<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Elon Musk, Leader of the Counter-Elites
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Has a billionaire (other than Donald Trump) ever been this overtly political?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4FQR7a9iI6al5YH7w2Gck6/e3efb4096a0397f6a6edff8f1e3d94b7/the-telegraph.png" alt="the telegraph" width="540px" />
Through their foundations and other vehicles, Bill Gates and Warren Buffett wield their might in more subtle ways than presidential politics. You can even say the same of Michael Bloomberg, his own short-lived run for president in 2019&ndash;2020 notwithstanding.
&ldquo;Elon Musk joined Donald Trump onstage at a rally on Saturday night,&rdquo; reports The Telegraph, &ldquo;as the former president returned to the scene where he was fired at by a would-be assassin&hellip;
&ldquo;There were clear differences this time around. The ex-president was speaking from a podium encased in bulletproof glass. The rooftop used by [Thomas] Crooks had been blocked from view by shipping containers and haulage trucks.&rdquo;
But it&rsquo;s Musk&rsquo;s bunny-hopping appearance that commands our attention this morning.
Not because he said anything unique or newsworthy. (He called this year &ldquo;the most important election of our lifetime.&rdquo; Musk was born in 1971.)
No, it&rsquo;s more than anything he said&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Whether he planned it or not, Musk has made himself the face of a counter-elite in the United States &mdash; maybe even more than Trump.
Counter-elite is a term coined by the Russian-American researcher and writer Peter Turchin.
In books like 2023&rsquo;s End Times: Elites, Counter-Elites and the Path of Political Disintegration, Turchin lays out a thesis that you can&rsquo;t have a civil war without competing groups of elites.
As he sees it, a united ruling elite can maintain control over a population indefinitely even in the face of major grassroots opposition. It&rsquo;s only when the elites start fighting among themselves that the edifice starts to crack.
As we&rsquo;ve chronicled before, there was almost no billionaire support for Donald Trump in 2016. The Wall Street Journal reported that nine of the 10 biggest donors gave to Hillary Clinton. (Home Depot&rsquo;s Bernie Marcus was the 10th.) Among donations of $1 million or more, Clinton collected $180 million, compared with Trump&rsquo;s $33 million.
Eight years later, Trump&rsquo;s elite backers include Musk&hellip; the venture capitalist Marc Andreessen&hellip; and hedge fund operators Bill Ackman and Paul Singer. Andreessen was a Clinton supporter eight years ago. Ackman, too, has a history of backing Democrats and he supported Nikki Haley in the 2024 GOP primaries. Eight years ago, Singer was a Never-Trump Republican.
But Musk is sui generis among this group. Only he commands the status of a rock-star CEO, maybe the first since Steve Jobs. His ranking as the world&rsquo;s richest man &mdash; at $244 billion, he comfortably outpaces No. 2 Jeff Bezos on the Forbes 400 &mdash; only adds to the mystique.
And he was largely apolitical until a few years ago; near as we can tell his &ldquo;red pill&rdquo; moment was when he kept Tesla&rsquo;s factory in Fremont, California open in May 2020, defying Alameda County&rsquo;s lockdown orders.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Earlier this year, we conducted an informal, open-ended survey of reader opinion about Musk.
We welcomed everyone&rsquo;s input, but we were especially interested in the opinions of the people who&rsquo;d come aboard via Altucher&rsquo;s Investment Network starting in late 2023.
At the risk of overgeneralizing, this is a group that bristles at the mention of anything adjacent to politics in this e-letter. Some are openly hostile to Donald Trump.
But in the main, the opinion toward Musk was favorable and the criticism was measured. I don&rsquo;t remember anyone saying words to the effect of I hate that fascist and I will unsubscribe at the next mention of him.
This is good and healthy. Because while politics does alter flows of money, you should strive to avoid letting it affect your investment decisions.
Especially in light of Musk&rsquo;s next big public appearance this coming Thursday.
With that in mind, did you miss our Elon Musk&rsquo;s Road to $1 Trillion Summit last night?
There, we shared the results from months of research into the big Tesla announcement Musk is set to make on Thursday&hellip; and why we believe one tiny AI stock is essential to Tesla&rsquo;s plans.
We&rsquo;re looking at profit potential of 10X in the next year and 50X beyond that.
It&rsquo;s still not too late to get caught up. <a href="https://pro.paradigm-press.info/m/2364862">Click here to get started</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Bull Market Still Intact
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Even with the distinct possibility of a short-term sell-off, I&rsquo;d caution you not to bet against this bull market,&rdquo; says Enrique Abeyta &mdash; the newest addition to the Paradigm Press team.
At one time, Enrique managed over $1 billion for a hedge-fund outfit. Like many denizens of the newsletter biz, he&rsquo;s happier writing for an audience of everyday folks like you than he ever was amid the backstabbing, brownnosing culture of Wall Street. Among his bang-on market calls in recent years was amid the COVID crash: Within three days of the bottom in March 2020, he said stocks were a &ldquo;screaming buy.&rdquo;
Back to the present: &ldquo;Going into October, the stock market has been higher for five months in a row,&rdquo; he says in our new Truth &amp; Trends e-letter.
&ldquo;This has happened 28 times since 1954. And in all instances except one, it was higher one year later.&rdquo; (The lone exception was 2018.)
