Picture this: You&rsquo;ve got bad news to break to someone you care about.&nbsp;
You could postpone the deed until it feels like &ldquo;the time is right&rdquo;... or you could rip off the Band-Aid and get it over with right away.
This week a storied American company had bad news to break to its shareholders. It opted to rip off the Band-Aid. Shareholders did not take it well. At all.
Maybe you&rsquo;ve already figured out we&rsquo;re talking about IBM &mdash; mentioned here briefly on Tuesday. Big Blue opted to disclose bad news a few days before it was scheduled to report earnings. Shares took a record one-day tumble of more than 25%.
IBM is a long-term hold in the portfolio of Altucher&rsquo;s Investment Network &mdash; and I do mean long-term, since late 2017.&nbsp;
<h2 style="text-align: center;">IBM: One Bad Quarter. One Big Opportunity.</h2>
In 2007, I was running a hedge fund and writing a column for the Financial Times.
I wrote an article about International Business Machines Corporation (IBM).
My argument was simple: Wall Street had the company completely wrong.
They saw a fading mainframe business with nowhere left to go.
What I saw was a company that was consistently profitable, reinventing itself, and almost entirely ignored by the people who should have been paying attention.
Nineteen years later, that mainframe business Wall Street wanted to bury is still at the center of IBM's story.
This week, IBM announced a preview of next week's earnings.
The mainframe unit came in short, and the stock dropped 27%, one of the worst single-day drops the company has seen in decades.
I'm not going to pretend the drop doesn't sting.
But I've seen how this ends.
The last time Wall Street was this wrong about IBM, the stock outperformed the S&amp;P 500 by 11.5x within five years.
And from where I'm sitting, they're making the exact same mistake again.
<h3 class="spad-subhead2 nbp">Why Nobody Turns the Mainframe Off</h3>
Most people have never heard the word mainframe, so here's what we're talking about.
Mainframes are used for processing credit card transactions, flight bookings, and insurance claims.
Unlike other servers, they can handle tens of thousands of transactions per second, 24 hours a day, every day of the year without missing a beat.
The global financial system runs on them: forty-five of the fifty largest banks in the world depend on these machines, and they've been spending on them reliably for decades.&nbsp;
Then AI changed the math.
That routine upgrade money got redirected toward AI hardware instead &ndash; chips, accelerators, and servers are in short supply globally, with companies front-loading purchases to get ahead of price increases.
Which means that mainframe spending is temporarily on hold.
Wall Street is worried this is a signal that AI is going to replace the mainframe.
That&rsquo;s the part they&rsquo;ve got wrong.
Two thirds of Fortune 500 rely on them, and for good reason.
Many of them have been running mainframes for decades &ndash; and in a lot of cases, the engineers who wrote the original software are long gone.&nbsp;
Nobody inside those companies knows exactly what would happen if they turned the mainframe off, and nobody wants to be the one to find out. You don't replace a system that has never failed, not when failure means every transaction stops.
The bear case on mainframes is wrong. But here&rsquo;s the thing &ndash; the real bull case on IBM has almost nothing to do with mainframes.
<h3 class="spad-subhead2 nbp">The Problem Every Company Has Right Now</h3>
Every company buying AI hardware runs into the same problem almost immediately: they have no idea how to use it. And that&rsquo;s exactly IBM&rsquo;s business.
That's IBM's business.
Before any company can run AI, it needs its data organized.
IBM works with Fortune 500 companies, like Pepsi, Ford, and Verizon, on exactly that problem.
Decades of disorganized data. Spreadsheets in conflicting formats. Paper records. Handwritten notes.
IBM works with Fortune 500 companies like Pepsi, Ford, and Verizon to structure all of it so AI models can actually read it.&nbsp;
Here's why that matters, and why it's not a job that goes to a startup. When a Fortune 500 executive picks a vendor and it fails, that failure belongs to them personally.
IBM has been the safe answer to that problem for decades.
No startup can offer that.
IBM's consulting division is already getting paid for generative AI work.
But enterprise customers are still in the early stages of deployment, and they move deliberately.
The biggest numbers are still ahead of us. The only real question is timing &ndash; and I've been here before on that too.&nbsp;
<h3 class="spad-subhead2 nbp">The Same Bet, Nineteen Years Later</h3>
The column I wrote in 2007 wasn't a prediction that IBM would never miss a quarter.
It was an argument that Wall Street's story about IBM was structurally wrong.
That story is wrong again today.
The miss was concentrated in one unit, while total revenue grew and infrastructure sales hit records.
A 27% drop on that picture isn't a verdict on the company &ndash; it's a reaction to a single number.&nbsp;
I know it hurts if you own the stock. It hurts for me too.
But the thesis hasn't changed: IBM is consistently profitable, reinventing itself again, and positioned at the center of the biggest enterprise technology shift in a generation.
I made this same argument in 2007. Within five years, IBM had outperformed the S&amp;P 500 by 11.5x. I was early then, and I might be early now &ndash; but those are odds I'll take every time.
Dave&rsquo;s final word: Two stories are dueling for Mr. Market&rsquo;s attention going into the weekend &mdash; trouble in tech, and trouble in the Persian Gulf.&nbsp;
The shakeout in chip stocks still isn&rsquo;t over. The Philadelphia Semiconductor Index (SOX) is down another 2.2% as we write. It now meets the conventional definition of a bear market &mdash; down 20% from its peak less than a month ago. Nvidia, meanwhile, just lost its crown as the world&rsquo;s most valuable company. (Apple&rsquo;s back on top.)
That weakness is spilling over into the Nasdaq &mdash; down 1.3%. And the S&amp;P 500 &mdash; down two-thirds of a percent.&nbsp;
Precious metals are licking their wounds from yesterday &mdash; gold just under $4,000 and silver at $55.53. And crypto is pulling back with Bitcoin just over $63,000 and Ethereum at $1,818.
As for the Gulf&hellip; the war is reaching a new and dangerous stage &mdash; pushing U.S. crude futures up another 3% to a one-month high of $81.44.
U.S. airstrikes are now targeting bridges in Iran. There are credible reports that Tehran has retaliated by hitting the King Fahd Causeway that links Saudi Arabia and Bahrain&hellip; as well as power plants in Kuwait and the United Arab Emirates.
&ldquo;Looks like it is going to be a very hot July,&rdquo; writes former CIA officer Larry Johnson on his blog.
We&rsquo;re back tomorrow with our Saturday highlights edition &mdash; where we&rsquo;ll unpack a ballot measure that&rsquo;s touched off a backlash from California&rsquo;s billionaire class. (And it could be coming to a state near you.) Catch you then&hellip;

FMF-issue-071726-Featured

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When a Storied Company Stumbles

FMF-Issue-071626-Featured

Look Who Stole Elon’s Playbook

<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" />[UPDATE] Buffett&rsquo;s Sudden About-Face
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Some people refused to believe it.
We kicked off <a href="https://paradigmpressroom.com/post/buffetts-sudden-about-face">our June 23 edition</a> with a bold proposition by Paradigm AI authority James Altucher: Berkshire Hathaway&rsquo;s $10 billion commitment to Google came at the behest of Warren Buffett.
Was it out of character for Buffett? On the surface, absolutely. Buffett invests in tangible things he can readily understand. Insurance, soft drinks, railroads. &ldquo;Technology&rdquo; was never his bag; even his investment in Apple stemmed from the fact AAPL is a consumer-product powerhouse.
And besides, didn&rsquo;t Buffett step down as CEO at the end of last year? Also true.
But none of that mattered, said James.
James said as Buffett sees it, Google parent Alphabet is no longer a &ldquo;technology&rdquo; company. Nowadays it&rsquo;s all about &ldquo;data centers, power grids, cooling systems. The kind of capital-intensive, durable infrastructure Buffett has always understood.&rdquo;
Furthermore, &ldquo;Buffett remains chairman and the largest shareholder. A man who spent six decades watching technology booms from the sidelines doesn't sign off on something like this because a new CEO asked nicely.&rdquo;
A skeptical reader wasn&rsquo;t having it: &ldquo;Really hard to believe that Warren is buying AI,&rdquo; he wrote. &ldquo;In the past Warren has never bought stocks at their highs.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />But here&rsquo;s the man himself&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/TyO4HADLmHxLTYzwqiM2G/56de52d2b521287f66e31c5d91241b98/FMF-Issue-071526-1.jpg" alt="pub" width="540px" />
&ldquo;I initiated it,&rdquo; Buffett said in a CNBC interview this morning &mdash; not his successor Greg Abel.
&ldquo;I am not doing anything that he doesn&rsquo;t approve of. He&rsquo;s not doing anything I don&rsquo;t approve of. We talk all the time, but he is the decider,&rdquo; Buffett clarified.
Buffett said Google meets all his traditional tests. &ldquo;The trick in life is to find &mdash; I mean investing &mdash; is to find businesses that are going to earn high returns on capital for an extended period of time.&rdquo;
The commitment now is even more notable in light of the regret he expressed way back in 2018 about not investing in Google sooner.
&ldquo;When it comes to finding some of the biggest winners in the stock market &mdash; think Google, Microsoft and Nvidia &mdash; one standout feature they share is their absolute dominance in their given sector,&rdquo; James Altucher says.
&ldquo;All of these companies developed a technology so powerful that it set them far apart from their competitors, making them virtual monopolies.&rdquo;
And as far as Warren Buffett is concerned, Google&rsquo;s still got it &mdash; 28 years after it was formed and 22 years after it went public.
<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" />How Long Is Forever?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />The mainstream is worrying about the wrong thing when it comes to the Iran war.
&ldquo;Analysts Warn Conflict Risks Becoming &lsquo;Forever War,&rsquo;&rdquo; says a CNBC headline.
The article quotes a Andreas B&ouml;hm, a lecturer in international affairs at Switzerland&rsquo;s University of St Gallen, who anticipates a years-long conflict &mdash; &ldquo;a long-time low-level conflict and therefore one of the forever wars Trump pledged to end. Each side will try to raise the costs for the respective other until it will become prohibitive.&rdquo;
One problem with that line of thought, says Paradigm macro maven Jim Rickards: &ldquo;The U.S. is running low on cruise missiles, Patriot interceptors, 155 mm artillery shells and other weapons and ammunition. The strain on key stockpiles has become increasingly serious.&rdquo;
Part of the problem is Washington&rsquo;s ongoing support for Ukraine in its conflict with Russia: &ldquo;The Patriot systems supplied to Ukraine have been heavily used and several have reportedly been damaged, underscoring both the intensity of the war and the difficulty of replacing these highly sophisticated weapons. Production remains slow, and replenishing inventories will take years.
&ldquo;Trump recently met with the CEOs of major defense contractors at the White House. According to reports, he berated them for not stepping up weapons production. He seems not to realize that many production lines were shut down years ago, they take years to restart and many of these weapons are so technologically sophisticated they&rsquo;re built in relatively small numbers rather than mass-produced.&rdquo;
So as Jim sees it, a &ldquo;forever&rdquo; war isn&rsquo;t even an alternative &mdash; the current escalation notwithstanding. &ldquo;Trump may discover that sustaining a prolonged conflict is more difficult than ending one.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />For the moment, Mr. Market has once more consigned the war to background noise.
Within the last 24 hours Trump is back to threatening airstrikes on Iran&rsquo;s bridges and power plants. If he follows through on those threats, Tehran will surely lay waste to the oil infrastructure in the Gulf sheikdoms.&nbsp;
Perhaps on the theory that Trump already knows this state of play, U.S. crude futures are little changed from yesterday&rsquo;s close at $79.26.
It being Wednesday, the Energy Department has issued its weekly inventory figures. They show another 3 million barrels of crude drained from the government&rsquo;s Strategic Petroleum Reserve &mdash; plus 1.7 million barrels drained from private-sector reserves. And those figures cover the week ended last Friday &mdash; when there was at least a shred of hope the ceasefire might hold and U.S. crude futures were still around $71.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Nor is there much movement today in the major U.S. stock indexes. They&rsquo;re all down but by less than a fifth of a percent.
Shares of PayPal Holdings are up 16.2% on the news that the online payments firm Stripe is joining up with the private equity firm Advent International to submit a $53 billion bid to buy the company. 10X Trade Club editor Chris Cimorelli has been anticipating a buyout for a while. A month ago he recommended PYPL call options and this morning he recommended closing that trade for an eye-watering 1,782% gain.
Gold is down a bit but still holding the line on $4,000. Silver, however, is down two bucks to $56.59, retesting its late-June lows.
Bitcoin is knocking on the door of $65,000 and Ethereum has surpassed $1,900.
The big economic number of the day is wholesale inflation &mdash; down 0.3% in June thanks in large part to the pause in the Iran war and the resulting drop in energy prices. Still, the year-over-year increase is a blistering 5.5%.
Milestone: Small Nuclear Reactors
<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" />Milestone: Small Nuclear Reactors
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />With little fanfare, the U.S. government met a nuclear-energy goal in time for a July 4 deadline.
We mentioned the effort briefly back in February &mdash; when the U.S. military airlifted a miniature nuclear reactor to an Air Force base in Utah.
The privately held Valar Atomics is one of the companies hoping to make hay with &ldquo;small modular reactors&rdquo; that can be built at their own factory and transported anywhere to produce electricity &mdash; in contrast with the 94 mega-reactors currently in operation around the United States. No taxpayer funds were involved in the stunt; Valar picked up the cost of the flight.&nbsp;
The Trump administration set a goal of getting three of these SMRs to go &ldquo;critical&rdquo; &mdash; running all their nuclear systems smoothly &mdash; in time for the nation&rsquo;s 250th anniversary a few days ago.
That goal has been met &mdash; and a fourth reactor went critical shortly after Independence Day.
&ldquo;The fact that they can do this and do this so quickly, it shows that the preconceived notions we&rsquo;ve had about nuclear are no longer valid anymore,&rdquo; the Department of Energy&rsquo;s Michael Goff tells Politico.
But that doesn&rsquo;t mean SMRs will go into widespread commercial use just yet. Like big conventional nuclear reactors, SMRs fall under the purview of the Nuclear Regulatory Commission. The NRC is notorious for stifling innovation in the industry.&nbsp;
And while there&rsquo;s talk within the Trump administration about a path to faster NRC approval, even an enthusiast like Goff says putting SMRs into use for, say, a data center, will be &ldquo;a matter of a few years.&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" />Half-Baked Time Change
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />The good news: The U.S. House has voted 308-117 to do away with twice-a-year time change. But yes, there&rsquo;s bad news&hellip;
&hellip; They&rsquo;ve opted for year-round daylight saving time.
Every now and then in these virtual pages, your aging editor laments the insidious stressors of time change. We&rsquo;ve regularly <a href="https://paradigmpressroom.com/post/the-secret-history-of-time-change">documented</a> how it doesn&rsquo;t save energy&hellip; but it does make for more workplace accidents, car crashes and heart attacks.
In 2020, the American Academy of Sleep Medicine, along with several other groups, published a position paper in the Journal of Clinical Sleep Medicine.
Its recommendation &mdash; year-round standard time, because that&rsquo;s what would be &ldquo;best aligned with human circadian biology and has the potential to produce beneficial effects for public health and safety.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Besides, the nation previously experimented with year-round DST and everyone hated it.
After the Arab oil embargo of late 1973, Congress passed and President Nixon signed a measure imposing year-round DST. It took effect just as kids returned to school from their Christmas-New Year break in January 1974.
Even in the easternmost stretches of every time zone, where the sun rises earliest, they were going to school in the dark. This clipping from The Washington Post is easily found online&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6qyt09cJ0titGPx2u4gOZm/99f601546875de78edc877a25c7a42d6/FMF-Issue-071526-2.jpg" alt="pub" width="540px" />
Year-round DST was repealed just in time for the darkest months of the 1974&ndash;75 school year.
As for the present proposal, we&rsquo;ll see what unfolds. Four years ago it was the Senate that passed year-round DST legislation &mdash; only for it to die on the vine in the other chamber.
<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: Generations, Goldman
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />After the provocative meme I shared at the conclusion of <a href="https://paradigmpressroom.com/post/this-isnt-the-endgame">yesterday&rsquo;s edition</a> &mdash; something you could interpret more than one way &mdash; a thoughtful email rolled in.
&ldquo;I&rsquo;ll make my partisan position clear right off: Someone spent all their time making money when they should have devoted more time to teaching their kids to be adults. Kids need parents. Is this one of our greatest shortages today, or what?
&ldquo;I speak from experience, having grown up in the &rsquo;50s and &rsquo;60s, when white-collar American families traded fathers in the home for good incomes, through the alluring miracle of commuting. The cultural upheavals that concluded the &rsquo;60s were one result.
&ldquo;Things haven't gotten better, and are not on a path for self-correction anytime soon. We need to regain respect for our heavenly Father if we expect to have any idea what an earthly father should be like, and how he should operate.
&ldquo;Good topic, Dave.&rdquo;
Dave responds: Good points, dear reader. And everything you lament goes hand-in-hand with the corruption of the currency.&nbsp;
The end of the gold-linked dollar in 1971 &mdash; however tenuous the link was by that time &mdash; set in motion both the hollowing out of the middle class and the &ldquo;financialization&rdquo; of the economy.&nbsp;
You wanted to get ahead? You had to adopt the earning-and-burning lifestyle &mdash; which doesn&rsquo;t allow much room for giving children the guidance they need.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Oh, no, no,&rdquo; objects a longtime reader after I casually labeled Goldman Sachs an &ldquo;investment bank&rdquo; yesterday, distinct from the likes of Chase and Citi.
&ldquo;Goldman is a deposit-taking commercial banking institution, don'tcha know?... fully able to hit up the Fed''s discount window.
&ldquo;Definitely not an investment bank. Absolutely not. No way. Think of them as a close cousin of Bailey Brothers Building and Loan and its officers as real-life Jimmy Stewarts.&rdquo;
Dave: Heh. Of course I was well aware of the history when I wrote what I wrote yesterday.
Goldman infamously converted from an investment bank to a &ldquo;commercial bank&rdquo; during the 2008 financial crisis so it could get access to emergency loans from the Federal Reserve&rsquo;s discount window. (Morgan Stanley did the same.)
The company did make a foray into online banking for the hoi polloi about a decade ago under the brand &ldquo;Marcus.&rdquo; But this segment of the business accounts for only a tiny fraction of GS&rsquo; revenue. Depending on how you parse the 10-K forms, it&rsquo;s as little as 1%.
Still&hellip; for purposes of the next financial crisis&hellip; Goldman remains every bit as much a &ldquo;commercial bank&rdquo; as the First National Bank of East Podunk. And don&rsquo;t you forget it!

