<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: &ldquo;A Deal to Make a Deal&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;We have to pass the bill so that you can find out what&rsquo;s in it.&rdquo;
Remember that? Those were the infamous words of House Speaker Nancy Pelosi during the debate over Obamacare in 2010.&nbsp;
&ldquo;Truer words were never spoken,&rdquo; said Cato Institute researcher Michael Cannon. &ldquo;Heck, Obamacare gives [the health and human services secretary] so much arbitrary power to reshape the health care sector that Congress had to pass the law so that Pelosi could find out what is in it.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> At least then the text of the bill was public knowledge. We don&rsquo;t even have that much today with the oh-so-ballyhooed Iran deal.
&ldquo;I have yet to see one authoritative list of terms both sides concur is authentic and that they will abide by,&rdquo; says retired Army combat officer Daniel Davis, host of the Daniel Davis Deep Dive podcast. &ldquo;The only thing that has been discussed thus far is a memorandum of understanding to get Phase 1 enacted so we can even begin negotiations for Phase 2.&rdquo;
&ldquo;It seems to be little more than a deal to make a deal since the nuclear issue and sanctions relief were left unresolved,&rdquo; Paradigm&rsquo;s own Jim Rickards wrote his Strategic Intelligence readers this morning.
Old acquaintance Erik Townsend, host of the Macro Voices podcast, had a pithy summary of how the Iranian side sees it&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1QGE8ek7tBjdQtQCo7fq4A/9d936d48a9fed6ad0f1e94532a6b2724/FMF-Issue-061526-1.png" alt="Erik Tweet" width="540px" />
Supposedly the &ldquo;deal to make a deal&rdquo; will be signed in Switzerland on Friday. Then maybe we can see a text? Pretty please?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> That&rsquo;s assuming U.S. and Iranian representatives even make it to the signing ceremony. There are two enormous stumbling blocks between now and Friday.
The first is the status of Tehran&rsquo;s frozen assets, rumored to be valued at $24 billion.
Iranian media say that under the deal, those assets will be restored to Tehran right away. Asked about that on CBS this morning, Vice President Vance said, &ldquo;We&rsquo;re open to a lot of things that are on the table but that doesn&rsquo;t appear anywhere in the text.&rdquo;
(At least he&rsquo;s seen the text?)
Given everything we&rsquo;ve heard from Iranian leadership in recent weeks, the immediate release of these assets appears to be non-negotiable.
And then there&rsquo;s Israel &mdash; not a party to the agreement, as Prime Minister Benjamin Netanyahu has said pointedly.
Netanyahu tried to deep-six the agreement yesterday by escalating in Lebanon &mdash; bombing metropolitan Beirut, which is a red line for Tehran.
Fox News Middle East correspondent Trey Yingst &mdash; a straight shooter despite who signs his paycheck &mdash; quoted a diplomat involved in the talks as saying, &ldquo;This is a clear attempt by Israel to sabotage the President&rsquo;s deal and drag the United States back into war.&rdquo;
It didn&rsquo;t work &mdash; this time. But Beirut is non-negotiable for Tehran. And a lot can happen between now and Friday.
<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" />Deal Arrives as &ldquo;Tank Bottoms&rdquo; Loom
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And at least until Friday, the Strait of Hormuz remains effectively closed. Here&rsquo;s a one-year chart of Hormuz traffic, placed in context.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2apgxy6H9EGv5Qa9GoBHKF/76bfbb8432e222f3abee443d2ba3e479/FMF-Issue-061526-2.png" alt="Don Tweet" width="540px" />
&ldquo;At this stage, there are no changes to our operations in the region,&rdquo; says a statement from the shipping giant Maersk. &ldquo;The announced agreement is a welcome and positive development, but publicly available details are still limited.&rdquo;
(Gee, you don&rsquo;t say&hellip;)
Even if a deal is signed Friday and everything goes swimmingly from there, it&rsquo;s going to take time to unscramble the scrambled supply chains.
Clearing the strait of mines? A six-month project. Moving vessels where they need to be? Two or three months. Restarting oil production where it&rsquo;s been shut down and then restoring to prewar levels? Another three months.&nbsp;
&ldquo;The war started in a second, but the consequences will linger on much longer,&rdquo; says Amena Bakr of the trade-data firm Kpler.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Assuming this deal is for real, it comes just in time for U.S. oil inventories.&nbsp;
As we chronicled last month, Carlyle Group commodities guru Jeff Currie said that America will be approaching &ldquo;tank bottoms&rdquo; around July 4. And an Exxon executive said the only thing keeping a lid on fuel prices during the war is the fact we&rsquo;re running down inventories.
Even CNN managed to figure that out by this weekend&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/F24KH2xgJIN7ganL9KKiI/afa64c7edb847a9160fb19fa408e9705/FMF-Issue-061526-3.png" alt="CNN Tweet" width="540px" />
As of the week ending June 5, inventories at the giant terminal in Cushing, Oklahoma totaled 21.64 million barrels. That compares with 40 million or so in normal times&hellip; and &ldquo;operational minimums&rdquo; of 20 million &mdash; beyond which there&rsquo;s too much sludge mixed in with the oil and pipelines lose pressure.
Meanwhile, the government&rsquo;s Strategic Petroleum Reserve now sits at its lowest level since August 1983.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The oil price today, you ask? Down over 5% to the lowest levels in over three months, but still over $80.
That might be as good as it gets for a while. Mr. Market hasn&rsquo;t yet absorbed the realities of how long it&rsquo;s going to take to restore energy flows to where they were before the war began. (See above.)
Elsewhere, it&rsquo;s &ldquo;risk on, baby.&rdquo; At last check, the S&amp;P 500 is up nearly 2% to 7,573 &mdash; not too far off its record close of June 2. The Nasdaq is up 3% while the Dow is settling for a 1.4% gain.
Precious metals are also rallying &mdash; gold up $110 to $4,328 and silver up two bucks, only a penny away from $70 again. Crypto is getting traction, too &mdash; Bitcoin up to $66,689 and Ethereum above $1,800 again.
One economic number of note: U.S. industrial production ticked up 0.1% in May, less than expected. Manufacturing output was flat, utilities activity shrank, mining/energy output grew. All told, 76.2% of U.S. industrial capacity was in use last month &mdash; well below the 60-year average.
<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" />SpaceX: 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" /> On Day 2 of SpaceX&rsquo;s existence as a publicly traded company, SPCX shares are trading north of $170 &mdash; up 8% from Friday&rsquo;s close and 29% from the IPO price.
But where does it go from here?
&ldquo;The chart below is my best guess for how the next year unfolds after SpaceX goes public,&rdquo; says Davis Wilson of our sister e-letter The Million Mission.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/DCJHQoSf3IvB75dVI3xry/e4297ae5709f3f3c4d2784deb506ff98/FMF-Issue-061526-4.png" alt="The Space X IPO" width="540px" />
&ldquo;We&rsquo;ve seen this movie before,&rdquo; he says. It breaks down into five phases&hellip;
<blockquote>Phase 1: IPO hype. In the brief window before IPO day, demand from retail investors for a limited number of pre-IPO shares was overwhelming. &ldquo;When disappointed investors rush into the open market to buy shares after trading begins,&rdquo; says Davis, &ldquo;It creates a natural source of upward pressure on the stock.&rdquo;</blockquote>
<blockquote>Phase 2: Insiders sell. The venture capital types, to say nothing of SpaceX employees, who&rsquo;ve owned shares for years, will want to cash out. And unlike the single &ldquo;unlock date&rdquo; that typically happens with IPOs, &ldquo;shares are expected to be released in stages from roughly July through December,&rdquo; Davis says. &ldquo;Rather than one giant wave of selling pressure, SpaceX could face a series of smaller waves as more insider shares become eligible for sale.&rdquo;</blockquote>
<blockquote>Phase 3: Investors lose interest. &ldquo;The financial media will move on to the next hot story. The next IPO will arrive&hellip; I wouldn&rsquo;t be surprised if SpaceX enters a prolonged &lsquo;dead money&rsquo; period where investors simply lose interest.&rdquo;</blockquote>
<blockquote>Phase 4: Institutions buy. &ldquo;Many large funds can't buy meaningful positions immediately after an IPO. And they don&rsquo;t want to buy at such inflated prices. Instead, they wait for the hype to fade and for insider selling to run its course.&rdquo; Neither the media nor retail investors will notice. And then&hellip;</blockquote>
<blockquote>Phase 5: Retail buys back in. &ldquo;Suddenly everyone who ignored the stock during the &lsquo;investors lose interest&rsquo; phase will decide they need exposure. That's usually how it works. People don't chase what has fallen. They chase what has already gone up.&rdquo;</blockquote>
No guarantees this is how it plays out. But Davis has seen it play out just like this many times before. &ldquo;The tickers are always different, but the underlying behavior rarely changes.&rdquo;
<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" />Trump Admin&rsquo;s Heavy Hand Slams Down an AI Giant
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s now apparent what the Trump administration&rsquo;s approach to AI regulation will be going forward &mdash; lurching back and forth between a light touch and a heavy hand.
The heavy hand slammed down hard last Friday on Anthropic, the Claude maker that intends to go public later this year.&nbsp;
As we mentioned at the time, Anthropic rolled out its powerful new Mythos model in April &mdash; so powerful, the company claimed, that it unearthed major vulnerabilities in nearly every operating system and web browser.&nbsp;
As such, Mythos&rsquo; initial release was limited to only a few dozen big corporate clients so they could patch their systems. A watered-down version of Mythos dubbed Fable was released to the public last week.
The whole time, Anthropic leaned hard into the Mythos-as-cyberweapon narrative, pleading for federal regulation. (When big companies plead for regulation, it&rsquo;s always to thwart up-and-coming competition.)
Regulation arrived on Friday when the feds issued an export-control order forbidding access to both Mythos and Fable by any foreign national. That&rsquo;s even if the foreign national is in the United States, and even if the foreign national works for Anthropic.
The company was given 90 minutes to comply.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Under strictures that tight, Anthropic simply revoked access to Mythos and Fable for everyone.
Social media had a field day&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3Ptw6dJAunBUhAyXwhC2yQ/1c247823a17f3fa98ac0a47d0ded0161/FMF-Issue-061526-5.png" alt="Comedic Relief" width="540px" />
If the Semafor news site is to be believed, the order resulted &ldquo;partly over suspicions that a China-linked group&rdquo; somehow accessed Fable, the consumer version of Mythos.
For his part, venture capitalist and White House AI adviser David Sacks says the feds got a warning from &ldquo;a highly credible trusted partner&rdquo; of both Anthropic and the U.S. government: Fable was subject to jailbreak. (The Financial Times reports that partner is Amazon.)
In Sacks&rsquo; telling, Anthropic CEO Dario Amodei refused to fix it &mdash; saying it was no big deal. The feds disagreed and issued their order.
This development comes after a series of mixed signals from the White House in recent weeks: Mythos spurred the White House to rethink its previous light-touch approach during April. A heavy-handed executive order <a href="https://paradigmpressroom.com/post/ai-speeding-toward-a-brick-wall">was in the works</a> during May&hellip; but <a href="https://paradigmpressroom.com/post/apples-secret-supplier/#meanwhile">then it was watered down come June</a>. Now it&rsquo;s heavy-hand time again.
You wonder if the Silicon Valley tech bros who gravitated toward Trump during the 2024 campaign are having second thoughts&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: DXYZ, Aging in Place
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A couple of complaints filtered into the mailbag this weekend &mdash; and I&rsquo;m hard pressed to say what brought them on.
Both readers called us out &mdash; and one called out James Altucher in particular &mdash; for talking up Destiny Tech100 Inc. (DXYZ) &mdash; a closed-end fund that was an indirect way to own SpaceX pre-IPO. (Last year, SpaceX made up more than half of DXYZ&rsquo;s holdings.)
As far as I can tell, DXYZ has never been a recommendation in Altucher&rsquo;s Investment Network.&nbsp;
Over the last year, Davis Wilson of the free e-letter The Million Mission did mention DXYZ now and then &mdash; mostly to discourage people from investing. He cautioned that it traded at nearly 4x its net asset value (September 2025) and that its price was falling even as SpaceX&rsquo;s valuation was soaring (March 2026).
If our editors give readers a bum steer, we expect them to own their oversight. But again, as far as I can tell, there&rsquo;s no oversight to own here.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After your editor made a parenthetical reference <a href="https://paradigmpressroom.com/post/spacex-there-is-no-choice">in Thursday&rsquo;s edition</a> to the fact that many boomers are choosing to &ldquo;age in place&rdquo; instead of downsizing &mdash; which helps to limit the available housing stock for younger folk &mdash; we heard from one of our semi-regulars&hellip;
&ldquo;7,000 boomers a day are making the ultimate downsize,&rdquo; he writes &mdash; &ldquo;they are dying!
&ldquo;That is 2.6 million per year. That is a lot of houses becoming empty for the younger generation. What other generation is adding that kind of real estate to the market?&rdquo;
Dave responds: Valid point. It&rsquo;s a self-correcting problem in that regard &mdash; even if it&rsquo;s not happening fast enough for young and growing families.
The eventual aging out of the boomers is also why I don&rsquo;t share in the hand-wringing you hear from many experts about the future of Social Security.&nbsp;
Boomers like to think they&rsquo;re immortal &mdash; heh &mdash; but they will be falling off the rolls sooner or later.&nbsp;
It&rsquo;s still going to take some combination of higher taxes and higher retirement age to keep the system afloat longer term. When the politicians choose to act is up in the air; under the circumstances, they&rsquo;ll likely hold off until the last minute&hellip;

FMF-Issue-061526-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

Iran: “A Deal to Make a Deal”

