncle Sam&rsquo;s debt at a fixed rate over a long stretch of time.
Jitters in the bond market of this magnitude almost always drag down the stock market. After closing yesterday over 7,500 for the first time, the S&amp;P 500 is down nearly 1%. Ditto for the Dow. And the Nasdaq is down nearly 1.25%.
The highflying chip stocks are dipping a little closer to earth, the Philadelphia Semiconductor index down 3.2%.
Precious metals? Getting crushed. Gold is down over $100 to $4,542. Silver is down over $7 to $76.26.
Crypto is faring reasonably well under the circumstances. Still Bitcoin is sinking toward $79,000 and Ethereum near $2,200.
One economic number of note: The Federal Reserve says industrial production jumped 0.7% in April &mdash; way more than expected. It remains to be seen whether that&rsquo;s the start of an uptrend, or just a surge of incoming orders from buyers hoping to beat looming price increases.
No major economic numbers next week &mdash; instead all eyes will be on Nvidia&rsquo;s earnings, due after the closing bell on Wednesday.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Fort Knox Redux
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Aw c&rsquo;mon, not this again.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6DhCdDBpsECScuKFfElBl5/025b42f6620d4f6fdfd7860115a3dad9/FMF-Issue-051526-5.jpg" alt="Watcher guru tweet" width="540px" />
&ldquo;We wanted to go and knock on the door of Fort Knox &mdash; a very thick door &mdash; and to see whether or not we have any gold in there,&rdquo; said Donald Trump a few days ago on Sharyl Attkisson&rsquo;s syndicated news show.
&ldquo;It&rsquo;s a very interesting question. We played with that. I wonder if they left the gold in Fort Knox, because they steal a lot,&rdquo; he rambled. &ldquo;I do want to go to Fort Knox sometime.
&ldquo;I want to see if the gold is there, which I&rsquo;m sure it will be.&rdquo;
Whatever.
We remember the buzz early in Trump&rsquo;s second term. Our Jim Rickards <a href="https://paradigmpressroom.com/post/golds-hype-cycle-you-are-here">poured cold water</a> on the notion even then. By summertime, when it was obvious the audit was never gonna happen, <a href="https://paradigmpressroom.com/post/fort-knox-fake-out">Jim explained </a><a href="https://paradigmpressroom.com/post/fort-knox-fake-out">why</a> it was never gonna happen.
For anyone taking Trump at his word about Fort Knox now &mdash; well, it&rsquo;s time to trot out the meme.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/14SU2KQfOPh0bNNiPWwEtY/ea2ea66f6f85084f85ad791d88a1e0f5/FMF-Issue-051526-6.jpg" alt="Comedic Relief" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Generational Resentment
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />The meme shared <a href="https://paradigmpressroom.com/post/kevin-warshs-no-win-bind">in yesterday&rsquo;s edition</a> brought forth the following objection&hellip;
&ldquo;Dave &mdash; saw your &lsquo;cartoon&rsquo; with retiring boomers laying in wait to attack hardworking millennials &mdash; interesting take on working-class boomers who busted their asses for years and get their basic SS bene and Medicare.
&ldquo;Some like this old guy remember all the years paying self-employed FICA as well as FICA for two&ndash;three employees for years. Dude, I coulda done better avoiding SS and paying into my own acct. in lieu of that. Anyway, I am now looking for the nearest high cliff so that I can just keep on walking.
&ldquo;Short memories are the part of the devil's brew to create hate and discord. Maybe you thought it was just humor, but you missed the mark, and you dropped a notch or two in my personal respect ledger.&nbsp;
&ldquo;You still get a bunch of things right, so I'll keep reading. Hang in there (not literally!)&rdquo;
Dave responds: Sometimes I share a meme not because I necessarily agree with it, but as a reflection of the zeitgeist. And that&rsquo;s the case here.
No doubt you worked hard to attain your present circumstances. Point is, there are legions of millennials and Gen-Zers who feel that no matter how hard they work, they&rsquo;ll never be able to live as well as the boomers of their personal acquaintance.
This might be especially so for the oldest millennials, now turning 45 (!) and approaching the midpoint of their working years.
Today&rsquo;s not the time to get into the whys and wherefores of the younger generations&rsquo; resentments. Suffice to say they exist &mdash; and they&rsquo;re going to come more and more to the surface in the years ahead.
No judgment attached here &mdash; just an early-wave Xer calling balls and strikes&hellip;

FMF-Issue-051526-Featured

Backlash! (Data Centers)

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />&ldquo;Tank Bottom&rdquo; Date: July 4
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The ceasefire in the Persian Gulf is now one month old. And while the guns aren&rsquo;t firing (for the most part), the noise is nonetheless deafening.
A deal is on, a deal is off. The president posts on social media, the war secretary holds a press conference, the Iranians put out a new Lego video.
Noise, noise, noise.
Once more, here&rsquo;s what matters most&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/qD2jsifipXRwzmigEVq0q/843acf906dc53266837c6db6ecebc31a/FMF-Issue-050826-1.jpg" alt="Daily crossing in Hormuz." width="540px" />
AAA says the national average price for a gallon of regular unleaded gasoline this morning is $4.55 &mdash; up from $4.17 a month ago and $3.15 a year ago.
Product is pricey &mdash; but it&rsquo;s still available.
That might not be the case in some spots by the Fourth of July &mdash; which, interestingly, is also a critical date for the Iranian side.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;When do storage tanks run empty?&rdquo; a Bloomberg TV anchor asked Carlyle Group&rsquo;s Jeff Currie yesterday.
When it comes to commodities, Currie is a vital voice outside of Paradigm that we follow closely.
His answer: &ldquo;It&rsquo;s going to be sometime in the month of May that you&rsquo;re going to end up with Europe hitting tank bottoms.
&ldquo;And in the U.S. it&rsquo;s somewhere in that July Fourth time period &mdash; if not sooner.
&ldquo;By the way, the inventories number coming out of the U.S. &mdash; the ones we got last night, the ones last week &mdash; I&rsquo;ve never seen anything like that before.&rdquo;
Overall crude inventories still look robust. But beneath the surface&hellip;
<ul>
<li>Fully 5% of the U.S. Strategic Petroleum Reserve has been drained since late March (and it was already near historically low levels)</li>
</ul>
<ul>
<li>Gasoline inventories are now 4% below the 5-year average for this time of year</li>
</ul>
<ul>
<li>Distillates inventories (diesel, fuel oil) are 11% below the 5-year average for this time of year.</li>
</ul>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As we&rsquo;ve mentioned in recent days, July 4 is also a date that looms large for Iran.
Last week, corporate media outlets reported that the U.S. blockade on Iranian ports is bottling up Iranian oil shipments to such an extent that there&rsquo;s nowhere to store it and the country&rsquo;s oil infrastructure will soon be damaged beyond repair.
Bloomberg even put a date on that point of no return &mdash; sometime between tomorrow and May 18.
We gave these reports the side-eye from the start. More objective observers examining the evidence and presenting their findings on social media figured Iran had two more months before reaching the bursting point.
Later that week, Ronald Reagan&rsquo;s budget director David Stockman ran the numbers and came to the same conclusion: Iran can stick it out until nearly the Fourth of July.
Now it seems that America is facing the same drop-dead date &mdash; for the opposite reason.
Eight weeks from tomorrow. Stay tuned&hellip;
➢ For the record: We have a new estimate of the Iran war&rsquo;s cost to the U.S. taxpayer: $72 billion for the first 60 days, according to Stephen Semler of the Center for International Policy.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Insider Trading: Is the Denial a Confession?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> About the skeevy-looking insider trading in the oil markets this week&hellip;
As we mentioned <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition">in real-time on Wednesday</a>, U.S. oil futures plunged when Axios reporter Barak Ravid reported that &ldquo;the White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war.&rdquo;
About an hour and 10 minutes before Ravid&rsquo;s report was posted, someone or a group of someones placed a $920 million bet on falling oil prices. It generated $125 million in profits in just 3&frac12; hours.
Later on Wednesday, an X account called &ldquo;The Hormuz Letter&rdquo; made a grave accusation&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5B1kUs5TeFYyw9Ecm4TcgY/3823e99d2308896d1f583bf8f7651d4d/FMF-Issue-050826-2.jpg" alt="Hormuz Letter" width="540px" />
Background: The Hormuz Letter is an account launched last December. It claims to be Iranian although X says it&rsquo;s based in Europe. It&rsquo;s acquired nearly 50,000 followers, most of them since the war began.
So&hellip; who are these &ldquo;whistleblowers,&rdquo; exactly? White House insiders? Financial pros who know the ins and outs of market plumbing?
The Hormuz Letter did not say in any subsequent posts. Nor did it seem to be latching onto the reporting of any Western news outlet &mdash; nothing your editor could track down, anyway.
And so I blew the whole thing off as engagement bait on the part of The Hormuz Letter.
Until&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6e5STviTXr3M98T9FOqEJ2/ff00b043429797ffa660e1a1b987904c/FMF-Issue-050826-3.jpg" alt="Barak Ravid Tweet" width="540px" />
Why on Earth would Barak Ravid deny a thinly sourced claim from an Iranian X account that&rsquo;s been around for less than six months?
Of course The Hormuz Letter hit back with the obvious rejoinder: &ldquo;The fact that you&rsquo;re denying it confirms it&rsquo;s true.&rdquo;
This much we know for certain: Barak Ravid is a veteran of Unit 8200, Israel&rsquo;s version of the National Security Agency. He&rsquo;s also been a reliable conduit for authorized leaks from the Trump administration for months now &mdash; including a handful of market-moving claims that peace is at hand.
<a id="3"></a>
&ldquo;Time after time,&rdquo; tweets the independent journalist Max Blumenthal, &ldquo;his &lsquo;reports&rsquo; are discredited and/or shot down by Iranian officials.
&ldquo;And now, everyone who&rsquo;s paying attention is onto him.&rdquo;
Moving on&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />All-Time Lows, All-Time Highs
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In addition to the war noise, the government&rsquo;s monthly jobs report figures into the market mix today.
The headline number was robust: The wonks at the Bureau of Labor Statistics say employers added 115,000 jobs in April &mdash; nearly double what the typical Wall Street economist was expecting. The official unemployment rate held steady at 4.3%.
The longer-term picture is still&hellip; concerning.
As we&rsquo;ve pointed out now and then in recent months, the fact the U.S. border has been effectively sealed for the last year changes the calculus when it comes to new jobs: In years gone by it took at least 150,000 new jobs a month to keep up with population growth. But without an influx of immigrants, the number could now be as low as 30,000.
Unfortunately, the average over the last 12 months is closer to 21,000. Not dire, but not great.
The report also says average hourly earnings grew 3.6% over the last year &mdash; which is more than the official inflation rate of 3.3%.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The numbers notwithstanding, wage earners don&rsquo;t feel as if they&rsquo;re keeping pace: The other big economic report today is consumer sentiment from the University of Michigan.
At 48.2 the number is still in the toilet &mdash; not quite record lows, but abysmal for a survey that&rsquo;s been conducted monthly since 1977. Asked what the inflation rate will be over the next 12 months, the average respondent said 4.5%.
Often this survey is little more than a reflection of how the stock market is doing. Not now &mdash; not with consumer sentiment near all-time lows and the market near all-time highs.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Speaking of the market near all-time highs&hellip; the S&amp;P 500 is on the way to its sixth-straight winning week.
At last check the index is up three-quarters of a percent to nearly 7,400 &mdash; more than offsetting yesterday&rsquo;s modest losses. The Nasdaq is likewise in record territory, comfortably surpassing 26,000. The Dow, as usual, is the laggard &mdash; barely in the green and still 350 points away from 50,000.
&ldquo;The chip stocks are soaring again today, leaving everything else in the dust,&rdquo; says Greg Guenthner at The Trading Desk. &ldquo;But this rally is stretched to the max, and it&rsquo;s starting to concern me. I&rsquo;d like to see some consolidation before it gets out of control.&rdquo;
Amid this rally, the Paradigm editors have racked up several wins in the last two days&hellip;
<ul>
<li>Readers of Enrique Abeyta&rsquo;s Breaking Profits bagged 227% in 13 months with shares of Quanta Services (PWR). And in Enrique&rsquo;s premium advisory The Maverick, long-dated call options on PWR generated 468% gains in less than a year</li>
</ul>
<ul>
<li>Meanwhile, Altucher&rsquo;s True Alpha readers collected 50% gains on the first half of a couple of trades, while letting the other half ride.</li>
</ul>
The aforementioned noise about the situation in the Persian Gulf has put U.S. oil futures at $94.68 &mdash; not much different from yesterday, but well below the $102 we saw at this time last week. (That&rsquo;s the power of a Barak Ravid article.)
Precious metals are gyrating around their late-April levels &mdash; gold over $4,700 and silver comfortably above $80.
Bitcoin is only a few bucks from reclaiming $80,000 while Ethereum rests at $2,281.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> This one might have been around a few years ago, but it&rsquo;s relevant once more&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/hRN6LMZVIRQbeaht8rkZu/7722dcf3c003240259686f42b1c3c754/FMF-Issue-050826-4.jpg" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: YOLO, California Fuel, Liquid Gold
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In a reminder that we can&rsquo;t take certain things for granted here&hellip; a reader submits a three-word email after Greg Guenthner&rsquo;s guest essay yesterday: &ldquo;What is YOLO?&rdquo;
YOLO is short for &ldquo;You only live once.&rdquo; The term came to the fore after legions of young people entered the markets for the first time during COVID lockdowns in 2020&hellip; and really took off amid the frenzy over GameStop and other &ldquo;meme stocks&rdquo; in early 2021.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the subject of the last tanker of Persian Gulf oil arriving in California this week, we heard from someone in an inland county that votes reliably &ldquo;red&rdquo;...
&ldquo;I think this &lsquo;no oil-no gasoline&rsquo; crisis will be used by the California greenies to say, You should have bought your electric cars and solar panels, now look who&rsquo;s laughing.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Buck Sexton&rsquo;s reminder <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition">in Wednesday&rsquo;s edition</a> that &ldquo;when cash is king, gold gets sold&rdquo; prompted the following reader comment&hellip;
&ldquo;That is a great point &mdash; and it jibes with a recent <a href="https://www.macleodfinance.com/p/gold-differences-of-opinion">observation</a> by Alasdair Macleod: &lsquo;U.S.-centric pricing is a credible explanation for gold&rsquo;s performance&rsquo; re: why its price seems to be doing the opposite of what it should.
&ldquo;Lately, gold falls when the risk of war increases or the price of oil goes up, and rises when tensions ease.
&ldquo;Fun times!&rdquo;
Dave responds: Really, it&rsquo;s a point we can&rsquo;t emphasize often enough. In the short term, events occur that might lead you to believe gold should rise &mdash; but it doesn&rsquo;t. (As I like to say, should is the most dangerous word in all of investing.)
If there&rsquo;s a scramble for liquidity &mdash; margin calls, derivative bets gone bad, whatever &mdash; gold is one of the most liquid assets out there. It&rsquo;s easy to sell, so it gets sold.
The most instructive example is the 2008 financial crisis. Gold surpassed $1,000 an ounce for the first time in March of that year. But when the crisis went critical that autumn, it tumbled to nearly $700.
Then it began to roar higher &mdash; reaching a peak of $1,900 less than three years later.
But leave aside the liquidity issues: After the insane ramp gold experienced in January &mdash; from roughly $4,300 at the start to $5,600 at the peak, some sort of consolidation period before the next leg higher was inevitable.
And that&rsquo;s where we are now: Gold at $4,713 might not feel great. But if you&rsquo;re a long-term holder, take heart &mdash; $4,713 was a record high less than four months ago!