FMF-Issue-071526-Featured

[UPDATE] Buffett’s Sudden About-Face

<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 Price of Admission
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Senior members of the executive branch &mdash; who have access to privileged information &mdash; shouldn&rsquo;t be using it to get rich.&rdquo;
So said Sen. Josh Hawley (R-Missouri) in 2023. It&rsquo;s right there in our voluminous archives: He drew up a bill that would have banned senior executive branch officials from owning or trading individual stocks.
At the time The Wall Street Journal had uncovered all manner of conflict of interest throughout the executive branch &mdash; including 2,600 officials who owned shares of companies overseen by their agencies.
But that was during Bidentime. Near as we can tell, Hawley has lost interest in the cause now that a Republican is back in the White House.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Shortly before the Independence Day holiday, the White House disclosed Donald Trump&rsquo;s stock-trading activity during calendar year 2025.
All told there were more than 21,000 transactions in his accounts &mdash; many of them held in a trust run by Donald Jr.&nbsp;
Perhaps the most eyebrow-raising trades occurred on April 8 &mdash; 327 buys totaling $3.6 million, and no sells.
The next day was when the president walked back a huge swath of his &ldquo;Liberation Day&rdquo; tariffs. The S&amp;P 500 leaped 9.5% higher, the biggest one-day percentage gain since 2008. The Nasdaq soared 12.2%, the biggest one-day percentage gain since 2001.
Wild coincidence? &ldquo;Neither the president nor his family has ever engaged&mdash;or will ever engage&mdash;in conflicts of interest,&rdquo; said White House spokeswoman Anna Kelly.
Given all of the <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition">suspicious trading activity</a> this year surrounding the Iran war and the various &ldquo;peace is at hand&rdquo; articles from Axios reporter Barak Ravid&hellip; next year&rsquo;s disclosures ought to be a gas.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Last week brought news that the administration is willing to share the wealth, as it were.
From the Reuters newswire&hellip;
<blockquote>Trump Media &amp; Technology Group has unveiled a paid-for, licensed data feed that will give banks and trading firms &ldquo;the fastest&rdquo; access &zwnj;to posts from influential Truth Social accounts, such as President Donald Trump's, whose posts often move global markets.</blockquote>
<blockquote>The product, called "Truth API," will deliver posts from the 10 most influential accounts to customers at a significantly faster pace than a regular push notification on the Truth Social platform, a spokesperson said.</blockquote>
<blockquote>The feed is designed for organizations "most impacted by the cost of a delay in information," such as algorithmic trading firms, the company said in a statement. "Until now... firms that prioritize tracking influential Truth posts have relied on manual monitoring. Truth API closes the gap."</blockquote>
The Financial Times advanced the story with the revelation that potential clients would be charged as much as $100,000 a month &mdash; although clients who committed to a three-year plan would get a discounted rate of $60,000.
On CNN, anchor Dana Bash was beside herself. &ldquo;It appears to be yet another example of the Trump family profiting off of his presidency.&rdquo;&nbsp;
She then debriefed reporter Dave Goldman, who addressed the most obvious question&hellip;
<blockquote>Yeah, it&rsquo;s legal. And this isn&rsquo;t the only company that&rsquo;s doing this. X, owned by Elon Musk, and Meta, others either offer for free or sell high-speed access to the data that&rsquo;s available on their platforms. But here&rsquo;s the key. President Trump owns the platform that he&rsquo;s making news on. And so by selling access to it, he is thereby making money.&nbsp;</blockquote>
<blockquote>Remember, he owns 41% of the parent company, Trump Media, which owns Truth Social. And the company could use some money, Dana, because it only made $3 million in ad revenue last year. It lost, get this, $711 million in operating losses. This is not a profitable company, and they&rsquo;re looking for ways to make some money.</blockquote>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Does Goldman not understand the distinction between Trump Media and X, Meta, etc?
Let me spell it out for him: Unlike X and Meta, the product for sale here is advance notice of proclamations about public policy being implemented with taxpayer dollars.
Really, don&rsquo;t you deserve a cut of the $100,000 per month that banks and hedge funds will be paying for this valuable information? Or better yet, a cut of the profits they make from their advance knowledge?
But good luck suing for redress, even if there&rsquo;s a relevant statute currently on the books.
You could bring millions of your fellow taxpayers together to file a class action, but the courts would surely find some dodge to deny you &ldquo;standing.&rdquo; That is, you didn&rsquo;t suffer direct harm from this arrangement because no one took money from your bank account or your paycheck.
Absent any relief from the courts, your only recourse is the proverbial strongly worded letter.
That, and the fact that several Paradigm trading services such as Altucher&rsquo;s True Alpha and Rickards&rsquo; Insider Intel leverage publicly available information to unearth legal insider activity before market-moving news breaks.&nbsp;
As we said at the time of Hawley&rsquo;s bill in 2023, &ldquo;Get mad or get rich.&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" />&ldquo;Planning for a Wider War&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Another Monday, another claim from Washington that &ldquo;Iran wants to make a deal&rdquo; &mdash; and another dip in the oil price.
U.S. oil futures popped last night to nearly $85 amid the escalation in the Iran war. Citing a Trump administration official, The New York Times said F-16s and F-35s currently based in Europe were being dispatched to the Middle East, as well as additional refueling aircraft.
&ldquo;The U.S. is planning for a wider war,&rdquo; another U.S. official told The Washington Post &mdash; although this individual added the caveat that air defenses and other munitions have been badly depleted already. &ldquo;We do not have enough to safely sustain operations, and I don&rsquo;t think the White House is aware of that.&rdquo;
But then Secretary of State Marco Rubio said Tehran is looking to cut a deal &mdash; and all of Sunday&rsquo;s price pop vaporized. At last check, U.S. oil futures are back to $82.23 &mdash; slightly lower than they were at the end of last week.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />That&rsquo;s even though the war is potentially heating up on its western front &mdash; with the Iran-aligned Houthi faction of Yemen declaring a maritime embargo against Saudi Arabia.&nbsp;
If the Houthis are serious about enforcing this declaration, that effectively cuts off any route for Saudi Arabian oil exports. While the Strait of Hormuz has been shut down, Saudi Arabia has still been able to move some of its oil through a pipeline to its western coast on the Red Sea. From there, it transits the slender Bab al-Mandab waterway to reach Asian customers.
But if access to the Bab is shut down? Then that oil has to go through the Suez Canal and all the way around Africa.&nbsp;
The meme-o-sphere is having great fun with all of this&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/B1Z3dDXXIegcYqCgP8dde/11c19e751d7261f762ac19a8b97ee310/FMF-Issue-072026-1.jpg" alt="Fake Cease fire news MEME" width="540px" />
&hellip; but the powers that be continue to keep a lid on oil futures for the moment.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />As for stocks, the major U.S. indexes are a mixed bag.
The S&amp;P 500 is up 0.4% to 7,487 while the Nasdaq is up more than three-quarters of a percent to 25,724. The Dow is slightly in the red, but still over 52,000. Congratulations to Rickards&rsquo; Insider Intel readers who booked 50% gains at the end of last week playing call options on ConocoPhillips.
Crypto is regaining some of its recent mojo &mdash; Bitcoin well over $65,000 and Ethereum a hair away from $1,900.
<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" />Gold: The View From Boca
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Gold continues to hold the line on $4,000 as &ldquo;the larger monetary story remains intact for the yellow metal,&rdquo; says Paradigm mining-and-energy authority Byron King.
&ldquo;Central banks continue to diversify reserves. Investors still want an asset that is no one else&rsquo;s liability. And the dollar, for all its current strength and historic staying power, is no longer the unquestioned storehouse of global trust.&rdquo;
Byron delivered a keynote earlier this month at the Rule investment symposium in Boca Raton, Florida &mdash; hosted by the renowned mining financier Rick Rule. What&rsquo;s more, Byron had the chance to speak one-on-one with some of the industry&rsquo;s sharpest minds.
&ldquo;I spoke with Andy Schectman of Miles Franklin, a gold and silver dealer who dwells close to the beating heart of physical metal markets. His point was simple: The world is still buying gold, and much of that buying is strategic, not speculative.
&ldquo;China, for example, has used the recent slump to buy gold &lsquo;off the books,&rsquo; so to speak. This means Chinese buyers are accumulating metal outside reportable state-level channels. According to Andy, you just have to know where to look &mdash; and yes, airplanes are flying beaucoup gold to Chinese ports of entry.
&ldquo;Brien Lundin, who runs the annual New Orleans Investment Conference, made a similar point from the Florida stage. Monetary debasement has not gone away; it has merely been upstaged by louder headlines: Hollywood celebrities, World Cup soccer and Washington soap-opera politics.
&ldquo;Meanwhile, about 40% of the annual U.S. budget is outright deficit, and the national debt continues its space-shuttle trajectory upward. Can or will the U.S. ever pay down its approximately $40 trillion of debt &mdash; and that&rsquo;s just the on-the-books debt? No way.&rdquo;
The dollar price of gold might be down from its January peak, but the Midas metal still &ldquo;protects against monetary disorder.&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" />Russia&rsquo;s Dash for Cash
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />"Having cash on hand gives you some sense of control and security," a woman in Moscow tells the BBC. "If there's an emergency in the city, I know I'll still be able to buy basic necessities, even if the mobile network goes down."
As you might be aware, Ukraine is stepping up its drone attacks deep inside Russian territory &mdash; including the capital. Because drones rely on wireless phone networks to reach their targets, Russian authorities are increasingly resorting to mobile internet shutdowns.
That has the effect of shutting down credit card payments and every other kind of electronic transaction.
Hence, the dash for cash. After reviewing figures from the Russian central bank, the BBC concludes that the nation has added 1.56 trillion rubles into circulation during the first six months of the year &mdash; an amount equal to $20 billion. That&rsquo;s the highest figure on record except for the COVID year of 2020.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Cash isn&rsquo;t just a necessity for transactions: It&rsquo;s also a way to avoid the Russian taxman.
In January the Kremlin boosted Russia&rsquo;s value-added tax from 20% to 22% &mdash; and it lowered the threshold at which smaller businesses have to start paying it.
&ldquo;With margins squeezed by higher taxes and a slowing economy,&rdquo; says the BBC, &ldquo;pharmacies, restaurants, beauty salons and corner shops are increasingly steering customers toward cash to keep more income off the books.&rdquo;
"This is a very worrying moment,&rdquo; says Taras Skvortsov, CFO at Russia&rsquo;s biggest lender Sberbank. &ldquo;We are not seeing cash return to the banking system through cash collection, ATMs or self-service terminals," he tells the Interfax news agency. "It is staying in people's hands".
A survey by a trade group representing small and medium-sized businesses finds 6% of respondents saying they&rsquo;re turning to &ldquo;gray schemes&rdquo; to skirt the tax burden.&nbsp;
And those were the ones willing to fess up &mdash; the real number is likely higher.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Generational Conflict, Continued
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Hi Dave &mdash; just wanted to reply to a reader who claimed that dads working white-collar jobs outside the home led to the &rsquo;60s protests and hippies.&nbsp;
&ldquo;Firstly, most white-collar jobs were already outside the home prior to the &rsquo;50s. The only difference in the &rsquo;50s as far as I can tell is there was a better relationship between labor and business and hours were more formalized.
&ldquo;So it seems unlikely that dads outside the home led to the hippies seeing as it was already the standard going back to the Industrial Revolution.
&ldquo;But what did change was moms starting to work in the &rsquo;70s partly due to the stagflation at the time, and it increasingly became more common due to stagnant wages and a decline in manufacturing, which as you correctly mentioned were due to end of the gold standard and financialization. There&rsquo;s no signs this can or will be reversed anytime soon.
&ldquo;Anyway, the main point is that the &rsquo;60s and &rsquo;70s upheavals seemed to have partly led to the decline in the nuclear family rather than the other way around.
&ldquo;And to address the tweet about rich parents not having to see their kids struggle, they&rsquo;re not very good parents if that&rsquo;s the case. That&rsquo;s all from me for now.&rdquo;
Dave responds: Thanks for the input. I think we&rsquo;re going to shut down this thread as of today. It started with an ambiguous tweet and went off on several unexpected tangents!