<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: The Iran Connection
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; is SpaceX&rsquo;s IPO today the reason Donald Trump called off a renewed attack on Iran yesterday?
Yesterday morning on his Truth Social platform, the president threatened to attack Iran &ldquo;VERY HARD TONIGHT.&rdquo;
But about six hours later, he declared he had &ldquo;cancelled the scheduled strikes and bombings against Iran this evening.&rdquo;
What changed?
One theory is that the Iranian side delivered damaging strikes against U.S. targets &mdash; more damaging than anyone in Washington cares to admit &mdash; and the Pentagon urged the president to hold off, allowing time to regroup.
Another theory is that a U.S. Treasury auction yesterday went poorly, with very weak demand. An escalation of the war would drive down foreign demand for Uncle Sam&rsquo;s debt even further&hellip; which would drive interest rates even higher.
But among some cynical cats on X, the consensus is that someone put a bug in the president&rsquo;s ear: You don&rsquo;t wanna mess up the SpaceX IPO tomorrow, do you?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7gb3xBCk5FKbRlPoSUnKE5/a0b9a69a2ffe76d0f17f06e6323b3f3b/FMF-Issue-061226-1.png" alt="pub" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1GENix5dhJhx4PdosYEBko/93083e61fe9b2220f5a857d923cd03a8/FMF-Issue-061226-2.png" alt="pub" width="540px" />
To no small extent, Donald Trump sees his legacy tied up with the performance of the U.S. stock market. Now is no time to throw a wrench in the works. Remember how the market swooned at the outset of the war in March?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But it wasn&rsquo;t just the threat of a renewed hot war tanking the stock market at a delicate moment.
There was also the threat the Iranian side issued against Elon Musk&rsquo;s interests in the Middle East.&nbsp;
Yesterday morning, Iran&rsquo;s semi-official Fars News Agency reported that Tehran planned to target &ldquo;all interests related to economic holdings managed by Elon Musk in West Asia&rdquo; &mdash; including a Starlink ground station.
&ldquo;The Islamic Republic of Iran reserves the right to attack all facilities related to [Musk]-managed holdings in the region and occupied territories,&rdquo; Fars quoted an &ldquo;informed source&rdquo; as saying.
There&rsquo;s precedent behind the threat: During the war&rsquo;s early days, Tehran attacked Amazon data centers in the United Arab Emirates and Bahrain.
Now, this threat did not carry the weight of coming from the news agency IRNA &mdash; the official Iranian government mouthpiece. And if you give it a moment&rsquo;s thought, the threat was almost surely a bluff: Iranian leaders know how unpopular this war is in the United States. Why would they do anything to anger millions of everyday American investors at a moment those investors are jazzed about the SpaceX IPO?
But if you&rsquo;re sitting in the White House&hellip; and you think your legacy is inextricably linked to the performance of the stock market&hellip; you&rsquo;re not going to take any chances. You&rsquo;re going to call off the attacks.
That&rsquo;s our informed speculation, anyway. Whatever the case, the shaky ceasefire looked a bit more steady as the trading day opened&hellip; and everything was on track for a smooth introduction of SpaceX as a publicly traded company.
<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" />Here We Go Again (Again)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And so the &ldquo;war&rsquo;s almost over&rdquo; trade is back on. At less than $85 a barrel, U.S. oil futures trade today at a two-month low.
Not only did Donald Trump call off a planned attack on Iran yesterday, he said &ldquo;discussions and final points have been, in both concept and great detail, approved by all parties involved.&rdquo;
Never mind that Trump has previously said a deal is nearly done 38 times before. (That count is from CNN, but it appears to check out.) Never mind that as usual the Iranian side is being much more circumspect about prospects for a deal. And never mind that Israel has an effective veto on anything Washington and Tehran might agree to.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Amid that backdrop, and the SPCX debut, the major U.S. stock indexes are just barely in the green after yesterday&rsquo;s solid gains. The S&amp;P 500 is back over 7,400 for the first time since Monday.&nbsp;
SPCX shares began trading shortly before lunchtime on the East Coast &mdash; opening at $150 each, an 11% improvement on last night&rsquo;s listing price of $135.&nbsp;
With that, Elon Musk has become the world&rsquo;s first trillionaire. (Granted, the value of a dollar ain&rsquo;t what it used to be, but still&hellip;)
In addition to SPCX&rsquo;s premiere, leveraged ETFs based on SPCX have also begun trading &mdash; a 2X ETF with the ticker SPCH and a 3X ETF with the ticker ELON.&nbsp;
(Guess Musk is out of luck if he wants to merge Tesla and SpaceX into one giant company with the ELON ticker?)
➢ Hats off to readers of Enrique Abeyta&rsquo;s The Maverick: Yesterday they collected 105% gains after six months with shares of the space name Voyager Technologies. Enrique thought it prudent to take profits on half the position ahead of the SpaceX debut.
Despite the stock market&rsquo;s sideways chop in recent days &mdash; including last Friday&rsquo;s big drop &mdash; there&rsquo;s an underlying sign of strength: Money is flowing out of the Magnificent 7 names into the broader market.
&ldquo;Take a look at RSP, the equal-weight S&amp;P 500 ETF,&rdquo; says Paradigm analyst Zach Scheidt. &ldquo;It's outperforming the traditional, mega-cap-heavy S&amp;P 500, and it's sitting within 2% of all-time highs. We're seeing the same in small caps. IWM is right up near its own highs and has led the last few sessions.
&ldquo;This tells us that the average stock is holding up well. We're getting participation from more &lsquo;healthy&rsquo; names instead of the whole market leaning on a few giants.&rdquo;
Precious metals rallied big-time yesterday after Trump called off the Iran attacks&hellip; but checking our screens gold is back under $4,200 and silver is off nearly a buck at $66.28. Bitcoin has pushed past $63,000 but Ethereum is still mired in the $1,600s.
<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" />Data Centers In Space(X)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Just days leading up to the largest IPO in history, Elon Musk unveiled something the market hasn't fully processed yet,&rdquo; says Paradigm space and tech specialist Ray Blanco.
&ldquo;Not a rocket. Not a Starlink update. Not a Grok benchmark.&rdquo;
Rather it was a satellite designed from the jump to be a data center in space. Perhaps not surprisingly, it&rsquo;s called AI1.
&ldquo;The timing is not accidental,&rdquo; Ray wrote yesterday for Altucher&rsquo;s Investment Network. &ldquo;You don't unveil your first orbital data center satellite right before the largest IPO in history by coincidence. Musk just showed the world what he's actually building with the money.&rdquo;
One AI1 satellite generates an amount of solar power equal to that needed for powering 125 homes. &ldquo;Its solar panels span 70 meters tip to tip,&rdquo; says Ray. &ldquo;That's wider than a Boeing 747.
&ldquo;To keep those chips from melting in the vacuum of space, it deploys a liquid radiator system covering 110 square meters &mdash; roughly the floor area of a decent apartment &mdash; that bleeds heat silently into the void.
&ldquo;And the detail that separates this from everything that came before: The compute payload is interchangeable.
&ldquo;The satellite could run Nvidia GPUs or Google TPUs, or SpaceX&rsquo;s own custom Terafab silicon.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Terafab is planned for a site near Austin, Texas &mdash; sitting cheek-to-jowl with Tesla&rsquo;s Gigafactory Texas complex, but 10 times the size.
It will aim for one terawatt of annual chip output &mdash; some 80% of that destined for space.
Put simply, &ldquo;The largest chip manufacturing initiative in human history is being built primarily to supply orbital infrastructure,&rdquo; Ray says.
&ldquo;This is the capital allocation decision made by what might be the most aggressive builder in the history of technology, backed by the proceeds of a $75 billion IPO.&rdquo;
As we&rsquo;ve emphasized since we first brought them to your attention last fall, orbiting data centers don&rsquo;t compete for scarce resources on Earth: Electricity comes from solar power that&rsquo;s available 24/7. No need to suck up water for cooling; space is plenty cold. And no neighbors to object.
&ldquo;The costs that remain &mdash; launch, hardware &mdash; are falling faster than anyone predicted,&rdquo; Ray goes on. &ldquo;Starship changes the launch economics the way container shipping changed global trade.&nbsp;
&ldquo;When the cost of getting a pound to orbit drops by 90%, the math on orbital compute doesn't just improve. It inverts.
&ldquo;The interchangeable compute payload architecture means AI1 isn't a satellite. It's a platform &mdash; the orbital equivalent of a server rack that any hyperscaler can populate with their own silicon.&rdquo;
Just wait till everyone else figures out what we&rsquo;ve been telling you for weeks: SpaceX isn&rsquo;t a rocket company. It&rsquo;s an AI company that sees the future of AI in space.
<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" />Something to Feel Good About
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Not sure if you&rsquo;ve noticed&hellip; but there are plenty of visitors to the United States for the World Cup who can make you feel good about being an American.
LIke a fellow from Germany who&rsquo;s become a social-media sensation with posts like this&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4CmrnXyN7I82nLnjZ8ISo9/635725bf94fdd928beaccc21b1539b23/FMF-Issue-061226-3.png" alt="pub" width="540px" />
Or a young woman from Sweden checking out the Hoosier State on her way to one of the venues&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5szV3nItUA6FVOb0YJXsUS/ced4ba45e3aba63fedf8a3361e4db738/FMF-Issue-061226-4.png" alt="pub" width="540px" />
Or a visitor from Japan <a href="https://x.com/japan_nobunaga/status/2064943515931660382">discovering for the first time</a> the astounding variety of ways you can order eggs for breakfast.
In recent weeks both <a href="https://dailyreckoning.com/the-missing-spirit-of-76/">Byron King</a> and <a href="https://paradigmpressroom.com/post/america-then-and-now-1976-2026/#3">yours truly</a> have mused in our respective publications about why the vibe for America&rsquo;s 250th is much more downcast compared with the Bicentennial in 1976.
In that regard, these visitors have brought us a great gift &mdash; the chance to see our country with fresh eyes.
<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: First They Came for the Illegals&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option/#4">My brief rant a week ago today</a> about a plan to seize illegal migrants&rsquo; bank accounts prompted a small flurry of reader reactions.
Some missed the point: &ldquo;The rights we have in the U.S. are not universal. Those people entering the U.S. illegally and taking advantage of our resources weaken all of us. If you ever choose to run for a public office I have $5,000 that I can contribute to your opponent.&rdquo;
Others raised a valid concern: &ldquo;On balance, your stance against government seizing bank accounts is a wise one, as government always overreaches.&nbsp;
&ldquo;However, my right to not have illegals (or anyone) stealing my tax dollars to enrich God knows who is important too.&nbsp;
&ldquo;Care to offer something beyond just saying NO to government, so that my tax dollars are protected from being stolen? An alternative solution perhaps?&rdquo;
Dave responds: It shouldn&rsquo;t be controversial &mdash; certainly not on &ldquo;the right&rdquo; &mdash; to strip illegal migrants of welfare benefits.
And yet&hellip; a budget bill passed in Washington last winter includes $5 billion in &ldquo;refugee and entrant assistance&rdquo; &mdash; cash benefits, health care, daycare, job programs.
Rep. Thomas Massie (R-Kentucky) offered an amendment to strip this funding from the bill &mdash; only to be shot down by House Speaker Mike Johnson and other GOP leadership. Donald Trump signed the measure into law, and then backed Massie&rsquo;s primary opponent &mdash; who won with the help of an unprecedented $15 million from the GOP donor class. Your beef (and mine) is with them.
I for one would be interested in seeing how it would work out if our leaders actually followed the Constitution&rsquo;s clear division of responsibilities: The federal government takes care of naturalization/citizenship, while immigration is left to the states.
That might sound outlandish to contemporary ears, but it&rsquo;s how things worked for our first century of existence as a country&hellip;