FMF-Issue-050826-Featured

“Tank Bottom” Date: July 4

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Groundhog Day, Iran Edition
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Here we go again&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/DGQ7P7D50yJIYQQm3dBT0/bdc4039ffdc0b55422082ca5a558234f/FMF-Issue-050626-1.jpg" alt="Peace Deal" width="540px" />
There&rsquo;s a lot that&rsquo;s happened in the last 18 hours or so. Let&rsquo;s try to make sense of it.
Last night, Donald Trump declared a &ldquo;pause&rdquo; to a scheme announced only 48 hours earlier in which international shipping would be &ldquo;guided&rdquo; through the Strait of Hormuz &mdash; but not with U.S. Navy escorts.
Just as well. No one understood the initial announcement. &ldquo;We&rsquo;ve really no idea what all this means,&rdquo; one shipping exec told the Financial Times. &ldquo;There&rsquo;s no communications plan, no routing information has been published and there&rsquo;s no assurance ships will be supported in the event of any attack.&rdquo;
The &ldquo;pause&rdquo; announcement was good to knock down the price of U.S. oil futures decisively below $100 for the first time in a week.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Then early this morning came another &ldquo;peace is at hand&rdquo; post from one of the Trump administration&rsquo;s favorite reporters &mdash; Barak Ravid of Axios.
&ldquo;The White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, according to two U.S. officials and two other sources briefed on the issue.&rdquo;
Never mind, as Cato Institute scholar Justin Logan tweets, that &ldquo;Barak Ravid has predicted seven of the last zero peace deals between the U.S. and Iran.&rdquo;
Crude plunged in a matter of moments from over $98 to under $90.
➢ And par for the course, there was what looks like blatant insider trading ahead of Ravid&rsquo;s &ldquo;scoop&rdquo; &mdash; a $920 million bet on falling oil prices that generated $125 million in profit in just 3&frac12; hours.
Meanwhile, stock futures sailed higher &mdash; as frequently happens under these circumstances.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/h7YJgow88rPX8RzyJf8VK/efd5f67e25cf4c63ab739927a306d416/FMF-Issue-050626-2.jpg" alt="TT3 Tweet" width="540px" />
A couple of hours later, Trump posted on his Truth Social site that Iran will be bombed at a &ldquo;much higher level&rdquo; if there&rsquo;s no deal.
That reversed the price action in oil &mdash; from under $90 back to $96. Still substantially lower than was the case when we were writing to you 24 hours ago. Checking our screens at midday, it&rsquo;s $95.57.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The major U.S. stock indexes leaped higher as soon as trading opened at 9:30 a.m. EDT.
And those gains are still holding &mdash; the S&amp;P 500 up over 1% in record territory at 7,340 and the Nasdaq up 1.6% in record territory at 25,728. (As usual of late, the Dow is the laggard, up 1% and still 200 points away from 50,000.) It helps that there&rsquo;s been another blowout earnings report from a chipmaker: AMD is up 16.8% after boffo numbers and strong guidance.
Bonds are rallying too, sending yields down. At last check the yield on a 10-year Treasury note is back below 4.36%. What we&rsquo;ve been noticing in this space is being picked up by others&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7HbK9hZvs0AbMMeRYPDZid/e2d62216edc34c9b9d5463518696d7fb/FMF-Issue-050626-3.jpg" alt="Gromen Tweet" width="540px" />
Precious metals are rallying big-time &mdash; gold up 2.7% to $4,681 and silver up 5.6% to $76.80. Crypto, however, is consolidating with Bitcoin around $81,500 and Ethereum still a ways away from $2,400.
Meanwhile, all the supply-chain snarls we chronicled again <a href="https://paradigmpressroom.com/post/summer-of-shortages-050526">yesterday</a> remain with us: The big Dutch firm Philips says it&rsquo;s having trouble obtaining helium for its MRI and CT scanners.
&ldquo;Medical imaging has a huge global footprint and unfortunately indeed with the Strait of Hormuz we saw the vulnerability of the dependency of such a finite material,&rdquo; CEO Roy Jakobs tells Bloomberg.
And that&rsquo;s where things stand with the war. Let&rsquo;s nervously turn our attention to other matters&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Gold: What&rsquo;s Next?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Central banks picked up their gold buying in the first quarter of 2026,&rdquo; says Paradigm macroeconomics maven Jim Rickards.
&ldquo;Elevated central bank buying ramped up in early 2022, after Russia invaded Ukraine. Biden and his EU cronies foolishly confiscated $300 billion worth of U.S. Treasuries owned by Russia's central bank.
&ldquo;This instantly caused central bankers around the world to buy gold, and reconsider their allocation to U.S. Treasuries. It was the spark that accelerated the current bull run, and there&rsquo;s no end in sight.&rdquo;
The World Gold Council reports that the total for the first three months of 2026 is 244 metric tons, the strongest quarterly figure in more than a year.
If the Q1 pace holds for the rest of the year, 2026 will easily exceed last year&rsquo;s total.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6Z5BIbaF0gQIDTVUhro8im/a680a13461fcedaec0e613648632fad6/5.6_5_Bullets_Chart.png" alt="Buying Accelerates" width="540px" />
Major buyers in the previous quarter included Poland, Uzbekistan and China.
Key point: China is notorious for underreporting its gold purchases. Officially its gold stash totals 2,313 metric tons. Unofficially it could be at least twice as large.
For reference the U.S. total is 8,134 metric tons &mdash; <a href="https://paradigmpressroom.com/post/the-truth-about-gold-manipulation">assuming those bars aren&rsquo;t being leased to foreigners</a>.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But what does any of this say about gold&rsquo;s investment potential with a third of 2026 already in the rear-view?
Many market observers scratched their heads when the war began&hellip; and the gold price fell.
&ldquo;Gold is supposed to go up when the world gets messy,&rdquo; observes Money &amp; Power editor (and nationally syndicated radio host) Buck Sexton. &ldquo;And yet gold has pulled back.&rdquo;
What gives?
&ldquo;The truth is when things start to break &mdash; and make no mistake, they are &mdash; investors don&rsquo;t sit around calmly rebalancing their portfolios,&rdquo; is his answer. &ldquo;They scramble and raise cash, grabbing whatever liquidity they can get their hands on.
&ldquo;And in a world still running on the U.S. dollar, that means everyone needs dollars. Now.&rdquo;
As Mr. Sexton sees it, it&rsquo;s not a gold problem but rather a liquidity problem.
&ldquo;The war in the Middle East disrupted the global economy. Oil and natural gas don&rsquo;t move without friction anymore and countries still have to pay for that energy &mdash; no matter the price.
&ldquo;And they can&rsquo;t pay in gold. They have to pay in dollars.
&ldquo;On top of that, there&rsquo;s a slow-motion credit squeeze underway, especially in private markets. Funds that were perfectly comfortable six months ago are suddenly dealing with losses, redemptions and margin calls.
&ldquo;That&rsquo;s where gold comes in. Gold is liquid. It&rsquo;s globally recognized. It can be turned into dollars quickly. So when pressure builds, it becomes a source of cash.
&ldquo;Simple as that. When cash is king, gold gets sold.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But don&rsquo;t lose sight of that chart above. &ldquo;Even as countries deal with short-term pressure &mdash; raising dollars, stabilizing currencies, managing crises &mdash; they&rsquo;re also thinking long term and building a buffer,&rdquo; Sexton continues.
&ldquo;They&rsquo;re dumping gold with one hand&hellip; and stockpiling it with the other.&rdquo;
Deutsche Bank forecasts $8,000 gold by 2031. &ldquo;As long as central bank demand continues and gold becomes a larger share of global reserves, we could hit that number even sooner.&rdquo;
After all, &ldquo;supply isn&rsquo;t exactly flooding the market. Mining output has been relatively flat and new discoveries are harder to come by. It&rsquo;s not easy to just flip a switch and increase production.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />AI, the White House and Hackers
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The Trump administration is digging its fingers still deeper into the AI pie.
<a href="https://paradigmpressroom.com/post/summer-of-shortages-050526">In yesterday&rsquo;s edition</a> we told you how the administration has been rethinking its hands-off approach to AI. It seems someone or a group of someones in the White House was freaked out by Anthropic&rsquo;s new Mythos model. Anthropic says it&rsquo;s so powerful that it unearthed &ldquo;high-severity vulnerabilities&rdquo; in &ldquo;every major operating system and web browser.&rdquo; A sweeping new AI executive order might be in the works.
Now comes word that Team Trump is doubling down on a Biden-administration scheme in which major AI firms share their models with the feds before they&rsquo;re released to the public.
When launched in 2024, Anthropic and ChatGPT parent OpenAI immediately signed on. Now The Wall Street Journal reports that Google, Microsoft and Elon Musk&rsquo;s xAI have also bought into the policy.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Uncomfortable question: If the feds discover vulnerabilities that these companies managed to overlook, will they tell these companies or keep it to themselves?
In 2017, we chronicled the &ldquo;Vault 7&rdquo; revelations of WikiLeaks: The CIA discovered vulnerabilities in the hardware and software produced by American high-tech companies like Cisco.
But rather than say to those companies, &ldquo;Hey, we found this stuff &mdash; you might want to patch it,&rdquo; they said to themselves, &ldquo;Hey, what if we use this stuff to jack around with the Chinese and the Russkies and the Iranians?&rdquo;
The fact that hackers might discover the same vulnerabilities and use them to jack around with you? The CIA couldn&rsquo;t have cared less.
At the time, Reuters described how as soon as WikiLeaks published the documents, engineers at Cisco were pulled off other projects &ldquo;to analyze the means of attack, create fixes and craft a stopgap warning about a security risk affecting more than 300 different products&hellip;
&ldquo;That a major U.S. company had to rely on WikiLeaks to learn about security problems well-known to U.S. intelligence agencies underscores concerns expressed by dozens of current and former U.S. intelligence and security officials about the government's approach to cybersecurity.&rdquo;
This time, the AI giants may never find out what the feds discover until millions of their users are hacked: The 2017 document dump was WikiLeaks&rsquo; last major revelation.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A timely reminder&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5t2kvU2a606d9qwygvxeUj/2e91506636359b0a45f5a8a9179810c4/FMF-Issue-050626-5.jpg" alt="Timely Reminder" width="540px" />[Hat tip: Ed Steer&rsquo;s Gold &amp; Silver Daily. I&rsquo;ve been a subscriber for years.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Trader Challenge, ASTS
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I entered your Top Trader challenge selecting one stock, which results in making a mockery of investing in a sense,&rdquo; a reader writes &mdash; &ldquo;a gamble on long-shot investment.
&ldquo;I'd rather see something along the lines of selecting five stocks over a fiscal quarter&hellip; an investing contest with merit. Just my humble opinion.&rdquo;
Dave responds: Thank you for the input. Maybe I didn&rsquo;t emphasize it strongly enough at the outset, but this contest had nothing to do with investing. That&rsquo;s why we called it the Top Trader challenge.
Once you&rsquo;re looking at a quarterly timeframe you&rsquo;re in the hazy dividing line between trading and investing. But we&rsquo;ll take your suggestion into consideration as we figure out how to mix it up for the next go-round.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Finally, a very short email: &ldquo;ASTS &mdash; Are you still buying?&rdquo;
To be clear, this is a free e-letter and as such we seldom tackle specific recommendations drawn from our paid publications &mdash; out of respect for the paying subscribers.
But&hellip; AST SpaceMobile is a workhorse holding in James Altucher&rsquo;s entry-level newsletter Altucher&rsquo;s Investment Network. It&rsquo;s up 345% from the initial recommendation in January 2021. This is hardly the first time we&rsquo;ve discussed it here.
Yes, the share price has taken a spill since its peak in February. But Ray Blanco &mdash; the tech and biotech specialist on James&rsquo; team &mdash; is as enthusiastic as ever.
In its quest to deliver satellite wireless service to the mobile phone you already have in your pocket, ASTS has an unbeatable advantage &mdash; access to the 700 MHz and 800 MHz portions of the wireless spectrum.
&ldquo;This is the band that actually penetrates buildings,&rdquo; says Ray &mdash; &ldquo;the signal where your phone lives.&rdquo; Aspiring competitors are stuck on higher frequencies where service will be less reliable.
Ray added to his personal position after the failed launch of an ASTS satellite last month. It was a one-off failure on the part of the rocketmaker Blue Origin. As he sees it, the fundamental story hasn&rsquo;t changed.
Indeed, shares are screaming 9.2% higher today on the news that Rakuten &mdash; the Japanese conglomerate that was an early investor in the firm &mdash; has finished its previously announced plans to sell 15 million ASTS shares. (Rakuten was deep in debt; it needed cash and it was sitting on 20X gains with ASTS.)
ASTS reports earnings next Monday. If you&rsquo;re an Altucher&rsquo;s Investment Network subscriber, watch your email (or the Paradigm mobile app) for ASTS updates as they happen.