FMF-Issue-072026-featured

The Price of Admission

<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" />This Isn&rsquo;t the Endgame
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Perspective: A week ago yesterday, U.S. oil futures traded for under $69. For a while this morning, they were over $81.&nbsp;
That&rsquo;s what the resumption of the Iran war has done.
As you might recall, Donald Trump projected at the start of the war in early March that it would last four&ndash;five weeks, although he allowed that the U.S. military has the &ldquo;capability to go far longer than that.&rdquo;
Asked yesterday about the resumption of U.S. bombing, he said, &ldquo;We were in Vietnam for 19 years. We&rsquo;re here for four months.&rdquo;&nbsp;
Moving the goalposts much?&nbsp;
Jim Rickards&rsquo; subscribers aren&rsquo;t surprised. In early June, he told Insider Intel readers that Trump&rsquo;s only options were surrender, stalemate and escalation.
&ldquo;Surrender won&rsquo;t happen because the political damage to Trump and the loss of face are too much for Trump to bear,&rdquo; he said. &ldquo;The Iranians won&rsquo;t agree to anything that makes Trump look good. Why should they? They&rsquo;re winning the war.&nbsp;
&ldquo;Stalemate, in the form of a ceasefire, may continue, but that won&rsquo;t reopen the Strait of Hormuz.&rdquo;
Which left only one remaining option &mdash; escalation.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Now that Trump has made that choice, investors need to understand that escalation is not an endgame,&rdquo; Jim says.&nbsp;
&ldquo;The U.S. can destroy more targets and inflict enormous damage on Iran, but turning that destruction into victory is another matter entirely.
&ldquo;The administration&rsquo;s apparent strategy is to use overwhelming American military power to raise the cost of the war until Iran accepts U.S. terms.
&ldquo;The problem is that destroying targets and winning wars are two different things.
&ldquo;History offers little evidence that strategic bombing by itself can force a large and determined country to surrender. Germany failed to bomb Britain into submission during the Battle of Britain. Allied bombing destroyed much of Germany, but victory required Allied armies advancing from the west and the Red Army from the east. The United States spent years bombing North Vietnam without achieving its political objectives.&nbsp;
&ldquo;Airpower can destroy military assets, degrade infrastructure and impose enormous costs. But bombing is not the same as victory.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;The economic consequences are cumulative,&rdquo; Jim goes on.&nbsp;
&ldquo;Every damaged facility takes time to rebuild. Every barrel released from reserves eventually has to be replaced. Every additional disruption to shipping adds cost and uncertainty to the global supply chain.
&ldquo;The danger is a chain reaction that moves from an energy shock to higher inflation, from higher inflation to tighter monetary policy and from tighter monetary policy to a sharp stock market decline and recession.&rdquo;
In his original write-up, Jim said escalation would produce the worst economic consequences of Trump&rsquo;s three options.
&ldquo;Trump has now chosen that path,&rdquo; says Jim.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As the day wears on, U.S. crude futures are pulling back toward $79 as the president has walked back his notion of imposing a toll on Strait of Hormuz shipping.
When we left you yesterday, he&rsquo;d said Washington would charge a toll for vessels wishing to transit the strait &mdash; a sum equaling 20% of the value of the vessel&rsquo;s cargo.
The amount was far greater than anything the Iranian government tried to impose. Nor was there any announcement about how Trump would enforce his wishes.
Perhaps sometime in the last 24 hours, someone sat him down and told him U.S. warships would have to transit the strait and be sitting ducks for Iranian drones and artillery.
And so today brought an Emily Litella &ldquo;Never mind&rdquo; moment.&nbsp;
As Trump posted on his Truth Social site: &ldquo;Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States.&rdquo;
No, he didn&rsquo;t specify which states or any amounts.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In case you&rsquo;re keeping score: The war cost Uncle Sam $103 billion through the end of June.
That&rsquo;s according to Stephen Semler of the Center for International Policy, who&rsquo;s examined everything from government data to open-source intelligence to media reports. The figure, he says, is &ldquo;larger than all but three countries&rsquo; military budgets.&rdquo;
By his reckoning, nearly half the total &mdash; $46.7 billion &mdash; has gone for weapons. Another $28.5 billion has gone for operations and another $20.3 billion for losses of damaged or destroyed bases and other assets.
And those are only the direct costs. Semler did not account for veterans&rsquo; care or the interest on the national debt that the war will accrue&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" />Bank Earnings! IBM! Inflation!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Aside from the war and oil prices, it&rsquo;s one of those days when there&rsquo;s an enormous amount of market-moving news &mdash; and noise.
For starters, earnings season is underway. In recent years, the release of JPMorgan Chase&rsquo;s quarterly numbers has marked the &ldquo;traditional&rdquo; start of earnings season.
But this morning, not only did JPM release its numbers. So did all of the biggest commercial banks &mdash; Bank of America, Citi, Wells Fargo. Oh, plus Goldman Sachs on the investment banking side.
We won&rsquo;t belabor the numbers since you can see them anywhere. Suffice to say Wells Fargo is the only one of the bunch whose shares are in the red. Goldman is up over 7.5% at last check.
But then there&rsquo;s IBM &mdash; whose shares are down 23% on the day after numbers that fell short of expectations.
CEO Arvind Krishna says last month, clients swore off IBM&rsquo;s software and infrastructure offerings &mdash; plowing money instead into hardware like memory chips. &ldquo;While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization.&rdquo;
This morning in The Map, Mason Sexton told his readers the price movement is a &ldquo;severe market overreaction&hellip; These software deals were not lost to competitors; they were merely delayed.&rdquo; From where he sits Big Blue is &ldquo;a generational buying opportunity.&rdquo;&nbsp;
[Note well: Do not freelance this if you&rsquo;re not one of his subscribers. Mr. Sexton&rsquo;s strategy relies on precise entry and exit points as well as moving stops. We&rsquo;re just passing along his insight.]
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And then there are the June inflation numbers &mdash; which at this point look hopelessly out of date.
If the Labor Department is to be believed, consumer prices fell 0.4% from May to June &mdash; helped by a 9.7% drop in gasoline prices.
Thus, the official year-over-year inflation rate climbed down from 4.2% in May to 3.5% in June.
As always, any resemblance between these figures and your own cost of living is purely coincidental. And from the vantage point of this week, the drop in energy prices looks like ancient history.
For whatever it&rsquo;s worth, Kevin Warsh is delivering his first testimony to Congress this morning as Federal Reserve chair &mdash; promising that &ldquo;if we get policy right &mdash; and we will &mdash; the inflation surge of the last five years will be a thing of the past.&rdquo;
His heart is presumably in the right place &mdash; but <a href="https://paradigmpressroom.com/post/declare-your-independence-from-inflation">history is not on his side</a>.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Put it all in a blender and you have a decidedly mixed picture for the major U.S. stock indexes.
The Dow is modestly in the red &mdash; mostly because IBM is one of its 30 component stocks. The S&amp;P 500 is up about a quarter percent while the Nasdaq is up three-quarters of a percent and back over 26,000.
Bonds and precious metals are staging a stronger rally. The yield on a 10-year Treasury note sits at 4.58%. Gold has bounced off the $4,000, sitting at $4,062. Silver&rsquo;s up over a buck to $58.64.
Crypto is trying (again) to break out &mdash; Bitcoin approaching $65,000 and Ethereum within sight of $1,900.
<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 Center Vibe Check
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> New York is the first state to enact a statewide moratorium on AI data centers.
Gov. Kathy Hochul will sign an executive order today &mdash; a one-year pause &ldquo;giving us the time to establish the nation's strongest protections for ratepayers, our communities and our energy grid,&rdquo; she promises.
The order is less sweeping than a bill that passed the legislature last month; Hochul has not yet decided whether to sign it.
&ldquo;The order will take effect immediately,&rdquo; says The New York Times. &ldquo;It is not expected to affect the data demands of back-office financial services, hospitals or universities.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Lest you think the political backlash is only a blue-state thing&hellip; last month Texas Gov. Greg Abbott &ldquo;released sweeping regulatory recommendations on data centers,&rdquo; reports the Texas Tribune.
Abbott has a laundry list of AI priorities when the legislature returns to Austin next year &mdash; including a requirement that new data centers add power generation to the state&rsquo;s grid and that they cover their own grid interconnection and infrastructure costs.
In addition, Abbott wants to nix the sales tax exemption for data centers &mdash; an incentive he labels &ldquo;outdated&rdquo; and &ldquo;unnecessary.&rdquo;&nbsp;
By one estimate, the Texas state government would collect another $3.2 billion in sales tax revenue over the next two years if the exemption goes away.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, a Bloomberg analysis finds a decidedly bipartisan bent this year in the campaign ads criticizing data centers.
&ldquo;Since December, 25 federal and gubernatorial candidates have run ads either promoting their own opposition to data centers or slamming their opponent for supporting these complexes,&rdquo; says Bloomberg&rsquo;s summary of the analysis.&nbsp;
&ldquo;Twelve &mdash; nearly half &mdash; are Republicans.&rdquo; That&rsquo;s even though the Trump administration is promoting data center expansion.
&ldquo;We&rsquo;re seeing this play out on both sides,&rdquo; says Clifford Young of the Ipsos consulting firm. &ldquo;Americans believe the system is broken. Republicans tend to be more anti-establishment today than Democrats, so this is an easy softball in this electoral cycle.&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" />Money Miscellany
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The mood on Main Street is improving measurably.
The National Federation of Independent Business is out with its monthly Small Business Optimism Index. At 97.4, the headline number is the highest in four months &mdash; and close to the survey&rsquo;s long-term average going back to the mid-1970s.
&ldquo;Lower fuel costs provide welcome relief for businesses as well as consumers, with firms anticipating improved operating conditions over the next six months,&rdquo; says NFIB chief economist Bill Dunkelberg.&nbsp;
(Well, the survey was conducted last month.)
&ldquo;While there have been improvements in the overall environment,&rdquo; he adds, &ldquo;high interest rates and modest economic growth are causing owners to approach hiring and capital spending with caution.&rdquo;
On the often-revealing portion of the survey where respondents are asked to identify their single most important problem, 21% said inflation. &ldquo;[We] will not attempt any growth or expansion of services until inflation and price increases are reduced,&rdquo; says the owner of a construction firm in Indiana.
Tied for second place at 19% were taxes and &ldquo;quality/availability of labor&rdquo; &mdash; which means good help is still hard to find.&nbsp;
Everything else was in single digits, including &ldquo;poor sales&rdquo; which had been a growing problem earlier this year.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the record: Yesterday Donald Trump signed an executive order shrinking the size of two national monuments in Utah.
Presumably the move will open up the lands to mineral development as part of the &ldquo;American Birthright&rdquo; agenda that Jim Rickards has been telling his readers about for the last year and a half.
We&rsquo;ve been anticipating this specific move since the spring of 2025: There&rsquo;s <a href="https://paradigmpressroom.com/post/trump-revives-clinton-scandal">a fascinating backstory harking back to the Clinton years</a>.
<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" />Thought for the Day?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Y&rsquo;know, you could interpret this social media post at least a couple of different ways&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7xUEmMBeClgGYL9o9BM8yj/d34fa9f81f73e12b9723d9e1eda3355c/FMF-Issue-071426-1.jpg" alt="Thought for the day post" width="540px" />
But rather than incite any generational warfare in the mailbag, we'll leave the interpretation to you.

FMF-Issue-071426-Featured

This Isn’t the Endgame

<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" />One Chart to Live By
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> There&rsquo;s a chart I&rsquo;ve been obsessing over for a few days. It&rsquo;s time that you take a good look at it.
Here&rsquo;s how it appeared on X, courtesy of a Swiss money manager named Thierry Borgeat. Study it closely&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/78YAUnTb7IHvnR9TB2QL2N/b71240132316310a97f1c9cf3366ed8c/FMF-Issue071326-1.jpg" alt="AVG annual real returns" width="540px" />
Borgeat&rsquo;s point is that the conventional wisdom about how you need to stay in the market for the long haul &mdash; because the market goes up an average 7% a year after inflation &mdash; rarely works out in real-world experience.
&ldquo;Notice the rhythm. A golden era, then a dead one,&rdquo; he says. &ldquo;Feast, famine, feast, famine.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Everyone who started investing after 2009 has only known the feast,&rdquo; Borgeat goes on.
&ldquo;Buy the dip worked every single time. Not because it's a law. Because you happened to live inside the blue bar.&rdquo;
On one level, I&rsquo;ve known this overview of market history for years&hellip;
<ul>
<li>If you bought at the top just before the 1929 crash, you didn&rsquo;t get back to breakeven until 1954</li>
</ul>
<ul>
<li>The Dow industrials peaked at 1,000 in 1966 &mdash; and couldn&rsquo;t surpass that level for good until 1982</li>
</ul>
<ul>
<li>The dot-com bubble burst in early 2000, at which time the S&amp;P 500 was around 1,500. The index returned to that level in 2007 and then came the financial crisis. The 1,500 level wasn&rsquo;t surpassed for good until April 2013. Brutal.</li>
</ul>
But seeing the visuals really brings it home &mdash; especially when you realize we&rsquo;re now 13 years into the current blue bar. We&rsquo;re closer to the end of this bull run than the beginning.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Note well: That chart shows the returns after inflation.&nbsp;
Recall the research we&rsquo;ve been citing regularly for a few years now: Once inflation sails past the 5% mark &mdash; as it did in 2022 &mdash; it typically takes a decade to get back to &ldquo;normal&rdquo; 2% inflation of the sort we experienced during the 2010s.&nbsp;
So we&rsquo;re looking at elevated inflation levels for the rest of this decade and into the 2030s. That means the stock market has to rally that much more to overcome the inflation rate &mdash; and for your portfolio to stay ahead of the cost of living.
Very few portfolio managers are preparing their clients for this outcome. They&rsquo;re operating under recency bias &mdash; assuming the 2% inflation of the 2010s will return any day now.
Bottom line: You can&rsquo;t invest in an index fund and hope your portfolio will stay ahead of a rising cost of living. Not now.&nbsp;
<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" />Trump Wants a Toll
<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 starting the week over $3 higher &mdash; $74.72 &mdash; now that it&rsquo;s becoming obvious to everyone that peace in the Persian Gulf is no longer &ldquo;at hand.&rdquo;
U.S. airstrikes hit Iranian oil infrastructure over the weekend. Iranian airstrikes hit U.S. bases in Bahrain, Qatar and Kuwait (as they did in March).&nbsp;
Then Tehran announced it was shutting down the Strait of Hormuz. This morning Donald Trump tried to one-up Tehran by resuming the U.S. blockade of Iranian ports &mdash; and by insisting that Washington will charge a toll for vessels wishing to transit the Strait of Hormuz.&nbsp;
Per Trump&rsquo;s declaration on social media, the toll will equal 20% of the value of every vessel&rsquo;s cargo &mdash; far more than the toll Tehran seeks to impose.
How he intends to enforce the toll, he did not say.
By the most authoritative count we can locate, only three vessels transited the Strait of Hormuz in the last 24 hours, and only one of those was an oil tanker. Here it is on a chart going back to last December&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4Lvw6WfnuLG7wEEH3YHSRG/1db863674aefb57b4535bea7e43187aa/FMF-Issue071326-2.jpg" alt="Hormuz is closer to being closed than open" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Think about what actually happened to the world's energy infrastructure these past four months,&rdquo; says Paradigm&rsquo;s Zach Scheidt, writing late last week for Rickards&rsquo; Insider Intel.
&ldquo;Iran's strike on Qatar's Ras Laffan complex knocked out a sizable portion of the country's LNG capacity, and that damage will take several years to repair. Refineries, terminals and loading facilities across the Gulf took similar hits.&rdquo;
At the same time, &ldquo;there&rsquo;s a secondary issue that will need to be addressed with stockpiles.
Governments and companies hold reserves of crude and refined products. Gasoline, diesel, jet fuel. Those reserves got drained hard in the first months of this war. The IEA directed the release of 400 million barrels. Governments around the world tapped strategic reserves to keep the lights on and the trucks moving.
&ldquo;Every one of those barrels has to be replaced.
&ldquo;So you have normal economic demand, and stacked on top of it, a second wave of demand from everyone who needs to refill what they burned through. Meanwhile, supply is constrained by infrastructure that takes years to rebuild.
&ldquo;The setup we&rsquo;re looking at here is rare. You have structural supply damage that takes years to repair, a second wave of demand coming from every reserve that needs refilling, all while the market keeps pricing in a peace that hasn't actually arrived.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Don&rsquo;t count out the highflying semiconductor stocks yet.&nbsp;
The benchmark Philadelphia Semiconductor Index (SOX) is down 15% from its nosebleed peak on June 22 &mdash; but Zach Scheidt, this time in a briefing for Altucher&rsquo;s True Alpha, says Micron Technology (MU) is changing the game.
Last week, &ldquo;Micron poured the first concrete at its new fab in Clay, New York, and announced a fresh round of investment aimed at strengthening the U.S. semiconductor supply chain.
&ldquo;The commitment runs up to $3 billion and lifts the company's total domestic investment target through 2035 from $200 billion to more than $250 billion. Roughly $500 million of it goes to GlobalWafers to expand wafer development and manufacturing in Texas, paired with a 10-year supply agreement for raw silicon wafer capacity.
&ldquo;Micron's New York facility will be the largest semiconductor manufacturing site in U.S. history.
&ldquo;The market noticed. Shares surged as much as 9% intraday, and the buying spread to semiconductor equipment makers and related stocks. By Thursday's close the Nasdaq had climbed 1.3% as the AI trade was able to plant its foot firmly on the ground, preparing to regain momentum.&rdquo;
Yes, semiconductors are notoriously a cyclical business &mdash; like the oil business, subject to both spectacular booms and epic busts. But &ldquo;nobody breaks ground on the largest chip plant in American history if they think the demand is a mirage,&rdquo; says Zach.&nbsp;
&ldquo;Concrete is a confession that management firmly believes in the next decade of development, and it says it just as loud as any earnings call could.&rdquo;
No, it&rsquo;s not an all-clear to pile back into chip stocks. &ldquo;We have to see how this rebound materializes,&rdquo; says Zach. &ldquo;The fact still remains that plenty of money walked out of the AI trade for the time being.&rdquo;
And still more is walking out today, with the SOX down over 4.5% as we check our screens.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Those losses in the chip stocks are dragging down the Nasdaq &mdash; over more than 1.25% as we write and back below 26,000.
The S&amp;P 500 is holding up better, down two-thirds of a percent at 7,527. The Dow is off a third of a percent, back under 52,500.
Bonds are reacting badly to the trouble in the Persian Gulf: Rising oil prices translate to rising inflation expectations which translate to rising interest rates. The yield on a 10-year Treasury note is up to 4.61% &mdash; not far from the 4.66% of last May, which was a 16-month high.
Precious metals are getting clobbered, too: Gold is off nearly 3% and back under $4,000 while silver is down 3.8% to $57.49.
Crypto is holding its own, Bitcoin over $62,000 and Ethereum a little under $1,800.
There&rsquo;s Still Life in the Semis
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Don&rsquo;t count out the highflying semiconductor stocks yet.&nbsp;
The benchmark Philadelphia Semiconductor Index (SOX) is down 15% from its nosebleed peak on June 22 &mdash; but Zach Scheidt, this time in a briefing for Altucher&rsquo;s True Alpha, says Micron Technology (MU) is changing the game.
Last week, &ldquo;Micron poured the first concrete at its new fab in Clay, New York, and announced a fresh round of investment aimed at strengthening the U.S. semiconductor supply chain.
&ldquo;The commitment runs up to $3 billion and lifts the company's total domestic investment target through 2035 from $200 billion to more than $250 billion. Roughly $500 million of it goes to GlobalWafers to expand wafer development and manufacturing in Texas, paired with a 10-year supply agreement for raw silicon wafer capacity.
&ldquo;Micron's New York facility will be the largest semiconductor manufacturing site in U.S. history.
&ldquo;The market noticed. Shares surged as much as 9% intraday, and the buying spread to semiconductor equipment makers and related stocks. By Thursday's close the Nasdaq had climbed 1.3% as the AI trade was able to plant its foot firmly on the ground, preparing to regain momentum.&rdquo;
Yes, semiconductors are notoriously a cyclical business &mdash; like the oil business, subject to both spectacular booms and epic busts. But &ldquo;nobody breaks ground on the largest chip plant in American history if they think the demand is a mirage,&rdquo; says Zach.&nbsp;
&ldquo;Concrete is a confession that management firmly believes in the next decade of development, and it says it just as loud as any earnings call could.&rdquo;
No, it&rsquo;s not an all-clear to pile back into chip stocks. &ldquo;We have to see how this rebound materializes,&rdquo; says Zach. &ldquo;The fact still remains that plenty of money walked out of the AI trade for the time being.&rdquo;
And still more is walking out today, with the SOX down over 4.5% as we check our screens.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Those losses in the chip stocks are dragging down the Nasdaq &mdash; over more than 1.25% as we write and back below 26,000.
The S&amp;P 500 is holding up better, down two-thirds of a percent at 7,527. The Dow is off a third of a percent, back under 52,500.
Bonds are reacting badly to the trouble in the Persian Gulf: Rising oil prices translate to rising inflation expectations which translate to rising interest rates. The yield on a 10-year Treasury note is up to 4.61% &mdash; not far from the 4.66% of last May, which was a 16-month high.
Precious metals are getting clobbered, too: Gold is off nearly 3% and back under $4,000 while silver is down 3.8% to $57.49.
Crypto is holding its own, Bitcoin over $62,000 and Ethereum a little under $1,800.
<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" />Startling Stat
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The sky started changing dramatically when Starlink began launching its satellites in 2019&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5tVeZcOsE8ldiNTh9bGbUQ/8d59bf1d5a92a5bfcd570e6587947358/FMF-Issue071326-3.jpg" alt="Starlink changed everything" 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: Data Centers
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We got an appreciative note after <a href="https://paradigmpressroom.com/post/ai-data-centers-and-chinese-stooges">Friday&rsquo;s edition</a> deconstructing a New York Times article strongly implying that people who oppose the construction of data centers are dupes of the Chinese and Russians.
&ldquo;Dave, thanks for rooting out Nina Jankowicz. That pretty much says it all for the validity of the source.&nbsp;
&ldquo;And NYT, enough said there too - a bunch of mainstream nonsense to create for fear and division.&rdquo;
Dave responds: I can&rsquo;t help wondering if we&rsquo;re at &ldquo;peak data centers&rdquo; here in the summer of 2026&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6e3A99apsAqV3NFYZNq5UO/ff161850753b60d1bc0a5d5bb0d0574c/FMF-Issue071326-4.jpg" alt="Data Center construction growth is slowing" width="540px" />
As I said 18 months ago (and again last week), AI faces two huge constraints that digital technology has never grappled with until recently &mdash; limited capacity in the U.S. electric grid and the rising cost of borrowed money.
By now, everyone knows about the electricity part. And today&rsquo;s Wall Street Journal acknowledges the cost of financing: &ldquo;Over the past several weeks, the investment-grade corporate bond market has struggled to absorb a combined $75 billion of bond issuance from Nvidia, SpaceX and Amazon.com.&rdquo;
The so-called hyperscalers like Amazon, Google and Meta can no longer tap their free cash flow for the data-center buildout. So they need to take on debt.&nbsp;
And it sounds as if Wall Street is approaching a threshold where it says no more.
To be continued&hellip;