FMF-Issue-061226-Featured

SpaceX: The Iran Connection

<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: There Is No Choice
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We&rsquo;ve spent days if not weeks trying to warn you off buying SpaceX shares on IPO day.
Which&hellip; in case you just emerged from a no-internet retreat in the Himalayas or something&hellip; is tomorrow.
History just isn&rsquo;t on your side. We&rsquo;ve cited the case of Facebook &mdash; down 54% in its first 12 months after going public in 2012.&nbsp;
Similar sob stories took place with Twitter (down 60%) and Robinhood (down 80%).
Yes, they all roared back to trade at many multiples of their IPO price &mdash; but, really, how many people had the patience to hold on?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> All that said &mdash; and we realize we&rsquo;re about to invoke one of the most dangerous phrases in all of investing &mdash; this time might be different.
To illustrate why, colleague Davis Wilson of our sister e-letter The Million Mission offers this analogy: Your spouse sends you to the grocery store with a shopping list from which you&rsquo;re not to deviate one iota.
The list includes Honeycrisp apples &mdash; which turn out to be $450 a pound.
You buy Honeycrisp apples, the insane price be damned. There is no choice. The list is the list.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Believe it or not, this is exactly how trillions of dollars are invested every day,&rdquo; says Davis &mdash; &ldquo;without the slightest thought given to the price paid.
&ldquo;The shoppers are index funds &mdash; like QQQ, SPY, VOO, etc.
&ldquo;The shopping list is a list of stocks that are chosen by the men and women working at Nasdaq, MSCI and Standard &amp; Poor&rsquo;s.
&ldquo;And thanks to recent rule changes at Nasdaq and MSCI, SpaceX could find itself on some very important shopping lists shortly after its IPO.&rdquo;
As you likely know, an index fund doesn&rsquo;t try to beat the market. It tries to reflect its underlying index as closely as possible.&nbsp;
&ldquo;If the index owns Nvidia, the index fund owns Nvidia,&rdquo; says Davis. &ldquo;If the index owns Microsoft, the index fund owns Microsoft. And if the index adds SpaceX, the index fund must buy SpaceX.&rdquo;
If the fund manager thinks SpaceX is too pricey, too bad &mdash; he has no choice. The list is the list.
&ldquo;Hisotorically,&rdquo; says Davis, &ldquo;newly public companies had to wait months or even years before being added to major indexes. That delay gave the market time to absorb the new shares and establish a fair price.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Not so with SpaceX &mdash; not with expectations the company will raise $75 billion at a valuation over $1.75 trillion.
&ldquo;Nasdaq recently changed its rules to allow certain mega-cap IPOs to enter the Nasdaq-100 after just 15 trading days,&rdquo; says Davis.&nbsp;
&ldquo;The Nasdaq-100 has roughly $1.4 trillion benchmarked against it through ETFs, mutual funds, retirement accounts and institutional portfolios.
&ldquo;If SpaceX entered the index with a 0.5% weighting &mdash; which it&rsquo;s expected to &mdash; those funds would need to buy roughly $6 billion worth of shares. At a 1% weighting, the figure rises to $12 billion.&rdquo;
And then there&rsquo;s MSCI &mdash; which has a similar fast track that could add qualifying companies in as little as 10 trading days.
&ldquo;Approximately $5.8 trillion is benchmarked to MSCI indexes globally,&rdquo; says Davis. &ldquo;Even a relatively small weighting could translate into another $10 billion or more of buying demand.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Add everything together and it's not difficult to envision $20&ndash;30 billion of &lsquo;forced buying&rsquo; arriving within weeks of the IPO,&rdquo; Davis says.
&ldquo;And that's before hedge funds get involved&hellip; active managers decide they need exposure&hellip; financial advisers recommend the stock to clients&hellip; and retail investors like us pile in.
&ldquo;Think about that for a second.
&ldquo;SpaceX may raise $75 billion in the IPO. Then, just days later, tens of billions of dollars of additional demand could arrive from investors who are required to buy the stock at any price.&rdquo;
In that atmosphere, valuation won&rsquo;t matter. The index fund managers must buy. There is no choice. The list is the list.
<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" />Dot-Com Echoes? Yes, But&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For all the stock market&rsquo;s choppy action in the last week, history suggests the bull market isn&rsquo;t over yet.
&ldquo;Over the past several weeks,&rdquo; says Paradigm trading pro Enrique Abeyta, &ldquo;I have seen dozens of rare technical signals that all point to the same thing: The stock market will be HIGHER in one year.
&ldquo;There have only been a few times in my 30 years as a professional investor when I have had this degree of confidence that the stock market will be higher in a year.
&ldquo;The last time was after the COVID shutdowns, when I (correctly) predicted that we would see one of the greatest periods of GDP growth since World War II.&rdquo;
For sure, Enrique sees parallels between the AI boom now and the dot-com boom of the late 1990s. But as he&rsquo;s said for several months, there&rsquo;s no indication we&rsquo;re at a &ldquo;March 2000 moment&rdquo; &mdash; when the Nasdaq began a sickening 78% slide.
At worst, he says we&rsquo;re at a June 1999 moment &mdash; in which case the Nasdaq was still up 61% a year later, a period including the first three months of the big sell-off!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> If you&rsquo;re looking for indications when &ldquo;the top is in,&rdquo; Enrique says watch the Federal Reserve.
Here&rsquo;s a chart of the fed funds target rate over the course of his career. Note the red arrows when the Fed was raising rates.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4l62ssnA5OtCl8w6nJnG9o/f05c9e11e624df02875214e9b183dc94/fmf-issue-061126-1.png" alt="pub" width="540px" />
In each case, those rate-raising cycles preceded the onset of a bear market.&nbsp;
True, the precise interval between the start of the rate-raising cycle and the start of the bear market varies. But the point now is that the Fed has not yet begun a new rate-raising cycle.&nbsp;
As such, the bull still has room to run.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After a tough day yesterday, the major U.S. indexes are staging a modest recovery.
The S&amp;P 500 is up 0.6% at last check, back over 7,300. The Nasdaq and the Dow are both up well over three-quarters of a percent.
Gold has clambered its way back over $4,100. Silver&rsquo;s back above $64. But Bitcoin is still mired below $63,000 and Ethereum in the $1,600s.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The big economic number today is wholesale inflation &mdash; and it&rsquo;s scary-bad, up 1.1% month-over-month and 6.5% year-over-year. It&rsquo;s the biggest increase since November 2022.
These increases feed through to the consumer with a lag &mdash; at least two months, sometimes much longer.
And you can&rsquo;t blame it all on the war driving up fuel prices. If you throw out food and energy, the year-over-year increase is still a blistering 4.9%. That means the primary culprit is a federal government that still can&rsquo;t get deficit spending under control.
<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" />Inflation and War
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I love the inflation,&rdquo; said Donald Trump yesterday in a remark that predictably went viral.
He was in the Oval Office, asked by reporters about the consumer-level inflation numbers that had just come out. At 4.2%, the official inflation rate is the highest in three years.
To be sure, those four words standing alone need context. Unfortunately, the context the president provided was an incoherent jumble &mdash; a word salad in which he seemed to suggest that people will be happy once the inflation rate starts coming back down. (If you wish, <a href="https://www.youtube.com/watch?v=OUUZOe7Bd2A">you can parse it yourself</a>. Good luck.)
Which is more or less what Buck Sexton, syndicated radio host and editor of Paradigm&rsquo;s Money &amp; Power, thinks the president is betting on.
With midterm elections less than five months away, it&rsquo;s all about perceptions &mdash; as he told his subscribers last Friday: &ldquo;Let's say tomorrow morning, investors wake up and become convinced that the Strait of Hormuz is staying open and that the worst of this is behind us. Oil prices would probably start reacting before a single thing actually changes on the ground.
&ldquo;Trump doesn't need perfection here. He needs people to feel like things are getting better. That's it.
&ldquo;The faster the White House can convince people that prices are headed in the right direction, the better everybody's life gets &mdash; including Republicans running for reelection this year.&rdquo;
In the meantime, though, even The Babylon Bee &mdash; the conservative parody site &mdash; is posting headlines like this.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2EZk6rrjRmRbYllnlgPsQ0/990c9aa0ad8988ae0cc7796fa511f269/fmf-issue-061126-2.jpg" alt="pub" width="540px" />
True, it doesn&rsquo;t lay blame for the war at Trump&rsquo;s feet. But still&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Oil traders are writing off Trump&rsquo;s latest threats to attack Iran &ldquo;VERY HARD TONIGHT.&rdquo; As we write, U.S. crude futures are up only 1.5% to $91.38.
For the first time since April, the president is suggesting U.S. forces will try to seize Iran&rsquo;s big oil terminal at Kharg Island &mdash; an undertaking that&rsquo;s no less fraught with peril now than it was then.&nbsp;
The latest shooting between the U.S. and Iranian sides began in earnest late Sunday/early Monday when a U.S. Apache helicopter was downed over the Strait of Hormuz.
The incident remains murky more than 72 hours later. Tehran hasn&rsquo;t claimed credit for bringing the copter down. Axios reports that Washington still hasn&rsquo;t determined whether the Iranians brought it down on purpose. (Yeah, I know, Axios. Still&hellip;)&nbsp;
The anonymous military blogger known as &ldquo;Big Serge&rdquo; poured cold water on Trump&rsquo;s account of what happened: &ldquo;Love the idea of a drone with the precision to spear the cockpit of a moving helicopter and then catch fire like a cheap toaster instead of exploding.&rdquo;
In any event, Washington says the pilots were rescued. And the Strait of Hormuz remains all but closed.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7RDEJ5dGIYoW3oe0EkqjA/a8834b7d3064a33b8141b5af61a15aad/fmf-issue-061126-3.png" alt="pub" width="540px" />
<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: America, RIP?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; this is an item available at Walmart &mdash; 100 for $2.97&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2DcXzVArETDuGsLlVO823v/8b578d1c555fe240d03a73c9e2d6d064/fmf-issue-061126-4.png" alt="pub" width="540px" />
Yeah, I know, it commemorates the nation&rsquo;s 250th birthday.&nbsp;
But it also looks&hellip; like&hellip; a headstone?
Does someone know something?
<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: More Property Taxes
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In an unexpected development, our reader-mail thread in recent days about <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option?vid2=f7584bb8d0f8b4ef03ea4a2a79cb9ffebd5601637dfb4b221b21055bfe10aa56fb9565c7166c12ea93687031263ed97489aead8f437e4ddd1cfcbcd5e6a6bb06&amp;utm_campaign=FMF_Issue_06.09.26_&amp;utm_source=Iterable&amp;itbl_templateId=24061820&amp;itbl_campaignId=18495542&amp;utm_medium=Email#3">a property tax referendum in Florida</a> has prompted a flurry of feedback from&hellip; California.
&ldquo;As ominous as it may sound,&rdquo; says one reader, &ldquo;California did one thing right back in the 1970s &mdash; they passed Proposition 13.
&ldquo;It limits property taxes to 1% of the purchase price of the property, with a max 2% annual increase. As a result, long-term property owners enjoy a reasonable tax burden in retirement.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;All this talk about the Florida property tax initiative reminds me of my parents dragging me to a stuffy, high school cafeteria to hear some guy named Howard Jarvis talk about Proposition 13, which was going to cut property taxes and restore the American dream,&rdquo; writes another.
&ldquo;And I remember how, over the next few years, those in charge of local governments and school districts made the most painful, most public cuts possible to punish the ignorant electorate for threatening their gravy train.
&ldquo;Ah the memories.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Proposition 13 is a subject of hot debate every election cycle,&rdquo; says a third.
&ldquo;Reading all of the feedback you've published, along with what I'm hearing out here, it's all the same and your last paragraph <a href="https://paradigmpressroom.com/post/spacex-and-smoothies">on Tuesday</a> summed it up perfectly.&nbsp;
&ldquo;The real question isn't how to shift the tax burden. The part that rarely gets brought up, but is the most important question, is what ought the government be funding in the first place. In my opinion, the answer is a helluva lot less than it currently does. The list of things my taxes fund which I find repugnant is too long to include here, and I imagine that's true for most people.&nbsp;
&ldquo;Perhaps if we'd get back to only funding actual essential services, we could figure out how to fund them without so much vitriol. Of course, that requires someone deciding for us all what is and isn't 'essential,' and those decisions are almost always made with influence from the beneficiaries/providers of said services.&nbsp;
&ldquo;It looks like we may actually avoid empirical collapse for another generation. While that is in many ways a relief, it is also somewhat of a disappointment. A clean slate would have been another chance to get it right.&nbsp;
&ldquo;The path we're on, which is likely to preserve the U.S.' status as the issuer of the world&rsquo;s reserve currency for a while longer, will certainly come with more central planning and control of the economy. Financed on the backs of the citizenry, with made-up dollars. Taxes aren't going away; the only question is how we choose to arrange the deck chairs while the band plays on.
&ldquo;You're not the only one who gets accused of cynicism BTW.&rdquo;
Dave responds: Heh.
I&rsquo;ll leave the dying-empire discussion for another time and keep the focus on California. The first reader&rsquo;s comment about &ldquo;a reasonable tax burden in retirement&rdquo; comes with a caveat, one I&rsquo;ve spotlighted before.
If a longtime California homeowner wants to downsize to a locale with low (Arizona) or no (Texas) state income taxes&hellip; he or she will take an enormous one-time hit with federal income taxes.
Under the Taxpayer Relief Act of 1997, there&rsquo;s an exemption on any capital gains you rake in from the sale of a personal residence &mdash; $250,000 for individuals, $500,000 for couples.
Even though this legislation was passed more than a generation ago, those thresholds have never been adjusted for inflation. If they were, they&rsquo;d be $515,000 for individuals and $1.03 million for couples.
And even those higher figures wouldn&rsquo;t be fair &mdash; considering that home prices have risen much faster than the inflation rate.
It hits hard everywhere &mdash; but especially in California where pretty much anyone with a paid-off house is a &ldquo;millionaire.&rdquo;
Come to think of it&hellip; You hear a lot of complaints these days about why the boomers won&rsquo;t downsize, which has the effect of shutting younger people out of homes that can accommodate growing families.&nbsp;
There are many reasons behind the phenomenon, no doubt &mdash; but the silly-low federal capital gains exemption has to be a big one&hellip;

FMF-issue-061126-featured

SpaceX: There Is No Choice

<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" />When Trust Is Broken
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Donald Trump is at risk of repeating one of Joe Biden&rsquo;s biggest blunders.
After Russia invaded Ukraine in 2022, Biden and his national security adviser Jake Sullivan thought it would be a clever idea to punish Moscow by freezing $300 billion in U.S. Treasuries held by the Russian central bank.
Executing that freeze was easy-peasy.&nbsp;
U.S. Treasuries &ldquo;are held on a digital ledger controlled by one or more depositories around the world,&rdquo; says Paradigm macro maven Jim Rickards &mdash; who knows the plumbing of this system inside-out from his days at Citibank. &ldquo;There&rsquo;s not much more to it than a phone call or a few keystrokes.&rdquo;
The freeze had zero impact on Moscow; Russia&rsquo;s economy chugged along just fine in the years immediately following.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But the freeze had the instant effect of undermining foreigners&rsquo; confidence in U.S. Treasuries.
We&rsquo;ve said it before and we&rsquo;ll say it again: Leaders of other governments around the world started to think, If it can happen to the Russians, it can happen to us too.
&ldquo;The reason reserve managers have such confidence in Treasuries as a reserve asset is that the U.S. is perceived to have a strong rule of law,&rdquo; Jim told his Strategic Intelligence subscribers yesterday. &ldquo;Yes, it&rsquo;s easy to freeze the securities, but the U.S. won&rsquo;t do so except after due process of law or a national security emergency.&rdquo;
But neither of those contingencies applied in the case of Russia during 2022.&nbsp;
And they don&rsquo;t apply in the case of Iran now. But that&rsquo;s not stopping the Trump administration.
A few days ahead of the deal supposedly reached between Washington and Tehran this past weekend&hellip; the White House threatened to seize $24 billion of U.S. Treasuries owned by Iran.
&ldquo;These assets,&rdquo; Jim explained, &ldquo;would be used to finance the reconstruction of war damage caused by Iran to U.S. allies in the Persian Gulf, such as Kuwait and Bahrain.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;You can debate the wisdom of these proposals, but you cannot debate the fact that the U.S. is destroying trust in its own rule of law,&rdquo; Jim says.
&ldquo;Countries around the world, including major Treasury securities holders such as South Korea, Taiwan, Japan, Saudi Arabia and China, are watching these developments in Russia and Iran and asking themselves if their own holdings of Treasuries are safe.
&ldquo;What if the U.S. doesn&rsquo;t like what one of those countries is doing in foreign policy? Will the U.S. seize their securities too?&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Another point we can&rsquo;t emphasize often enough: The 2022 Russia freeze touched off a worldwide scramble for a different reserve asset &mdash; gold.
For years, Jim has said that unlike Treasuries, &ldquo;gold is a physical nondigital asset that cannot be stolen, frozen or seized provided it is in safe storage.&rdquo;
As such, global central banks started stacking gold at a record pace in&hellip; 2022.
It sticks out like the proverbial sore thumb on this chart. And if the first-quarter figures for 2026 are any indication, this year&rsquo;s buying will exceed 2025&rsquo;s total.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5rapbFBMyvQvjHQmIqsb2h/12b9531ac8bf9813e12b6bf4efa0d977/FMF-Issue-061616-1.png" alt="Accelerates" width="540px" />
And as we mentioned a few days ago, gold has just overtaken U.S. Treasuries as the biggest asset held by global central banks.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/48dJSZCcrOnHMU5624vqWe/2ea34424495e8bdc2ca2cb629cfbb3ed/FMF-Issue-061616-2.png" alt="Safety in Gold" width="540px" />
It&rsquo;s no coincidence the gold price soared from about $1,800 at the time Washington seized Russia&rsquo;s Treasury holdings to about $4,250 at year-end 2025.
What&rsquo;s the outlook for the dollar price of gold going forward? Jim returns for insight in Bullet No. 4, after we take up 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" />SpaceX Gains, Other Tech Names Lose
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The share price of SpaceX has sailed past $200 on its third trading day &mdash; up 57% from Thursday&rsquo;s listing price of $135.
In after-hours trading yesterday, SpaceX added an amount to its market cap that equaled the entire market cap of Starbucks. As one skeptic pointed out, Starbucks generates twice as much revenue as SpaceX.
Once the market opened today, SpaceX&rsquo;s total market cap exceeded that of Amazon&hellip; and it soon surpassed Microsoft as well. At $2.8 trillion, SpaceX is now the fourth-biggest U.S. company. (Nvidia holds the crown at just over $5 trillion. For now.)
We&rsquo;re definitely in the &ldquo;IPO hype&rdquo; phase. That&rsquo;s the first of five phases to SpaceX&rsquo;s likely trajectory over the next year as described here <a href="https://paradigmpressroom.com/post/iran-a-deal-to-make-a-deal">yesterday</a> by colleague Davis Wilson.
Some of the social media chatter is out of control. &ldquo;A no-brainer 100X&rdquo; says one rando &mdash; unaware that SpaceX would then be 10 times the size of the U.S. economy.
On the flip side, skeptics declare SpaceX is a firm that&rsquo;s still &ldquo;basically pre-revenue&rdquo; but &ldquo;trading like a meme coin.&rdquo;
True that. But as John Maynard Keynes quipped a long time ago, &ldquo;The market can remain irrational longer than you can remain solvent.&rdquo;&nbsp;
Just ask the &ldquo;Tesla shorts&rdquo; who kept betting against Elon Musk&rsquo;s other big company throughout the 2010s&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the moment, it sure looks as if hot money is flowing into SpaceX at the expense of many other tech-adjacent stocks.
While SpaceX is up 11.5% on the day, the Nasdaq Composite is down about 0.6%. And the red-hot-until-recently Philadelphia Semiconductor index (SOX) is down 3.8%.&nbsp;
Nvidia is down 1.75% as we check our screens, Microsoft 2%. IGV, the big software ETF, is on its heels again, down 1.62%.
The S&amp;P 500 is off about a quarter percent at 7,536. The Dow, with relatively limited tech exposure, is up 1% in record territory over 52,000.
Precious metals are consolidating yesterday&rsquo;s big gains &mdash; gold at $4,341 and silver just over $70. But crypto is losing ground, Bitcoin well below $66,000 and Ethereum back under $1,800.
<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" />Hormuz: &ldquo;You Go First.&rdquo; &ldquo;No, YOU Go First&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the second day in a row, major shippers are making clear they&rsquo;re in no hurry to resume transiting the Strait of Hormuz &mdash; &ldquo;deal&rdquo; or no deal between Washington and Tehran.
The CEO of the world&rsquo;s biggest tanker operator says shipowners will likely hold off for weeks.
&ldquo;What will have to come in place is not just a simple ,agreement between the relevant countries, but it has to be material and translated into the real situations in the Strait of Hormuz, so that shipping lines can make themselves comfortable to go through,&rdquo; Mitsui OSK Lines CEO Jotaro Tamura tells the Financial Times.
That&rsquo;s on the heels of the statement we mentioned yesterday from Maersk, the No. 2 container-ship operator in the world &mdash; which pointed out that when it comes to the U.S.-Iranian agreement, &ldquo;publicly available details are still limited.&rdquo;
That remains the case today even though Vice President Vance says President Trump and Iranian Parliament Speaker Mohammad Bagher Ghalibaf have &ldquo;digitally&rdquo; signed the agreement. No confirmation on that from the Iranian side.
For that matter, there&rsquo;s confusion coming from within the U.S. side. Trump said Sunday the U.S. blockade on Iranian ports had been lifted&hellip; but in an advisory to merchant ships yesterday, the U.S. military said it remains in effect &ldquo;pending execution&rdquo; of the agreement.
Is this just a case of the left hand not knowing what the right is doing? Or is the military defying the orders of the commander in chief? (Just asking &mdash; <a href="https://5minforecast.com/2016/09/23/has-the-u-s-military-gone-rogue/">wouldn&rsquo;t be the first time</a>.)
No wonder the shippers are so skittish.
But hope springs eternal among oil traders. U.S. futures are down another five bucks on the day. At $75.64 they&rsquo;re the lowest since the early days of the war last March.
<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 $10,000 (But Maybe $3,600 First)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The bad news about gold is that Jim Rickards won&rsquo;t rule out gold sinking to $3,600. But he says even today&rsquo;s bid of $4,341 is &ldquo;an excellent entry point.&rdquo;
Yes, gold is down significantly from the late-January record &mdash; when front-month gold futures reached $5,355. But that&rsquo;s not unexpected. And $3,600 would be completely normal on the way to much higher prices.
It comes back to something Jim was told over a decade ago by the legendary commodities trader Jim Rogers: &ldquo;No commodity goes from a baseline to a permanently new high without a 50% retracement along the way.&rdquo;
Jim Rickards demonstrates how that worked with gold&rsquo;s bull market in the early years of this century: &ldquo;Using the 1999 price of $250 per ounce as a baseline and the 2011 peak of $1,900 per ounce, gold had gained $1,650 per ounce in the prior bull market.&nbsp;
&ldquo;Applying Rogers&rsquo; 50% rule, a drawdown of $825 per ounce would satisfy the condition. Subtracting $825 from $1,900 produces a target bottom of $1,075 per ounce.&rdquo;
Turns out gold bottomed around $1,050 in mid-December 2015. In 5 Bullets&rsquo; predecessor e-letter, the two Jims <a href="https://5minforecast.com/2015/12/11/rogers-and-rickards-gold-outlook/">called the bottom nearly to the day</a>.
Now Jim does the math for the present situation: &ldquo;We can reasonably date the start of the current bull market from Oct. 1, 2023, at a price of $1,845 per ounce. (Gold prices moved relatively little from 2019&ndash;2023.) The market peaked at $5,355 in January 2026. The dollar gain in that period was $3,510 per ounce.
&ldquo;A 50% drawdown of that amount is $1,755 per ounce. Subtracting that amount from $5,355 would produce a price of $3,600 per ounce to meet the 50% drawdown that the Rogers method would predict&hellip;&rdquo;
All that said, Jim won&rsquo;t rule out that we might have already seen the bottom for this cycle &mdash; $4,110 last week. Chalk it up to &ldquo;the volatile nature of commodity trading in general and gold in particular,&rdquo; he says.
&ldquo;If you own gold, hang on. If you&rsquo;re looking to buy gold, this is an excellent entry point.&rdquo;
Either way, expect &ldquo;substantial gains,&rdquo; Jim concludes &mdash; &ldquo;as a new bull market finds its legs, moves decisively past $5,000 per ounce and ultimately heads toward $10,000 per ounce &mdash; and potentially higher.&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: DXYZ
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A handful of alert readers wrote in during the last 24 hours to shed light on the complaints from yesterday&rsquo;s mailbag that had your editor stumped.
The complaint was that Paradigm in general and/or James Altucher in particular had recommended shares of Destiny Tech100 Inc. (DXYZ) &mdash; the closed-end fund that was a proxy of sorts for SpaceX before SPCX went public last Friday.
Turns out it was in the portfolio of our now-defunct entry-level newsletter Technology Profits Confidential. Ray Blanco recommended it in 2024.&nbsp;
Later that year we shuttered the newsletter and folded it into Altucher&rsquo;s Investment Network. Some of Ray&rsquo;s picks made it into the Altucher portfolio &mdash; but DXYZ was not one of them. Of the cast-off names, Ray made clear in his final dispatch for TPC that &ldquo;I won&rsquo;t be continuing coverage of these plays moving forward. Be sure to plan your exits from these stocks accordingly.&rdquo;
&ldquo;I personally did well on it,&rdquo; says the reader who brought this to our attention &mdash; &ldquo;and sold it when additional info became available and price started to go down after the hype.
&ldquo;You should just tell your readers that timing is of essence when sell alerts are coming, even if international users like me can&rsquo;t subscribe to text alerts (at least now we have the app - for which I am very grateful).&nbsp;
&ldquo;Thank you for all the hard work you guys are doing to help us navigate as best as possible the news in the markets.&rdquo;
Ah, but there&rsquo;s more to the story&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;My first-ever encounter with Paradigm was a video I viewed around Christmas 2025,&rdquo; writes another reader who sheds additional light.&nbsp;
&ldquo;In the video, I&rsquo;m pretty sure, James Altucher either recommended it, or sure made DXYZ sound like a logical or attractive way to get in on the SpaceX IPO and avoid trying to get actual shares of SPCX. So I bought some.
&ldquo;Don't get me wrong, I made money on it but then it sort of languished and I sold it. But to act like this was a non-event with Paradigm is wrong. It&rsquo;s the whole way I got involved with James Altucher to start with. Maybe go back and take a look at the videos you guys were pumping out back then and see if you don&rsquo;t run across some old footage?
&ldquo;May I also respectfully suggest that perhaps you more judiciously create and send out videos and articles and conduct summits. I have been overwhelmed by the sheer volume and, at times, they actually appear to contradict one another. Or, at the very least, I find myself having to read them or watch them repeatedly to try to sort out the minor differences between them to make sure you guys haven&rsquo;t changed your stance. (DXYZ is a good example.)
&ldquo;I don&rsquo;t mean to be a whiner, but I am starting to wonder if I&rsquo;m just not cut out for the Paradigm investment world. I do have an MBA from Purdue, so it seems odd that I can&rsquo;t keep up better. Might it be your style of delivery or, again, the sheer volume that makes it difficult for me and maybe others?&rdquo;
Dave responds: OK, got it now. DXYZ was an &ldquo;unofficial&rdquo; pick mentioned in a sales promotion for Altucher&rsquo;s Investment Network.
Those picks often fly under my radar here. They&rsquo;re not something I can easily look up like the formal recommendations made in the monthly issues and special reports.
They&rsquo;re also a relatively new thing for us. Perhaps we&rsquo;ve been a touch cavalier in the way we treat them &mdash; relative to the formal recommendations in the paid publications, which of course are thoroughly screened, vetted and monitored. I&rsquo;ve flagged this matter to the Paradigm leadership team; thanks for bringing it to my attention.