FMF-Issue-050626-Featured

Groundhog Day, Iran Edition

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Summer of Shortages
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The war drums are beating more quietly than they were 24 hours ago.
Forget the competing claims and counterclaims from Washington and Tehran about who shot at whom and when.
What matters for the moment is that as Washington sees it, Tehran has not broken the ceasefire: Everything so far is &ldquo;below the threshold of restarting major combat operations at this point,&rdquo; says Gen. Dan Caine, chair of the Joint Chiefs of Staff.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> None of which changes the fact that the Strait of Hormuz remains all but closed.
We ran down the numbers two months ago. They&rsquo;re worth revisiting today. Because it&rsquo;s not just that a quarter of the world&rsquo;s crude oil transits the strait during normal times. So does&hellip;
<ul>
<li>About 15% of the world&rsquo;s refined diesel and jet fuel (which is why airline stocks are having such a rough time)</li>
</ul>
<ul>
<li>Roughly 20% of the world&rsquo;s liquefied natural gas (very bad for Europe, whose leaders already swore off Russian gas)</li>
</ul>
<ul>
<li>About 35&ndash;40% of fertilizers (Reminder: About 70% of U.S. farmers tell the American Farm Bureau Federation say they can&rsquo;t afford all the fertilizer they&rsquo;ll need this year)</li>
</ul>
<ul>
<li>Over 40% of sulfur (used in everything from fertilizers to oil refining to mining to water treatment)</li>
</ul>
<ul>
<li>And 10% or more of aluminum and iron ore.</li>
</ul>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;There are no easy substitutes for any of these outputs,&rdquo; says Paradigm&rsquo;s macroeconomics maven Jim Rickards.
&ldquo;The U.S. and Russia may increase their oil exports somewhat but LNG, chemicals, fertilizers, aluminum and refined oil products (gasoline, diesel, jet fuel) are not easily replaced if at all.
&ldquo;Kuwait&rsquo;s Mina Al-Ahmadi oil refinery, which processes 730,000 barrels of oil per day, has been struck by Iranian missiles extensively. Saudi Arabia&rsquo;s giant Ras Tanura refinery complex, which handles 550,000 barrels per day, has also come under attack.
&ldquo;Shortages will soon appear not only in crude oil but also in refined products. Of course, damage to oil production infrastructure elevates the price of LNG alongside the prices of crude oil and refined products.&rdquo;
Speaking of LNG, &ldquo;the damage to Qatar&rsquo;s Ras Laffan LNG export facilities from Iranian missiles and drones is so extensive that 20% of its capacity may be offline for years. Ras Laffan produces 20% of the world&rsquo;s LNG.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Who&rsquo;s feeling the impact most? Jim runs down a list for us&hellip;
<ul>
<li>In the world&rsquo;s least-developed countries, Jim says &ldquo;those most dependent on Persian Gulf nitrate exports and therefore those most likely to suffer from higher prices and supply shortages are Jordan, Pakistan, Sri Lanka, Egypt, Ethiopia and Kenya&rdquo;</li>
</ul>
<ul>
<li>Among the more prosperous developing countries, &ldquo;Brazil will be the hardest hit. Brazil relies heavily on imports of nitrogen fertilizer to support its agricultural output including coffee and soybeans&rdquo;</li>
</ul>
<ul>
<li>In the developed Asian economies, &ldquo;Japan and South Korea are almost completely dependent on Middle Eastern exports of oil and natural gas. Large sectors of their industrial capacity will begin to shut down within weeks if the energy shortages are not alleviated&rdquo;</li>
</ul>
<ul>
<li>And in Europe, the impact might be the most severe &mdash; given European leaders&rsquo; insistence on what Jim calls the &ldquo;Green New Scam&rdquo; of solar and wind. &ldquo;European natural gas reserves were only 46 billion cubic meters (bcm) in early March, down from 60 bcm in 2025 and 77 bcm in 2024. The Telegraph reports that Europe is burning through gas reserves faster than they can be replaced.&rdquo;</li>
</ul>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And then there&rsquo;s California, unique in the United States because of its reliance on oil imports from the Gulf region &mdash; the last of which just arrived at the Port of Long Beach after a trip that started before the war on Feb. 24.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6p2OPzIdlXpjyc9YJH1OFa/344f832532e3947ff68e0d90a13ee62d/FMF-Issue-050526-1.png" alt="pub" width="540px" />
Paradigm&rsquo;s resident oil field geologist Byron King went in-depth on California&rsquo;s conundrum in a <a href="https://dailyreckoning.com/california-nightmare-a-looming-energy-disaster/">special guest essay</a> last week &mdash; and the arrival of this tanker, called the New Corolla, puts it all into sharp focus.
&ldquo;After she sails away, California &mdash; namely its refiners, and political powers who care about energy &amp; stuff &mdash; must figure out how to replace all that imported oil that will no longer be arriving from the Persian Gulf,&rdquo; says Byron now.
&ldquo;Alternative sources include Ecuador and Brazil, but that involves outbidding refineries pretty much everywhere else, which are also scrambling for crude oil.
&ldquo;By the end of May, people in the Golden State will look back with fond nostalgia for the &lsquo;good old days&rsquo; of $6 gasoline and $9 diesel. It's going to get bad out there, and effects will ripple across the U.S. economy like a 200-car Union Pacific freight train. Brace for impact.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Busting a Buffett Myth
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;While value investing is where he started, Warren Buffett is actually the greatest growth investor of all time,&rdquo; says our senior investment director Enrique Abeyta.
Enrique was in attendance last weekend at Berkshire Hathaway&rsquo;s annual meeting in Omaha, Nebraska &mdash; the first where Buffett was not presiding as CEO and his chosen successor Greg Abel was.
Still, Buffett&rsquo;s presence was felt everywhere. And many attendees still sing his praises as a value investor. A few were probably lugging around copies of The Intelligent Investor, the legendary book penned by Buffett&rsquo;s Columbia professor Benjamin Graham.
As a reminder, value investing means buying companies at less than book value &mdash; the accounting value of their assets. Alternatively, it means buying a company below the replacement value of its assets, or liquidation value.
Problem is, times have changed. Value investing&rsquo;s heyday &ldquo;was before these strategies became well known, the explosion in the asset management business and (most importantly) the internet,&rdquo; says Enrique.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Besides, value investing isn&rsquo;t where Buffett made his money. &ldquo;It was buying large companies that would then go on to grow their earnings tremendously,&rdquo; Enrique says.
Case in point &mdash; the ultimate &ldquo;Buffett stock,&rdquo; Coca-Cola. A $1.3 billion investment in 1988 has swelled to $24.5 billion today.
At the time of the purchase, KO sported a price-earnings ratio of 15.8X. Over the following three decades, the median P/E was 27X &mdash; up about 70%.
That&rsquo;s nice. But look at the earnings per share: &ldquo;It has grown 1,270% from $0.18 per share to almost $2.50 per share in 2023,&rdquo; Enrique says.
&ldquo;The valuation of KO stock was not what drove the appreciation in Buffett&rsquo;s stake&hellip; it was the growth in the earnings.&rdquo;
Oh, and don&rsquo;t forget the dividends. The dividend grew 2,200% from 8 cents per share to $1.84.
Which gets back to Enrique&rsquo;s favorite Buffett quote: &ldquo;It&rsquo;s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As for the markets today, the major U.S. stock indexes are recovering much of yesterday&rsquo;s losses.
At last check the S&amp;P 500 is back in record territory at 7,259. Ditto the Nasdaq at 25,310. The Dow is also in the green, but still a long way from reclaiming its 50,000 levels of February.
The attempt in Washington to lower the temperature in the Persian Gulf (see above) has knocked over $4 off of U.S. oil futures &mdash; now just over $102 a barrel.
Interesting: The yield on a 10-year Treasury note has been bumping up against the 4.4% level for a few days now. Back in March, every time the 10-year approached 4.4%, Donald Trump made some sort of conciliatory statement or gesture toward Tehran so as to not further spook the bond market. Perhaps that&rsquo;s what&rsquo;s going on here as well&hellip;
Precious metals are staging a weak rebound, gold at $4,563 and silver at $73.18. Bitcoin has surpassed $81,000 for the first time in over three months and Ethereum is approaching $2,400.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Trump and AI and Cyberattacks
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The Trump administration is rethinking its hands-off approach to AI.
Rewind to the days after Election Day 2024: Silicon Valley venture capitalist Marc Andreessen is interviewed by Joe Rogan. Andreessen tells of a meeting he and his partner Ben Horowitz had earlier that year with Biden administration officials.
&ldquo;They told us to not even start AI companies because there&rsquo;s no way they&rsquo;ll let them succeed,&rdquo; he said. The aim was to limit AI to &ldquo;a function of two or three large companies&rdquo; under tight government control.
Asked by Rogan &ldquo;What do you do after a meeting like that?&rdquo; Andreessen replied, &ldquo;You go endorse Donald Trump.&rdquo; Which he did.
Last summer, President Trump said of AI, &ldquo;We&rsquo;re going to make this industry absolutely the top, because right now it&rsquo;s a beautiful baby that&rsquo;s born. We have to grow that baby and let that baby thrive. We can&rsquo;t stop it. We can&rsquo;t stop it with politics. We can&rsquo;t stop it with foolish rules and even stupid rules.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Evidently that all changed last month when Anthropic took the wraps off its Mythos AI model. 
Anthropic claims Mythos is so powerful it unearthed &ldquo;high-severity vulnerabilities&rdquo; in &ldquo;every major operating system and web browser.&rdquo; Seems the Trump admin is now spooked by the prospect of a major AI-enabled cyberattack.
Thus, The New York Times cites &ldquo;U.S. officials and people briefed on the deliberations&rdquo; as saying the administration is &ldquo;considering the introduction of government oversight over new AI models.
&ldquo;The administration is discussing an executive order to create an AI working group that would bring together tech executives and government officials to examine potential oversight procedures, according to U.S. officials, who declined to be identified in order to discuss deliberations over sensitive policies. Among the potential plans is a formal government review process for new AI models.&rdquo;
Anthropic, Google and OpenAI have supposedly been clued into the process.
The Wall Street Journal has confirmed the Times&rsquo; account. The Journal previously reported that the White House objects to Anthropic&rsquo;s plans to release Mythos to another 70 or so companies beyond the 40&ndash;50 that got the initial limited release.
Exactly how all of this will shift the investing landscape for AI is way too soon to tell. But it&rsquo;s not too early to put this on our radar. To be continued&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Sign of the Times
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Presented without comment&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/11Qhx1dlcH9A5oy95rFyhs/cda1970d8d9568a6292a0383735d96f7/FMF-Issue-050526-2.png" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Lucky Man
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;You sure you want to congratulate the winner of your Top Trader challenge with ELP&rsquo;s &lsquo;Lucky Man&rsquo;??&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/so-you-think-you-can-trade-results">yesterday&rsquo;s edition</a>.
&ldquo;I mean, the guy dies in the song! Not very lucky.
&ldquo;Thanks for all your hard and excellent work.&rdquo;
Dave: Well yeah, he did &mdash; but lived a very full life beforehand!
By the way, we finally tracked down and notified the $50,000 winner &mdash; a gentleman from Tennessee who was literally too busy working to answer email or pick up the phone. Once he did, he was shocked: &ldquo;Last I checked the leaderboard I was in 200th place!&rdquo;
Hey, that&rsquo;s how it works when you&rsquo;ve got a hard 30-day window. Again, thanks to everyone who took part. We&rsquo;re scheming on how to do another event like this even bigger and better.