FMF-Issue071326-Featured

One Chart to Live By

<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 Data Centers and Chinese Stooges
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> If you oppose the construction of an AI data center in your neck of the woods, then you must be a dupe of the ChiComs and the Russkies and the Iranians.
Seriously, that&rsquo;s the gist of a front-page New York Times article today.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1mwKCpZ0D6wDjpGxfRfYp9/9c478f526ccf38a42ba6c7566dd2a362/FMF-Issue-071026-1.jpg" alt="pub" width="540px" />
The key paragraph: &ldquo;China, Russia and, to a lesser extent, Iran have sought to use state media outlets to turn the controversy over data centers in the United States into &lsquo;a domestic fracture point,&rsquo; according to a new analysis by Alethea, a threat intelligence company, which identified scores of articles and posts on social media this year.&rdquo;
Here&rsquo;s one meme by way of example&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/iKY7iGf1DBI32O1Qf4oQJ/a9dcedf38eeaa5ec55f7b9472accac83/FMF-Issue-071026-2.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" /> So&hellip; what&rsquo;s this Alethea outfit all about? The article doesn&rsquo;t really say. It just assumes we should accept the company&rsquo;s claims as credible.
Based in Washington, D.C., Altethea Group &ldquo;is a technology company helping the Fortune 500, private companies, democracies and nonprofits protect themselves from harms stemming from disinformation, misinformation and social media manipulation,&rdquo; the company states on its LinkedIn page.
Hmmm&hellip;
Perhaps for understandable reasons, Alethea does not identify its major clients. So it&rsquo;s hard to evaluate whether the company is a neutral observer here or if it&rsquo;s got a significant conflict of interest.&nbsp;
But Alethea does have a somewhat well-known former employee &mdash; Nina Jankowicz, named by the Biden administration in April 2022 to head up a &ldquo;Disinformation Governance Board.&rdquo; Its purpose &mdash; strong-arming social media platforms to censor posts that met with White House disapproval.&nbsp;
The backlash against this budding Ministry of Truth was so severe that Jankowicz resigned after just three weeks and the board <a href="https://5minforecast.com/2022/07/20/when-cash-is-all-youve-got/#320">was disbanded</a>.
As it turns out, Jankowicz was on Alethea&rsquo;s payroll as &ldquo;director of external engagement&rdquo; for a few months before her appointment. And it seems Alethea founder Lisa Kaplan is all on board with U.S. government efforts to combat &ldquo;disinformation.&rdquo;&nbsp;
&ldquo;Disinformation will become the next iteration of warfare,&rdquo; Kaplan said during a 2020 podcast interview. &ldquo;The government should identify vulnerable populations and develop support plans.&rdquo;
Yeah, The New York Times said nothing about any of this by way of background.
We&rsquo;ll deconstruct what the paper did instead in Bullet No. 2&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Anatomy of a Narrative
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> What the Times did instead was take Alethea&rsquo;s research at face value to slyly impugn the motives of people who oppose data center construction.
Behold this remarkable passage early in the piece&hellip;
<blockquote>These campaigns, whose impact on public opinion remains to be seen, have raised alarms in Washington, where AI is seen as a top issue heading into this year&rsquo;s midterm elections.</blockquote>
<blockquote>The foreign efforts appear intended to stoke the debate over data centers that has united political figures across the political spectrum &mdash; from Sen. Bernie Sanders of Vermont, a progressive, to Stephen K. Bannon, the erstwhile adviser to President Trump.</blockquote>
<blockquote>&ldquo;Foreign actors aren&rsquo;t manufacturing American debates over the future of AI, they are exploiting them,&rdquo; said Jessica Brandt, a former official with the Office of the Director of National Intelligence who tracked foreign influence efforts during the Biden administration.</blockquote>
<blockquote>The goal, she added, is to &ldquo;deepen our divisions in order to dent our appeal and weaken us from within.&rdquo;</blockquote>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> See what they did in these four paragraphs?&nbsp;
First, there&rsquo;s a clause buried in the middle of a sentence where you&rsquo;re liable to overlook it that says the &ldquo;impact on public opinion remains to be seen.&rdquo; Can&rsquo;t play up a detail like that too much when you&rsquo;re trying to foment a moral panic.
Then, they&rsquo;re limiting the respectable boundaries of debate, within the 40-yard lines on a football field. You don&rsquo;t want to be associated with looney-tunes like Bernie Sanders and Steve Bannon, do you? Especially BOTH of them, right?
And finally they bring on some chin-stroking &ldquo;disinformation&rdquo; expert (from the Biden admin, natch) to trot out the hoary old narrative about foreign governments &ldquo;sowing discord.&rdquo;
Remember that? It was <a href="https://5minforecast.com/2017/11/01/might-useful-idiot-russia/">all the rage a decade ago</a> when Russia supposedly unleashed Facebook bots and Twitter trolls on the American populace to poison our civic dialogue.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> To be sure, this narrative has been building for weeks. I just didn&rsquo;t expect to see it front and center in the one corporate news outlet that sets the agenda for the rest.
For starters, none other than Kevin O&rsquo;Leary of Shark Tank fame has invoked the Chinese-stooge argument.&nbsp;
As we mentioned in May, O&rsquo;Leary is bankrolling a massive data center project in rural Utah that&rsquo;s met with <a href="https://paradigmpressroom.com/post/backlash-data-centers/#1">huge backlash</a>. A couple of weeks ago, he accused two Utah organizations and their leaders of being linked to the Chinese government &mdash; an accusation for which he offered no supporting evidence and which he ultimately <a href="https://www.fox13now.com/news/local-news/box-elder-county/kevin-oleary-walks-back-accusations-that-data-center-opponents-are-funded-by-china">walked back</a>.
Also last month, OpenAI generated publicity when it claimed Chinese operatives were using its ChatGPT platform to create anti-data center content for social media. But even the guy who led the investigation for OpenAI conceded that &ldquo;neither campaign appears to have gained much authentic engagement.&rdquo;
Then there was Sen. Tom Cotton (R-Arkansas), the 24/7 warmonger who sent a letter last month to acting Attorney General Todd Blanche: &ldquo;Alarming reports indicate that a network of foreign actors, led by the Chinese Communist Party, is attempting to manipulate U.S. policy and public opinion on data centers.&rdquo;
As the writer Leo Hohmann pointed out, Cotton &ldquo;offered no proof, just innuendo.&rdquo;
Which is more or less what The New York Times did as well. But now that the Times is running with it, you&rsquo;re going to see it everywhere for a few days.&nbsp;
But the data center backlash isn&rsquo;t going away. We&rsquo;ll tackle some other angles &mdash; including the potential investment implications &mdash; next week.&nbsp;
Oh, I&rsquo;m also going to dunk on The Wall Street Journal later in today&rsquo;s edition, but first let&rsquo;s turn our attention to the markets&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" />Markets Today: Good Timing
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The big market story today is the well-timed Wall Street debut of SK Hynix &mdash; the giant South Korean chipmaker.
SK Hynix is one of the &ldquo;Big Three&rdquo; manufacturers of memory, along with South Korea&rsquo;s Samsung and America&rsquo;s Micron. Formed in 1983, it will start trading on the Nasdaq today as SKHYV, which will be shortened to SKHY next Tuesday.
The company announced it would list on the Nasdaq back on June 24 &mdash; which happens to mark the recent peak in its Korean-traded shares. The share price has since cratered 25%. A new influx of cash from American investors would probably be pretty welcome about now.
For a few weeks, savvy market watchers have looked upon South Korea&rsquo;s benchmark KOSPI as a potential harbinger for America&rsquo;s red-hot semiconductor sector.&nbsp;
The American chip benchmark, the Philadelphia Semiconductor Index (SOX) peaked on June 22 at 14,634. It bottomed on Tuesday at 12,300 &mdash; a more modest 16% drop &mdash; and trades today a little over 12,900.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The broad U.S. indexes are little moved as the week winds down &mdash; the S&amp;P 500 up barely 10 points at 7,554.
Monday will be potentially quiet too, but Tuesday is the start of earnings season and the Labor Department will issue the official inflation numbers.
The week has brought a staggering number of big wins in several Paradigm portfolios. This is in no particular order. With any luck I&rsquo;m not leaving anyone out here&hellip;
<ul>
<li>102% on ConocoPhillips call options in Rickards&rsquo; Insider Intel</li>
<li>146% on International Seaways in Rickards&rsquo; Strategic Intelligence</li>
<li>77% in only four months with put options on FXE, the big euro currency ETF, for PRO-level readers of Rickards&rsquo; Strategic Intelligence</li>
<li>A staggering 1,000% on Adobe call options in 10X Trader</li>
<li>50% on Magnite Inc. in Paradigm Mastermind Group</li>
<li>29% on Robinhood in The Income Alliance, our options-selling service</li>
<li>And a clean 1,000% on the space name Rocket Lab in Ray Blanco&rsquo;s Catalyst Trader.</li>
</ul>
That last one is a prime example of sound money management: After four years and three months, it&rsquo;s no time to get greedy. Ray says the thesis behind RKLB is changing now that it&rsquo;s acquiring the satellite communications firm Iridium. It introduces a level of risk that wasn&rsquo;t there before. And so Ray advised his readers to sell half the position and let the rest ride.
Checking in on non-dollar assets, gold appears set to end the week just barely above $4,100 but silver will probably wind up below $60. Meanwhile, crypto appears to be hanging onto its most recent gains &mdash; Bitcoin approaching $64,000 and Ethereum a shade under $1,800.
<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" />Oil and World War III
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Oh, now the nation&rsquo;s leading business newspaper tells us&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3R2teDq18sehf2VQ1YBdWv/b7771d46d7e2e684724676e10f274f11/FMF-Issue-071026-3.jpg" alt="US OIL SUPPLY" width="540px" />
Memo to The Wall Street Journal: The situation was risky before Donald Trump ended the ceasefire with Iran.&nbsp;
For months, we&rsquo;ve been spotlighting the ongoing drain from both private-sector inventories and the government&rsquo;s Strategic Petroleum Reserve. (If you&rsquo;re a newer reader, <a href="https://paradigmpressroom.com/post/40-oil">here&rsquo;s a good place to get caught up quickly</a>.) Why the mainstream decided to start worrying this week is anyone&rsquo;s guess.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, the feds have nixed plans for oil futures that would trade on weekends.
As we mentioned at the time, CME Group &mdash; which oversees the most widely used U.S. commodities exchanges &mdash; announced last month it would launch an oil futures contract that trades round the clock.
That includes weekends. As we&rsquo;ve spotlighted since at least 2024, major U.S. airstrikes in the Middle East tend to come over the weekend &mdash; when markets are closed and there&rsquo;s no chance of a knee-jerk reaction.
The new contract was supposed to start trading as early as today. Yesterday, the Commodity Futures Trading Commission said Oh no you don&rsquo;t.
Usually the CFTC allows CME Group to &ldquo;self-certify&rdquo; new futures contracts. And that&rsquo;s what CME Group sought to do here &mdash; until CFTC chair Michael Selig slapped it down yesterday in blunt terms.
"CME's decision to disregard the commission's effort to undertake a reasoned analysis of the critical issues at stake is wholly inappropriate,&rdquo; he said &mdash; &ldquo;and necessitates commission action to stay the certification.&rdquo;
Now the whole thing will be subjected to what the CFTC calls a &ldquo;thorough review.&rdquo;
Betcha it doesn&rsquo;t survive that review. The White House needs a window every weekend to wage war without impact on the oil price. (And of course, a &ldquo;peace is at hand&rdquo; announcement for the resumption of trading on Sunday night&hellip;)
For the moment, traders are buying into Donald Trump&rsquo;s declarations that Iran is once again &ldquo;desperate&rdquo; to make a deal. U.S. crude futures are down a little over 1% to $71.30.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We can&rsquo;t let the week pass without acknowledging the possibility Washington will soon be waging a two-front war.
At a NATO summit in Turkey on Wednesday, Trump nodded in approval at Ukraine&rsquo;s recent drone strikes on Russian oil refineries. In addition Trump authorized Ukraine to start building Patriot missiles.
&ldquo;It&rsquo;s an escalation,&rdquo; he said, &ldquo;but it&rsquo;s also an escalation that could help lead to an end.&rdquo;
Or it&rsquo;s an escalation that could lead to further escalation &mdash; like Russian airstrikes on NATO&rsquo;s Baltic states, whose airspace Ukraine is using to send those drones into Russia.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3m7oskxd7ZwMhC1BaLR8pP/21ad579d6de9103abe1ef5a68ce633cc/FMF-Issue-071026-4.jpg" alt="Trump" width="540px" />
&ldquo;Diplomacy is dead and this is now Trump&rsquo;s war,&rdquo; tweets the Norwegian political scientist Glenn Diesen, author of several books about Russian foreign policy.
&ldquo;How to fight and defeat the world&rsquo;s largest nuclear power in a fight for its survival? We will now see massive escalation as we move toward total war.&rdquo;
Or at the very least, Moscow could step up its shipments of S-400 air defense missiles to Iran &mdash; along with targeting intelligence on U.S. forces in the Persian Gulf.
<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 (Teaser)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;How do you measure demand for compute?&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/elons-new-plan-for-world-domination">yesterday&rsquo;s guest edition featuring Ray Blanco</a>. &ldquo;Who are the players that provide the current answers?&rdquo;
Unfortunately Ray&rsquo;s out of pocket today and I can&rsquo;t get a ready answer. But those are great questions worthy of follow-up next week.

FMF-Issue-071026-featured

AI Data Centers and Chinese Stooges

In the electronic dictionary that came installed on my desktop computer, the word &ldquo;compute&rdquo; appears only as a verb:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4PnSix7TUyvYUKP755M0bP/ba81173911d4d0259620d3b3f994e7f9/FMF-Issue-070926-1.jpg" alt="Compute" width="540px" />
But soon &mdash; if you haven&rsquo;t already &mdash; you&rsquo;re going to hear it used as a noun. Constantly.
From Elon Musk&rsquo;s Grok AI engine&hellip;
<blockquote>"Compute" as a noun refers to computational resources or processing power &mdash; basically, the "brainpower" (CPUs, GPUs, memory, etc.) that computers use to run calculations, train AI models or handle heavy tasks.</blockquote>
<blockquote>It's like treating "compute" as a measurable thing you can have more or less of, rent or run out of &mdash; similar to saying "We need more horsepower" for an engine.</blockquote>
But it&rsquo;s not just a trendy new usage. Paradigm tech investing specialist Ray Blanco says compute is rapidly evolving into a desirable type of currency &mdash; and Elon Musk is positioning himself to corner the market in it.
The concept is so cutting-edge that we&rsquo;re breaking from our usual format today to bring you Ray&rsquo;s compelling case. The following was first published on July 1 for readers of&nbsp;Altucher&rsquo;s Investment Network.
<h2 style="text-align: center;">Elon&rsquo;s Secret Currency</h2>
There is a new currency being minted right now &mdash; and almost nobody can name it.
It isn't gold&hellip;&nbsp;
It isn't the dollar&hellip;&nbsp;
It isn't even Bitcoin.
You can't hold it in your hand, you can't bury it in the backyard, and your bank won't let you deposit it.
But every AI lab on the planet is fighting for it.
Every government on Earth is now stockpiling it.
And the man building the biggest reserve of it just pulled off the largest IPO in human history.
The currency is compute.
If that word sounds like jargon, stay with me a moment &mdash; because once you see it, you can't un-see it.
It changes how you should think about where the next decade of wealth gets created.
The Line That Gave It Away
A couple of years back, the heads of the big AI labs started talking in a strange new way.&nbsp;
They stopped talking about software. They stopped talking about apps.
They started saying things like "it all comes down to compute."
At first it sounded like Silicon Valley nerd-speak. It wasn't.&nbsp;
What they were admitting is that the bottleneck on artificial intelligence &mdash; the one thing standing between their models and something far more powerful was raw processing power. The chips. The electricity to run them. The physical infrastructure to house them.
Pour in all the dollars you want; what every one of them actually needs is the thing at the end of the pipeline: compute.
When the most powerful companies in the world start measuring their strength not in dollars but in a single scarce resource&hellip; that resource has become a currency.
We've Seen This Play Out Before
In 1870, the resource that took over the world was oil. And one man understood something his competitors didn't.
John D. Rockefeller realized the money wasn't really just in the oil itself. It was in controlling the whole chain &mdash; the refineries that turned crude into something useful, the pipelines that moved it, the distribution that put it everywhere.
He didn't just sell the currency of the industrial age. He owned the machine that minted it.&nbsp;
That machine was Standard Oil.
And a hundred and fifty years later, history is rhyming.
Today the strategic resource isn't crude pumped out of the ground. It's compute. And once again, the real fortune won't just go to the people who simply use it. It'll go to whoever controls the refinery &mdash; the chips, the power, and the fabs that turn sand and electricity into intelligence.
So the question that matters is simple: who's building the new Standard Oil?
The Rockefeller of the AI age
I'll give you a hint.&nbsp;
He already controls the railroads. Now he's coming for the refinery and the power plant.
Rockefeller's empire was built on controlling how the currency moved. Over the past year Elon Musk has assembled the one thing no one else on Earth has &mdash; and he&rsquo;s building exactly the way Rockefeller did.
Start with the transport layer. Elon controls the rockets that haul mass to orbit and Starlink, the network that pipes the output back down. In a world where compute is the currency and the refinery is migrating to space, that is the chokepoint &mdash; and while every rival is left negotiating for a ride, Musk owns the freight line.&nbsp;
The rockets are his railroads. Starlink is his pipeline.
Now for the two other pieces.
The first is a project he calls Terafab. This is the refinery.
A refinery that takes a raw resource and turns it into the high-value fuel everyone fights over. Terafab will take silicon and turn it into chips: the refined, scarce fuel of the AI age, the thing nations now guard like enriched uranium. Whoever controls the refinery controls the fuel supply for the entire industry.
But fuel sitting in a warehouse doesn't do anything. You have to burn it. And that's the second piece &mdash; the data center, the power plant where chips and electricity get fused into the only thing anyone actually wants at the end: compute. The refinery makes the fuel. The power plant turns the fuel into the currency.
That's a Standard Oil strategy.&nbsp;
Musk isn't trying to win one link in the chain &mdash; he owns the railroad, he's laying the pipeline, he's building the refinery, and he's building the power plant. Every rival who wants to mint this currency has to come through infrastructure he controls.
Which leaves just one question.&nbsp;
Where It Gets Strange
Where do you put a power plant that devours that much electricity &mdash; and throws off that much heat?
For two hundred years the answer was "wherever the resource is." For the compute age, I think the answer is going to surprise people: off the planet.
This is a thread we&rsquo;ve been pulling on for a while.&nbsp;
We call it the Great Migration &mdash; the slow, inevitable shift of heavy compute up into orbit, where solar power is unlimited, where the cold of space solves the heat problem for free, and where you're not fighting cities and regulators for land and electricity.
The same man building the refinery already owns the only fleet on Earth that can cheaply move mass into space.
Connect those dots, and the SpaceX IPO stops looking like a rocket story. It starts looking like the opening move in a plan to mint the world's most important currency &mdash; and to do it somewhere no competitor can easily follow.
The Proof Is In How the Powerful Are Behaving
You don&rsquo;t have to take my word that compute is the new money.
Governments now treat advanced chips the way they once treated enriched uranium &mdash; with export controls, with watch lists, with national-security reviews.
Nations talk openly about how much compute they have versus their rivals, the same way the old powers once counted oil reserves and gold bars.
When a country starts measuring its strength in a unit, and starts hoarding that unit, and starts forbidding its enemies from getting it, that's a currency.&nbsp;
And currencies, unlike fads, don't go away. They get more entrenched. The early holders get richer the longer the game runs.
What This Means For You
You can&rsquo;t open an account and buy a pile of compute.
But you can own the refinery and the picks-and-shovels that feed it &mdash; the chip designers, the power and energy plays, the thermal and fabrication names, and the orbital infrastructure that becomes the future foundation for it.
That&rsquo;s the map we&rsquo;ve been laying out. The names are already in our portfolio. Keep watching.
For today, I just want you to walk away with this one idea:
Oil was the currency of the last century.&nbsp;
Compute is the currency of this one.&nbsp;
And the man minting it just went public.
The people who understood Standard Oil in 1880 didn't need to be geniuses. They just needed to see the pattern before everyone else did.
We're at that same moment again&hellip; right at the start.