FMF-Issue-061616-featured

When Trust Is Broken

FMF-Issue-060926-Featured

SpaceX and… Smoothies?!

<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 Problem With the SpaceX IPO
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;We&rsquo;re about to watch a transfer of cash from&hellip; ordinary people to the very rich,&rdquo; said the veteran radio host John Batchelor last night.
He was speaking of SpaceX&rsquo;s IPO, set for this Friday.
He invoked the railroad boom of the 19th century &mdash; and the relentless pitches to own, say, shares of the Erie Railroad in 1870.
In both cases the appeal was that you could own a piece of the future.
But in both cases that ownership came at a ridiculously high price for everyday Americans &mdash; ridiculously high relative to the price that early investors paid.
Still, it&rsquo;s all good for those early investors, who in the case of SpaceX will cash out big-time a few months from now once the &ldquo;lockup&rdquo; period is over.
Meanwhile, if the history of other recent IPOs is any indication, everyday folks who buy in on Day 1 will be watching red on their screens for months on end. Example: Facebook shares tumbled 40% after the company went public in 2012.
Yes they roared back and Facebook, now Meta, trades for nearly 20X that initial 2012 value. But how many of those Day 1 buyers sold in disgust within a few weeks or months and booked a loss?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Which brings us to a couple of headlines from Friday. It seems both the federal government and Wall Street are bound and determined to rope as many everyday people into this wealth transfer as possible.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/301oenxHeAtQr5QNjzFtHH/85133a0f6491e2afc301590ab9021ed1/zack_voell_x.png" alt="X Screenshot" />
Those were real headlines &mdash; although they prompted some amusing parodies as well&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4hc08U3NX5V1lLGoZoV6Vp/5e4000310a46a25f5edf3136b47e417e/arun_chopra_x.png" alt="X Screenshot" />
All kidding aside, it&rsquo;s for reasons like these that in a special email on Friday I explained why our experts are urging you to steer clear of the SpaceX IPO.
Our AI authority James Altucher&hellip; our macro maven Jim Rickards&hellip; our trading pro Enrique Abeyta&hellip; They frequently disagree, but on this point they&rsquo;re in lockstep. They don&rsquo;t want to see you take the hit that millions of Americans are setting themselves up for this week.
Besides, they&rsquo;re also in accord about a much better way to play the SpaceX frenzy &mdash; an early-stage investment tied to the growth of SpaceX with profit potential of up to 3,000% in the next two&ndash;three years.
All three of our top experts will lay out their cases during an exclusive online briefing titled The SpaceX SuperIPO Summit &mdash; tomorrow June 9 at 1:00 p.m. EDT.
They&rsquo;ll also give you a list of seven space-related stocks they believe could skyrocket along with the IPO, in a report that&rsquo;s yours FREE just for hearing their thesis. <a href="https://signups.paradigm-press.info/2526671" target="_blank" rel="noopener">Click here to instantly reserve your seat</a>.
<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" />After Friday&rsquo;s Rout
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />It appears the U.S. stock market will defy history today.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3a9mogpKFVsoPyg1OZV4ll/af113efac2f508c87a13951cd51074bd/odd_stats_x.png" alt="X Screenshot" />
Over the last 40 years there&rsquo;ve been 15 Fridays in which the Nasdaq took a steep tumble &mdash; including three days ago. On average, the following Monday has resulted in further 1.4% drop.
A day like this last Friday was inevitable.
The semiconductor stocks were weeks into a hyperbolic rally that couldn&rsquo;t go on forever. Apprehensions about AI were building after the chipmaker Broadcom delivered a blockbuster earnings report &mdash; but its forecast going forward didn&rsquo;t match up with Wall Street analysts&rsquo; giddy expectations.
The possibility of a continued tech meltdown today was significant: South Korea&rsquo;s KOSPI index &mdash; dominated by chipmakers Samsung and SK Hynix &mdash; collapsed 8.3% on the day. Taiwan&rsquo;s TAIEX &mdash; dominated by Taiwan Semiconductor &mdash; tumbled 3.5%.
But at last check this morning, the Nasdaq is up 1.8% on the day and the S&amp;P 500 up 1.1%.
Why the divergence?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />For once the corporate media are silent about the &ldquo;reasons&rdquo; behind today&rsquo;s rally. But from our perch, it seems pretty obvious.
Donald Trump was aboard Air Force One on Friday afternoon, headed to an appearance in Wisconsin&rsquo;s Chippewa Valley region. He mused to reporters about the possibility of the U.S. government taking ownership stakes in AI companies.
&ldquo;There&rsquo;s a concept out there where pieces could be given to the American public, where the American public essentially becomes a partner with the companies&hellip; where the American people can benefit from the success of AI and by doing that they are going to like it better.&rdquo;
Asked whether it felt strange to be &ldquo;on the same page&rdquo; in this regard with Sen. Bernie Sanders (I-Vermont) &mdash; Sanders has proposed the government take a 50% ownership stake in major AI firms &mdash; Trump said, &ldquo;As far as economics are concerned, we have certain things that are not that far apart.&rdquo;
Near as we can tell, these remarks did not become public record until after the market closed on Friday.
As we have seen frequently over the last year &mdash; indeed, it&rsquo;s a trend that&rsquo;s been very profitable for some of Paradigm&rsquo;s readership &mdash; the feds taking an ownership stake in a company can drive up that company&rsquo;s share price big-time.
Of course the chatter here is entirely hypothetical. But it&rsquo;s probably enough to give the U.S. tech market a bit of a lift today.
➢ Checking in on precious metals, they&rsquo;re licking their wounds after a severe drubbing on Friday. Gold is more or less flat at $4,336 while silver is up nearly a buck to $68.67. But as a practical matter, both metals are mired near their late-March lows.
<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" />Who Calls the Shots?
<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 instantly zoomed from $90 up past $95 when trading opened last night for a new week.
Let&rsquo;s reconstruct what happened while the markets were closed over the weekend.
It appeared U.S. and Iranian negotiators were making progress toward some sort of agreement. An agreement is the last thing Israeli Prime Minister Benjamin Netanyahu wants &mdash; but &ldquo;he won&rsquo;t have any choice,&rdquo; Trump told the Financial Times. &ldquo;I call the shots. I call all the shots. He doesn&rsquo;t call the shots.&rdquo;
And then, knowing it would sabotage the talks, Netanyahu ordered a series of airstrikes on Lebanon&rsquo;s capital Beirut. For weeks, Iranian leaders have said airstrikes on Beirut were a red line. Sure enough, Tehran started lobbing missiles toward Israel for the first time since the U.S.-Iranian ceasefire two months ago.
At that point, Donald Trump told the Axios website that &ldquo;I am going to call Bibi right now and tell him not to retaliate.&rdquo;
Yeah, &ldquo;Bibi&rdquo; retaliated anyway. But remember, Trump calls all the shots.
➢ Recovered history: When Netanyahu first became prime minister in 1996, he paid a call on President Bill Clinton in Washington. According to veteran diplomat Aaron David Miller&rsquo;s 2008 book The Much Too Promised Land, Netanyahu was so overbearing that after the meeting, Clinton groused to his aides, &ldquo;Who&rsquo;s the f***ing superpower here?&rdquo; <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3DyeqpoGnWvZbq1OsgkuGg/99c5e3c0e8e5b8a1d0f19120611b3be4/geiger_x.png" alt="X Screenshot" />
For the moment, however, both Tel Aviv and Tehran say they&rsquo;re holding off on further attacks &mdash; and U.S. crude futures have retreated to $91.41.
As usual, rising oil prices translate to rising inflation expectations, which translates to rising Treasury yields. The 10-year T-note is back over 4.55% &mdash; up meaningfully from 4.45% at the end of May.
Today is Day 101 of the war. The Strait of Hormuz remains effectively closed.
[Program note: The war and its market impact were a major topic &mdash; but hardly the only one &mdash; discussed last Thursday at Paradigm&rsquo;s &ldquo;America 76/26&rdquo; event featuring Jim Rickards and his team.
During a wide-ranging three-hour discussion, Jim and the analysts put out 53 (!) stocks and ETFs for your consideration. If you missed the livestream from Philadelphia, <a href="https://paradigmpresslive.com/America7626" target="_blank" rel="noopener">the replay is still available for viewing at this link</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" />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&rsquo;s been making the rounds throughout corporate America&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7xZMVQnh56A03g6gMcr5IM/4b136e0421c4bc680fc50d16a313245f/plank_meme.png" alt="Meme" />
That one guy on the left seriously needs to work on his form. Just sayin&rsquo;...
<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: Florida&rsquo;s Property Tax Proposal
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Note there are two parts to this amendment,&rdquo; says the first of several thoughtful emails we got from Floridians about <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option/#3" target="_blank" rel="noopener">a referendum that would slash property taxes for millions.</a>
&ldquo;One is the potential increase on the homestead exemption from $50K now to $150K in 2027, $250K in 2028 and then as adjusted by the legislature in following years with proviso in the meantime for CPI increases. The latter would have been welcomed years back but never instituted. The exemption for schools is not affected.
&ldquo;The other part is to limit property tax to the &lsquo;rollback&rsquo; rate and limit what can be used for the property taxes collected to &lsquo;essentials&rsquo; such as police, fire, water and sewage, infrastructure maintenance and ???. What are essential? (Rollback rate is the rate which based on the certified property appraiser rolls current assessed property values equals the same $$ collected previous fiscal year).
&ldquo;Are programs for families and elderly such as recreational courses, pools, adult daycare to be not essential and thus property tax money may not be used for them?
&ldquo;Can other &lsquo;fees&rsquo; be used &mdash; and this is where the discussion from the legislators is NO.
&ldquo;How about those rural or smaller municipalities that 80&ndash;90%-plus of their income to support a balanced budget is going to be impacted severely &mdash; will there be grants for the state? If so, those grants will have conditions, and how will this go over on their constituents?
&ldquo;Great idea but short on solid study showing impact and options.
&ldquo;Short-term fix that may lead to long-term repercussions.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;The proposal was watered down by the legislature &mdash; &lsquo;Don&rsquo;t touch education money!&rsquo; (gotta protect those teacher unions),&rdquo; another reader points out.
&ldquo;So the proposal means that in 2027 a five-year-plus homeowner in Florida will get a $150,000 reduction in their property value for the 40&ndash;50% of their property taxes that have nothing to do with education.
&ldquo;In 2028, that reduction would go to $250,000.
&ldquo;It&rsquo;s a step in the right direction, but it&rsquo;s not what Gov. DeSantis was requesting. The legislature is beholden to the schools and counties and not the citizens (despite declining student enrollment). Tax revenue has grown by many multiples of inflation and the government keeps growing to gobble it up.
&ldquo;Fiscal responsibility and taxpayer empathy don&rsquo;t exist even in &lsquo;the Free State of Florida,&rsquo; at least not at the county level.
&ldquo;It will likely go down in defeat because there will be nonstop bleating, &lsquo;What about the children?!&rsquo; (Who are completely unaffected by the property tax proposal, but it helps to raise the hysteria). And veiled threats to increase county fees to make up the difference, despite state assurances that they will not allow the counties to do that.
&ldquo;Counties won&rsquo;t tighten their belts, they&rsquo;ll just raise fees to make up for any revenue loss. The public sector never has layoffs at the state or local levels. State and local governments always grow, but never shrink.
&ldquo;Sorry, I&rsquo;ve seen this cheerleading for tax cuts and seen time and again how our &lsquo;representatives&rsquo; and government administrators cannot ever be fiscally responsible; there just isn&rsquo;t sufficient accountability because of a complicit or braindead press, term limits on reformers, a purposely uninformed populace (see former statement about the press) and greed/kingdom-building mentality of the government managers who just wait out the term-limited reformers like DeSantis.
&ldquo;Hope springs eternal, but we are dealing with a society that is prone to mass hysteria. Remember Covid and Trump Derangement Syndrome.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;The tax reduction will only apply to homesteaded Florida residences, which only account for 7% of all taxes across the state, not 75%,&rdquo; says a second-generation Floridian.
&ldquo;Commercial, rental and business properties will not be included. I look forward to voting FOR this amendment on Nov. 3 and finally getting closer to actually owning my home.&rdquo;
Dave responds: Cursory research aided by AI shows primary residences account for about 27% of local property tax revenue in Florida, not 7% &mdash; but you raise an important point of clarification, and I thank you. I should have given that number from the Tax Foundation more scrutiny.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;This is a great idea for seniors and those on fixed incomes, especially if they paid off their houses,&rdquo; says our final correspondent.
&ldquo;Development frenzy has doubled and tripled tax bases in some areas (like Tampa), but you have to understand those taxes don't pay for the community developments &mdash; bonds attached to property deeds do. So where does the tax money go?
&ldquo;It's a tough issue. I would personally benefit from this, but I can see where smaller, rural areas would be hurt and the tax shift would be real. Florida has no income tax, and most cities do not levy city tax, so all of a sudden we might see 15% sales tax in some areas. Where does my no-state-income tax benefit go if my other taxes go up so high?
&ldquo;You don't get somethin&rsquo; for nothin&rsquo;.&rdquo;
Dave: And on that note, you get the last word! Thanks to everyone who wrote in. More feedback tomorrow&hellip;