FMF-Issue-050526-Featured

Summer of Shortages

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />&ldquo;So You Think You Can Trade&rdquo; (Results)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> OK, that was fun.
The results are in from Paradigm&rsquo;s first-ever 30 Day Top Trader challenge.
In late March, thousands of readers like you took on the challenge of identifying the one stock or ETF with the biggest profit potential between April 1&ndash;30.
As we said at the outset, this was an unusual exercise: Forget about fundamentals. This wasn&rsquo;t about identifying a &ldquo;good company&rdquo; with &ldquo;steady growth.&rdquo; This was about short-term catalysts &mdash; biotechs with big news, short-squeeze candidates, leveraged ETFs with a trendy tailwind.
And the fixed start and end dates? That only amped up the element of surprise.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Sure enough, the best-performing pick among our readers during April was a biotech that lay low until nearly the end.
Curiously, however, it wasn&rsquo;t a blockbuster trial result or an FDA approval that gave a huge lift to Edesa Biotech (EDSA) &mdash; just speculative buying ahead of a presentation the CEO will make later in May at a conference in Orlando. The company is making tracks on Phase 3 trials for a treatment of acute respiratory distress syndrome &mdash; a sudden and severe inflammation of the lungs.
EDSA&rsquo;s share price went nowhere most of April. Then it suddenly took off &mdash; racing from under $7 on April 24 to over $18 on the 30th. It wasn&rsquo;t until the final day of the challenge that EDSA emerged as the best performer of April &mdash; leaping 237.8% over the 30 days.
A total of 19 readers &mdash; fewer than one-tenth of one percent of the challenge participants &mdash; chose EDSA as their top performer of the month.
This is why we had readers make a second and third choice in addition to a top pick &mdash; to serve as tiebreakers.
Having said that, we&rsquo;re still not in a position to tell you who won the grand prize of $50,000 &mdash; nor the winner of the $10,000 second prize and $5,000 third prize. The reason is simple: We&rsquo;re still trying to get in touch with them. (Really, if it were you, it would be weird if you read it here first!)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Some more fun facts emerging from the challenge&hellip;
The second-best performer of the month was Axe Compute (AGPU) &mdash; which experienced two big leaps during the month before pulling back. Between April 1&ndash;30, it gained 219.5%.
The most popular pick, chosen by nearly 1,300 participants, was AST SpaceMobile (ASTS) &mdash; a favorite of our tech/biotech specialist Ray Blanco. As we chronicled in these pages, ASTS hit a speedbump on April 19 with its ambitions to deliver wireless service via the mobile phone you already carry in your pocket: The Blue Origin rocket carrying ASTS&rsquo;s inaugural satellite failed to deliver it to the proper orbit. It fell back toward Earth and burned up in the atmosphere.
ASTS ended the 30-day period down 12.6%. But Ray&rsquo;s conviction remains solid: The firm still plans to launch dozens of satellites this year &mdash; and it has launch contracts with firms other than Blue Origin.
<a id="2"></a>
Finally&hellip; among all the contest entries, the median return was 6.9%. Nearly two-thirds of participants &mdash; 63.6% &mdash; ended the month with their top pick in the green. And 1.2% submitted a pick that gained 100% or better.
Congratulations to the winners and thanks to everyone who took part. We&rsquo;re already thinking through how to do something like this again and make it even better. Stay tuned&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />War Back On?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The U.S.-Iran ceasefire is facing what looks like its most severe test since it came into force April 8.
The trading week started quietly enough, with Donald Trump announcing a scheme to &ldquo;guide&rdquo; shipping through the Strait of Hormuz.
The initial announcement came on social media yesterday &mdash; and gave the impression that U.S. warships might be escorting commercial vessels through the strait.
Not so, said The Wall Street Journal: &ldquo;The new mechanism is effectively a coordination cell to move traffic through the strait, involving countries, insurance companies and shipping organizations.&rdquo;
&ldquo;In other words,&rdquo; said one cynic on X, &ldquo;another Sunday market pump.&rdquo;
And it worked for a while: U.S. oil futures fell as low as $102 while stock futures were in the green.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Then everything started heating up this morning.
Iranian state media says Iranian forces fired warning shots at a couple of U.S. destroyers. Then a huge oil terminal in the United Arab Emirates came under Iranian attack. This terminal is the UAE&rsquo;s only means of bypassing the Strait of Hormuz.
CNN says Washington and Tel Aviv will return to war within 24 hours.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> With that, U.S. oil futures are back to $105.59. And while the major stock indexes opened the day flat, they&rsquo;re now decisively in the red.
The S&amp;P 500 is down a half percent from Friday&rsquo;s record close at 7,191. The Nasdaq&rsquo;s loss is about the same; the Dow is down 1%.
&ldquo;We&rsquo;re experiencing a split market right now that&rsquo;s yanking around different stocks and sectors every single day,&rdquo; writes Greg Guenthner at The Trading Desk (who won our internal version of the Top Trader challenge. No prize, just bragging rights.)
&ldquo;This back-and-forth action continues to dominate the tape. On Friday, the tech trade stole all the green while industrials, energy and consumer names slipped. On days where semiconductors are rallying, software stocks take a beating. The next day, they flip spots.
&ldquo;These moves can be frustrating, for sure. But it could all be part of a bigger consolidation looming now that the averages have fully recovered from their March lows. The market ran white-hot for an entire month so it&rsquo;s going to need to rest at some point.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> If the war is coming back into view, earnings are not retreating: Reports will continue to pour in this week although Nvidia is the only one of the &ldquo;Magnificent 7&rdquo; we&rsquo;re still waiting on &mdash; and NVDA doesn&rsquo;t report until May 20.
Of the S&amp;P 500 companies that have reported so far, FactSet tells us 84% have beaten the estimates of Wall Street analysts &mdash; better than the averages of the previous five years and ten years. And the average &ldquo;beat&rdquo; is by 20.7% &mdash; well above the recent norm.
➢ For the record: Spirit Airlines shut down over the weekend; for whatever reason the scheme the White House was hatching to use Spirit&rsquo;s jets as troop transports didn&rsquo;t pan out. As Sean Ring points out in <a href="https://rudeawakening.info/posts/the-spirit-of-capitalism">today&rsquo;s </a><a href="https://rudeawakening.info/posts/the-spirit-of-capitalism">Rude Awakening</a>, Spirit was not &ldquo;too big to fail&rdquo; &mdash; a rarity for a publicly traded company in 21st-century America.
Precious metals are losing ground &mdash; gold clinging to $4,500 and silver back under $73. On the other hand, Bitcoin is back over $80,000 and Ethereum is at $2,363.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Report From Omaha
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The &ldquo;new&rdquo; Berkshire Hathaway is ready to deploy that enormous pile of cash it&rsquo;s sitting on.
Saturday was the first BRK shareholder meeting in Omaha, Nebraska where Warren Buffett did not preside as CEO. Instead it was his chosen successor Greg Abel.
Our senior investment director Enrique Abeyta was in attendance&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6k7FmvVDG8nxRV8Sx9m8hC/f2f9e9faf03bdb02e6994876a24437a7/FMF-Issue-050426-1.png" alt="pub" width="350px" />
&hellip; and keen to hear what Abel had to say about the record $373 billion cash pile the company had accumulated by year-end 2025.
&ldquo;Many investors believe this was intentional,&rdquo; Enrique wrote his Truth &amp; Trends readers ahead of the meeting &mdash; &ldquo;that Buffett, in his final years at the helm, chose patience over action to give his successor maximum flexibility.&rdquo;
Sure enough, Abel said on Saturday that Berkshire has a shortlist of companies it wants to buy &mdash; in part or in whole.
At the right price, of course. &ldquo;There will be dislocations in markets that will allow us to act,&rdquo; he said.
Buffett jumped on such &ldquo;dislocations&rdquo; when they presented themselves over the decades.
&ldquo;During the financial crisis,&rdquo; Enrique said by way of example, &ldquo;Buffett deployed capital into companies like Goldman Sachs and Bank of America on extremely favorable terms, locking in high returns and reinforcing Berkshire&rsquo;s reputation as a lender of last resort.&rdquo;
Look for Enrique to share more reflections from Omaha later today when a new Truth &amp; Trends is published.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> There are &ldquo;sin taxes&rdquo; and then there are&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7mrAGdd0kFgVLwnbg8UR1N/d553266c00a0f99b8ce22caaf38e8246/FMF-Issue-050426-2.jpg" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Protests, Reading Comprehension, High-end Audio
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the subject of the May Day protests mentioned <a href="https://paradigmpressroom.com/post/the-day-america-shut-down">off the top Friday,</a> a reader writes&hellip;
&ldquo;Recently the socialist Minneapolis City Council approved funding to assist renters who fell behind in their rent because they couldn't leave home during the ICE episode.
&ldquo;During that time there were protests encouraging people to stay home from work, school, shopping. You can't make this up.
&ldquo;IMO, they have been turning Minneapolis into a sh***ole. Used to spend a lot of time and money there, haven't stepped foot there since George Floyd and won't in the future.&rdquo;
Dave responds: Numbers are hard to come by, but it seems the May Day protests were a bust &mdash; with considerably lower turnout than the &ldquo;No Kings&rdquo; protests that take place on weekends and draw an older crowd.
Doesn&rsquo;t bode well for the organizers if they hope to pull off a nationwide general strike on May Day in two more years. On the other hand, a lot can happen between now and then&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> I was stunned to read the reason why a reader demanded over the weekend that she be removed from the 5 Bullets email list.
The relevant passage, and the trigger for her outrage: &ldquo;If you&rsquo;re taking jabs at people who are constitutionally using their First Amendment rights &mdash; if you don&rsquo;t like it &mdash; too bad, shove it up your a**es.&rdquo;
Then followed a spirited diatribe against Donald Trump.
Too bad her outrage overwhelmed her reading comprehension: I took a minor swipe at Jimmy Kimmel <a href="https://paradigmpressroom.com/post/the-day-america-shut-down">during Friday&rsquo;s edition</a>in defense of his right to say stupid things. I was taking the president and his FCC chair to task for actions that undermine the First Amendment.
This is every bit as pathetic as conservative readers who call me a &ldquo;liberal&rdquo; when I deign to say critical things about the Iran war. Is Tucker Carlson a &ldquo;liberal&rdquo;? Ron Paul?
No, this is not a renewed plea for sympathy on the part of the many gracious readers who <a href="https://paradigmpressroom.com/post/america-then-and-now-1976-2026">rose to my defense</a> (and in one notable case, apologized) when the partisan vitriol got out of hand last month. Just another reminder that tempers are on a hair trigger in the society at large.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Sometimes it&rsquo;s easy to get myopic and single-minded about markets, money, accumulation, investment, the rat race,&rdquo; says our next entry.
&ldquo;It&rsquo;s a pleasant diversion to see many of your readers have other interests and passions, regardless of what they are.&rdquo;
That&rsquo;s a reference to last week&rsquo;s mailbag thread where we went off on a high-end audio tangent. On the subject of my budget-audiophile NAD CD player, the reader adds: &ldquo;I can only say go NAD!
&ldquo;Hehe, some of us are juveniles too! :)&rdquo;
Dave: LOL, I remember seeing Corey Greenberg write, &ldquo;Go NAD,&rdquo; in the pages of Stereophile magazine in the early 1990s.
Greenberg was the young gonzo writer they brought in to shake up an otherwise stuffy editorial stable. My 20-something self thought his prose alone was worth the subscription price.
This was long before he sold out and <a href="https://www.washingtonpost.com/archive/lifestyle/2005/04/20/firms-paid-tvs-tech-gurus-to-promote-their-products/3624e757-381f-412a-8a19-de8f7e825e72/">took payments from companies to </a><a href="https://www.washingtonpost.com/archive/lifestyle/2005/04/20/firms-paid-tvs-tech-gurus-to-promote-their-products/3624e757-381f-412a-8a19-de8f7e825e72/">shill</a><a href="https://www.washingtonpost.com/archive/lifestyle/2005/04/20/firms-paid-tvs-tech-gurus-to-promote-their-products/3624e757-381f-412a-8a19-de8f7e825e72/"> their products</a> on the Today show.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;That audiophile change-up was a nice stress-buster,&rdquo; says another reader.
&ldquo;Much needed and a reminder of things that really matter. Thanks and the very best for upcoming weeks ahead as we will all be tested.&rdquo;
One more item of feedback, and there&rsquo;s not space to share the whole thing &mdash; but the reader had a suggestion: &ldquo;With all the ELP Tarkus talk, maybe you can get the guys to play &lsquo;Lucky Man&rsquo; for the announcement of the winner of the Trader Challenge!&rdquo;
Love it. Let&rsquo;s take it out today with <a href="https://www.youtube.com/watch?v=LDiLOMP9MNE&amp;list=RDLDiLOMP9MNE&amp;start_radio=1">their live version from the Royal Albert Hall</a> on their 1992 reunion tour&hellip;