FMF-Issue-070926-Featured

Elon’s (New) Plan for World Domination

<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" />War&rsquo;s Back On?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Gee, what were we saying in the middle of yesterday&rsquo;s edition? Oh yeah, don&rsquo;t rule out a few ceremonial U.S. airstrikes late this afternoon or tonight.
U.S. Central Command says it struck 80 Iranian targets overnight.
Maybe it&rsquo;s not so ceremonial now. Of the ceasefire that&rsquo;s been formally in effect for the last three months, the U.S. president says, &ldquo;I think it&rsquo;s over.&rdquo;
So how did we get here?&nbsp;
As mentioned yesterday, the latest trouble began with two attacks on ships that tried to transit the Strait of Hormuz without Tehran&rsquo;s permission.&nbsp;
No one was hurt and the damage was minimal. The attacks were intended to &ldquo;send a message&rdquo; about who&rsquo;s in charge of the strait.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />As the Iranian side sees it, the &ldquo;Memorandum of Understanding&rdquo; between Washington and Tehran gives Iran sole responsibility for traffic going through the strait.
Here&rsquo;s the language both sides signed onto: &ldquo;Upon the signing of this MoU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels, with no charge for 60 days only.&rdquo;
There&rsquo;s nothing in there about how Iran must revert to a prewar state of free navigation for all &mdash; which seems to be what the U.S. side is demanding.
(Reminder: The strait was free for all to navigate before Trump and Netanyahu started the war on Feb. 28 with a sneak attack while negotiations were ongoing.)
Washington&rsquo;s initial response to the shipping attacks was to yank the waivers that allowed Tehran to sell oil to foreign buyers &mdash; a move Tehran was almost sure to interpret as marking an end to the MoU.
Then came the U.S. airstrikes &mdash; during the official mourning period for the previous Supreme Leader, Ayatollah Khamenei, which doesn&rsquo;t end until his burial tomorrow. That&rsquo;s sure to enrage both Iranian leadership and the population at large.
For the moment, Iran&rsquo;s response has been limited to airstrikes on U.S. targets in Bahrain and Kuwait &mdash; a move that retired CIA officer Larry Johnson believes is perhaps calculated to give Washington a chance to back down.
&ldquo;If the U.S. continues the strikes,&rdquo; Johnson writes at his website, &ldquo;then I expect Iran to expand its targets to include Mowafaq al Salti airbase in Jordan and possibly Israeli airfields.&nbsp;
&ldquo;At this point the MoU is hanging by a thread.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />And so U.S. oil futures priced under $69 on Monday are priced over $74 today.
Whoop, make that nearly $76. Because as we write the Energy Information Administration is out with its weekly U.S. inventory figures. It&rsquo;s grim stuff, especially with this latest turn of events.
The government&rsquo;s Strategic Petroleum Reserve sits at another low last seen in 1983. Fully 1.9% of the remaining crude in the SPR was drained just last week &mdash; when peace kinda-sorta reigned.
Private-sector inventories fell another 0.9% last week. The giant oil terminal at Cushing, Oklahoma saw only a slight drawdown &mdash; but it&rsquo;s still very near &ldquo;tank bottoms&rdquo; beyond which there&rsquo;s not enough crude to reliably feed the pumps and pipelines.
Between the war and the inventory numbers, it all looks bullish for crude &mdash; although a few hardened cynics are expecting another rug pull&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7eP1xnlPdJWXhkNvXAReq4/4ae096c8a5538f9036433a3c62bf9726/FMF-Issue-070826-1.jpg" alt="Rick J Tweet Iran is begging for another chance report" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />This would be a good time to review some numbers that we explored at the start of the war.
&ldquo;It&rsquo;s useful to know just how much of the global output of key energy and other commodity supplies comes from the Gulf,&rdquo; Jim Rickards wrote his Insider Intel readers yesterday.
&ldquo;The numbers are astounding including 34% of the trade in crude oil, 19% of global output of liquified natural gas (LNG), almost 30% of liquified petroleum gas, 13% of chemicals and fertilizers, 19% of refined oil products and about 10% of global aluminum.
&ldquo;There are no easy substitutes for any of these outputs. The U.S. and Russia may increase their oil exports somewhat but LNG, chemicals, fertilizers, aluminum and refined oil products (gasoline, diesel, jet fuel) are not easily replaced if at all.
&ldquo;Markets have yet to internalize the continuing danger of the Iran war situation and the impact on demand for crude oil and distillates,&rdquo; Jim concludes.
Although maybe that process is starting today, as we&rsquo;ll see in Bullet No. 2.
<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" />Yahoo Goes Doomer
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;There&rsquo;s an Urgent Sign of an Impending Market Collapse,&rdquo; reads the subject line of an email your editor got this morning from Yahoo.
I&rsquo;m not accustomed to Yahoo as the deliverer of doom. So out of curiosity I clicked on the link and up came an article from the Futurism site.&nbsp;
It was a profound disappointment. It said a valuation metric called the &ldquo;Shiller CAPE ratio&rdquo; sits at 41. &ldquo;Said another way, investors are paying $41 for every $1 of average annual profits the S&amp;P 500 has generated over the past decade.&rdquo;&nbsp;
The Shiller CAPE&rsquo;s historical average is 17.3. Thus the present situation is &ldquo;more or less the financial equivalent to the tide receding before a freak tsunami.&rdquo;&nbsp;
Only two possible outcomes, we&rsquo;re told: &ldquo;Either earnings actually catch up to the pie-in-the-sky AI fantasies, or the market closes the gap between financial valuation and productivity the hard way.&rdquo;
Whatever. Your editor is well aware that the Shiller CAPE sits at nosebleed levels. What the author purposely omitted from his article &mdash; because it didn&rsquo;t comport with the narrative &mdash; is that the Shiller CAPE was even higher at the peak of the dot-com bubble.
It was over 44 compared with today&rsquo;s 41. So there&rsquo;s still some ceiling here.&nbsp;
We&rsquo;re as certain as the Futurism author that &ldquo;the hard way&rdquo; is coming sooner or later. But not right now &mdash; and the tell is that Yahoo picked up an article like this. It&rsquo;s when you see only bullish articles &mdash; and the only remaining bears are a few cranky contrarian newsletter editors &mdash; that&rsquo;s the time to worry.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />All that said, the stock market is reacting poorly to the resumption of the war &mdash; however long or brief it turns out to be.
Among the major indexes, the biggest hit by far is to the Dow Industrials &mdash; down nearly 1% and approaching 52,100. Monday&rsquo;s record high over 53,000 is but a memory. Next worst is the S&amp;P 500, over three-quarters of a percent and closer to 7,300 than 7,400.
But for a second day running, the tech-heavy Nasdaq is shrugging off concerns from Asia. South Korea&rsquo;s benchmark KOSPI index slid another 5%. It&rsquo;s met the threshold of a &ldquo;bear market&rdquo; in that it&rsquo;s down 20% from its (very) recent peak.
And while the Nasdaq has been in the red yesterday and today, the sell-off hasn&rsquo;t been anywhere near as severe. At last check, the Nasdaq Composite is down three-quarters of a percent at 25,633. It&rsquo;s down 5.3% from its peak in early June. Not good but not disastrous.
Bonds are selling off alongside stocks &mdash; on the theory that a renewed war will goose inflation. As prices fall, yields rise: The 10-year Treasury note is up to 4.56%, the highest since mid-June.
As yields rise, precious metals become less attractive. Gold is down 2%, approaching $4,000 again&hellip; while silver is down 4.2% to $57.31.
Crypto can&rsquo;t hold onto its recent mojo &mdash; Bitcoin retreating toward $61,500 and Ethereum about to crack below $1,700.
<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" />Free Money
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Whether or not it&rsquo;s a good idea for the country&hellip; it&rsquo;s free money for someone you love, and it compounds from an early age.
On Monday, Donald Trump formally rolled out the &ldquo;Trump Accounts&rdquo; made possible under the Big Beautiful Bill passed last year.
&ldquo;Eligible children can receive a $1,000 investment account at birth,&rdquo; writes colleague Davis Wilson. &ldquo;And given enough time, that initial investment could compound into hundreds of thousands &mdash; or even millions &mdash; of dollars.&rdquo;
The money will go into an index fund that tracks the broad U.S. stock market.
&ldquo;Using historical S&amp;P 500 returns,&rdquo; says Davis, &ldquo;if your family never contributes another dollar, the government's initial $1,000 could grow to roughly:
<ul>
<li>$6,000 by age 18</li>
</ul>
<ul>
<li>$15,000 by age 27</li>
</ul>
<ul>
<li>$243,000 by age 55.</li>
</ul>
Those numbers only mushroom further if parents and grandparents contribute to the account (maximum $5,000 per year).
Yes, there are a few more details and logistics to cover about who qualifies and how. Davis runs them down for you on <a href="https://million-mission.com/posts/read-this-if-you-have-kids">Monday&rsquo;s edition of our sister e-letter The Million Mission</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" />Stupid Bureaucrat Tricks
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Props to whoever crafted this headline: Sometimes the most straightforward, deadpan telling is the one that makes you say, &ldquo;Holy s***!&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7nVy2bBvcUfcWXcgRJ0Pwc/4f565ea8787d08dcd28276b8b84407aa/FMF-Issue-070826-2.jpg" alt="Politico" width="540px" />
Yeah.
Citing four sources within the Department of Homeland Security, Politico reports that last summer, Madhu Gottumukkala &mdash; the acting director of the Cybersecurity and Infrastructure Security Agency &mdash; &ldquo;uploaded sensitive contracting documents to the public version of ChatGPT.&rdquo;
None of the files was classified. &ldquo;But the material included CISA contracting documents marked &lsquo;for official use only,&rsquo; a government designation for information that is considered sensitive and not for public release.&rdquo;
Everything uploaded to ChatGPT is assimilated by ChatGPT into its knowledge base to answer other people&rsquo;s questions in the future. Those files are now a matter of public record.
Accountability, you wonder?
Back to the article: &ldquo;Cybersecurity sensors at CISA flagged the uploads this past August, said the four officials. One official specified there were multiple such warnings in the first week of August alone. Senior officials at DHS subsequently led an internal review to assess if there had been any harm to government security from the exposures, according to two of the four officials.
&ldquo;It is not clear what the review concluded.&rdquo;
Well, except for the fact Gottumukkala is still on the job 11 months later. That much is very clear.
<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: Agitating About Apple
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Dave, so glad you talked about Apple and its demise for user-friendliness,&rdquo; a reader writes after the mailbag in yesterday&rsquo;s edition.
&ldquo;They continually &lsquo;upgrade&rsquo; the iPhone with no warning and no explanation of how the &lsquo;improvements&rsquo; function. As an investor I love the stock. As a user I'm extremely frustrated and disappointed.&nbsp;
&ldquo;Don't always agree with you but love your column.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Apple had and has many chances to make their technology better that they missed,&rdquo; writes another reader with a good example.
&ldquo;They should have long ago standardized device control (apps on your phone interacting with third-party devices) so that rather than having separate apps with different functionality from every manufacturer, they would provide common interfaces to register/enable/connect to devices of different kinds.
&ldquo;It&rsquo;s ridiculous how many apps I have, and having to search through apps to remember which one controls something as simple as a power switch, and then discover it requires logging in again with a password I haven&rsquo;t had to use, etc., etc. &mdash; it&rsquo;s just a big fail.
&ldquo;And for those who would say it&rsquo;s too hard or would stifle innovation I&rsquo;d point to printers&hellip; when you get a new printer you may have to install a driver, but the UI, command-P to print, etc., are standardized. Different printers support or don&rsquo;t support features like double-sided printing, but you don&rsquo;t have to remember a password or a special UI for any given printer, regardless of manufacturer.
&ldquo;I could go on.
&ldquo;One of many misses.&rdquo;
Dave responds: Interesting analogy. I will say that connecting wirelessly to a printer these days is way easier than it was with a wired connection 30 years ago. Some things do get better!

FMF-Issue-070826-featured

War’s Back On?