fmf hero 060826

The Problem With the SpaceX IPO

<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" />Elon: Failure Is ALWAYS an Option
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s staggering to think about, but the last time a human being walked on the moon was&hellip; 1972.
It&rsquo;s not for lack of technology. &ldquo;It&rsquo;s mostly a matter of money,&rdquo; says Paradigm&rsquo;s macroeconomics maven Jim Rickards.&nbsp;
Democrats spent money on handouts; Republicans spent money on wars. There wasn&rsquo;t much left over.
But here in 2026, &ldquo;Space is back on the front burner in a big way,&rdquo; says Jim.
&ldquo;What&rsquo;s different this time is that the effort is being privatized. Specifically, the space race is turning into a classic public-private collaboration where private-sector players provide most of the capital and technology while the government offers generous contracts to carry out NASA missions and highly classified tasks for the Pentagon.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Of course, the leader in this effort is SpaceX &mdash; which starts trading publicly as SPCX one week from today.
Compared with some of our other experts at Paradigm, Jim has had relatively little to say in recent weeks about SpaceX. But make no mistake: He&rsquo;s blown away by what SpaceX and Elon Musk have achieved.
&ldquo;Of course, SpaceX is a rocket company that plans to build thousands of its giant Starship rockets with reusable booster rockets. By delivering larger payloads and reusing the boosters, Musk expects to lower the cost of putting a kilogram into space to $185. That&rsquo;s only 1% of the historic cost of getting a payload to space.
&ldquo;Large rockets and cheap payloads are just the beginning of Musk&rsquo;s goals. SpaceX also owns Musk&rsquo;s artificial intelligence company xAI and his space-to-Earth internet company Starlink &mdash; the only profitable part of SpaceX today.
&ldquo;Musk&rsquo;s plan is to use SpaceX to launch a million or more power plants into space. These can run on &lsquo;free&rsquo; solar power 24/7. That power can then support a million space-based data centers, which can run the xAI applications more cheaply than Earth-based data centers.
&ldquo;The combination of cheap payloads, free energy, massive computing power, space-based internet and sheer scale could make Musk a monopolist of AI, energy and the internet.&nbsp;
&ldquo;Everyone else from Google to Anthropic and OpenAI would have to pay rent to Musk to tap into his energy-data nexus.
&ldquo;Of course, a lot could go wrong, but that&rsquo;s all in a day&rsquo;s work for Musk. He solves new problems with the same engineering prowess that he has used to get where he is today. Musk's view is that anything is possible as long as you don&rsquo;t defy the laws of physics.&rdquo;
And yes, things do go wrong. Like when Starship &mdash; a $100 million rocket the size of a skyscraper &mdash; exploded over the Indian Ocean two weeks ago today.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But that&rsquo;s all part of the process. &ldquo;Failure, correctly understood, is a buy signal,&rdquo; says Paradigm AI authority James Altucher &mdash; who&rsquo;s had a lot to tell his subscribers about SPCX in recent weeks.
&ldquo;Elon Musk has been mocked, shorted and written off more times than most people have tried anything serious.
&ldquo;Tesla nearly went bankrupt. He's been through congressional hearings and the kind of public humiliation that would have finished most people.
&ldquo;He's also the richest person on Earth.&rdquo;
As Musk is fond of saying, &ldquo;If things are not failing, you are not innovating enough.&rdquo;
With that in mind, &ldquo;SpaceX doesn't treat a failed launch as a setback,&rdquo; says James. &ldquo;It treats it as data.&nbsp;
&ldquo;You launch, you fail, you learn, you launch again faster than anyone thought possible.&nbsp;
&ldquo;Every Starship test since 2023 has destroyed hardware. And every one of those destroyed rockets has pushed the engineering closer to something genuinely historic: bringing launch costs from $18,500 per kilogram &mdash; where they sat for decades &mdash; down toward a number that would have sounded like science fiction five years ago.
&ldquo;When the prize is that large, markets stop grading on perfection. They start grading on progress. And every failed attempt is evidence that progress is happening.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Which is why SpaceX can get away with bucking Wall Street tradition &mdash; as it did on Wednesday.
SPCX set a price for its shares more than a week before its planned listing &mdash; $135 each. The way it usually works with an IPO is the company sets a range and then adjusts it after a few days of meetings with investors.
Elon Musk is essentially saying, &ldquo;$135 &mdash; take it or leave it.&rdquo;
The brightest minds at Paradigm &mdash; Jim Rickards, James Altucher, Enrique Abeyta &mdash; agree that you should leave it.&nbsp;
SPCX is a fantastic company &mdash; but it&rsquo;s too richly valued. At $135 a share, the big payoff might not come for several years.
Besides, Jim and James and Enrique have pinpointed an early-stage investment tied to the growth of SpaceX with much more upside potential, and a much quicker payoff. They believe it could skyrocket as much as 3,000% in the next two&ndash;three years.
With that in mind, we&rsquo;re convening an event featuring all three of these experts. We&rsquo;re calling it The SpaceX SuperIPO Summit &mdash; and it&rsquo;s set for next Tuesday at 1:00 p.m. EDT.
At this exclusive online briefing, they will&hellip;
<ul>
<li>Reveal how this SuperIPO is part of Elon Musk&rsquo;s plan to unlock an entirely new multitrillion-dollar industry around a NEW type of artificial intelligence that has been called &ldquo;the final frontier&rdquo; of the AI revolution</li>
</ul>
<ul>
<li>Discuss a NEW pre-IPO buy alert that could jump 30 times higher in the next 2&ndash;3 years&hellip; starting as soon as SpaceX goes public</li>
</ul>
<ul>
<li>Reveal a big piece of the SuperIPO puzzle everyone is missing&hellip; and that could help Elon Musk unlock 700 times more wealth than the IPO itself&nbsp;</li>
</ul>
<ul>
<li>Give you a chance to win an $8,000 Speedmaster Moonwatch Professional&hellip; the only watch NASA has ever officially certified for space missions</li>
</ul>
<ul>
<li>Give you a FREE gift just for joining. You&rsquo;ll also get a list of SEVEN space-related stocks that they believe could skyrocket along with the IPO&hellip; completely free of charge.</li>
</ul>
And much more. Again, the SpaceX SuperIPO Summit is set for next Tuesday at 1:00 p.m. EDT. <a href="https://signups.paradigm-press.info/2526337">Click here to save your seat.</a>
<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" />Money Miscellany
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> While sky-high semiconductor stocks slipped yesterday, the medium-term outlook for the broad market remains strong.
&ldquo;The S&amp;P 500 has now traded more than 5% above its 50-day moving average for at least one month,&rdquo; says Paradigm trading pro Enrique Abeyta.&nbsp;
According to Bespoke Investment Group, that&rsquo;s happened 21 times in records going back to 1952. &ldquo;In all but one,&rdquo; Enrique tells us, &ldquo;the stock market was higher one year later!&rdquo;
That data lines up with Enrique&rsquo;s thesis that while the AI boom has parallels to the dot-com boom in the late 1990s, it is not yet that &ldquo;1999 moment&rdquo; when everything is about to fall apart.
&ldquo;Here is a chart,&rdquo; he submits, &ldquo;showing the number of the Nasdaq-100 (QQQ) members that are up at least 400% over the previous 12 months.&nbsp;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3nKSjd6vwQ4qFBY4lQhg6j/30766c3aa081abe27a1d73c72d401b20/FMF-Issue-060526-1.png" alt="Extreme Nasdaq winner" width="540px" />
&ldquo;We recently went to a high (six) that we have not seen since 2000.&nbsp;
&ldquo;Back in 2000? Twenty-two (!) of the components were up 400% or more. Think about that! Almost one in four stocks in the QQQ was a four-bagger over the previous year&hellip; wow.&nbsp;
&ldquo;THAT was a BUBBLE. Maybe we get there&hellip;&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Milestone: When it comes to the reserves maintained by the world&rsquo;s central banks, gold has just taken over U.S. Treasuries as the world&rsquo;s top asset.
A report from the European Central Bank says at year-end 2025, bullion accounted for 27% of global central bank reserve assets &mdash; up from 20% in 2024.
<a id="3"></a>In contrast, Treasuries fell from 25% to 22%.&nbsp;
Chalk it up to two factors: 1) The <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition#2">relentless gold accumulation by central banks</a> ever since Washington froze the U.S. Treasuries held by Russia&rsquo;s central bank in 2022, and 2) The big jump in the gold price during 2025, from under $2,700 to over $4,400.
That said, dollar-denominated assets still make up the biggest chunk of global reserves at 42%. The world wants to get out from under the dollar&rsquo;s thumb &mdash; but as we&rsquo;ve been wont to say over the years, &ldquo;de-dollarization&rdquo; is a process, not an event.
<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" />Abolish Property Taxes? (Sort Of&hellip;)
<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 an outright abolition of property taxes&hellip; but for many Floridians it would come close.
On Tuesday, the Florida legislature passed a resolution to amend the state constitution, radically curbing property taxes. Now it goes before the voters Nov. 3.
The measure would phase in a homestead exemption starting at $150,000 next year &mdash; jumping to $250,000 in 2028. It would also authorize the legislature to abolish property taxes altogether if it so chose.
In principle, the idea is wonderful. In practice, the problem is the same as the one we chronicled in 2012 and 2024 when North Dakota voters were given a choice to eliminate property taxes. (Both referendums went down in flames.)&nbsp;
To wit, property taxes currently make up almost 75% of local tax revenue in the Sunshine State. How would counties and municipalities make up the difference?
&ldquo;This isn't tax relief; instead, it is a shift of the tax burden,&rdquo; write the analysts at the Tax Foundation.&nbsp;
&ldquo;The state would likely need steep sales tax hikes to compensate &mdash; our <a href="https://taxfoundation.org/research/all/state/property-tax-repeal-replace-revenue">prior analysis</a> found full property tax elimination could push the combined state-local sales tax rate to over 15%, the highest in the nation.&rdquo;
<a id="4"></a>
If you&rsquo;re a Florida reader, you&rsquo;re a lot closer to the debate than we are &mdash; and we&rsquo;re interested in hearing your take.&nbsp;
Shoot us a line at <a href="mailto:feedback@paradigmpressroom.com">feedback@paradigmpressroom.com</a> and we&rsquo;ll share your input next week.
<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" />First They Came for the Illegals&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> I know I&rsquo;m going to catch a lot of flak for what follows here. I don&rsquo;t care: This isn&rsquo;t about immigration policy, it&rsquo;s about the rights you and I are born with.
This week &mdash; in a development overlooked by both legacy and alternative media &mdash; the president signed an executive order accompanied by this post on his Truth Social platform.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5uzMaJZmJZJvBtTULi6WXz/0d01d4dc20f17623956ff95425c40dfa/FMF-Issue-060526-2.png" alt="pub" width="540px" />
OK, I get the surface objective here: Seizing illegal migrants&rsquo; bank accounts will encourage them to &ldquo;self-deport&rdquo; and leave the country on their own.&nbsp;
➢ It was the same rationale behind the now-abandoned <a href="https://paradigmpressroom.com/post/your-bank-wants-your-passport">proposal</a> that would have required you to present a passport or birth certificate to open a new bank account or even keep your current one.
But where&rsquo;s the due process?&nbsp;
As Judge Andrew Napolitano reminded us in his syndicated column a few days ago, &ldquo;The Fourth Amendment protects all persons in America &mdash; not just Americans &mdash; from warrantless searches and seizures of their &lsquo;persons, houses, papers, and effects&rsquo;.&rdquo;
Yes, compared with seizing bank accounts it&rsquo;s harder to physically track down and remove people in the country illegally.&nbsp;
Too bad. The Constitution&rsquo;s language is plain. The Framers recognized that rights denied to noncitizens will sooner or later be denied to citizens as well &mdash; at which point we&rsquo;re no longer citizens but subjects.
This won&rsquo;t stop with illegal migrants: If the feds can seize their accounts on the pretext of being in the country without the proper papers, they can seize yours for some other pretext &mdash; whether under Trump or under a future Democratic president.
<a href="https://paradigmpressroom.com/post/deport-tucker-carlson">As we documented last year</a>, former Trump administration officials speak openly about &ldquo;debanking&rdquo; Tucker Carlson simply for engaging in what they see as &ldquo;hate speech.&rdquo;
Whatever your opinion about immigration policy, this is a slippery slope&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" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Going into the weekend, let&rsquo;s have a triple dose of good money-themed memes that made the rounds this week&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/65PpEtp6r4Zrmnu6s2xQLa/c9ce03ac94b4e47b904f907facefc16b/FMF-Issue-060526-3.png" alt="Benjamin Graham" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3jokRGwqWnDLg56M2E6Qdg/d73c0c10a452a698ea7b247b0bfd335b/FMF-Issue-060526-4.png" alt="Monopoly" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/69Ro5dH8PHJkEXVRAT1VrF/063018491dbea794a91289bc88931ceb/image1.png" alt="pub" width="540px" />