FMF-Issue-050426-Featured

“So You Think You Can Trade” (Results)

FMF-Issue-050126(Featured)

The Day America Shut Down

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />The Truth About Gas Prices
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> With no progress tamping down U.S.-Iran tensions, U.S. oil futures are up over 3.5% today to $103.57 &mdash; the highest since April 13.
Gasoline prices are following in tandem: The national average this morning is $4.23 a gallon, the highest since July 2022.
And it&rsquo;s tracking toward $4.30 soon according to GasBuddy&rsquo;s chief analyst Patrick De Haan. Big jumps are coming by midday today, he says, in the four states surrounding Lake Michigan thanks to ongoing production glitches at BP&rsquo;s big refinery in northwest Indiana.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> "If the U.S. is energy independent, why are prices higher HERE in the wake of the Iran war?" is a common question these days.
Yesterday on the Paradigm Press mobile app, our hedge fund veteran and jack-of-all-trades analyst Zach Scheidt served up an answer.
&ldquo;Even though the U.S. produces plenty of its own oil, crude is a GLOBAL market. And since prices are higher overseas, there is an incentive for U.S. producers to ship oil and collect higher prices from international markets.
&ldquo;More GLOBAL demand drives LOCAL prices higher.&rdquo;
With that in mind, Zach shared a chart showing the number of empty supertankers headed to the United States to load up and then head back overseas.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/KEFGiZQ3bWguhy5YcxLEm/3bd247c75deb93fd335601df25b29c99/5Bullets_Chart_oil_042926.png" alt="Empty Super Tankers" width="540px" />
Or as petroleum engineer Christine Guerrero puts it on her X account, &ldquo;You don&rsquo;t pay less for a T-shirt at Walmart just because you live in a different neighborhood. More reality checks coming as U.S. exports soar.&rdquo;
Much of that traffic will be headed to Europe &mdash; where most of the refineries are set up to handle the &ldquo;light, sweet&rdquo; crude that comes from America&rsquo;s shale patch. (Most American refineries were set up decades ago to handle the thick, sulfurous stuff that comes from Canada&rsquo;s tar sands and from Venezuela.)
We&rsquo;ll give the final word to GasBuddy&rsquo;s De Haan before we move on: Policymakers have a &ldquo;narrow window,&rdquo; he says, in which to bring about a full reopening of the Strait of Hormuz.
&ldquo;If that doesn&rsquo;t happen soon, Americans will start changing their summer travel plans &mdash; and they will NOT forget why when they head to the polls in November.&rdquo;
[Update: As we get closer to virtual &ldquo;press&rdquo; time WTI futures are now up 6.75% to $106.69. That&rsquo;s the highest since the U.S.-Iran ceasefire took effect on April 8.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Markets Today: Suspended Animation
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The stock market is in a state of suspended animation &mdash; awaiting a decision from the Federal Reserve and earnings numbers from the biggest AI &ldquo;hyperscalers.&rdquo;
After the closing bell today, Amazon, Meta, Google and Microsoft all report their numbers &mdash; the first time it&rsquo;s happened in one fell swoop, if memory serves.
All four have been rallying in recent weeks &ldquo;despite still spending at historic levels,&rdquo; says Davis Wilson of our sister e-letter The Million Mission. &ldquo;This week, we find out if spending is still accelerating &mdash; or quietly slowing.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But before those earnings figures drop, the Federal Reserve makes its next call on interest rates &mdash; presumably the final call under the chairmanship of Jerome Powell.
As usual, the decision is not in doubt: The Fed will hold its benchmark fed funds rate steady at 3.75%, where it&rsquo;s stood for over four months.
We await Powell&rsquo;s press conference &mdash; but it&rsquo;s likely he&rsquo;ll say that with the official inflation rate rising since the start of the Iran war, any rate cuts now would be like pouring gasoline on a fire.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1Ce2HMlS7FpaoGAwrmu8Nn/f27408993980f6ef3f644b830163374c/5Bullets_Chart_Inflation_042926.png" alt="War is inflationary" width="540px" />
The April figures don&rsquo;t come out for a couple more weeks, but is there any doubt about the trajectory?
&ldquo;Inflation is well above the Fed&rsquo;s 2.0% target and is moving in the wrong direction,&rdquo; says Paradigm macro maven Jim Rickards.
&ldquo;Even 3.3% inflation will cut the purchasing power of $1.00 in half in just 21 years and half again in another 21 years.
&ldquo;In a typical working career of 42 years from age 23 to age 65, the dollar will lose 75% of its purchasing power with 3.3% inflation.
&ldquo;There&rsquo;s nothing benign about that rate and the Fed knows it. Lowering the inflation rate by keeping interest rates unchanged will be the sole focus of this FOMC meeting.&rdquo;
From here, who knows? Of course, Donald Trump wants lower rates &mdash; really, does any real-estate guy not want lower rates? &mdash; and he&rsquo;s made that stance clear to Kevin Warsh, his nominee to replace Powell.
Still, even if Warsh agrees with the president and pushes for lower rates, he has to persuade a majority of the 12-member Fed Open Market Committee to go along.
The next meeting with Warsh in charge is set for June 16&ndash;17.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Ahead of the Fed announcement and the big earnings reports, the S&amp;P 500 is adding slightly to yesterday&rsquo;s losses &mdash; down less than a quarter percent at 7,127. The Nasdaq is in similar shape; the Dow&rsquo;s losses are a bit steeper.
We&rsquo;re watching rising bond yields closely today: The yield on a 10-year Treasury note is bumping up against 4.4% for the first time all month. Last month, every time the 10-year touched this level there was some sort of conciliatory announcement from the White House aimed at lowering the temperature of the war &mdash; and lowering rates. Something to watch for especially with the oil spike today&hellip;
Precious metals are losing more ground, gold at $4,559 and silver at $71.56. Crypto can&rsquo;t get any traction &mdash; Bitcoin just over $76,000 and Ethereum at $2,276.
The big economic number of the day is durable goods orders &mdash; up 0.8% in March. This number is often skewed by orders for aircraft and military hardware, which are notoriously volatile month to month. Take those out and you get a category called &ldquo;core capital goods.&rdquo; This number jumped 3.3% in March.
That&rsquo;s a very healthy number &mdash; too healthy. It suggests businesses are rushing to place orders ahead of expected price increases.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Power Grid Emergency
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The news got lost in the shuffle of war headlines last month &mdash; but here&rsquo;s a development with America&rsquo;s creaky power grid we shouldn&rsquo;t overlook.
&ldquo;The U.S. Department of Energy (DOE) announced it will invest $1.9 billion to accelerate improvements to the nation&rsquo;s electrical grid,&rdquo; says Paradigm natural-resources pro Matt Badiali.
&ldquo;Of course, this program has a stupid acronym: &lsquo;Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades&rsquo; (SPARK).
&ldquo;What&rsquo;s important about SPARK is that it will accelerate the purchase of electrical components made in the U.S. from metals like aluminum, steel and copper. The DOE will announce the recipients of the money at the end of May this year.
&ldquo;To add to the urgency, the White House announced an executive order that marks America&rsquo;s electric infrastructure as critical to national defense under the Defense Production Act.&rdquo;
We&rsquo;ve been sounding the alarm about the grid in these pages for nearly four years. Rolling blackouts during hot weather were becoming a very real risk in mid-2022: Too many coal and nuclear plants were being retired, and the wind and solar coming online weren&rsquo;t nearly enough to replace it.
Starting in early 2024, we also led the charge in warning about the added stress that AI data centers would put on the grid &mdash; long before the mainstream caught on.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But fixing the problem doesn&rsquo;t come cheap. 
The American Society of Civil Engineers says there&rsquo;s a $578 billion gap between planned spending on maintenance and what needs to be spent for upgrades.
&ldquo;There are only so many bandages you can put on a failing system,&rdquo; says Matt. &ldquo;At some point you need to tear the system down and actually fix it. That&rsquo;s why SPARK and the new executive order are so critical.&rdquo;
Key investing angle: &ldquo;The U.S. cannot make these grid upgrades without buying metals. Lots of them.&rdquo;
That will undoubtedly benefit the copper miners in Matt&rsquo;s Real Wealth Insider portfolio.
It will also benefit the aluminum giant Alcoa (AA). Matt talked up Alcoa in a special Martin Luther King Day edition of 5 Bullets last January. It&rsquo;s up a modest 4% since then, and the thesis is only getting stronger.
&ldquo;While electric motors must have copper,&rdquo; says Matt, &ldquo;transmission lines are primarily made of aluminum&hellip; and they are old.&rdquo;
The design of the power lines we use today dates back to the 1970s. Many power-industry experts believe that just replacing the old lines and conductors with new technology could double the grid&rsquo;s capacity.
Another tailwind: &ldquo;According to the Aluminum Association,&rdquo; Matt tells us, &ldquo;the U.S. needs about five new 750,000-metric‑ton primary smelters to &lsquo;fully meet current metal needs&rsquo;. That is roughly 3.75 million tons of additional annual capacity. The U.S. currently consumes about 5 million metric tons per year, across all sectors. That includes construction and packaging.&rdquo;
And that doesn&rsquo;t even get to the aluminum shortage resulting from the blockade of the Strait of Hormuz.
Bottom line: Aluminum is lucrative &mdash; and Matt says Alcoa is the only good way to play it at this time.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A grim chuckle courtesy of Bloomberg&rsquo;s commodity reporter&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5Q0KEihv18OqdebFlkfnTq/3a030de9b82f068f2394e04cc461314f/FMF-Issue-042926-4.png" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Audiophile Mailbag
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Let&rsquo;s keep it light: Our musings <a href="https://paradigmpressroom.com/post/is-ai-suddenly-doomed">in yesterday&rsquo;s edition</a> about the revival of vinyl record sales prompted the following email from one of our longtimers&hellip;
&ldquo;Dave, Dave, Dave&hellip; Just when the readership was getting calmed down, you go and call us &lsquo;oldsters.&rsquo; LMAO! I know it was just meant in jest, but with all the riled-up readers lately, well, who knows how that will be taken?
&ldquo;But (the inevitable) let&rsquo;s talk about that costly endeavor of serious audiophiles. Yes, I&rsquo;m an &lsquo;oldster&rsquo; and proud of it! I also have an &lsquo;awesome&rsquo; (ah, you Gen-Xers) sound system. Carver 150-watt amp, SoundTech speakers and the turntable? A Bang and Olufsen Beogram horizontal turntable! (google it!).
&ldquo;Hope your editors keep churning out winners, as these new collector vinyls are running upwards of $120 nowadays. Jim, BTW, is doing a great job of that!
&ldquo;Then the wife (she&rsquo;s Chinese) needed me to add onto the sound system for her and her karaoke friends. We added a mixer board, mikes, a 12&rdquo;/CD silver-platter karaoke player. When we were younger our place was the place to party at! Yes, honey, do you need anything else? 😊
&ldquo;If that wasn&rsquo;t loud enough to wake the neighbors, my son recently handed me down his Logitech 500-watt, six-way surround sound system, because it was &lsquo;too much&rsquo; for his place. So now Dad has F-15&rsquo;s (think Top Gun) landing and taking off in my living room! He&rsquo;s a Gen-Xer too and I taught him well!
&ldquo;So Dave, go enjoy a cold microbrew (think I steered you away from light beer in &rsquo;23), you ELP-loving guy and crank on Tarkus on your budget system! I&rsquo;m going to enjoy a full-volume version, err, as soon as the wife goes shopping! LOL!
&ldquo;Still in your corner after all these years!&rdquo;
Dave responds: Hats off. That&rsquo;s hardcore.
Different strokes for different folks. An NAD CD player, an iFi headphone amplifier and a pair of Grado SR325 cans are all I need. Even today the whole shebang sets you back about $1,000.
Yeah and I&rsquo;m still not above a Miller Lite now and then. Can&rsquo;t be a Milwaukee Brewers fan otherwise, right?