<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: Too Big to Fail
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A new government document says the AI industry in the 2020s has become like the big banks in the 2000s &mdash; &ldquo;too big to fail.&rdquo;
Not that the document frames it in those terms, of course.
The report is being prepared for Treasury Secretary Scott Bessent and Federal Reserve Chair Kevin Warsh, among others. From the nonprofit NOTUS news site&hellip;
<blockquote>A draft report inside the Treasury Department is set to warn of the risks posed by the artificial intelligence market, likening key aspects of it to the dot-com bubble that upended the U.S. economy when it burst in the early 2000s.</blockquote>
<blockquote>The document, the existence and contents of which have not been previously reported but was obtained by NOTUS, is a significant departure from the Trump administration&rsquo;s public tone, which has focused on encouraging unrelenting investment to unlock exponential growth.</blockquote>
<blockquote>Career Treasury analysts found that AI firms are more deeply entrenched in the U.S. economy than their dot-com predecessors and pose significant risk to the entire system if financial conditions change, productivity goals are missed or various choke points stymie growth.</blockquote>
I bolded those couple of lines for a reason.&nbsp;
While the report compares the AI boom with the dot-com boom, the implicit analogy is with the 2008 financial crisis &mdash; with all of its domino effects starting in one isolated pocket of the system and then spilling into everything everywhere.
According to the NOTUS write-up, the report says &ldquo;AI investors are taking risks so significant that much of the financial system now rests upon AI meeting expectations for productivity gains and profitability&hellip;
&ldquo;If AI companies fall short, the effects would ripple throughout the financial system as a whole, from big banks and hedge funds to private creditors, the analysts note. The largest AI firms are also all interconnected with each other and across different markets, which also points to widespread impacts if investment dries up or demand slows.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The report acknowledges a reality first spotlighted in this space <a href="https://paradigmpressroom.com/post/stargate">18 months ago:</a> AI faces two huge constraints that digital technology has never grappled with until recently.
One is the limitations of the electric grid &mdash; whose capacity remained static between 2011&ndash;2023. The buildout since 2023 hasn&rsquo;t been nearly enough to keep up with demand: Data center projects are being cancelled left and right, not because of local opposition as much as the fact there&rsquo;s just no juice to power them.
The other constraint is the rising cost of borrowed money. Interest rates move in decades-long cycles of roughly 40 years down and 40 years up. We&rsquo;re about six years into the current up phase &mdash; with the benchmark 10-year Treasury note yielding 0.5% in the summer of 2020 and over 4.5% today.
On that first limitation, NOTUS says the Treasury report worries that &ldquo;supply chain issues, geopolitical tensions, electricity bottlenecks, utilities shortfalls and other concerns could all block AI&rsquo;s momentum.&rdquo;
On that second constraint, NOTUS says the report frets that &ldquo;the AI sector is vulnerable to funding for data centers and other infrastructure projects drying up and sustained growth expectations not being met.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s hard not to think this report is greasing the way for an eventual taxpayer bailout of the AI industry.
We broached that possibility <a href="https://paradigmpressroom.com/post/ai-needs-a-rescue">late last month</a>. And our suspicions were reinforced last week when OpenAI CEO Sam Altman proposed &ldquo;giving&rdquo; Uncle Sam a 5% stake in his (money-losing) firm ahead of its IPO.&nbsp;
Such a deal, right?&nbsp;
What would Uncle Sam have to do in return? Our Jim Rickards unpacked the details yesterday for Strategic Intelligence readers: &ldquo;In exchange, the U.S. government will clear any obstacles to the release of OpenAI's new ChatGPT models and bury any antitrust or fair trade objections to the IPO.&nbsp;
&ldquo;Not only that, but once OpenAI is public, the U.S. government stake will pretty much ensure government contracts and government support if needed.
&ldquo;Let's give Altman credit for learning to feed at the government trough - just like many others before him.&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" />&ldquo;Big, Fat, Ugly Bubble,&rdquo; 10 Years On
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> No one remembers now, but during one of his debates with Hillary Clinton in 2016, Donald Trump warned of a &ldquo;big, fat, ugly bubble.&rdquo;
&ldquo;We're in a bubble right now. And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that's going to come crashing down. We are in a big, fat, ugly bubble. And we better be awfully careful.&rdquo;
He could speak candidly then because no one, least of all himself, thought he&rsquo;d win the election. But once he did, he found himself desperately trying to keep the bubble inflated as long as possible.
<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 yesterday. From the White House, he remotely rang the opening bell for yesterday&rsquo;s trading on the New York Stock Exchange and the Nasdaq.
The occasion was to promote &ldquo;Trump Accounts&rdquo; &mdash; a new tax-advantaged vehicle for kids made possible by the &ldquo;Big Beautiful Bill&rdquo; passed last year (More about that tomorrow.)
Not surprisingly, everything he said about the stock market was effusive. Recent performance was &ldquo;the hottest stock market in history.&rdquo; As for future performance, &ldquo;I think the market&rsquo;s going to go through the roof.&rdquo;
He even hit out at short sellers: "I guess you have a couple of guys that went short, those poor bastards. I mean, they're in big trouble. They're being wiped out. I never like short guys because they're betting against the country.&rdquo;
Setting up scapegoats in case an AI bubble starts to deflate?&nbsp;
It&rsquo;s gotta be in the back of his mind.
To be sure, the AI bailout chatter is still in its early stages. There&rsquo;s nothing you need to do about it yet &mdash; but we&rsquo;re going to stay all over it.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As for the market action today, stocks are mostly in the red &mdash; along with nearly every other asset class.
The tech-heavy Nasdaq is taking the biggest slide &mdash; down two-thirds of a percent and back below 26,000. The S&amp;P 500 and the Dow are down about a third of a percent.
Bonds are selling off, pushing yields higher: Checking our screens the 10-year Treasury note is now over 4.52% &mdash; a four-week high.
Gold is losing ground but is still comfortably over $4,100. Silver&rsquo;s lost over a buck and is back under $61.&nbsp;
The exception to the rule today is crypto &mdash; Bitcoin back over $64,000 and Ethereum over $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" />&ldquo;Captain, We Have Bombed Your Vessel&rdquo;
<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 have shot up nearly two bucks &mdash; back over $70 &mdash; now that shooting has resumed in the Persian Gulf.
Iran&rsquo;s Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz.&nbsp;
In one case, the IRGC got onto marine channel 16 &mdash; the emergency radio frequency known to all boaters and sailors &mdash; and announced, "Captain, we have bombed your vessel.&nbsp;
&ldquo;You shall only use routes as approved by Persian Gulf Strait Authority. Any other routes are considered unsafe.
&ldquo;All vessels in your vicinity must turn around immediately or face imminent danger."
No one was hurt and the damage was minimal. Basically what happened is what happened about 10 days ago: A couple of vessels tried to transit the southern side of the strait, bordering Oman, and Tehran took a few potshots just to say Look at me, I&rsquo;m the captain now.
Also to say: We will impose a toll once the 60-day Memorandum of Understanding with the Americans expires in mid-August.
Last time this happened was on a Thursday. U.S. forces then bombed Iran over the weekend &mdash; while the markets were closed, and then of course it was announced the ceasefire was back in effect before the markets reopened Sunday night.&nbsp;
It being Tuesday, there&rsquo;s no opportunity for a precise replay of those events this time. But don&rsquo;t rule out a few ceremonial U.S. airstrikes late this afternoon or tonight.
In the meantime, shipping traffic through the Strait of Hormuz remains only about a third of its prewar level.
<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" />Follow-up: Where In the World Is Gal Luft?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For nearly two years, the whereabouts of an accused arms trafficker have been known only to himself&hellip; and the feds.
It was in 2018&ndash;19 when Gal Luft first <a href="https://5minforecast.com/2018/08/29/de-dollarization-goes-mainstream/">came on our radar</a> for his early warnings about de-dollarization &mdash; a concerted move by governments in the Global South to get out from under U.S. sanctions and other economic warfare measures. This was years before global central banks began <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition#2">accumulating gold</a> in response to Washington&rsquo;s freeze of Russia&rsquo;s U.S. Treasuries.
In February 2023, Luft was <a href="https://5minforecast.com/2023/03/02/biden-whistleblower-under-arrest/">picked up</a> on an Interpol warrant in Cyprus. He then escaped house arrest and went <a href="https://paradigmpressroom.com/post/biden-whistleblower-in-hiding">on the lam</a>.
&ldquo;The chances of me getting a fair trial in Washington are virtually zero,&rdquo; he told the New York Post from an undisclosed location.
That&rsquo;s because Luft said he had the dirt on Joe Biden&rsquo;s son Hunter &mdash; having talked to the FBI in 2019 about the Biden family taking illegal payments from Chinese officials.
In May 2023, the Justice Department detailed its allegations against Luft &mdash; summed up by USA Today as acting as &ldquo;an illegal arms broker and unregistered agent for the Beijing government while also seeking to help China obtain Iranian oil in violation of U.S. sanctions.
&ldquo;Gal Luft, a dual U.S. and Israeli citizen, is accused of recruiting and paying a former high-ranking U.S. government official &mdash; and adviser to then president-elect Donald Trump &mdash; on behalf of principals based in China in 2016 without registering in the U.S. as a foreign agent as federal law requires.&rdquo;
➢ The official Luft allegedly recruited and paid was not named in the feds&rsquo; paperwork &mdash; but investigative reporters identified him as former CIA Director James Woolsey. The claim made zero sense. Woolsey is a card-carrying neoconservative &mdash; about the last guy in the Beltway you&rsquo;d figure would cozy up to Beijing.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Three years later, the story has retreated into the mists of mystery.
There&rsquo;s only one update of substance we can locate, although it&rsquo;s a big deal: In September 2024, Reuters reported that Luft had been re-arrested and plans were supposedly underway to extradite him to the United States for trial.
The weird thing is that prosecutors did not specify when or where the new arrest took place. There has been no update since.
Meanwhile, on his reputation rehab tour this past spring, Hunter Biden told conservative influencer Candace Owens that Luft is living as a fugitive in Israel and that the &ldquo;Israelis will not help us locate&rdquo; him.
And that&rsquo;s all that can be readily found in the public record.&nbsp;
Where, if anywhere, is Luft in custody now?&nbsp;
Whenever we hear, we&rsquo;ll have an update&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" />Apple and the Ens***tification of Everything
<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 passing mention last week about &ldquo;how Apple has gone down the tubes, a process underway even while Steve Jobs was still alive,&rdquo; the following landed in our inbox&hellip;
&ldquo;I&rsquo;m interested to hear the reasons you dislike Apple and think they&rsquo;ve gone downhill. They&rsquo;ve pissed me off quite a few times over the years too but as far as I can tell, most of the problems (except maybe iTunes) started awhile after Jobs.&nbsp;
&ldquo;I think it&rsquo;s obvious he cared more about user experience, and not just because of the bottom line either.
&ldquo;Anyway, go ahead and list all your reasons. We may share a few criticisms. And keep up the good work, etc.&rdquo;
Dave responds: What I&rsquo;m about to say comes with the authority of having bought my first Mac on the recommendation of a friend in the summer of 1996 &mdash; before Jobs returned to the company.
Leave aside the technological advances of the last 30 years: Apple products today under Tim Cook are less reliable and less user-friendly than Apple products under Michael Spindler 30 years ago.&nbsp;
That&rsquo;s because in 1996 the Jobsian ethos still suffused the company even though he&rsquo;d been away for a decade.&nbsp;
Within only a few years of Jobs&rsquo; return, it seems that ethos dissipated as Apple evolved from scrappy upstart to world dominator. An early warning was an iBook laptop purchased in 2005 that croaked in catastrophic fashion not long after the AppleCare coverage lapsed.
In 2018 I bought a Mac mini that constantly gave me fits for reasons I could never figure out. One day in 2020 &mdash; while it was still covered by AppleCare &mdash; I called once more for support and was kicked up to a &ldquo;senior adviser&rdquo; who had the temerity to tell me the machine was underpowered for what I wanted it to do.
Preposterous. I write documents and browse the web. I wasn&rsquo;t using the computer for video editing or high-end gaming, for crying out loud. And I custom-ordered it with 16 GB of memory, double what came standard, specifically so it would be somewhat &ldquo;future-proof.&rdquo;
Then there are the constant &ldquo;improvements&rdquo; to macOS and iOS which inevitably make simple tasks harder. What used to require one or two taps on the iOS Podcasts app now takes five or six &mdash; and I still haven&rsquo;t mastered the proper sequence in the current iteration.
I could go on, but I think you get the point.
People talk these days about &ldquo;the ens***tification of everything.&rdquo; From where I sit, Apple is a prime example.

FMF-Issue-070726-Featured

AI: Too Big to Fail

<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 SPCX Casino
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> "We've all been forced into a giant casino," says Tim &mdash; a sixtysomething engineer from the Silicon Valley region.
Asked by The Guardian how he feels about the SpaceX IPO and how it might affect him, he replied, "I've never wanted to participate in the so-called AI bubble. Basically my entire retirement is in the S&amp;P 500. Not out of choice, but if you don't have investments in the stock market, you're losing ground compared to everybody who does.&nbsp;
&ldquo;That's the pernicious thing about it. There's really no way for the average person to diversify."
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Lurking in the background of Tim&rsquo;s concerns is this: SpaceX is being added to major stock market indexes well ahead of the usual schedule for newly public companies. It joins the Nasdaq-100 tomorrow.
&ldquo;If you own a Nasdaq index fund &mdash; in your 401(k), your IRA, your kid's college account &mdash; you're about to become a SpaceX shareholder,&rdquo; says Paradigm tech investing specialist Ray Blanco. &ldquo;Nobody asked you. That's how index inclusion works: Trillions in passive money is now mandated to buy SPCX.
&ldquo;And the circumstances are unusual. The Nasdaq wrote special rules just to get SpaceX in early after the record IPO.
&ldquo;Here's what makes the timing interesting. SPCX closed Thursday at $162 &mdash; about 20% below its June high. The retail euphoria came and went. The rotation traders came and went. And now the most patient, price-insensitive buyers on Earth &mdash; index funds that never sell &mdash; start accumulating.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; will index investors like Tim be left holding the bag?
Maybe not &mdash; not if Elon Musk moves ahead and merges SpaceX with Tesla.
Ray is among the Paradigm experts along with James Altucher and Davis Wilson who are convinced it&rsquo;s going to happen.
&ldquo;The signals are already there,&rdquo; Ray says. &ldquo;For example, Terafab isn't a SpaceX venture. It's a formally joint initiative spanning both Tesla and SpaceX. Tesla builds the $3 billion pilot line. SpaceX owns the full-scale fab. Two shareholder bases, one project.
&ldquo;And we have the Elon pattern. X folded into xAI in March 2025. xAI folded into SpaceX this February. Exactly one major piece remains outside SpaceX.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But the most compelling rationale for a SpaceX-Tesla tie-up is the calendar.
&ldquo;The SpaceX IPO lockup expires in December,&rdquo; Ray says. &ldquo;Up to 20 years of paper gains &mdash; early funds, employees, institutions with LPs demanding distributions &mdash; become sellable in a single window.
&ldquo;There is exactly one announcement that turns December's sellers into December's holders: Your shares are about to become part of something far bigger.
&ldquo;To be clear, the two sides of the combination need to legally sort things out and get shareholder approval.
&ldquo;So the deal announced this year likely closes next year. But I'm betting on the announcement.
&ldquo;If it comes, it creates something without precedent: rockets, satellites, AI, robots, energy, chips, and self-driving cars inside one company. A company assembled to mint the currency of the next century from a place no competitor can follow.&nbsp;
&ldquo;This will be the greatest moonshot in the history of capitalism,&rdquo; Ray concludes.
To be clear, that doesn&rsquo;t make SpaceX a buy right now. SPCX is not a recommendation in any paid Paradigm publication. Most of the time, there&rsquo;s too much noise and not enough signal amid the price action in an IPO &mdash; and that&rsquo;s doubly true for a company with as much hype as SPCX.
But if the pre-IPO shareholders have an incentive to hold on beyond this year&hellip; maybe the folks who are about to involuntarily own shares through index funds can rest a little easier.
<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" />Stock Market Shift
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s been nearly five weeks since the S&amp;P 500 notched an all-time high. But don&rsquo;t confuse that with weakness in &ldquo;the market.&rdquo;
A shift took place during June: &ldquo;After months of the rally being concentrated in a handful of semiconductor stocks,&rdquo; colleague Davis Wilson writes at The Million Mission, &ldquo;market leadership finally began to broaden. Financials started participating. Health care joined the rally.
&ldquo;Small caps surged too. The Russell 2000 ended the first half more than 21% higher, putting the index on pace for its best first-half performance since 1991.
&ldquo;Granted, even that small-cap rally was heavily influenced by AI. Nine of the 10 best-performing stocks in the Russell 2000 are tied to artificial intelligence or semiconductors.
&ldquo;But investors are no longer just buying just the Magnificent Seven and a handful of chipmakers.
They're buying the broader AI ecosystem.
&ldquo;That's a much healthier market than the one we started the year with.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;The average stock is now starting to carry its weight,&rdquo; concurs Zach Schiedt &mdash; analyst for Altucher&rsquo;s True Alpha and Rickards&rsquo; Insider Intel.
Evidence shows up in RSP &mdash; the ETF in which all the S&amp;P 500 stocks comprise 0.2% of the holdings. RSP logged several all-time highs during the final days of June and first days of July.
&ldquo;When the average stock wins while the giants stall,&rdquo; says Zach, &ldquo;that tells you money is spreading out across the whole market instead of crowding into the same five names.
&ldquo;The mega-caps that carried this thing for years are cracking, with several slipping below key support. That money has to go somewhere, and right now it's fanning out into the rest of the market.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Of course, we mention all of this on a day when the price action is an exception to the recent rule.
As we check our screens, the S&amp;P 500 is up nearly three-quarters of a percent at 7,537. Meanwhile, RSP is flat on the day.
The Nasdaq Composite has powered 1.4% higher, back over 26,000. But the Dow is slightly in the red.
Precious metals are losing ground &mdash; gold at $4,147 and silver at $61.39. But crypto is showing renewed signs of life &mdash; Bitcoin over $63,000 and Ethereum in striking distance of $1,800.
U.S. oil futures are flat at $68.76 &mdash; about where they were during the Iran war&rsquo;s early days four months ago.&nbsp;
That said, we&rsquo;re hearing rumblings that China&rsquo;s oil imports are starting to pick up again. As we chronicled here <a href="https://paradigmpressroom.com/post/spacex-and-smoothies/#3">last month</a>, China slashed its crude imports by 40% year-over-year and stopped adding to its strategic petroleum reserve. But the country&rsquo;s small, semi-independent &ldquo;teapot&rdquo; refineries are starting to load up again.
<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 Data Centers and Heat Waves
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Amid a heat wave, it was a lucky break the Eastern Seaboard didn&rsquo;t experience widespread power outages over the holiday weekend.
On Friday, PJM &mdash; the country&rsquo;s biggest regional grid operator &mdash; said it was under federal orders to cut power consumption across its territory, covering 13 states stretching from New Jersey west to Illinois.
PJM was under assault from &ldquo;generator outages, massive overloading ⁠on its transmission lines and a surge in air conditioning use from prolonged sweltering &zwnj;heat,&rdquo; per a CNBC report.
And if you suspect data centers were a factor, you&rsquo;d be correct: Spot wholesale power prices in northern Virginia &mdash; home to &ldquo;Data Center Alley,&rdquo; the highest concentration of data centers in the world &mdash; surged past $2,000 per megawatt hour. That compares with $40 during normal times.
&ldquo;The surge in prices &zwnj;is mostly because it has become expensive to provide power across congested high-voltage power lines, according to industry analysts and PJM&rsquo;s operations data.&rdquo;
We warned at this time two years ago that AI was becoming &ldquo;<a href="https://paradigmpressroom.com/post/the-monster-that-ate-the-power-grid-ai">the monster that ate the power grid.&rdquo;</a> During 2025, Paradigm readers prospered from investing in companies like Vistra and Talen &mdash; &ldquo;independent power producers&rdquo; that aren&rsquo;t regulated utilities.
Turns out there&rsquo;s an ETF packed with these companies &mdash; the Virtus Reaves Utilities ETF (UTES). The share price has gone nowhere for nearly a year, but it might simply be digesting massive gains from 2024 and the first half of 2025. Worth a look&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Speaking of heat waves and stress on the power grid&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/65ETfUyo47Uim7Izx3CWgz/53c2b03dc6d980ab547ba8f6a90f804a/FMF-Issue-070626-ComicRelief.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: OpenAI Bailout, National Debt, &ldquo;Inalienable&rdquo; Rights
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;The bailout of Altman&rsquo;s OpenAI has been telegraphed for a long time,&rdquo; a reader writes after we took note last week of OpenAI&rsquo;s pitch for the federal government to take a 5% stake in the firm.
&ldquo;The only way this works for him is to have the taxpayer foot the bill. Now with the chief inside trader in charge, it will be much easier for him to get his wish.&nbsp;
&ldquo;As far as pushing the IPO out to &rsquo;27, perhaps he is getting a little nervous about having to actually open his books. Pretty sure when this bubble is over, the emperor will indeed be buck naked.
&ldquo;Thank you for all you do!&rdquo;
Dave responds: Hard not to wonder whether Anthropic, the company behind Claude, might make the same pitch soon.
About a month ago, Anthropic called on the AI industry to slow its pace of development. The company&rsquo;s rationale was this: The state of the art was advancing so quickly that AI models would soon be able to improve themselves without human intervention, touching off all manner of unintended consequences for society.
(Again, as with Altman, notice the humanitarian appeal.)
As one skeptic put it on X, &ldquo;Translation: People can&rsquo;t afford our models and our AI bags are about to blow up.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Any ideas on how to reduce the national debt?&rdquo; a reader inquires after <a href="https://paradigmpressroom.com/post/george-washingtons-warning">Sean Ring&rsquo;s guest edition</a> we published while the markets were closed Friday.
Another reader already has an idea: &ldquo;I believe what is always ignored is the waste, fraud and abuse of taxpayer funds.
&ldquo;Elon tried to correct the matter with the DOGE program but was shot down or ignored. I believe that if the waste, fraud and abuse of the taxpayer funds were eliminated, the debt would drop to one half of what it is; the problem, of course is that the present representatives and Senate are on the take as much as the normal crooks and that has to do with the elections and noncitizens voting.
&ldquo;A long time ago The 5 asked how does one become a millionaire and I answered by running for political office in D.C. and that still holds true today &mdash; a sad commentary on today's politicians (it may have always been that way from the beginning)!&rdquo;
Dave: Sorry, but &ldquo;waste, fraud and abuse&rdquo; are part and parcel of the system. If you want to reduce it, you have to reduce the size and scope of government first.
On that score, and to tackle the original question, nothing gets better until two things happen: <a href="https://paradigmpressroom.com/post/luigi-mangione-isnt-the-problem">the health care cartel</a> is smashed and <a href="https://paradigmpressroom.com/post/usd1-5-trillion">the military-industrial complex</a> is dismantled.
Neither of those things is likely to happen without a sovereign debt crisis forcing the issue. Which is why your editor is partial to investments geared toward tangible wealth &mdash; precious metals, base metals, energy, agriculture. People want real stuff when paper promises blow up.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> OK, we&rsquo;re going to put the whole inalienable/unalienable thing to bed for good today.
&ldquo;Haven&rsquo;t you ever accidentally hit a &lsquo;u&rsquo; when reaching for an &lsquo;i&rsquo;?&rdquo; a reader writes with tongue firmly in cheek.&nbsp;
(The QWERTY keyboard didn&rsquo;t come along until a century after the Declaration of Independence.)
More seriously he says, &ldquo;Obviously the discrepancy between Jefferson and the Declaration was a typo!&rdquo;
Meanwhile, the original reader who touched off the controversy wrote back: &ldquo;So it's &lsquo;tomato &mdash; tomato.&rsquo; My sincere apologies &mdash; to me it sounded like a David Hume/John Locke-type distinction.
&ldquo;I did find a source that opined that the i- form pretty much replaced the u-form during the 1830s. Again, sorry for the distraction. Thank you for filling up the rabbit hole.&rdquo;
Dave: Looks as if you found <a href="https://persistentenlightenment.com/2014/07/07/rights-unalienable-or-inalienable-a-concluding-philological-postscript/">the same article</a> I did, complete with a graph showing how indeed the usage shifted nearly 200 years ago.
No apologies necessary &mdash; you&rsquo;ve been around long enough to know that I&rsquo;ll make a conscious decision now and then to let the mailbag go off on a tangent!