FMF-Issue-060526-Featured

Elon: Failure Is ALWAYS an Option

<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" />Apple&rsquo;s &ldquo;Secret Supplier&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> People laughed in 2011 when our James Altucher forecast Apple would become a $1 trillion company.
At the time its market cap was barely a third of that total. The iPhone was already becoming a mature product. How could the company possibly triple in size from there?&nbsp;
But triple it did &mdash; reaching that lofty $1 trillion milestone on Aug. 2, 2018.
Here in 2026? AAPL is valued over $4.6 trillion.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I think they&rsquo;re about to be the first $10 trillion company,&rdquo; James says now.&nbsp;
OK, James isn&rsquo;t sticking his neck out here the way he was 15 years ago. The company basically has to double to reach that target. Still impressive, though.
The catalyst for that growth, you ask?
Well, that comes back to what we covered here yesterday &mdash; the run-up to WWDC, Apple&rsquo;s annual Worldwide Developers Conference next week.
Apple is about to turn the AI world on its head in two ways&hellip;
<ul>
<li>It will make &ldquo;agentic AI&rdquo; simple and accessible. As colleague Chris Campbell described it last week in Altucher Confidential, AAPL is &ldquo;throwing its ecosystem open to AI agents that reach into your apps and actually do things&mdash;book the Uber, edit the photo, compare the prices&rdquo;</li>
</ul>
<ul>
<li>It will perform essential AI tasks on your device &mdash; doing the hard work with only minimal input from a distant data center. That meets the Apple standard of simplicity, elegance and privacy.</li>
</ul>
Of course, you can buy Apple shares and wait patiently for the price to double over the next few years.
Or you can achieve far bigger gains much sooner by investing in a &ldquo;secret supplier&rdquo; to Apple &mdash; a company without which Apple will never achieve its lofty AI ambitions.
Which is exactly what James Altucher has done in the past. Only last year, in fact, he recommended shares of BTQ Technologies &mdash; a tiny stock in Apple&rsquo;s ecosystem &mdash; to a special group of his readers.
Shares shot up 1,025% in six months.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/JJqeZqWAt9zywKb3tBn8A/1d03534334993c62100d0cf339d5fdaf/FMF-Issue-060326-1.png" alt="BTQ" width="540px" />
And it&rsquo;s about to happen all over again with Apple&rsquo;s big AI reveal next Monday at WWDC.
Only this time, James thinks the profit potential is much bigger. &ldquo;Over time, over the next handful of years,&rdquo; he says, &ldquo;I think shares could soar as high as 23,519%. That&rsquo;s enough to turn $10,000 into $2.3 million.&rdquo; (How does he come up with such an exact figure? <a href="https://pro.paradigm-press.info/m/2526048">Watch here</a>.)
As mentioned yesterday, subscribers to James&rsquo; Microcap Millionaire service already know what company he&rsquo;s talking about. And they&rsquo;re scooping up shares &mdash; positioned for maximum profit once this company&rsquo;s identity becomes something &ldquo;everyone knows&rdquo; next week.
There&rsquo;s still time to act ahead of the keynote at WWDC next Monday. <a href="https://pro.paradigm-press.info/m/2526048">Click here and James will walk you through the urgent details</a>.
<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" />Labor Day?!
<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 over $95 for the first time in nearly two weeks as it becomes evident that global oil flows won&rsquo;t normalize anytime soon.
In fact, Donald Trump himself acknowledged as much this morning in a rambling Truth Social post. He said the U.S. Navy blockade of Iranian ports might be lifted by&hellip; Labor Day.
As we&rsquo;ve tried to emphasize in these daily missives, the world doesn&rsquo;t have anywhere near that much time.&nbsp;
Even the legacy media are acknowledging as much now. Here&rsquo;s a Bloomberg chart&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6wXXHabi8O4I54E0aSYEjA/1da04ed4326ab74257ada6e39cdc6649/FMF-Issue-060326-2.png" alt="World Oil Inventories" width="540px" />
The U.S. situation is better than the world situation, but that&rsquo;s not saying much. &ldquo;Based on current trends,&rdquo; tweets SoFi chief market strategist Liz Thomas, &ldquo;the Strategic Petroleum Reserve would reach operational minimum levels around August.&rdquo;
Later today the Energy Department releases its weekly U.S. inventory figures. GasBuddy&rsquo;s Patrick De Haan says inventories of distillates (diesel, jet fuel) will likely sit at 20-year lows.
California &mdash; whose plight we&rsquo;ve chronicled now and then in recent weeks &mdash; is on track to hit &ldquo;tank bottoms&rdquo; for diesel and jet fuel by July 4. As one wag says on X, &ldquo;California is going to be a fun place to be on America&rsquo;s 250th birthday.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Speaking of America&rsquo;s 250th birthday, here&rsquo;s one more reminder that our &ldquo;America 76/26&rdquo; event headlined by Jim Rickards is coming tomorrow.
It will come to you live from Philadelphia, a short distance from Independence Hall.
The fuel situation will surely be at the top of the agenda &mdash; along with the economic &ldquo;stagflation&rdquo; reminiscent of the 1970s. Jim and crew will also tackle precious metals, the rest of the commodity complex and the defense sector.
&ldquo;We will share actionable STOCK PICKS throughout the event tied directly to these trends,&rdquo; Jim promises.&nbsp;
And we will not try to sell you on one of our premium advisories.&nbsp;
Our exclusive livestream gets underway tomorrow at 1:00 p.m. EDT. To see the full agenda, <a href="http://rickardslive.com">check out our special event page at RickardsLive.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" />Climbing the Wall of Worry
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Yes, the stock market is at all-time highs&hellip; and here&rsquo;s the most powerful indication that it&rsquo;s on track to move still higher.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6m4p6Q3Y6KtywhaIEq29ZN/80abdcc6031a3542d681be6644386859/FMF-Issue-060326-3.png" alt="CNBC" width="540px" />
The headline is totally factual. But the fact CNBC brings it up suggests that even after 3&frac12; years, this bull market is still climbing the proverbial &ldquo;wall of worry.&rdquo;
The fact you&rsquo;re seeing all manner of references to the 1999 dot-com bubble in the corporate media? Ironically, that suggests the market still has legs.
It&rsquo;s when the media stops fretting over a bubble that you should start to worry.&nbsp;
In late 1999 and early 2000, no one outside a handful of cranky contrarian newsletter editors thought the party would ever end.&nbsp;
But end it did in early 2000&hellip; and the Nasdaq ground down 78% by late 2002.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For today, the bull is taking a breather.
All the major indexes are in the red as we write, but not much: The S&amp;P 500 is down a third of a percent, back below 7,600.
➢ Congratulations are in order for Greg Guenthner&rsquo;s Trading Desk readers &mdash; who rode the revival in software stocks to 365% gains yesterday playing call options on Zeta Global Holdings. Not bad for less than a week!
Rising oil prices are feeding through to rising inflation expectations and thus rising Treasury yields: The 30-year bond is once more knocking on the door of 5%.
Gold is sinking to its lowest since late March at $4,451. Silver is testing recent support at $73.56.
<a id="meanwhile"></a>
The relentless punishment of crypto continues: Bitcoin is below $67,000 for the first time in two months and Ethereum is down to $1,858.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, traders are still trying to make heads or tails of Donald Trump&rsquo;s latest executive order and its impact on the AI industry.
As we chronicled throughout the month of May, the Trump administration was revisiting its promise last year of a hands-off approach to AI regulation. An executive order was in the works, set to be signed with great fanfare on May 21.
But then the president nixed it at the last minute &mdash; concerned that it went too far and would hamstring the industry&rsquo;s ability to compete with Chinese AI.
Yesterday, amid zero fanfare, he signed an executive order that appears to be scaled down from the original.&nbsp;
In a way, it&rsquo;s a continuation of a Biden-era policy in which major AI firms share their models with the feds before they&rsquo;re released to the public.
It appears to be voluntary. The feds have a 30-day review period, down from an original 90-day proposal.
Venture capitalist David Sacks, previously the White House AI and crypto czar and an advocate of a hands-off approach, says he&rsquo;s pleased with the outcome: &ldquo;It allows our AI labs to comply with the voluntary framework without delaying new model releases.&rdquo;
Others aren&rsquo;t so sure: One former Trump AI adviser frets to The Wall Street Journal that the government is going down the slippery slope toward a scheme in which AI models will have to get a federal license before release. Ugh&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" /> We present the following with no further comment&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5vKhUT30xLrR5wbnA8HKf6/eadc03a7288a31be840a04df21fed9a7/FMF-Issue-060326-4.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" />Mailbag: Only 5 Bullets?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Thanks for the sidearm (even though it's not a six-shooter),&rdquo; says a note of praise from a new reader.
&ldquo;I really enjoyed the updates in the new briefing. I also appreciate that it is available for free to subscribers of one or more of your publications.
&ldquo;It is a great gesture that shows you care about your customers&mdash;a detail that is often overlooked by other sources.&rdquo;
Dave responds: You&rsquo;re too kind. And for any other newcomers who want to learn &ldquo;who we are and what we&rsquo;re all about,&rdquo; <a href="https://paradigmpressroom.com/post/who-we-are-and-what-were-all-about">there&rsquo;s this</a>.
Funny about the firearm reference: After this e-letter adopted its current name in 2022, a reader wrote in to say something to the effect of, &ldquo;Only 5 Bullets? What, you&rsquo;ve got California-level limits on magazines?&rdquo;

FMF-Issue-060326-Featured

Apple’s “Secret Supplier”

<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&rsquo;s iPhone Moment
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Next week is when Apple gets serious about AI. Or more to the point, next week is when Apple shows the world how serious it&rsquo;s been about AI for several years now.
You might think Apple is behind the curve. After all, Apple doesn&rsquo;t make BIG HONKING AI HEADLINES day after day the way that Nvidia, Microsoft and Google do.
But that&rsquo;s not the Apple way &mdash; as Paradigm AI authority James Altucher explained in this space two years ago.
&ldquo;Apple is taking a slower and more cautious approach to releasing customer-facing applications of AI,&rdquo; he said.
&ldquo;Apple has a history of waiting to optimize new technologies before releasing them to the market. Apple&rsquo;s slow delivery in the AI space would suggest the company believes today&rsquo;s AI technology does not meet its standards and that there's more innovation that can be squeezed out to produce the perfect product.&rdquo;
This has long been the Apple way: Let Sony screw up a digital music player&hellip; while Apple quietly perfects the iPod. Let BlackBerry and Palm make the early mistakes on a smartphone&hellip; while Apple refines the iPhone so it&rsquo;s a must-have item from Day 1.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And so it goes here. Apple&rsquo;s looking pretty smart right around now compared with the so-called hyperscalers like Microsoft and Google.
The hyperscalers are spending like mad on data centers &mdash; at a pace they&rsquo;ve never spent in their history.&nbsp;
To finance it, they&rsquo;re taking on gobs of new debt &mdash; and in the case of Google this week, issuing $80 billion in new shares.
Look at the growth trajectory posted on social media just this morning&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/guWUNLgfZjtVB9xSgWivr/57e7ca899e4edabab30198d212b05dd6/FMF-Issue-060226-1.png" alt="Trajectory" width="540px" />
Apple is taking an entirely different approach &mdash; AI on your device.
And the wraps finally come off next week during Apple&rsquo;s big annual WWDC event &mdash; the Worldwide Developers Conference.
It could be nothing less than the &ldquo;iPhone Moment&rdquo; for AI &mdash; you know, that day in 2007 when Steve Jobs unveiled the iPhone to the world.
What&rsquo;s in the works is something that Altucher Confidential readers have been hip to since late March &mdash; and that got mainstream confirmation last week from Bloomberg.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the one hand, it&rsquo;s tempting to call it a souped-up Siri &mdash; but that totally undersells the level of transformation.
Apple&rsquo;s aim is nothing less than to bring &ldquo;agentic AI&rdquo; to the masses.&nbsp;
In theory, AI agents are supposed to &mdash; for example &mdash; rebook your cancelled flight plus a rideshare plus a hotel and notify your family and work colleagues in less time than it takes you now to pull up your airline&rsquo;s app or walk to a help desk.
So far, it works better in theory than in practice. But Apple intends to make it real, and make it simple.
Again, Apple is biding its time to get everything right &mdash; and irresistible.&nbsp;
What&rsquo;s more, the hardware and computing power making it all possible? It won&rsquo;t reside in a distant data center. It&rsquo;ll be right there on your phone.
Of course, Apple can&rsquo;t pull off something this ambitious by itself&hellip; and James Altucher says he&rsquo;s found &ldquo;hard evidence that a small, $1 billion company is behind Apple&rsquo;s big push into AI.
&ldquo;This is not public knowledge. Neither Apple, nor this company, have confirmed this partnership. But I found the smoking gun.
&ldquo;It basically proves Apple is working with this company. And quite frankly, I think this has the makings of my next 1,000% winner.&rdquo;
James&rsquo; Microcap Millionaire readers are already clued in to the identity of this company. If you&rsquo;re not among them, <a href="https://pro.paradigm-press.info/m/2525964">you owe it to yourself to follow this link</a>. Because once everyone else figures it out during WWDC next Monday, it&rsquo;ll be too late to maximize the profit potential. <a href="https://pro.paradigm-press.info/m/2525964">Give it a look now</a>.
<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" />95 Days and Counting
<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 sit at $92 this morning &mdash; giving up none of yesterday&rsquo;s monster gains.
As mentioned at the conclusion of yesterday&rsquo;s edition, Iranian leaders are fed up that Israel continues to bomb Lebanon &mdash; so they&rsquo;ve broken off their indirect talks with the United States.
Today is Day 95 of the war and Day 56 of a tenuous ceasefire.&nbsp;
&ldquo;When the war started on Feb. 28, President Trump said that it would be over quickly because of massive U.S. bombardment and the killing of practically all of Iran&rsquo;s religious, military and civilian leaders,&rdquo; says Paradigm macroeconomics authority Jim Rickards.
So as long as the stalemate drags on, &ldquo;It appears that Trump is engaged in a protracted propaganda effort. He's trying to prop up support for the war among the American people and in Congress. He&rsquo;s trying to keep the negotiations alive by combining his happy talk with threats to resume large-scale attacks on Iran if they don&rsquo;t make his claims come true.
&ldquo;Most of all, Trump seems to be trying to boost the stock market and lower gasoline prices by painting a picture of a world where the war is over soon.&rdquo;
But after 95 days, Jim says bluntly that &ldquo;the Trump show is getting old. He&rsquo;s losing credibility. Markets may soon reprice for the reality, which is a far cry from Trump&rsquo;s claims.&nbsp;
&ldquo;Investors are not ready for this. They should be.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Program note: We&rsquo;re less than 48 hours away from a special LIVE and FREE briefing that Jim Rickards and his team are hosting ahead of the nation&rsquo;s 250th birthday.
They&rsquo;ll gather not far from Independence Hall in Philadelphia on Thursday at 1:00 p.m. EDT.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6zCEpq1P3crt8ykJOlZHbn/dc65b692af8cbb50e3e2a79e413be05c/FMF-Issue-060226-2.png" alt="pub" width="540px" />
&ldquo;The headlines are moving fast,&rdquo; says Jim &mdash; &ldquo;but underneath the surface, far bigger forces are beginning to collide.&rdquo;
Among the topics on the agenda&hellip;
<ul>
<li>Inflation and its impact on Americans</li>
<li>Energy markets and the Strait of Hormuz crisis</li>
<li>Gold, commodities and hard assets</li>
<li>America First policies and resource independence</li>
<li>Key sectors and investment themes we believe could outperform ahead.</li>
</ul>
Yes, there will be names and ticker symbols &mdash; so make sure you can take notes.&nbsp;
And no, we won&rsquo;t try to sell you anything &mdash; so you don&rsquo;t have to keep your wallet handy.
You can check out the full agenda and reserve your spot <a href="http://rickardslive.com/">when you click here on our special event page</a>.&nbsp;
And now back to the Persian Gulf for Bullet No. 3&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" />Barnacleypse Now
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Even if the Strait of Hormuz reopens tomorrow, it will take months to unsnarl global supply chains &mdash; a process that will include cleaning barnacles off oil tankers and cargo ships.
Yes, barnacles.
&ldquo;Who knew that mooring your tanker or cargo ship idle in the warm Persian Gulf for three months could encourage growth of&hellip; barnacles?&rdquo; says Paradigm oil expert (and 30-year Navy veteran) Byron King.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/cWZF3PKyLWnEXnfQm6sna/2caa2315531c2b30d2bb0f1a7c08c41a/FMF-Issue-060226-3.png" alt="Barnacles" width="350px" /> And that&rsquo;s just the propeller, not the hull&hellip; [Photo posted by the shipping-data firm Marhelm on X]
&ldquo;And now it dawns upon shippers everywhere that we have hundreds of vessels unfit to sail because their hulls are fouled. Worse, even the propellers are encrusted. And no ship is going anywhere with this kind of crud on the propulsive mechanisms.&rdquo;
Or if they can, by one estimate their fuel economy is cut by 40&ndash;80%.
&ldquo;Seriously,&rdquo; Byron goes on, &ldquo;this is not a minor issue; there's no quick-fix solution because hull cleaning requires (not cheap) drydocking, and/or well-trained diving teams with specific kinds of mechanical equipment. It's not free, not by any means.
&ldquo;And then we have the &lsquo;environmental&rsquo; angle, which mandates hull-cleaning permits because this stuff is gunky and the residue must go somewhere... even in the Middle East.&nbsp;
&ldquo;Point is... &lsquo;reopening&rsquo; the Gulf via the Strait of Hormuz is not a simple task. There's no such thing as just &lsquo;turning the key,&rsquo; cranking up the ship and sailing oil, LNG and other cargos through the passageway and out onto the high seas.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But barnacles are the furthest thing from Mr. Market&rsquo;s mind on this Tuesday.
All the major U.S. stock indexes are in the green and in record territory, the S&amp;P 500 now over 7,600. The big buzzy story of the day is Claude maker Anthropic filing its plans to go public. No date is set yet but it will be the second mega-IPO of the year after SpaceX and before OpenAI.
The Paradigm editors have racked up a string of winners for their readers in the last 24 hours&hellip;
<ul>
<li>101% on Unity Software calls in Altucher&rsquo;s True Alpha</li>
</ul>
<ul>
<li>20% on a leveraged Microsoft ETF and 30% on Atlassian shares in Enrique Abeyta&rsquo;s The Maverick&hellip; plus nearly 100% gains in a week on Atlassian call options</li>
</ul>
<ul>
<li>328% on Rivian calls and 700% on Apple calls in Chris Cimorelli&rsquo;s 10X Trade Club&hellip; plus a clean 10X on Virgin Galactic calls</li>
</ul>
Gold is back above $4,500, if barely. But silver is up over a buck to $75.80
Crypto is getting beaten with an ugly stick &mdash; Bitcoin approaching three-month lows just over $67,000 and Ethereum clinging to the $1,900 level.
&ldquo;No one cares about crypto right now,&rdquo; observes colleague Greg Guenthner at The Trading Desk. &ldquo;They&rsquo;re too busy making money in the memory names. We&rsquo;d be wasting our time trying to pick bottoms in these out-of-favor groups like crypto. Sure, I think they&rsquo;ll bounce eventually. But right now, the hot money is elsewhere.&rdquo;
<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" />Financial Follies
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And now for a case of mistaken identity&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4ulXelVGLkvsSELXvnDrmy/57c86bd0a8521039b2f012a7de92c931/FMF-Issue-060226-4.png" alt="pub" width="540px" />
Yep, Richard Branson&rsquo;s Virgin Galactic (SPCE) has rallied hard in recent weeks &mdash; in large part because &ldquo;investors&rdquo; who don&rsquo;t know any better are plowing money into it thinking they&rsquo;re buying shares of Elon Musk&rsquo;s SpaceX (SPCX).
Of course, SPCX doesn&rsquo;t go public for another 10 days.
<ul>
<ul>➢</ul>
</ul>
Note well 
<ul>
<ul>what we mentioned a few moments ago &mdash; the 1,000% gains on SPCE call options in our</ul>
</ul>
10X Trade Club
<ul>
<ul>service. Chris Cimorelli had a solid fundamental case for SPCE back in April &mdash; but once in a while it&rsquo;s better to be lucky than good!</ul>
</ul>
The tweet above implies this is the first time anything like this has happened. Hardly.&nbsp;
Deep in our voluminous archives is an episode from 2013 in which Twitter was about to go public as TWTR &mdash; and people who didn&rsquo;t know any better bid up the shares of Tweeter, a bankrupt electronics retailer trading as TWTRQ.
And in 2021 we <a href="https://5minforecast.com/2021/02/12/blooper-trades/">drew your attention</a> to academic research demonstrating these &ldquo;blooper trades&rdquo; happen way more often than you might think.&nbsp;
What&rsquo;s more, it seems a lot of them surround Elon Musk, go figure&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Before we move on, a quick 5 Bullets follow-up: Amazon has abandoned its internal leaderboard tracking employees&rsquo; use of AI tools.
Last week we told you how Amazon employees are <a href="https://paradigmpressroom.com/post/the-yamanaka-secret/#4">&ldquo;running up the score&rdquo;</a> when it comes to AI agents. That is, they&rsquo;re automating useless tasks just to consume AI tokens &mdash; because Amazon was tracking token consumption on internal leaderboards.
Whelp, the leaderboard is no more.
&ldquo;Please don&rsquo;t use AI just for the sake of using AI,&rdquo; says a memo from senior VP Dave Treadwell.
&ldquo;The move highlights how tech groups&rsquo; efforts to encourage the use of AI can lead workers to try to game performance measures with pointless activity,&rdquo; says the Financial Times &mdash; &ldquo;increasing infrastructure expenses.&rdquo;
You mean, the &ldquo;compute&rdquo; from data centers isn&rsquo;t an infinite resource? Say it ain&rsquo;t so!
Which nicely tees up today&rsquo;s mailbag&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: AI Data Center Backlash
<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 AI and electricity &mdash; <a href="https://paradigmpressroom.com/post/backlash-data-centers">and the growing backlash to AI data centers</a> &mdash; a reader writes&hellip;
&ldquo;The energy solution is simple. If you build an AI center you mandatorily have to build an energy source to operate it. No plugging into the grid.&rdquo;
Dave responds: To some extent this is what&rsquo;s already happening out of necessity &mdash; to wit, the natural gas turbines running the Colossus plant in Memphis owned by SpaceX&rsquo;s xAI division. Or Microsoft&rsquo;s deal with Constellation Energy to restart the undamaged reactor at Three Mile Island in Pennsylvania, which was shuttered in 2019.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In a related and unarguably positive development&hellip; Ohio Gov. Mike DeWine has ordered a pause to the sales tax break that data centers get in the Buckeye state.
When a sales tax exemption was first extended to data centers, the thinking was that the economic growth generated by data centers would be so massive that it would dwarf the $136 million in revenue the state would give up.
But that original $136 million estimate for 2025 turned out to be&hellip; $1.5 billion.&nbsp;
(Gee, the state&rsquo;s bean counters were off by only an order of magnitude&hellip;)
&ldquo;The numbers have triggered a firestorm inside the Ohio Statehouse,&rdquo; says the Cleveland Plain-Dealer, &ldquo;as lawmakers from both parties demanded answers about how the estimates ended up so dramatically wrong.&rdquo;
With any luck, state leaders elsewhere will take Ohio&rsquo;s cue and stop giving tax breaks and other special favors to the industry. Data centers must compete on the proverbial level playing field.