FMF-Issue-042926-Featured

The Truth About Gas Prices

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Is AI Suddenly Doomed?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Suddenly, AI stocks are falling out of bed.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6JO1tK8OdIrcpHF3PngBM6/3fd8d9c0ca275b97398f62cec912eb90/FMF-Issue-042826-1.jpg" alt="OpenAi" width="450px" />
Early this morning, The Wall Street Journal posted a story that begins thus: &ldquo;OpenAI recently missed its own targets for new users and revenue, stumbles that have raised concern among some company leaders about whether it will be able to support its massive spending on data centers.&rdquo;
The story cites the usual &ldquo;people familiar with the matter&rdquo; as saying OpenAI&rsquo;s board is questioning CEO Sam Altman&rsquo;s efforts &ldquo;to secure even more computing power despite the business slowdown.&rdquo; In addition, CFO Sarah Friar is supposedly worried &ldquo;the company might not be able to pay for future computing contracts if revenue doesn&rsquo;t grow fast enough.&rdquo;
Because OpenAI is not (yet) a public company, there aren&rsquo;t any numbers to go on. We&rsquo;re taking everyone at their word here &mdash; the Journal, the Journal&rsquo;s sources and OpenAI&rsquo;s C-suite.
To its credit the Journal put a denial by Altman and Friar in the fifth paragraph. &ldquo;We are totally aligned on buying as much compute as we can and working hard on it together every day,&rdquo; says a joint statement that calls the article&rsquo;s premise &ldquo;ridiculous.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the moment, the market attributes more credibility to the Journal&rsquo;s sources than to Altman and Friar. 
Publicly traded companies adjacent to OpenAI are getting smoked today &mdash; Oracle down 4.3% as we write, CoreWeave down 5.7%, Nvidia down 3.5% after touching an all-time high yesterday.
That&rsquo;s dragging down the Nasdaq as a whole. At 24,552 the index is down 1.3% from yesterday&rsquo;s record high. Ditto the S&amp;P 500, down nearly three quarters of a percent from yesterday&rsquo;s all-time high, 7,123 at last check.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The price action is giving Paradigm&rsquo;s AI authority James Altucher a sense of deja vu.
He recalls only last month when Google announced it had developed software to make memory more efficient. The memory stocks like Micron (MU) and Astera (ALAB) took a 20&ndash;30% hit.
&ldquo;I recommended MU and ALAB then,&rdquo; says James &mdash; &ldquo;and they are both up significantly since then (MU from about 300 to over 500, for instance).
&ldquo;Similarly, I'd scoop up your favorite AI stocks at bargain prices that are being created today.&rdquo;
There&rsquo;s an undeniable tailwind, he says: About 86% of organizations plan to grow their AI budgets this year &mdash; and 40% expect growth of 10% or more.
Don&rsquo;t shed a tear for OpenAI, says James: He points out Google&rsquo;s Gemini AI platform has doubled its number of users in a little over a year &mdash; from 400 million to over 800 million now.
<a id="2"></a>
&ldquo;Even if OpenAI &lsquo;missed&rsquo; (they are at 800 million users versus the billion they expected at this time), AI spending and growth is up on every possible metric.
&ldquo;Spending on AI is not slowing down,&rdquo; he concludes. &ldquo;The media, as usual, is getting it wrong.&rdquo;
Speaking of questionable media narratives&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Is Iran Suddenly Doomed?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The narrative of the week is that Iran has only days before its oil industry is wrecked for good.
That is, the U.S. blockade of Iranian ports means that Iranian crude has nowhere to go. Once all its storage is full, production has to shut down &mdash; causing damage to oil wells that might be irreparable.
Sounds serious, right? It started yesterday with a rather inelegant tweet from the U.S. Treasury secretary&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7i2lqKevQVmvGeBzLwKiSs/67c1f9eb8c9b3ae30dd730875398f53c/FMF-Issue-042826-2.jpg" alt="Scott Bessent" width="540px" />
From there it was stovepiped through hawkish think tanks like the Foundation for Defense of Democracies and United Against Nuclear Iran.
Then it landed on the front page of today&rsquo;s Wall Street Journal&hellip;
<blockquote>Iran is scrambling to find new ways to store its oil, hoping to avoid a crippling production shutdown as a U.S. naval blockade bottles up its exports and negotiations to end the war remain deadlocked.</blockquote>
<blockquote>With oil backing up at home, Iran is reviving derelict sites known as &ldquo;junk storage,&rdquo; using improvised containers and trying to ship crude by rail to China.</blockquote>
And on Bloomberg&rsquo;s homepage&hellip;
<blockquote>Tankers laden with Iranian oil are clustering off Chabahar, a port in Iran that&rsquo;s outside the Persian Gulf but just shy of the U.S. blockade line.</blockquote>
<blockquote>Around six to eight supertankers were idling in waters near the port in the Gulf of Oman late last week, according to satellite images and analyses from United Against Nuclear Iran and maritime intelligence firm Windward, with more smaller tankers nearby.</blockquote>
Another Bloomberg story published yesterday put a date on the phenomenon: Iran would reach the point of no return sometime between May 9&ndash;18.
More objective observers, patiently examining the evidence and presenting their findings on social media, are reaching a different conclusion.
They&rsquo;re looking at satellite imagery of still-empty VLCCs, or very large crude carriers, bottled up in the Persian Gulf. They figure Iran can go another two months without cutting production.
Besides, when it comes to cutting production out of necessity, this isn&rsquo;t Iran&rsquo;s first rodeo&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4FT77AL6bEspDqKd9PagkC/1e714fcabc8d951305565b5a67b0a431/FMF-Issue-042826-3.jpg" alt="EDF Hobbies tweet" width="540px" />
Two months is a long time. It almost gets us to Independence Day weekend &mdash; at which time U.S. gasoline prices would be&hellip; what?
Two months is longer than the &ldquo;election math&rdquo; in the United States probably allows.
Check back with us between May 9&ndash;18 and we&rsquo;ll see who turns out to be right.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In the meantime, U.S. oil futures have sailed up to their highest level in over two weeks.
A barrel of West Texas Intermediate traded as high as $101.50 around 8:00 a.m. EDT&hellip; although it&rsquo;s since pulled back below $100.
Aside from the possibility of a return to a shooting war in the Persian Gulf after a three-week pause, the big story today is the United Arab Emirates announcing it&rsquo;s pulling out of the OPEC cartel.
The UAE is OPEC&rsquo;s No. 3 producer &mdash; and its government strenuously denies that the decision has anything to do with frustration over years of production cuts spearheaded by its frenemies in Saudi Arabia.
&ldquo;This has nothing to do with any of our brothers or friends within the group,&rdquo; UAE Energy Minister Suhail Al Mazrouei tells CNBC. &ldquo;We&rsquo;ve been working together for years and years. We have the highest respect for the Saudis for leading OPEC.&rdquo;
More believable is his claim about the timing: &ldquo;It will have a minimum impact on the price and it will have a minimum impact on our friends at OPEC and OPEC+.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Elsewhere in the commodity complex, oil&rsquo;s gains are translating to precious metals&rsquo; losses.
Gold is down over $100 at last check to $4,578 &mdash; approaching the lows of a month ago. Chart-watchers think $4,100 is still a distinct possibility as the Midas metal continues to consolidate after the dizzying heights of late January.
Silver, meanwhile, sits at three week lows &mdash; a hair below $73.
The risk-off atmosphere is spilling into crypto &mdash; Bitcoin back under $76,000 and Ethereum below $2,300.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Elon: Paid in Planets
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;When was the last time a CEO got paid in planets?&rdquo; asks Paradigm tech-investing specialist Ray Blanco.
&ldquo;This morning,&rdquo; he tells us, &ldquo;Reuters got hold of excerpts from SpaceX's confidential S-1 &mdash; the registration statement that goes public next month. Buried in there is Elon Musk's compensation plan.
&ldquo;It's not a salary. It's a charter.
&ldquo;200 million super-voting shares unlock only if SpaceX hits a $7.5 trillion market cap and Elon plants a permanent human colony on Mars with at least 1 million people.
&ldquo;Do the math at $7.5 trillion and that single tranche is worth roughly $340 billion.
&ldquo;That's not Musk's salary. That's the unlock on one milestone. Hit it, and Elon doesn't just become a trillionaire.
&ldquo;He practically becomes the King of Mars.&rdquo;
Ray directs your attention to historical examples: &ldquo;In 1670, King Charles II handed the Hudson's Bay Company a royal charter granting it dominion over 1.5 million square miles of North America. Sovereignty. Trade rights. Governance.
&ldquo;The Dutch East India Company got something similar over Asia. So did the British East India Company over India.
&ldquo;Empire-building moments in human history that started with a charter that handed a private company the keys to a territory.
&ldquo;The SpaceX board just wrote one for Mars.&rdquo;
Much more to say in the run-up to SpaceX&rsquo;s IPO this summer. Stay tuned.
[Friendly reminder: Ray posted these musings a short time ago on the Daily Feed section of the Paradigm Press mobile app. The Daily feed delivers instant insights like these that frequently don&rsquo;t get published anywhere else.
What&rsquo;s more, the app is the easiest way to keep track of the buy and sell alerts of your paid publications &mdash; no sifting through email. Subscribers like you rave about the simplicity of the app. <a href="https://d2z65klgtz99km.cloudfront.net/PPG-App/">Download here</a>.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Final Vinyl
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Vinyl album sales in the United States increased for the 19th consecutive year in 2025,&rdquo; say the folks at Statista.
Figures from the Recording Industry Association of America show that sales bottomed in 2006 at less than one million. Last year&rsquo;s total was 46.8 million &mdash; both EPs and LPs.
The last time the number was anywhere near this high was 1988, six years after the introduction of the CD.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6yOdxBLLLZymKnEGpmJrMH/de72c4b6156a4b5bfbc941ec242fb1e4/FMF-Issue-042826-4.jpg" alt="Vinyl" width="540px" />
&ldquo;Physical goods, it appears, still hold value for many people, even in the digital age,&rdquo; writes Statista&rsquo;s Felix Richter.
That&rsquo;s even if the goods go unused, serving as collectors&rsquo; items only; figures from Luminate say only 50% of vinyl buyers own a turntable.
It stands to reason. The vinyl revival seems driven mostly by younger folks who grew up on crappy compressed digital audio &mdash; MP3 downloads at the start, streaming audio now. They don&rsquo;t know any better and they&rsquo;re content to listen to vinyl records on some $50 Chinese-made &ldquo;Victrola.&rdquo;&nbsp;
Oldsters know that serious vinyl listening is a costly endeavor. The turntable, the tonearm, the cartridge (preferably from separate manufacturers), a quality record cleaning machine like the Nitty Gritty &mdash; too much for your budget-audiophile GenX editor!
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: PLTR Wants Your Son
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Last week&rsquo;s exploration of Palantir and its advocacy for a <a href="https://paradigmpressroom.com/post/pltr-wants-your-son">return to the draft</a> prompted the following reader reflection&hellip;
&ldquo;For many years now, I&rsquo;ve been thinking about the all-volunteer Army, especially after visiting South Korea.
&ldquo;When I was there in the early 2000s I was told that &lsquo;when Korean men are 15 or 16 they would protest the army and then when they came of age, they had to spend a couple of years in the army, keeping protesters in check. That service would mature them, teach them self-discipline and make them better suited to survive as civilians.
&ldquo;Looking at our young &lsquo;soyboy men&rsquo; today who seem to lack purpose, self-discipline and motivation, I wondered if a couple of years of military service might do them some good.
&ldquo;In addition to that, it would provide job training and reduce unemployment (especially in the inner cities, where it is most needed). It could be mandatory service in the National Guard at age 18 instead of the &lsquo;real Army,&rsquo; and then for those who liked military life (or had few job prospects at home) they could enlist in the real Army at age 20. Or use their newly acquired skills to find a job.
&ldquo;Or they could go to college a bit more mature and disciplined, ready to learn rather than just party. The program could possibly be designed to address the college debt issue as well.
&ldquo;This has nothing to do with a &lsquo;warmonger&rsquo; attitude but more looking at how &lsquo;men&rsquo; are turning out since we instituted the all-volunteer Army.
&ldquo;I haven&rsquo;t yet considered how this would apply to young women, never having been one. But a properly designed program might do them some good as well.
&ldquo;I always appreciate your thought-provoking commentary even when I disagree.&rdquo;
Dave responds: Thanks for writing. A few thoughts&hellip;
South Korea in the early 2000s was barely 15 years removed from military dictatorship. As admirable as its rise to a first-world democracy has been&hellip; is it a model to follow?
Here in the United States, men were men and we got along just fine without a peacetime draft until the late 1940s &mdash; when the &ldquo;wise men&rdquo; surrounding President Truman decided we should become a nation permanently mobilized for war.
So that suggests the problem now lies in society at large.
I get where you&rsquo;re coming from&hellip; but I don&rsquo;t share your confidence the military can credibly take on a social engineering project and step in where the culture has failed.
The culture needs to heal on its own. No, I have no idea how that would come about!

FMF-Issue-042826-Featured

Is AI Suddenly Doomed?