FMF-Issue-070626-Featured

The SPCX Casino

For most of its history, the United States treated debt with suspicion, if not outright fear. That instinct came from four men who understood, in ways modern policymakers seem to have forgotten, debt is less an economic tool and more a political weapon.
George Washington, Benjamin Franklin, Thomas Jefferson, and John Adams, America&rsquo;s founders, architects, and revolutionaries, were students of history. History taught them one simple lesson: nations don't collapse overnight. They decay under the weight of obligations they can&rsquo;t control.
Washington warned against entanglements that could drag the young republic into endless commitments. Today, America is entangled in alliances abroad and its balance sheet at home.
Franklin, the pragmatist, understood the corrosive nature of excess. &ldquo;Rather go to bed without dinner than to rise in debt,&rdquo; he said. Today, the United States does neither. It spends without restraint and borrows without consequence&hellip; for now.
Unlike that statist Alexander Hamilton, Jefferson feared centralized financial power and permanent debt, arguing that each generation should pay its own way. Now, that idea is almost quaint. The current system doesn&rsquo;t just pass the bill to the next generation; it compounds it.
Adams was blunter still: &ldquo;There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.&rdquo;
We chose the latter.
Now comes the reckoning. Not in soft theory, but hard mathematics.
When Interest Becomes the Budget
Within a few years, interest on the national debt is projected to become the single largest line item in the federal budget &mdash; overtaking defense, Medicare, and eventually Social Security, if nothing changes.
This is one obscenely incredible post:

<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3KzgoEGvh50kdv6WvT74Gv/11e97debf45f378b5520e6960082ba65/mr-issue-06-11-26-img-2.png" width="540px" />

Credit: <a href="https://x.com/charliebilello/status/2064824365309444427">@charliebilello</a>
The numbers are already brutal. The government paid roughly $882 billion in net interest in fiscal 2024 &mdash; nearly triple the $345 billion paid in 2020, and more than it spent on national defense or Medicare. In 2025, that figure climbed again to an estimated $970 billion, or about 19 percent of all federal revenue collected.
Read that again. Nearly 1 in 5 tax dollars now goes just to pay interest. That&rsquo;s before a single soldier is paid, a single pension check is mailed, or a single road is repaired.
Based on CBO projections, annual interest costs will exceed $1 trillion around 2026 and continue to climb to roughly $1.8 trillion by 2035. Over the next decade, cumulative interest payments will run into the tens of trillions. Over the next 30 years, the U.S. is on track to spend nearly $100 trillion on interest alone if current policies persist.
This is nothing if not a slow-motion transfer of national income from taxpayers to bondholders.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1KiBlQ3H2zIuPqp43BY2CY/4e11fa54afd7244ea2a5fccec4a715dd/mr-issue-06-11-26-img-3.png" alt="" width="540px" />
You can see this in the above chart. Net interest costs are rising from a few hundred billion in 2020 to roughly $1 trillion by the mid-2020s, then marching relentlessly toward $1.8 trillion by 2035. It&rsquo;s not a gentle slope. It&rsquo;s an accelerating curve.
From Spending Priorities to Interest Tribute
The more alarming story isn&rsquo;t the nominal dollars. It&rsquo;s the changing composition of the federal budget itself.
Interest costs have already become the government&rsquo;s second-largest expenditure, trailing only Social Security and outpacing every other major program. As a share of total federal spending, interest is projected to reach 15&ndash;16 percent by the end of this decade &mdash; surpassing the prior peaks of the 1990s, but this time on a far larger debt base with far less room to maneuver.
As a share of the economy, interest is heading into uncharted territory. CBO-style projections show net interest rising from just over 3 percent of GDP in the mid-2020s to around 4.5 -- 5 percent by the mid-2030s, and higher still beyond that.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1J8E7uRvGQCgz1LQ0NCPC6/3c849c825b8db99427c6305aca550c1c/mr-issue-06-11-26-img-4.png" alt="" width="540px" />
The above chart tells this story cleanly: one line shows interest as a share of GDP grinding higher; another shows it climbing through the mid-teens as a share of federal outlays.
At some point, the budget is no longer about national priorities. It&rsquo;s about servicing past decisions.
That&rsquo;s the tipping point the four founders would have recognized immediately.
Once interest becomes your largest expense, you&rsquo;re not governing freely. You&rsquo;re managing liabilities.
Debt as Stealth Political Control
Every dollar spent on interest is a dollar that cannot go to defense or infrastructure. It&rsquo;s a transfer from citizens to creditors. Those creditors include foreign governments and large institutional investors whose only concern is that America keeps paying.
To put a finer point on it, let&rsquo;s look at the numbers for this past May, thanks again to Charlie Bilello:

<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3Osh6JjAoJ2ZLfj9NUxEP5/07cb28b2e245e6ad265ebd5cd4c982ae/mr-issue-06-11-26-img-5.png" width="540px" />

Credit: <a href="https://x.com/charliebilello/status/2064829101001556076?s=46">@charliebilello</a>
You read that right: $107 billion spent on interest in the month of May 2026, just behind Social Security.
This is where the founders&rsquo; warnings stop sounding like philosophical musings and start sounding like a risk memo.
Washington feared entanglements that would limit the republic&rsquo;s independence of action. A government that must roll over trillions of dollars at ever-higher rates is not fully independent. It&rsquo;s constrained by what markets will tolerate. One only needs to monitor The Donald&rsquo;s war-on/war-off policy, which depends only on when the markets are open.
Jefferson&rsquo;s skepticism of permanent debt was not anti-growth naivety. It was a recognition that a state that lives forever in arrears slowly mortgages its future policy choices.
Adams&rsquo; line about conquering a nation by debt rather than by the sword was not hyperbole. It was a description of how power actually operates: not through the now pass&eacute; direct coercion, but through the more modern means of controlling cash flows.
We&rsquo;re living in that world now. The U.S. is still nominally sovereign, militarily dominant, and the issuer of the world&rsquo;s reserve currency. But its fiscal trajectory is increasingly dictated by a simple math problem: how to service a ballooning stock of debt in a world of higher rates.
When interest consumes 15&ndash;20% of your budget and a quarter of your revenues, you&rsquo;re working for your bondholders, not your citizens.
What Happens When the Bill Comes Due
The markets will tolerate this&hellip; until they don&rsquo;t.
There is no precise breakpoint on a chart where confidence disappears. But the mechanisms are familiar:
<ul>
<li>Borrowing costs rise as investors demand compensation for fiscal risk.</li>
<li>The currency weakens as foreigners question its long-term purchasing power and store-of-value status. (Just check out TLT&rsquo;s dreadful returns since 2020.)</li>
<li>Policymakers are forced into bad choices: higher taxes, sudden spending cuts, financial repression, or higher inflation.</li>
</ul>
The CBO&rsquo;s long-term outlook already assumes that interest rates stay elevated enough to keep interest costs outpacing growth in both revenues and the underlying economy. That&rsquo;s how you get to projections where interest alone may be the single largest category of federal spending within a decade.
None of this would surprise Washington, Franklin, Jefferson, or Adams. They had all studied what happened to overextended empires like Spain, France, and Britain. Their reach exceeded their revenue. Our Four Fathers understood that debt, if abused, was a slow form of national subjugation.
Unfortunately, their successors (and their voters) ignored them.
Wrap Up
The result is visible now, not in abstract theory, but in the federal budget line where interest is about to eclipse everything else.
The successors systematically dismantled every cultural, political, and fiscal safeguard its four founders had tried to leave in place to stop this from happening.
Debt becomes destiny. And the charts are telling you: destiny is getting closer.

FMF-Issue-070426

George Washington’s Warning

<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" />Celebrate the Second!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;The second day of July 1776 will be the most memorable epoch in the history of America,&rdquo; wrote Founding Father John Adams &mdash; in a letter to his wife, Abigail.
<blockquote>I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires and illuminations from one end of this continent to the other, from this time forward forever more.</blockquote>
No, not the Fourth, Adams believed. The second, 250 years ago today.
It was on July 2, 1776, that the Continental Congress, meeting in Philadelphia, passed a resolution offered nearly a month earlier by Virginia&rsquo;s Richard Henry Lee&hellip;
<blockquote>Resolved, That these United Colonies are, and of right ought to be, free and independent States, that they are absolved from all allegiance to the British Crown, and that all political connection between them and the State of Great Britain is, and ought to be, totally dissolved.</blockquote>
The delegates had spent much of the previous week debating Lee&rsquo;s resolution. Meanwhile, the actual Declaration of Independence languished &mdash; having been submitted by Thomas Jefferson back on June 28.
Only after Lee&rsquo;s resolution passed did the delegates get down to debating and editing Jefferson&rsquo;s document &mdash; which they adopted on the Fourth. Whew.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Then there&rsquo;s the matter of whether the Declaration was signed on the Fourth.&nbsp;
The overwhelming historical evidence is that the signing took place on Aug. 2, once the final draft had been put on parchment.
That said, late in their lives both Adams and Jefferson swore up and down it was signed on the Fourth. The 20th-century Princeton historian Julian Boyd, who spent over 35 years editing The Papers of Thomas Jefferson, was likewise persuaded &mdash; but he remains in the minority.
<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;re in the weeds here, we should (briefly) return to the inalienable/unalienable thing.
I referred in Tuesday&rsquo;s edition to our &ldquo;inalienable&rdquo; rights &mdash; much to the consternation of a longtime reader who pointed out the language of the Declaration says &ldquo;unalienable.&rdquo; He asserted there&rsquo;s a huge difference. An AI search told me there was no meaningful difference &mdash; but that didn&rsquo;t square with my memory of a lecture I listened to long ago.
Now another reader weighs in: &ldquo;As a copy editor/tech editor for 60 years, I was predisposed to ask the same question way back in school days. The answers I always got were exactly what AI was telling you. The words mean the same.&nbsp;
&ldquo;In my professional opinion, they even mean the same today; anyone trying to build a case for a distinction is simply &lsquo;making a distinction without a difference.&rsquo;&rdquo;
I subsequently managed to locate the lecture recording. Turns out my memory was faulty and the AI take is correct. As the late libertarian scholar George H. Smith said in the 1980s&hellip;
<blockquote>You may have noticed that although we usually say inalienable rights spelled with an &ldquo;i&rdquo; the Declaration speaks of unalienable rights spelled with a &ldquo;u.&rdquo; Does this difference reflect a subtle change in meaning? Most likely not. It probably reflects what we call today a typographical error.&nbsp;</blockquote>
<blockquote>Jefferson used the word inalienable in his original draft. Where and how the &ldquo;i&rdquo; became a &ldquo;u&rdquo; is anyone&rsquo;s guess.</blockquote>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> No matter. Whichever word you use, the meaning is the same &mdash; and essential to the Founders&rsquo; vision. Smith again&hellip;
<blockquote>Jefferson and other radical Whigs believed that human beings have natural rights. Natural rights are rights we were born with, rights we enjoy in virtue of our nature as human beings. These rights do not rely for their validity on any person or government. And no person or government can legitimately violate them or take them from us.&nbsp;</blockquote>
<blockquote>Natural rights seemed so obvious to many 18th-century Americans that the Declaration calls them self-evident.</blockquote>
Natural rights have nothing to do with majority rule &mdash; which too many miseducated Americans believe to be at the heart of the American experiment.
No. Your inalienable rights are rights that no majority &mdash; no matter how large &mdash; can ever take away from you.
That&rsquo;s something to celebrate and preserve &mdash; today, and on the Fourth and on every other day as well.
<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" />Meta&rsquo;s Lies, OpenAI&rsquo;s Backdoor Bailout
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Facebook is a big fat liar,&rdquo; declared our AI authority James Altucher today on the Paradigm mobile app.
When we left you yesterday, the big tech news was that Facebook parent Meta planned to lease its mushrooming data-center infrastructure to outside customers &mdash; that is, getting into the same business as Amazon Web Services, Microsoft Azure and CoreWeave. META shares leaped almost 10% on the day while CRWV tanked hard.
&ldquo;Let's get this straight,&rdquo; says James: &ldquo;META is not selling compute and companies that sold off are going to bounce back hard.
&ldquo;First off, META has paid tens of billions of dollars to CoreWeave, Google and others to BUY compute from them. In fact, META's demand for compute has been so great that Google has had to ration them.
&ldquo;The idea that they have excess compute is ridiculous, particularly when they can't even buy enough compute to meet their own demands.
&ldquo;So why was this news leaked? To get the stock price up so they can sell shares at inflated prices to buy compute.&rdquo;
James says he&rsquo;d be a &ldquo;strong buyer&rdquo; of companies that took a hit from the news yesterday &mdash; CoreWeave as well as memory makers Micron and SanDisk.&nbsp;
Checking our screens CRWV and MU are down another 3.5% on the day&hellip; while SNDK has shed another 11%. META has given up nearly half of yesterday&rsquo;s gains.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile the big tech news today is ChatGPT maker OpenAI pitching the federal government on a backdoor bailout.
&ldquo;OpenAI has discussed giving a 5% stake to the U.S. government,&rdquo; reports the Financial Times, &ldquo;as the $852 billion AI startup seeks to clear political obstacles by securing financial buy-in from the Trump administration.&rdquo;
Giving. Yes, how magnanimous on the part of OpenAI co-founder and CEO Sam Altman. What have we peasant taxpayers done to deserve this splendid humanitarian gesture?
&ldquo;Giving the government an ownership stake,&rdquo; the article goes on, &ldquo;could help secure good relations with the administration and would mark an attempt to address political blowback by sharing the wealth generated by AI with the public.&rdquo;
Wealth? OpenAI is losing money hand over fist &mdash; depending on who you want to believe, $21 billion during 2025, more than double the 2024 total.
As one sober assessment on X puts it, &ldquo;This is bullish if you now assume that the government will be very incentivized to make sure AI doesn&rsquo;t fail&hellip;
&ldquo;This is bearish if you assume that OpenAI is having some serious issues and now the U.S. gov will have to hold the bag when things don&rsquo;t work out.&rdquo;
As you&rsquo;ll recall, OpenAI has filed for an IPO with the Securities and Exchange Commission. But the latest scuttlebutt is that the offering will be pushed back into 2027. One theory is that a delay would improve the odds of the company reaching Altman&rsquo;s goal of a $1 trillion valuation at the time it starts trading publicly. Stay tuned&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" />About the Job Numbers&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> With a three-day weekend starting tomorrow, the government is out with its monthly jobs report a day early.
The wonks at the Bureau of Labor Statistics conjured 57,000 new jobs for June.
On the one hand, that&rsquo;s not an awful number &mdash; not with the U.S. border having been more or less sealed since the spring of 2025. We no longer need 150,000 or more new jobs each month to keep up with population growth; several experts think 30,000 is adequate.
On the other hand, no one among dozens of Wall Street economists was expecting a number this low. In addition, the robust numbers for May and April were revised down &mdash; and not by a little.
One eye-opener in the report was a monthly decline in the number of leisure-hospitality jobs. Really? With the World Cup going on in 11 U.S. cities? OK then&hellip;
The official unemployment rate ticked down to 4.2%.
Your editor is always suspicious of the headline job numbers. Like the official inflation rate, they&rsquo;ve been subject to statistical tinkering over the last 40-plus years.
There are a couple of numbers the statisticians can&rsquo;t game, and they don&rsquo;t look good&hellip;
<ul>
<li>The labor force participation rate &mdash; the percentage of working-age adults either working or looking for work &mdash; sits at 61.5%. Aside from the COVID disruptions of 2020, the number hasn&rsquo;t been this low since June 1976, just ahead of the Bicentennial</li>
</ul>
<ul>
<li>The employment-population ratio sits at 59.0%. It does not sit at 50-year lows &mdash; but it&rsquo;s been dropping like a stone for six months.</li>
</ul>
In theory, the lower-than-expected headline number of 57,000 should be cooling expectations that the Federal Reserve will raise interest rates later this year. And in theory, that should be giving the stock market a lift today.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Instead, the major U.S. stock indexes are a decidedly mixed bag.
At last checkthe Nasdaq was down over a half percent, the Dow up over three-quarters of a percent and the S&amp;P 500 pancake-flat at 7,484.
Instead, it&rsquo;s the precious metals enjoying an across-the-board rally &mdash; gold up $95 to $4,125 and silver up two bucks, just a penny away from $61. Crypto is also bouncing, with Bitcoin well over $61,000 and Ethereum approaching $1,700.
U.S. oil futures have sunk nearly another buck to $67.70 &mdash; where it was on Day 3 of the Iran war.
The latest drop comes despite Vice President Vance telling an interviewer that the purpose of the 60-day &ldquo;memorandum of understanding&rdquo; is merely to buy time &ldquo;to sort of refill the world&rsquo;s oil economy&rdquo; after which the Trump administration would &ldquo;see where the hand is.&rdquo;
Does Vance think no one in Tehran will see this interview?
<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" /> Well as long as we had air conditioning on the brain <a href="https://paradigmpressroom.com/post/crank-up-the-all-american-ac">in yesterday&rsquo;s edition</a>&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3adb1tKYwxOy2MOSTSszTx/72956d2ae6c0da0c9c461261a6b57f25/FMF-issue-070226-2.png" alt="Comedic Relief" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Pipelines, American Comeback
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Perhaps you can help me with something. Why would anyone, other than Iran, ship oil (or anything else) through the Strait of Hormuz in 24 months?&rdquo; a reader inquires.
&ldquo;I would think they would be actively expanding pipelines and other infrastructure to bypass this chokepoint in the future &mdash; rather than be held hostage by Iran anytime they want to do so.
&ldquo;I would certainly see Saudi Arabia as leading this and helping the Gulf states, if needed, bring it to fruition. Nothing else makes long-term sense, but I am surprised that there has been no news around planning for a long-term &lsquo;Hormuz alternative.&rsquo;
&ldquo;Love your work!&rdquo;
Dave responds: It&rsquo;s in the works. Or at least there&rsquo;s some jawboning.
Last week the CEO of the French oil giant Total said &ldquo;we must invest in pipelines to bypass the strait, which is an absolute priority." It wasn&rsquo;t clear whether he was speaking of his own firm or if he was using the royal &ldquo;we&rdquo; addressing the industry as a whole.
In any event, pipelines aren&rsquo;t a panacea.&nbsp;
Iran made a strategic decision during the hot-war phase this spring to conduct only theatrical pinprick attacks on Saudi Arabia&rsquo;s Yanbu oil terminal &mdash; which handles the crude coming from an east-west pipeline crossing the kingdom.&nbsp;
If Tehran had decided to attack for real, the impact would have been catastrophic &mdash; taking another 5 million barrels of oil a day off the market.
Too, as our own Byron King points out, oil pipelines don&rsquo;t solve the &ldquo;Hormuz problem&rdquo; for liquefied natural gas, helium, sulfur, fertilizer and so on.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Can I share yesterday&rsquo;s 6th Bullet with friends and family?&rdquo; a reader writes after yesterday&rsquo;s extended edition.
Adds another: &ldquo;I have never read such a positive, encouraging article in any of the
many financial newsletters to which I subscribe. Thank you, Ray Blanco.&rdquo;
Dave: You can always share the material we publish at our daily e-letters. They&rsquo;re free content intended to supplement your paid subscription.
We knew Ray&rsquo;s piece would be a hit. Going into the holiday weekend, we&rsquo;re cross-posting it at several of our sister publications. The handiest link to give to friends and family is <a href="https://rudeawakening.info/posts/the-builders-are-back">today&rsquo;s Rude Awakening</a>. Enjoy!