FMF-Issue-060226-featured

AI’s iPhone Moment

FMF-Issue-06.01.26-featured

[2026 UPDATE] Echoes From Hell

FMF-Issue-052826-Featured

The Yamanaka Secret

<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 Is Not a Space Company
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> From Paradigm&rsquo;s lips to CNBC&rsquo;s ears&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3S0YwtrZLajRpu299eolGF/b475cb41e67633f7c8f7d0b0c6d996aa/FMF-Issue-052726-1.jpg" alt="Unsual_Whales Tweet" width="540px" />
Way back in January, colleague Davis Wilson at our sister e-letter The Million Mission <a href="https://million-mission.com/posts/ticker-symbol-elon-coming-soon?vid2=f7584bb8d0f8b4ef03ea4a2a79cb9ffebd5601637dfb4b221b21055bfe10aa56fb9565c7166c12ea93687031263ed97489aead8f437e4ddd1cfcbcd5e6a6bb06&amp;utm_campaign=FMF_Issue_02.03.26_&amp;utm_source=Iterable&amp;itbl_templateId=21797526&amp;itbl_campaignId=16746037&amp;utm_medium=Email">mused</a> about just this possibility: &ldquo;What if Elon Musk eventually consolidates all of his companies into one mega-entity?&rdquo;
Days later, Musk took an initial step in that direction &mdash; bringing his xAI artificial-intelligence venture under the SpaceX umbrella.
For the moment, a SpaceX-Tesla tie-up remains in the realm of speculation. And so we&rsquo;ll keep the focus today on what we know &mdash; and there&rsquo;s a lot to know in the prospectus SpaceX filed with the feds last week ahead of going public 17 days from now.
In yesterday&rsquo;s edition, our tech-investing pro Ray Blanco spotlighted the standout number in that document: SpaceX sees AI as a $26.5 trillion market, compared with a paltry $370 billion for space.
Today Davis Wilson shares his own insights after pulling apart SpaceX&rsquo;s S-1 document&hellip;
<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 SpaceX sees AI as a vastly bigger market than space: It&rsquo;s also the fact SpaceX is spending its precious capital accordingly.
&ldquo;For the three months ended March 31, 2026,&rdquo; says Davis, &ldquo;SpaceX spent:
<ul>
<li>$1.05 billion expanding its Space segment</li>
</ul>
<ul>
<li>$1.33 billion on Connectivity (Starlink)</li>
</ul>
<ul>
<li>And a shocking $7.72 billion building AI infrastructure.</li>
</ul>
&ldquo;That means SpaceX is currently spending roughly 7X more on AI than its actual space operations.
&ldquo;This completely changes the narrative around the company.
&ldquo;Most investors still think rockets are the main story. The S-1 strongly suggests AI increasingly is.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> All that spending would be impossible without Starlink. &ldquo;Rockets and AI generate the headlines &mdash; but Starlink generates the cash flow,&rdquo; says Davis.
The &ldquo;Connectivity&rdquo; division of SpaceX &mdash; dominated by Starlink &mdash; generated $7.2 billion last year in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
&ldquo;Meanwhile,&rdquo; Davis tells us, &ldquo;SpaceX&rsquo;s Space segment lost $657 million in 2025, while its AI segment lost $6.4 billion.
&ldquo;In other words, Starlink is increasingly funding the rest of Elon Musk&rsquo;s empire.&rdquo; As such, Davis thinks &ldquo;Starlink may ultimately be the most important business inside SpaceX.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, the integration between SpaceX and Tesla is already tighter than you might think.
Davis unearthed the following from SpaceX&rsquo;s filing&hellip;
<ul>
<li>&ldquo;Tesla owns 18,990,195 shares of SpaceX Class A common stock</li>
</ul>
<ul>
<li>SpaceX obtained goods and services from Tesla of $11 million in 2023, $4 million in 2024 and $144 million in 2025</li>
</ul>
<ul>
<li>xAI obtained goods and services from Tesla of $191 million in 2024 and $506 million in 2025</li>
</ul>
<ul>
<li>Tesla has directly and indirectly purchased advertising on SpaceX&rsquo;s X platform</li>
</ul>
<ul>
<li>Even the cost of Elon&rsquo;s jet usage is split between SpaceX and Tesla.</li>
</ul>
&ldquo;The lines between these companies are becoming increasingly blurred,&rdquo; says Davis &mdash; making that mega-merger more and more plausible. &ldquo;Maybe one day my prediction will come true &mdash; Ticker Symbol: ELON.&rdquo;
Davis is on the fence about whether he&rsquo;ll actually buy once SpaceX starts trading June 12 as SPCX.
&ldquo;But at the very least,&rdquo; he says, &ldquo;I now understand what I&rsquo;d actually be buying.
&ldquo;And no&hellip; regardless of what most people think, it isn&rsquo;t a rocket company.&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" />Here We Go Again (Again)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> All evidence to the contrary, the &ldquo;war&rsquo;s almost over&rdquo; trade is in play for a second straight day.
At last check, U.S. oil futures are down over 4% at $90 on the nose. That&rsquo;s even though there&rsquo;s still no &ldquo;deal&rdquo; between Washington and Tehran that would bring the Iran war to a conclusion.
Even if the two sides can somehow come to terms on uranium and the Strait of Hormuz, Tehran wants Israel to stop bombing Lebanon &mdash; and there&rsquo;s no sign Israel is willing to let up. (Remember when Donald Trump &ldquo;forbade&rdquo; Israel to attack Lebanon last month?)
And so shipping through the strait remains at a trickle relative to when Washington and Tel Aviv launched the war three months ago.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4NWxWnoTSEaZlipaUUGkQd/49a35cd3f8e9dd38bde14a240cfc2314/FMF-Issue-052726-2.jpg" alt="pub" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, the major U.S. stock indexes are taking a breather &mdash; the S&amp;P 500 and Nasdaq down fractionally from yesterday&rsquo;s record closes.
Paradigm readers are savoring a handful of gains racked up by the editors just yesterday&hellip;
<ul>
<li>Greg Guenthner&rsquo;s Trading Desk readers collected 435% in just over a month playing call options on the red-hot space name Redwire</li>
</ul>
<ul>
<li>It took less than three months for Altucher&rsquo;s Investment Network readers to collect 140% on the chipmaker Astera Labs</li>
</ul>
<ul>
<li>Microcap Millionaire readers bagged 382% in less than a year on Navitas Semiconductor</li>
</ul>
<ul>
<li>Chris Cimorelli&rsquo;s 10X Trade Club readers pulled in 123% in less than four months with call options on Enphase Energy.</li>
</ul>
Precious metals are getting clobbered again despite the &ldquo;war&rsquo;s almost over&rdquo; atmosphere. Gold is down $64 to $4,442, a two-month low. And silver&rsquo;s off more than two bucks, retesting its May lows at $74.63.
Crypto remains stuck in the mud, Bitcoin under $75,000 and Ethereum at $2,060.
<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 Regulation Rethink
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the record: The Trump administration is pulling back on its plans for heavy-handed AI regulation.
Earlier this month we told you how the White House&rsquo;s thinking underwent a major transformation since last year: Gone was the president&rsquo;s talk about how AI is too important to burden &ldquo;with foolish rules and even stupid rules.&rdquo; Instead, National Economic Council Director Kevin Hassett started talking about AI being regulated &ldquo;just like an FDA drug.&rdquo;
Your editor was <a href="https://paradigmpressroom.com/post/ai-speeding-toward-a-brick-wall">appalled</a> at the prospect. The FDA is the last thing that comes to mind when you think about innovation and competitiveness.
But last Thursday, at nearly the last minute&hellip; Donald Trump called off a signing ceremony for an AI executive order that had been in the works for weeks.
As he explained it, he doesn&rsquo;t want to get in the way of the American AI industry&rsquo;s advantages over China.
&ldquo;I really thought that could have been a blocker, and I want to make sure it&rsquo;s not&hellip; I don&rsquo;t want to do anything that will get in the way of that lead.&rdquo;
It appears David Sacks still holds sway in this administration even though he&rsquo;s stepped back from his role as the White House AI and crypto czar.
Sacks stands for the hands-off approach that was the administration&rsquo;s stance last year. &ldquo;There&rsquo;s a very visceral negative reaction here because we know how damaging that would be to innovation,&rdquo; he said recently on the All In podcast that he co-hosts.
As it happens, Sacks still has a voice within the White House as co-chair of the President&rsquo;s Council of Advisors on Science and Technology.
One wonders if Sacks has been getting input from Elon Musk now that it turns out SpaceX is mostly an AI company: Both men belonged to the original &ldquo;PayPal mafia&rdquo; during the 1990s&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" />Your Bank Won&rsquo;t Ask for Your Passport After All
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> OK, it looks as if you won&rsquo;t have to present your U.S. passport just to open a bank account.
Three months ago <a href="https://paradigmpressroom.com/post/your-bank-wants-your-passport">we sounded the alarm</a> as the Trump administration was poised to issue a sweeping executive order forcing banks to collect information about their customers&rsquo; citizenship status.
In theory it was aimed at cracking down on illegal migration. In practice it was a huge step toward a show-me-your-papers society for law-abiding citizens. You would have had to cough up a passport or birth certificate not only to open a new bank account, but even to keep your existing one.
It appears the White House has dialed back on the proposal. Not because of pressure from the public &mdash; but rather pressure from the banking industry, which blanched at the new paperwork requirements.
The final executive order, issued last week, merely directs banks to &ldquo;make a person&rsquo;s immigration status an explicit part of a bank&rsquo;s assessment of whether a customer poses a money-laundering risk,&rdquo; according to The Wall Street Journal.
Clear as mud, right?
At least we know this much: Unlike the original proposal, whatever enforcement takes place won&rsquo;t be visible to the customer.
Well, unless the bank decides you &ldquo;pose a money-laundering risk&rdquo; and closes your account.
Which is a potentially greater risk than you might think.
Under previous instances of unclear federal mandates, JPMorgan Chase shut down everyone from porn starlets to gun-shop owners to crypto bros.
It could easily start happening again &mdash; and all because the U.S. government can&rsquo;t keep track of who&rsquo;s in the country legally and who&rsquo;s not.
<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: Intergenerational Warfare
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Dave, I don&rsquo;t think it is an &lsquo;I got mine&rsquo; philosophy,&rdquo; a reader writes on the subject of boomer attitudes toward younger generations. &ldquo;I believe it&rsquo;s more that we see the waste in the name of equality.
&ldquo;Government establishes student loans for everyone. It lowers standards and provides loans that have no bearing with what the degree will produce, e.g. $200,000 in loans for a job that won&rsquo;t earn the student $50,000.
&ldquo;Schools lower entrance standards in the name of fairness, knowing full well the student will not make it past the first year. This extra money is gravy for them. It doesn&rsquo;t cost much to carry a student that will flunk out the first year.
&ldquo;So what do they do? Build more extravagant buildings that aren&rsquo;t really needed. Add extra courses in new disciplines to attract more students that will suffer. Add more administrative staff and cut back on the quality of teaching staff. That makes the degree weaker, resulting in lower ranking for the programs.
&ldquo;Students suffer and are behind the eight ball if they even make it to graduation.
&ldquo;I went to a smaller university ranked No. 3 nationally in engineering. The total expenses including food and housing for the four years were approximately $15,000 per year. Starting salaries for graduates were approximately $9,000 per year. That&rsquo;s 60% of the total expenses.
&ldquo;The ratio is now 20% for engineering grads and their ranking in engineering is No. 53. But they added many liberal arts programs in order to diversify the student body. They also spent $200 million on a performing arts theater for the 30 or so music majors. God knows what the ratio is for music majors.
&ldquo;A few ideas:&nbsp;
<ul>
<li>Make universities liable for a majority of student defaults. They knew the loans wouldn&rsquo;t be paid</li>
</ul>
<ul>
<li>Limit total loans to two years of average starting salary for their planned degree. Annual loans would be limited to a percentage based on the number of credits scheduled. If a student plans on a six-year program, they are limited to 1/6th of the loan total per year. No front-end loading.</li>
</ul>
&ldquo;I know these ideas are unrealistic for a government that can handle its own finances, but I do believe it is what makes us boomers cynical about people not handling their own finances with student loans, credit card debt, etc. They are just used to low interest money being available with no regard to how they will pay it back.&rdquo;
Dave responds: So you raise many valid points about how government intervention has messed up higher education&hellip; but then you put the responsibility on the students?
We now have two generations of Americans for whom it was impossible to pay for college by flipping pizzas part time &mdash; but they were also told they&rsquo;d be condemned to a life of penury if they didn&rsquo;t get the sheepskin.
All they did was respond to the incentives, perverse as the incentives were. And that&rsquo;s on them?
The simplest fix &mdash; not a panacea, but a good start &mdash; would be to make student loans dischargeable in bankruptcy again. They were until 2005 &mdash; until Joe Biden shepherded the change through the Senate and George W. Bush signed it into law. Bipartisanship!