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Iran: The Only Thing That Matters Now
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; the war did not resume over the weekend, despite the massing of U.S. military assets in the Middle East at levels unseen in over two decades.
The ceasefire has held, more or less, since April 8.
In recent days, Paradigm&rsquo;s macroeconomics authority Jim Rickards has pounded away at a single theme across his publications.
&ldquo;It&rsquo;s critical to separate the geopolitical noise and signal coming from the Middle East and the war in Iran right now,&rdquo; he said in The Situation Report on Wednesday.
&ldquo;JD Vance&rsquo;s peace mission to Islamabad is noise. Trump&rsquo;s claim of bombing Iran into the Stone Age is noise. Iran&rsquo;s decision to skip the latest peace talks and threaten retaliation across the Persian Gulf countries if Trump resumes bombing is noise. The status of the ceasefire is noise.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As Jim sees it there&rsquo;s only one signal amid the noise: &ldquo;The Strait of Hormuz has effectively been closed for nearly two months.&rdquo;
You don&rsquo;t need to see the numbers on this chart to get a picture of &ldquo;before&rdquo; and &ldquo;after&rdquo; when it comes to the number of ships exiting the strait under Tehran&rsquo;s selective blockade.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2n0mSoDbvjLu9nSjye7vf2/be422f40e34ebf9d63fc42a5e5b8a3fb/FMF-Issue-042726-1.png" alt="Verified Outbound History chart" width="540px" />
Nor is there much inbound oil tanker traffic to speak of&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/SI5y30HoVhWvNJblkCtpQ/23e94d3ae1fc9c99942d4de58022de40/FMF-Issue-042726-2.png" alt="Tanker Chart" width="540px" />
&ldquo;Oil that has been delivered to South Korea, Japan and other countries in Asia recently came from tankers that left the Persian Gulf before the war began,&rdquo; Jim adds. &ldquo;It takes weeks to go from the Persian Gulf to East Asia. That &lsquo;floating pipeline&rsquo; has now dried up. The last vessels in the chain have unloaded. Reserves are now being drawn down.
&ldquo;In a matter of weeks, it will be time to shut down the factories and turn off the lights in much of the industrial world. Poorer countries will face starvation due to an absence of nitrates for fertilizer to grow crops that also come from the Persian Gulf.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Yes, Americans will avoid the worst of the consequences. Small comfort with gasoline about to jump back over $4 a gallon in many states.
Energy Secretary Chris Wright has forecast a return to sub-$3 gas next year; the president says it will happen much sooner.
&ldquo;The economics suggest otherwise,&rdquo; Jim wrote his Strategic Intelligence readers today.
&ldquo;Gasoline demand is what economists call inelastic. People have to buy it regardless of price because they need it for commuting, shopping and daily life. But there&rsquo;s no free lunch. Higher fuel costs come out of other spending &mdash; dining, travel, discretionary purchases &mdash; which quietly weakens the broader economy even as fuel demand holds up.
&ldquo;The closure of the Strait of Hormuz removes roughly 20% of global oil supply from circulation. Ignore futures prices near $100 per barrel. The spot price for immediately available cargoes is closer to $140 or higher.
&ldquo;The U.S. won&rsquo;t face shortages, due to domestic production, but it won&rsquo;t escape global pricing. Energy is a world market with a world price.&rdquo;
Jim says there&rsquo;s one scenario where gas prices would fall &mdash; &ldquo;a sharp slowdown in demand driven by recession. If consumption drops enough, oil prices will fall. But that outcome would come with rising unemployment and a broad economic contraction.
<a id="2"></a>
&ldquo;Lower gas prices would not be a sign of strength. They would be a symptom of something breaking.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Spirit Airlines, Troop Transport?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The rationale for the Trump administration&rsquo;s rescue of Spirit Airlines is coming into view.
As mentioned briefly last week, the Trump administration is set to loan $500 million to Spirit in exchange for warrants that could give Uncle Sam a substantial stake in the firm.
On the surface, the move doesn&rsquo;t line up with the administration&rsquo;s previous acquisitions of equity stakes in public companies &mdash; MP Materials, USA Rare Earth, Intel and the like all have some sort of &ldquo;strategic&rdquo; value to the government. A budget airline? Not so much.
But on Friday, CBS News reported that the White House might resort to the Defense Production Act of 1950 to make the deal happen. &ldquo;The Pentagon would use Spirit's excess capacity for transporting troops, military cargo or other missions.&rdquo;
Sure enough, other struggling second-tier airlines want a piece of the action: A consortium of carriers including Frontier and Avelo have approached the government for $2.5 billion in help, according to The Wall Street Journal.
The Journal article didn&rsquo;t bring up the military angle &mdash; but certainly it&rsquo;s on the table.
And it doesn&rsquo;t suggest the war is winding down anytime soon, does it?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For a change, the week did not begin with some sort of effort on the administration&rsquo;s part to suggest peace is at hand, tamping down oil prices.
As a result, West Texas Intermediate futures are up nearly 3% on the day at $97.11 &mdash; on the high end of their trading range since mid-April.
The major U.S. stock indexes are in the red, but not by much. The S&amp;P 500 is down 0.15% at 7.154. The losses in the Dow and the Nasdaq are a bit steeper. Big movers include Shell &mdash; down 1.3% on news that it plans to acquire Canada&rsquo;s ARC Resources for $13.6 billion.
Microsoft is down a half percent after word that its ongoing breakup with OpenAI is moving to a new phase: Microsoft&rsquo;s license to OpenAI&rsquo;s intellectual property is no longer exclusive. And while OpenAI will continue to fork over a share of its revenue to Microsoft, the flow of funds in the other direction will stop.
➢ Meanwhile, congratulations are in order for PRO-level subscribers to Altucher&rsquo;s Investment Network. Friday they took 200% gains on POET Technologies after barely a month. (That&rsquo;s just the stock, not options!)
Precious metals are pulling back modestly, gold at $4,678 and silver at $75.09. Crypto is struggling for the next leg higher, Bitcoin just over $77,000 and Ethereum below $2,300.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Follow-up: Maine Gov. Janet Mills has vetoed a bill that would have temporarily paused construction of large-scale data centers.
We mentioned this bill a couple of Saturdays ago &mdash; part of a nationwide backlash driven by the perception that data centers are driving up electric bills.
Mills wanted an exemption for a data center currently under construction in the town of Jay &mdash; she said it would bring 800 temporary and 100 permanent jobs &mdash; but lawmakers wouldn&rsquo;t oblige. &ldquo;I supported the exemption and would have signed this bill if it had included it,&rdquo; says Mills.
An override in the legislature looks unlikely.
Maine was the first state where such a proposal reached the governor&rsquo;s desk. It likely won&rsquo;t be the last. We&rsquo;ll keep you posted.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />The IRS, Powered by Palantir
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Good news: The IRS is cutting personnel. Bad news: The IRS is replacing personnel with AI.
&ldquo;The agency plans to replace the nearly 30,000 employees it lost to Trump administration cuts with a new army of auditors, one that doesn&rsquo;t sleep,&rdquo; writes independent reporter Ken Kilppenstein.
Klippenstein has obtained documents laying out the IRS&rsquo; plans to force taxpayers&rsquo; compliance with, as one of the documents says, &ldquo;minimal human contact.&rdquo;
Key to the plans is software developed by&hellip; drumroll, please&hellip; <a href="https://paradigmpressroom.com/post/pltr-wants-your-son">the civic-minded folk at Palantir</a>.
The software &ldquo;allows IRS investigators and auditors to conduct &lsquo;near real-time data analysis&rsquo; through a custom tool called the &lsquo;Selection and Analytic Platform,&rsquo; or SNAP,&rdquo; Klippenstein continues.
&ldquo;What that means in practice is that millions of middle-income Americans who once fell below the threshold of what scarce human auditors could manage are now within reach. The little guy just became a lot easier to monitor at scale.&rdquo;
As we&rsquo;ve chronicled in the past, small-business owners and the self-employed are particularly subject to IRS shakedowns. They&rsquo;re not W2 employees and thus they can be nailed more easily for inflating deductions and (especially) underreporting income.
Go figure: The IRS personnel cuts engineered by Elon Musk and his DOGE boys &mdash; one of the few meaningful accomplishments they racked up last year &mdash; is clearing the way for tax collection to become more efficient and more ruthless.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> This is wild &mdash; an AI-enabled mashup of 1970s decor, a 1990s Saturday Night Live bit and 2020s doomerism&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/iFvjCMDzjlONU8Dq5lfF9/f7bf86465570f85236bf536ae7f8e315/FMF-Issue-042726-3.png" alt="Comedic Relief" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Catch-Up Day
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s been several days since we&rsquo;ve had a proper mailbag &mdash; and we start with a follow-up to <a href="https://paradigmpressroom.com/post/limbo">Wednesday&rsquo;s edition</a> centered on the state of limbo between Washington and Tehran.
In particular, a reader overseas takes issue with the statement by Arta Moeini from the Institute for Peace &amp; Diplomacy: &ldquo;The current status quo places a greater burden on the Islamic Republic than on Washington.&rdquo;
&ldquo;I think that is a very U.S.-centric point of view. While the Strait of Hormuz is closed, most Asian countries, including some close U.S. allies, are close to running out of oil and LNG, and the pressure from those allies will become fierce in the next few days or weeks. European flights are already being cancelled for lack of jet fuel, and even if the strait was opened again tomorrow, it would take weeks or even months for demand and supply to stabilize again.
&ldquo;In the U.S., as many have pointed out, we are nominally energy sufficient, but if Trump starts trying to meet our allies' needs from U.S. production, we will soon see long lines at the pumps, with gas prices in double digits. If we don't help our allies, they may soon seek allies elsewhere.
&ldquo;And then there is China, who is hardly an ally, but on whom the U.S. is dependent for many critical items. People talk about rare earths, but even most medical supplies come from China, among many other things we don't think about until the shelves go bare.
&ldquo;In the end, I suspect that Iran is better positioned to endure another four&ndash;eight weeks of the current situation than is the U.S. Beyond that, who knows?&rdquo;
Dave responds: All good points. We just wanted to put a contrarian line of thought out there for consideration.
I too bristle at the nonchalance with which U.S. media approach the privation facing hundreds of millions of people as a result of this war. And not just in developing countries; depending on who you want to believe, Japan could be in a world of hurt in another 10 days or so. But as long as WTI futures stay under $100, almost no one seems to care&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;As usual, I'm fashionably late to the party, but I wanted to weigh in on the political vitriol issue,&rdquo; writes one of our semi-regulars.
&ldquo;A long time ago in a galaxy far, far away... (i.e. when I was in college) I read in a magazine article &mdash; something to the effect that the only reason to hate is fear.
&ldquo;My reaction was &lsquo;That's ridiculous! I KNOW hate and I don't fear the person I hate.&rsquo; Soon after, I received a letter from a friend with a single line in it that instantly transformed my hatred for that person to pity.
&ldquo;After a few years&rsquo; deep introspection I had to admit that there was something I had feared. It just wasn't obvious or easy to identify. My friend's letter changed the way I saw that person so that she no longer had the ability -- or more to the point I no longer gave her the power &mdash; to affect how I felt about myself. That is what I had feared.
&ldquo;And so I came to understand that the author of that article was correct: All hatred has fear as its root. Anyone who denies this isn't looking deep enough.
&ldquo;No matter where they are on the political plot chart, those of your readers who cannot bear any
criticism of their cherished political beliefs or praise for a position they don't share need to ask
themselves what it is they fear to make them so thin-skinned? You don't need me to tell you
that's on them, not you. I'm just saying it to let you know we rational readers know it too,
&ldquo;So if you are still at a loss for &lsquo;what to do,&rsquo; I have an answer for you: You keep doing you. You
aren't responsible for your readers' feelings or inability to confront their own fears.
&ldquo;Your incites... er... insights and those of other Paradigm editors give me perspectives on the issues I don't get elsewhere. I'm sure a very large majority of your readers agree with me. To those who don't... well, you know how to delete an email without reading it, don't you?
&ldquo;So, Dave, please don't &lsquo;do&rsquo; anything other than what you have been doing.&rdquo;
Dave: Gee, I forgot the part about &ldquo;what to do&rdquo; after the mailbag that <a href="https://paradigmpressroom.com/post/the-strait-is-open-maybe-sort-of">went off the rails</a> a week ago Friday.
But after the gracious responses of folks like yourself since, I&rsquo;ve decided to&hellip; keep on keeping on. Thank you kindly.