FMF-issue-070226-Featured

Celebrate the Second!

<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" />Crank up the (All-American) AC
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So you&rsquo;ve probably heard about the heat wave in Europe. But maybe you haven&rsquo;t heard about the crackdowns on people who &mdash; God forbid &mdash; want relief from the heat.
&ldquo;Air conditioning is very rare in European homes,&rdquo; says CNN &mdash; present in only one of every five households. In the U.K., it&rsquo;s only one of every 10.&nbsp;
&ldquo;Many residents ride out the searing heat with the help of electric fans, ice packs and cold showers.&rdquo;
&ldquo;It was my luck,&rdquo; writes Matthew Petti at Reason, &ldquo;that I arrived in Britain to pick up my master's degree just before a heat wave hit&rdquo; &mdash; with daytime highs of 95 Fahrenheit.
<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 that people across the Atlantic relish suffering through the heat. It&rsquo;s that Europe&rsquo;s control freaks and power trippers want people to suffer.
&ldquo;A combination of environmental regulations, NIMBYism and cultural snobbishness have slowed down Europeans who want to buy an AC unit,&rdquo; Petti writes.
For instance&hellip;
<ul>
<li>Homeowners with AC are subject to periodic inspections in several countries &mdash; including Hungary, Slovakia and Greece. The inspections cover everything from energy usage to noise to historic preservation rules</li>
</ul>
<ul>
<li>For several years, Spain and Italy have ordered public and commercial buildings to keep the thermostat no lower than 81 and 77 degrees Fahrenheit respectively during summertime</li>
</ul>
<ul>
<li>In Switzerland&rsquo;s Geneva canton, homeowners must prove a medical need before they can install AC.</li>
</ul>
Of course, these rules are frequently &ldquo;for thee, but not for me.&rdquo;&nbsp;
Last Friday the European Commission&rsquo;s headquarters building in Brussels shut down the AC &ldquo;due to extreme weather conditions&rdquo; &mdash; but only on the seven lowest floors. The senior staff on floors 8&ndash;13, including EC President Ursula von der Leyen, stayed cool as cucumbers.
Complained one of the lower-floor staffers to Politico: &ldquo;It&rsquo;s like feudalism.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And then there&rsquo;s the U.K. &mdash; where people have been ordered to remove AC from their homes even as temps soar past 100 Fahrenheit.
Local officials &ldquo;have told residents to take down their cooling units over concerns about carbon dioxide emissions,&rdquo; reports the conservative-leaning GB News channel.
The rules are frequently confusing and contradictory &mdash; setting up &ldquo;situations where units are fitted believing they comply with rules, only for council enforcement teams to turn up and demand their removal.&rdquo;
In London&rsquo;s Camden section, inspectors told a resident to &ldquo;permanently remove&rdquo; two cooling units from the rear of the property, saying they violated the neighborhood council&rsquo;s &ldquo;cooling hierarchy&rdquo; policy.
The homeowner appealed the decision &mdash; only to be told to open second-floor windows for ventilation. When the homeowner raised concerns about crime and the risk of a break-in, the inspectors then pointed out &ldquo;the absence of ceiling fans&rdquo; in the home &mdash; even though there&rsquo;s no explicit requirement for ceiling fans.
In the end, the homeowner won an appeal &mdash; by pointing out the property did have solar panels, thereby assuaging the busybodies&rsquo; &ldquo;climate&rdquo; concerns.
And that&rsquo;s just one example of many in Great Britain. The situation is so absurd it&rsquo;s become the stuff of memes&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/RPs1SpMDyLCyEtSome8R1/ac2b28051cf6d470ecda4bcb0146e1e9/FMF-Issue-070126-1.jpg" alt="AC MEME" width="540px" />
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> No wonder Europeans visiting the United States for the World Cup seem so happy &mdash; especially now amid our own heat wave.
&ldquo;I've been getting a kick with news stories of foreigners visiting the U.S. for the World Cup, awestruck and marveling at our advanced level of civilization &mdash; like air conditioning, and how restaurants just come right out and serve water when you sit down,&rdquo; observes Paradigm&rsquo;s resident oil field geologist Byron King. &ldquo;There's even ice (!) and free refills at fast-food joints.&nbsp;
&ldquo;Of course, this also reflects the U.S. energy buildout, in which energy is widely available and relatively low-cost.&nbsp;
&ldquo;By comparison, other nations of the world are energy-impoverished... even so-called &lsquo;advanced&rsquo; countries like Germany and the U.K.&rdquo;
Last week on the Daily Feed section of the Paradigm Press mobile app, Byron shared this infographic courtesy of the Visual Capitalist site. &ldquo;Helps put it all in perspective,&rdquo; he says.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6W2d1c7jK7Qtm6LqhAFwLl/0247a1b4edf1a781026152099754a52d/FMF-Issue-070126-2.png" alt="Fuel Consumption chart" width="540px" />
&ldquo;And note how China-China-China is such a vast energy producer, much of it for industry (versus air conditioning, ice, fast food, etc.). And note how China generates more energy from just coal than the U.S. generates energy in total.&nbsp;
&ldquo;Point is... when good things happen, follow the energy trail. And when bad things happen with energy... well, that's a predictor as well.&rdquo;
Something to think about as we recall how the Founders sweltered their way through adoption of the Declaration of Independence in Philadelphia 250 years ago. On this day in 1776, the weather diaries kept by Thomas Jefferson and Phineas Pemberton suggest temps well into the 80s and thick humidity.&nbsp;
And no AC for any relief.&nbsp;
Now there&rsquo;s something to be grateful for this week as you crank down the thermostat. Only in America! (Well, Japan and South Korea, too. Their adoption of AC in the home is nearly as extensive as our own&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" />Meta, Markets, Oil
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Among the big market movers today is Facebook/Instagram parent Meta.
&ldquo;META is up 10% today after giving investors exactly what they wanted: a plan to monetize its massive AI spending,&rdquo; says colleague Davis Wilson at The Million Mission.
&ldquo;The company is reportedly developing a cloud computing business that would rent excess AI compute to outside customers &mdash; putting it in competition with Amazon Web Services, Microsoft Azure, Google Cloud and even CoreWeave.
&ldquo;For months, investors questioned whether Meta's hundreds of billions of dollars in AI infrastructure spending would ever generate a return.
&ldquo;Now they have an answer.
&ldquo;Instead of letting unused computing power sit idle, Meta&rsquo;s turning it into a new revenue stream.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Not that Meta&rsquo;s move is powering the rest of the stock market today.
To be sure the major indexes are in the green &mdash; but in the case of the Nasdaq, just barely. The S&amp;P 500 is up about a quarter percent; the 7,500 level is looking more and more like a ceiling at the moment.&nbsp;
The Dow is up 0.4% &mdash; once more in record territory at 52,522, goosed by the addition of Google parent Alphabet to the index this week (replacing Verizon) along with strong performance by Caterpillar.
Precious metals are staging a modest comeback, gold up nearly $75 to $4,079 &mdash; with silver up 2.7% and back over $60. Bitcoin has hefted its way back over $60,000 and Ethereum over $1,600.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. crude futures are sinking toward $68 &mdash; apparently because there&rsquo;s no sign that U.S. reserves are being replenished.
The Energy Department is out with its weekly inventory numbers: Despite a shaky &ldquo;memorandum of understanding&rdquo; between the United States and Iran, the U.S. government drained another 5.5 million barrels from the Strategic Petroleum Reserve, dropping its total level to another low last seen in 1983.
Private-sector reserves were drained an additional 3.8 million barrels. The silver lining here is a small inventory build at the giant terminal in Cushing, Oklahoma. As mentioned here in recent days, Cushing was approaching &ldquo;tank bottoms&rdquo; beyond which it can&rsquo;t go on pumping and transferring crude.
<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" />&ldquo;It&rsquo;s for the Children&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Ready to verify your age before you go online? The U.S. House just took a huge step in that direction.
The late Rush Limbaugh observed that some of the worst legislation tends to be enacted &ldquo;for the children&rdquo; &mdash; and that&rsquo;s certainly the case with the &ldquo;Kids Internet and Digital Safety Act,&rdquo; which of course shortens to KIDS Act.
Digital rights groups like Reclaim the Net warn that the KIDS Act raises huge concerns &ldquo;about government overreach, privacy erosion and the expansion of online surveillance.&rdquo;
So of course the legislation passed the House Monday night with <a href="https://clerk.house.gov/evs/2026/roll228.xml">overwhelming bipartisan support</a>, 267-117.
&ldquo;Buried inside the KIDS Act are provisions that will push online services to verify all users&rsquo; ages, require government-directed moderation policies for online speech and even create new rules about private and encrypted communications,&rdquo; writes Joe Mullin for the Electronic Frontier Foundation.&nbsp;
&ldquo;While supporters continue to claim this bill protects minors online, its requirements come at the expense of privacy, free expression and the ability of people of all ages to use the internet without revealing sensitive data.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Technically the measure doesn&rsquo;t require websites and apps to conduct age verification. But it sure as heck pressures them to do so.&nbsp;
&ldquo;The problem,&rdquo; Mullin writes, &ldquo;is a website operator doesn&rsquo;t need actual knowledge that a user is a minor to get in legal trouble. It applies when a platform &lsquo;knows or should have known&rsquo; a user&rsquo;s age &mdash; a low, negligence-style standard of knowledge. If an online service gets it wrong, it&rsquo;s going to be up to courts and regulators to decide, after the fact, if an online service &lsquo;should&rsquo; have known a user was 16.&rdquo;
Given that burden, most website/app operators will simply opt to make all users verify their age.&nbsp;
&ldquo;Some companies may respond by requesting driver's licenses or passports,&rdquo; Mullin continues.
&ldquo;Others will rely on age-estimation systems that attempt to guess users' ages by looking at existing activity or doing facial scans.&rdquo;
Say goodbye to online anonymity.
And it gets worse. Another section of the bill creates new rules for encrypted messaging platforms like WhatsApp &mdash; aimed at curbing discussion among young people about drugs, alcohol, gambling and so on.
&ldquo;The KIDS Act never answers an obvious question,&rdquo; Mullin says: &ldquo;how exactly is a platform supposed to address those activities if they&rsquo;re inside encrypted communications that it can&rsquo;t read?&nbsp;
&ldquo;That will create pressure for providers to weaken private communications or limit features on encrypted private services.&rdquo;
The good news is that the Senate has yet to act. The bad news is that the Senate version of the KIDS Act is even more restrictive.&nbsp;
We&rsquo;ll keep you posted&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> You laugh because you know it&rsquo;s true&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1GnfkQWPO2Qj7oMbV7YYZy/83284730e54c0d8c92f23dc0f979a7bf/FMF-Issue-070126-3.png" alt="Comedic relief" width="540px" />
Amazing how they can pass legislation shredding online privacy but just can&rsquo;t get around to that bill limiting their own trading activity&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: &ldquo;Unalienable&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After I closed yesterday&rsquo;s edition with a reference to &ldquo;our inalienable rights,&rdquo; a longtime reader was quick to correct&hellip;
&ldquo;Um, Dave, that's &lsquo;unalienable&rsquo; rights. More than a slight difference &mdash; means we can't even give 'em away.
&ldquo;New poll for you -- how many of your readers catch it?&rdquo;
Dave responds: You&rsquo;re the only one who wrote in. And it is true: The parchment says &ldquo;unalienable.&rdquo;
I confess to listening to an authoritative lecture years ago about the distinction &mdash; and it&rsquo;s become muddled in my mind with the passage of time.
Unfortunately, I&rsquo;m on deadline and I can&rsquo;t trust AI to refresh my memory.&nbsp;
One link after another suggests no difference between the two, even at the time the Declaration of Independence was adopted&hellip; that Jefferson&rsquo;s early drafts said &ldquo;inalienable&rdquo; and somewhere along the line it was inadvertently changed to &ldquo;unalienable&rdquo;... and that throughout the 19th century, common usage adopted &ldquo;inalienable&rdquo; especially as Abraham Lincoln used the word in his speeches.
And I don&rsquo;t trust any of it. I&rsquo;ve got the authoritative lecture in audio form somewhere on my computer, but Apple&rsquo;s deprecation of iTunes over the years has made it impossible for me to locate it readily. (Maybe AI can help me?)
Don&rsquo;t get me started on how Apple has gone down the tubes, a process underway even while Steve Jobs was still alive&hellip;

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