FMF-Issue-052726-Featured

SpaceX Is Not a Space Company

FMF-Issue-052626-Featured

SpaceX’s Halo

<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" />Musk&rsquo;s Biggest Ambition
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The sooner this technology is perfected, the sooner the societal stress over data centers is dampened.
For over six months now, we&rsquo;ve been waxing enthusiastic in these pages about the potential for data centers in space &mdash; delivering the AI &ldquo;compute&rdquo; the world demands with 24/7 solar power.
Data centers in space won&rsquo;t compete for scarce electricity with existing homes and businesses. They won&rsquo;t suck up prodigious amounts of water for cooling. They won&rsquo;t generate noise that keeps neighbors up at night.
The existing power grid simply can&rsquo;t accommodate the current buildout of data centers. Something&rsquo;s gotta give.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Data centers already eat electricity like a small country. And AI adoption isn't slowing down. It's going vertical,&rdquo; affirms Paradigm AI authority James Altucher.
In yesterday&rsquo;s Altucher Confidential, James said energy is the single biggest constraint on AI &mdash; and whoever solves the energy problem wins the AI race. Not whoever has the smartest model or the most sophisticated chips.
&ldquo;You can build the most powerful artificial intelligence the world has ever seen. Give it a name and a personality. And it will sit there doing absolutely nothing &mdash; because you can't plug it in&hellip;
&ldquo;The grid we have was not built for this. It was built for air conditioners and refrigerators and the occasional Christmas display. It was never built to run a digital civilization.&rdquo;
But data centers in space? They can be purpose-built to meet all their own power demands.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;If even part of AI compute moves up there, we're looking at a brand-new layer of infrastructure underneath the entire economy,&rdquo; James goes on. &ldquo;The way railroads were a layer. The way the internet was a layer.&rdquo;
As we&rsquo;ve chronicled since last fall, Elon Musk is the biggest enthusiast of orbiting data centers. And James says Musk has put a number on their economic potential.
$1 quadrillion. With a Q. That&rsquo;s 1 followed by 15 zeroes. A thousand trillion.
To be clear, James is extrapolating from something Musk said at Tesla&rsquo;s most recent shareholder meeting.
&ldquo;Elon said AI and robotics could grow the global economy &lsquo;by a factor of 10 or maybe 100.&rsquo; Run the low end against world GDP and you land on $1 quadrillion.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;And here's why Elon can say it with a straight face: This doesn't apply to one product. It applies to everything he is building,&rdquo; James goes on.
&ldquo;The robotaxi network. The Optimus humanoid robots. Grok, and whatever comes after Grok. Every one of those runs on compute. And compute runs on power.
&ldquo;So the real bottleneck across his entire empire is power. Always power. Solve power, and you don't improve one product &mdash; you unlock all of them at once.&rdquo;
Really, energy is Musk&rsquo;s biggest ambition. Because everything else stems from that.
Musk is keenly aware of all this as he prepares for SpaceX&rsquo;s IPO on Friday, June 12. Remember that his xAI venture and the Starlink satellite network both operate under the SpaceX umbrella. Energy is key to all of it.
&ldquo;He's taking an entire ecosystem public,&rdquo; says James. &ldquo;And if you've watched Elon operate for 20 years, you know exactly what he does next. When something is critical to his plans, he does not politely wait for the market to hand it to him. He buys it. He partners with it. Or he pulls it inside the tent.
&ldquo;He did it before. He'll do it again.&rdquo;
With that in mind, James has been digging into one small company that&rsquo;s key to Musk&rsquo;s ambitions.
&ldquo;It already works with SpaceX. It already has real, functioning technology in orbit &mdash; today. It&rsquo;s NOT a household name. You've never seen it on CNBC. Most professional investors couldn't tell you what it does. But it is sitting on precisely the kind of technology a man building a trillion-dollar AI empire cannot afford to be without.&rdquo;
If you&rsquo;re a Microcap Millionaire subscriber, you&rsquo;re already hip to what James is talking about.
<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" />$6 Gasoline
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The national average gasoline price sits at $4.56 a gallon, according to AAA &mdash; and Paradigm natural resources pro Matt Badiali says $6 is in view this summer.
&ldquo;The only good news is that high prices cure themselves,&rdquo; he wrote for yesterday&rsquo;s Daily Reckoning. &ldquo;It just takes pain and time.&rdquo;
Matt sees parallels between the present moment and the summer of 2008 &mdash; the first time gas prices eclipsed $4 a gallon.
&ldquo;We stopped driving and conserved when we could,&rdquo; he recalls. &ldquo;We carpooled. When we went out to run errands, we ran ALL of them at once. And we changed our plans to accommodate the extra expenses.&rdquo;
Result: Fuel consumption fell 21.5% between December 2007&ndash;May 2009. (OK, it helped that millions of people were thrown out of work in the &ldquo;Great Recession&rdquo; and had nowhere to commute. But you get the point.)
And that $4 gas in the summer of 2008? It was well under $2 by early 2009.
&ldquo;The price fell off so much, so quickly because at the time, 60% of the demand for oil came from personal automobiles,&rdquo; says Matt. &ldquo;And if we all stop driving, there&rsquo;s plenty of oil again.
&ldquo;Today, light-duty vehicles (cars, SUVs and motorcycles) use 52&ndash;60% of U.S. oil demand. That means personal vehicles still have a major impact on demand. And when driving becomes a luxury, a huge swath of the country will conserve.&rdquo;
By the way, that $4 a gallon in 2008 translates to $6.34 today. With the Strait of Hormuz still all but closed, Matt thinks we&rsquo;re on our way there. &ldquo;All over the world, governments are burning through strategic oil reserves. The reality is about to come crashing home this summer.&rdquo;
You can offset those high prices with gains in your portfolio. Matt says you can consider the United States Gasoline Fund (UGA) &mdash; an ETF that tracks the gasoline price via options. Or the VanEck Oil Refiners (CRAK). Refiners have to grapple with rising oil prices, yes, but they still sport handsome margins.
[Dave&rsquo;s disclosure: I own a small position in CRAK.]
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, In the short term, U.S. oil futures are sinking big-time &mdash; down over 6% and back below $98 for the first time in over a week.
Supposedly that&rsquo;s because Donald Trump says U.S.-Iran talks are in their &ldquo;final stages.&rdquo; (Gee, where&rsquo;ve we heard that before? And were there suspicious trades ahead of that remark?)
From everything we see, the Iranian side is signaling that no talks will take place while the annual Muslim pilgrimage to Mecca is underway. If so, that means nothing happens until after May 30.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As Nvidia goes, so goes the whole stock market? Kinda feels like it.
Nvidia reports its quarterly numbers after the closing bell today. NVDA isn&rsquo;t just the biggest company in the world. It&rsquo;s a bellwether for chip stocks. Lately, chip stocks have been a bellwether for the tech sector. And tech has been a bellwether for the whole market.
All of these things touched record highs last Thursday &mdash; only to hit an air pocket since. The reaction to Nvidia might well set the tone for everything else in the coming days.
And what will drive the reaction? Davis Wilson at our sister e-letter The Million Mission says investors want to know three things&hellip;
<ul>
<li>&ldquo;Does the AI investment boom still have legs?</li>
<li>&ldquo;Can Nvidia maintain its dominant position as competition ramps up?</li>
<li>&ldquo;Any updates on selling chips to China following CEO Jensen Huang&rsquo;s recent Beijing summit alongside President Trump?</li>
</ul>
&ldquo;Tonight&rsquo;s earnings call will set the tone for the entire AI market heading into the second half of the year.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In the meantime, the broad market is in the green today on the aforementioned &ldquo;war&rsquo;s almost over again&rdquo; trade.
The S&amp;P 500 is up nearly 1% to 7,422. The gains in the Dow and the Nasdaq are even stronger.
Likewise bonds are rallying, sending yields down &mdash; the 10-year Treasury note at 4.58% and the 30-year bond at 5.12%. (Those levels are still very high by recent standards.)
Precious metals are licking their wounds, gold back over $4,500 and silver approaching $76. Crypto is also staging a modest rally with Bitcoin back over $77,000 and Ethereum above $2,100.
<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" />About Those Retail Sales&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We don&rsquo;t have a lot of economic data points this week &mdash; so it&rsquo;s worth stepping back to examine the bigger picture when it comes to one of the most-reported numbers out there.
We mention the retail sales figures each month. Frequently we mention how they&rsquo;re not adjusted for inflation.
So what would you see if they were adjusted for inflation? The folks at Statista did just that this week.
&ldquo;Between April 2021 and April 2026,&rdquo; writes Statista&rsquo;s Felix Richter, &ldquo;monthly retail and food services sales (adjusted for seasonal variations, holiday and trading day differences) increased by 24.3%.
&ldquo;While that sounds like the economy must be humming along nicely, sales were essentially flat when adjusted for inflation.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/rz8AKPi3ALKeFx8IwICqu/f6b721c114358ebf10f0b6d26f4b63b5/FMF-Issue-052026-1.jpg" alt="Real Retail Sales" width="540px" />
&ldquo;From a positive perspective,&rdquo; he continues, &ldquo;that means that Americans haven&rsquo;t really cut back on their purchases despite the financial pain that inflation has inflicted on many households.
&ldquo;From a more negative viewpoint, it means that Americans are spending (a lot) more to keep the same living standard, which is not just bad for consumers but also for retailers trying to actually grow sales.&rdquo;
Worse, over the last five years wages haven&rsquo;t kept pace with the official inflation rate. Wages almost caught up with prices as the calendar flipped from 2025 to 2026 &mdash; but then came the Trump-Netanyahu &ldquo;excursion&rdquo; into Iran and once again price increases are running away from wage increases.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Worse still, the official inflation rate understates your real increase in the cost of living. 
Maybe you already know that intuitively&hellip; but we should emphasize this point more often: Federal statisticians have been monkeying with the inflation numbers for decades to make them seem better than they really are.
Here are the two major techniques, with supporting examples&hellip;
<ul>
<li>Hedonic adjustments. If the price of a new car goes up, but the manufacturers add new features to the new models, well then the price of a new car hasn&rsquo;t really gone up, has it?</li>
</ul>
<ul>
<li>Substitution. If you start buying hamburger because steak is too expensive, well, your price of beef hasn&rsquo;t really gone up, has it?</li>
</ul>
Seriously, this is how government statisticians think.
Result: In mid-2023 the official inflation rate was about 4%. But economist John Williams at Shadow Government Statistics runs the numbers the same way the feds did in the 1970s &mdash; and by that yardstick inflation was running at a 12% clip.
<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" /> As long as we&rsquo;ve had AI and resistance to AI on the brain in recent days&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/37Jyc5WD1lqIWYByHKYoSV/b0d009b56dd93a35e81965b6b36757ee/FMF-Issue-052026-2.jpg" alt="Comedy 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 Data Centers, Again
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Dave, I can't be the only reader who is on the fence about these AI data centers,&rdquo; a reader writes as we continue to get feedback from <a href="https://paradigmpressroom.com/post/backlash-data-centers">last Friday&rsquo;s edition</a>.
&ldquo;Your writers have made it abundantly clear that they will gobble up enormous amounts of power and water. It's the &lsquo;jobs' part of the equation that seems to be missing? I can assume there would be quite a few construction jobs as these huge warehouses are erected and they will need enormous HVAC and power switching systems.
&ldquo;BUT what happens after they're built? Just a couple of guys waiting around for things to break down? Or is there a real need for the technically savvy to be inside testing, running, repairing and what not?
&ldquo;So will they create 100/200/500/1,000 jobs after commencing operations or are they just great big power-sucking empty warehouses?&rdquo;
Dave responds: Well, let&rsquo;s return to Maine &mdash; the first state where a moratorium on data center construction reached the governor&rsquo;s desk.
As we mentioned at the end of April, Gov. Janet Mills vetoed the bill because there was no carve-out for a data center already under construction in the town of Jay. She said it would bring 800 temporary jobs and 100 permanent ones.
Presumably that 8:1 ratio is consistent regardless of the project size?
We&rsquo;ll leave it there for today &mdash; except to note that the largest headline on the front page of today&rsquo;s Wall Street Journal is: &ldquo;Americans&rsquo; AI Rebellion Grows, Fed by Energy Costs, Job Losses.&rdquo;
Hey, you heard it here first!