FMF-Issue-042726-Featured

Iran: The Only Thing That Matters Now

FMF-Issue-04-23-26-Featured

PLTR Wants Your Son

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />A Ceasefire Until&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; a day later we&rsquo;re still in limbo.
After we hit &ldquo;send&rdquo; on yesterday&rsquo;s edition, the president announced he was unilaterally extending the ceasefire with Iran &ldquo;until such time as their proposal is submitted, and discussions are concluded, one way or the other.&rdquo;
In other words, he did not set an expiration date &mdash; instead putting the ball in Tehran&rsquo;s court.
The response from the adviser to Iran&rsquo;s parliament speaker was You do you, Donald.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4zXILbCdwqOPJxpu1G0maI/79bb4738e5cab3d6a788c3fe14b128e1/FMF-Issue-042226-1.png" alt="pub" width="540px" />
&ldquo;The Strait of Hormuz remains closed. And Trump will continue the blockade on Iranian ports and ships,&rdquo; our Jim Rickards says on the Paradigm mobile app.
&ldquo;The danger hasn&rsquo;t passed yet. Economic damage will continue to pile up until a deal is reached. And a return to fighting remains possible.&rdquo;
By the way, that U.S. blockade on Iranian ports and ships is looking shaky. The Financial Times &mdash; citing figures from the cargo tracking group Vortexas &mdash; reports that at least 34 &ldquo;Iran-linked&rdquo; oil tankers have bypassed the blockade since it began nine days ago.
Not surprising. U.S. warships enforcing the blockade are spread thin, not least because they&rsquo;re staying out of the range of Iranian anti-ship missiles and drones.
At the same time, Iranian forces have seized two containerships that tried to run Tehran&rsquo;s blockade of the Strait of Hormuz.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the moment, however, Trump has what he wants &mdash; and the Iranian side does not.
When the ceasefire came into effect a couple of weeks ago, Quincy Institute executive VP Trita Parsi projected a possible outcome &mdash; &ldquo;no deal, no sanctions relief, no nuclear compromise, no return to war, while Iran continues to control the strait.&rdquo;
Which is where we stand more or less this morning. &ldquo;Not a stable situation,&rdquo; Parsi tweets now, &ldquo;but one in which Trump pockets the central thing he sought &mdash; exiting the war &mdash; while Iran is bereft of the main thing it was looking for: sanctions lifting.&rdquo;
&ldquo;The current status quo places a greater burden on the Islamic Republic than on Washington,&rdquo; agrees Arta Moeini from the Institute for Peace &amp; Diplomacy &mdash; &ldquo;a pressure that will only intensify so long as the blockade persists.&rdquo;
Which means as he sees it the status quo can&rsquo;t hold indefinitely: &ldquo;It's only a matter of time before Iran attempts to impose new regional costs of its own to break the U.S. blockade, a move that would likely collapse the fragile ceasefire entirely.&rdquo;
So where does this all leave the markets?
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Markets Today: Oil up, Stocks up Too
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Because the tension level remains &ldquo;elevated,&rdquo; oil futures actually rose despite Trump&rsquo;s announcement. West Texas Intermediate is up over 3.5% at last check &mdash; two pennies shy of $93.
That&rsquo;s still vastly below the real-world price of &ldquo;wet&rdquo; barrels that we continue to spotlight &mdash; frequently in the neighborhood of $130.
Key point: May oil futures expire today. Keen observers of the oil market are noting that &ldquo;open interest&rdquo; &mdash; the total number of futures contracts that are not yet closed, expired or settled &mdash; have totally collapsed relative to a typical expiration day.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5t4XvNFwOLmvr77IIIMKbD/c42d77cc9f51eb6622925b85b60d180e/FMF-Issue-042226-2.png" alt="pub" width="540px" />
But that real-world shortage continues to manifest in unlikely supply-chain snags.
From the BBC: &ldquo;The boss of the world's biggest condom maker, Karex, says the firm will raise its prices by up to 30% or possibly more if the Iran war continues to disrupt supplies of the raw materials [derived from oil] used in its products.&rdquo;
Karex, based in Malaysia, makes 5 billion condoms a year and supplies major global brands including Durex and Trojan.
&ldquo;The good news,&rdquo; one wag quips on X, &ldquo;is we&rsquo;re going to make a dent in the fertility crisis.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, the S&amp;P 500 is back to its record levels set last Friday &mdash; offsetting all of yesterday&rsquo;s and Monday&rsquo;s losses.
At last check the index is up nearly 0.9% to 7,125. The Nasdaq&rsquo;s gains are stronger, the Dow&rsquo;s a little weaker.
Among the big movers today is Spirit Airlines: The Wall Street Journal and Bloomberg report that the Trump administration is set to loan $500 million to Spirit in exchange for warrants that could give Uncle Sam a substantial stake in the firm. In bankruptcy, Spirit is a thinly traded penny stock with the ticker FLYYQ &mdash; and it&rsquo;s up over 32% on the day.
[Just in: Life comes at you fast. Make that 538%!]
Meanwhile, congratulations are in order for members of the Paradigm Mastermind Group. Yesterday they took profits of 220% in just under two years on Lincoln Educational Services. And today they bagged 309% in just under a year on Amkor Technology.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Forget the day-to-day stock market movement: Where do we stand in the big picture?
Paradigm senior investment director Enrique Abeyta passes along an updated chart from the folks at Bespoke Investment Group. It tracks the Nasdaq Composite&rsquo;s performance during the dot-com boom and the current AI boom.
It sets the starting point of the dot-com boom with the launch of the Netscape web browser in December 1994. And it sets the start of the current boom with the launch of ChatGPT 3.5 in November 2022.
Here&rsquo;s the latest chart, updated to reflect the volatility set off by the Iran war.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3AIF7u7eyk8YhdsbrDdGNW/788806825bfb4894493dcff97affdd87/FMF-Issue-042226-3.png" alt="pub" width="540px" />
Interesting. If history rhymes, the volatility brought on by the war is analogous to the volatility brought on in 1998 by Russia&rsquo;s debt default and the resulting collapse of the hedge fund Long Term Capital Management.
Speaking of &ldquo;analogues,&rdquo; Enrique passes along a spooky stat from Bespoke: The S&amp;P 500 is up 17.8% so far during Trump&rsquo;s second term. The index was up 17.6% at this time in 2018 during Trump&rsquo;s first term.
➢ Checking the dollar prices for non-dollar assets: Gold is nearly flat after yesterday&rsquo;s beat-down at $4,734 but silver is up over a buck to $77.67. The real action is in crypto: Bitcoin is on the verge of $79,000 for the first time since early February and Ethereum is approaching $2,400.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Scarce Electricity and the Uranium Boom
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And now a shocking development in our ongoing chronicle of the super-stressed U.S. power grid.
In 2022 we started warning about the potential for rolling blackouts in some regions of the country. In 2024, long before the mainstream caught on, we warned that AI data centers would become <a href="https://paradigmpressroom.com/post/the-monster-that-ate-the-power-grid-ai">&ldquo;the monster that ate the power grid.&rdquo;</a>
Here&rsquo;s the latest, courtesy of Paradigm natural-resources pro Matt Badiali: &ldquo;The problem isn&rsquo;t just that we aren&rsquo;t adding new sources of electricity fast enough &mdash; it&rsquo;s worse. The U.S. is actually going backward.
&ldquo;The current administration killed somewhere around 30&ndash;35 gigawatts (GW) of new wind power. This includes TotalEnergies&rsquo; (NYSE: TTE) windfarms: 4 GW offshore North Carolina and New York, 10 GW offshore Virginia and 22 GW on federal lands.
&ldquo;Those are just a few examples of projects specifically killed by new legislation. Companies shelved or delayed another 266 GW (about 1,891 projects). That was due to tax credit rollbacks, permitting freezes and funding clawbacks.
&ldquo;I don&rsquo;t care what your political position is&hellip; we need electricity. All electricity. Give me solar. Give me wind. Give me coal. Hell, give me a hamster on a wheel&hellip;
&ldquo;Because if we don&rsquo;t have it, we ALL will pay much higher prices.&rdquo;
Oh, and those stories you might have seen about how rising gasoline prices are spurring renewed demand for electric vehicles?
&ldquo;Batteries aren&rsquo;t power sources,&rdquo; Matt reminds us. &ldquo;They must be filled up&hellip; with electrons instead of gasoline. The competition for those electrons will grow. Demand from data centers, artificial intelligence and EVs are all soaring.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> How to play it? &ldquo;Nuclear energy is one of the principal areas of energy growth,&rdquo; says Matt.
&ldquo;According to the World Nuclear Association, total capacity could reach 1,446 GWe (gigawatts electric) by 2050. That&rsquo;s up from 398 GWe today.&rdquo;
The scare from the Fukushima disaster in Japan in 2011 throttled the nuclear industry. Dozens of reactors were shut down across Europe. Nuclear energy made up over 15% of the global electricity mix in 2000&hellip; and less than 9% today.
&ldquo;The declining demand worked its way down to the uranium miners,&rdquo; says Matt. The capital fled. Production flattened out. In 2025, there was a 5.4 million pound supply deficit. By 2040, supply will hit 201 million pounds, up just 14% from 2025. Demand, however, will grow to 397 million pounds, up 118% from 2025.
&ldquo;This is a classic setup for higher uranium prices. And as with most mined commodities, the industry can&rsquo;t fix this before those prices go up.&rdquo;
This week Matt recommended an especially attractive uranium producer.for his Real Wealth Insider readers.
If you prefer to go the more conservative ETF route, there&rsquo;s always the Global X Uranium ETF (URA). [Dave&rsquo;s disclosure: I own some URA.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Crypto Fraud, Strait of Hormuz Edition
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Go figure: Crypto fraudsters are making hay from the blockade of the Strait of Hormuz.
As you might be aware, the Iranian government is keen to collect tolls through the Strait of Hormuz &mdash; $2 million for the biggest oil tankers. And as you might have heard from colleague Chris Campbell at Altucher Confidential, that toll is <a href="https://altucherconfidential.com/posts/irans-bitcoin-tollbooth">payable in Bitcoin</a>.
So there&rsquo;s your context for this Reuters story&hellip;
<blockquote>Fraudulent messages promising safe passage through the Strait of Hormuz in exchange for cryptocurrency have been sent to some shipping firms with vessels stranded west of the waterway, said Greek maritime risk management firm Marisks&hellip;</blockquote>
<blockquote>Marisks on April 21 issued an alert warning shipowners that unknown actors, claiming to represent the Iranian authorities, had sent shipping firms a message demanding transit fees in cryptocurrencies, Bitcoin or Tether, for clearance.</blockquote>
On Monday it seems the captain of an Indian-flagged ship tried to transit the strait, believing he&rsquo;d ponied up the fee to the Iranian authorities on behalf of his employer.
He learned the hard way he had not&hellip; when the ship was hit by Iranian gunfire. He quickly turned tail.
For the record, the number of ships transiting the strait on any given day recently is in the single or low double digits. Before Washington and Tel Aviv launched the war on Feb. 28, it averaged 120&ndash;140.
[Update: The plot thickens. An official in India&rsquo;s Ministry of Ports denies the Reuters report. &ldquo;We spoke with the owner of the vessel&hellip; and he confirmed that it is fake news and no such incident had happened.&rdquo;]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Lowering the Temperature
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Dave, glad to see you received a lot of supportive responses,&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/america-then-and-now-1976-2026">yesterday&rsquo;s extended mailbag edition</a>.
&ldquo;I think my favorite is the person who said he didn't remember subscribing to any of the reader's emails, LOL. It's your platform and I am thankful because it makes me know and think about subjects in a way I wouldn't otherwise.
&ldquo;I think a lot about so-called TDS &mdash; especially when it comes to you being attacked by both &lsquo;sides&rsquo; &mdash; and have come to the conclusion that TDS is not one-sided. It is suffered by both the people who think Trump is Hitler and can't do anything right and the people who think he is their savior and can't do anything wrong. Same disease, different symptoms :)
&ldquo;Keep doing your thing and if it ruffles feathers, then that probably means you are doing something right.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Reading your received responses yesterday, I just want to say that I am quite happy to be included among what is shown to be a well-mannered and informed group of grateful readers,&rdquo; says another.
&ldquo;I well appreciate the scope and intensity of your daily inputs and the effort that goes into sharing them widely for such an affordable price.
&ldquo;You have added greatly to my personal perspective and enjoyable retirement of almost 30 years. Just your recommendation of Neil Howe&rsquo;s books has been a great source of personal reflection and understanding.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Hey Dave, keep up the great work,&rdquo; says a third. &ldquo;I have cut back drastically on the daily emails I receive. Yours is the only one I look forward to reading. Love your unique perspective. I feel fully informed after reading it.
&ldquo;Regarding the division among us, it is created by the evil forces. Please remember, everyone, we need a revolution, not a civil war.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Thank you for the work you do and your 5 Bullets, Dave,&rdquo; says our final correspondent today.
&ldquo;There is just so much noise and banter out there that has no substance. You obviously do and have done over the years a lot of digging and musing that just gives a different perspective.
&ldquo;And I think in such a nutso time as this that really helps people see the picture in a different light. Always look forward to what you have to say.
&ldquo;And Paradigm Press and the services I&rsquo;ve chosen have absolutely given my Roth a serious boost because of the thoughtful, expert advice from many different angles. But it&rsquo;s also fun, interesting and thoughtful.&rdquo;
Dave responds: Thank you, sir, for affirming why we do what we do.
And thanks to everyone who corresponded in recent days &mdash; especially the self-described longtimers who don&rsquo;t usually write. It&rsquo;s restored both my faith in humanity&hellip; and my conviction that this e-letter has the most informed and engaged readership in the business!