What&rsquo;s more, Enrique shares a chart from the legendary market analyst Ed Yardeni &mdash; depicting every bull market since the 1960s.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6cxsiF0EFROhnLMUK3UuTF/c73a729325dd345773dac9e3b6bffb3d/S_P500Picture1.png" alt="S&amp;P 500" width="540px" />
&ldquo;The current bull run that started in October 2022 has the stock market up a little over 60%,&rdquo; Enrique says. &ldquo;Only one of the previous bull markets has been up less than that. In fact, the average bull market in the last six decades has gone up more than 200%. And bull markets have also been getting longer and stronger.&rdquo;
That said, don&rsquo;t discount the likelihood of autumn volatility. &ldquo;In the near term,&rdquo; he says, &ldquo;sentiment has gotten quite stretched. It&rsquo;s now back to levels where the stock market has previously corrected.&rdquo;
Possible catalysts for a downdraft include an escalating Middle East conflict &mdash; about which more shortly &mdash; and the proverbial October surprise ahead of Election Day.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> For the moment, though, the stock market is quiet &mdash; the major averages down a half-percent or less to start the week. At 5,727 the S&amp;P 500 sits only 35 points below its record close notched a week ago today.
Gold has sold off below $2,650 and silver has been slammed back below $32. Bitcoin, on the other hand, has rallied to within $250 of the $64,000 mark.
The biggest selling is in the bond market, pushing prices down and yields up. The yield on a 10-year Treasury note is back above 4% for the first time in over two months.
<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" />Oil: Geopolitical Risk Still Underpriced
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Crude is up another two bucks to start the week, a barrel of West Texas intermediate now $76.56 &mdash; the highest since late August.
Today is the anniversary of the Hamas attack inside Israel a year ago. The consensus among Israeli politicos a year later was captured last week by Naftali Bennett, who was prime minister for a year in 2021&ndash;22: &ldquo;Israel has now its greatest opportunity in 50 years, to change the face of the Middle East.&rdquo;
Presumably that entails Gaza, the West Bank, Lebanon, Yemen and Iran. Maybe Iraq and Syria too. Definitely Iran&rsquo;s nuclear program &mdash; even though every year since 2007 U.S. intelligence has said there&rsquo;s no evidence Tehran is working to make a bomb.
Assuming this &ldquo;makeover&rdquo; can be accomplished at all, it can happen only with support and cooperation from Washington &mdash; which would open up U.S. aircraft and bases in the region to attack.
In which case, $76.56 doesn&rsquo;t begin to reflect the risk.
Even the mainstream is alert to the possibility: &ldquo;$100 Oil Could Be the October Surprise No One Wanted,&rdquo; says a CNN headline.
&ldquo;Investors, having been burned by prior geopolitical scares that quickly fizzled, have grown numb to the cascade of crises around the world. This time they&rsquo;re waiting for evidence of actual supply disruptions before bidding up the price of crude oil.&rdquo;
Tehran could, if it wanted, easily shut down the Strait of Hormuz &mdash; only 21 miles wide at its narrowest point. Shut it down and large quantities of crude from Saudi Arabia, the United Arab Emirates, Iraq and Kuwait would be stranded.
&ldquo;In such a scenario, global oil markets would be in uncharted waters,&rdquo; says a report from Citigroup &mdash; &ldquo;with oil prices likely experiencing a sharp and significant spike well past previous record highs.&rdquo;
How high is that? The record remains $147 a barrel shortly before the 2008 financial crisis went critical.
That would be bad enough, but if you adjust for inflation it&rsquo;s $215.
For the moment gasoline prices are under $3 a gallon in 18 states.
<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" />Update: Helene, Quartz, Semiconductors
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The secretive Belgian conglomerate that controls the world&rsquo;s sole source of high-purity quartz reports &ldquo;significant progress&rdquo; in recovering from Hurricane Helene.
As we mentioned a week ago today, the world&rsquo;s semiconductor industry is surprisingly dependent on a mine site just north of Spruce Pine, North Carolina. The quartz that emerges from there is essential to make silicon wafers for semiconductor manufacturing.
Sibelco, the company that owns the mining complex, acknowledges that the area was &ldquo;hit particularly hard.&rdquo;
However, &ldquo;The initial assessment indicates that our operating facilities in the Spruce Pine region have only sustained minor damage,&rdquo; the company said in a statement issued Friday. &ldquo;Detailed assessments are ongoing.&rdquo;
Not a lot of transparency there. Author Ed Conway, who spotlighted Spruce Pine in his 2023 book Material World, believes it will be several months before the operation is back at pre-Helene capacity.
&ldquo;It&rsquo;s quite hard to imagine this won&rsquo;t have at least some impact,&rdquo; he writes at his Substack site.
To be continued&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: Middle East Mess
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />On the subject of the Middle East war metastasizing (and potentially driving oil over $100)... a reader responds to the mailbag section in <a href="https://paradigmpressroom.com/post/what-is-sam-altman-afraid-of">Friday&rsquo;s edition</a>&hellip;
&ldquo;Dave, I do not see how anyone can say that President Trump cannot handle Mideast policy better than Vice President Harris. He has already proven it during his first term, when there was much less trouble in southern Lebanon, Yemen, Gaza and Iran (primarily because he prevented Iran from financing terrorism to the degree we see at present).
&ldquo;Furthermore, I have been an evangelical Christian for 40 years and lived in four different parts of the country. I have yet to find any who believe American foreign policy governs or influences the timetable for the return of Jesus. We do not believe you can play wag the dog with God. You do hear about such people on mainstream media documentaries, but I can tell that a lot of those people and all of their detractors generally have no understanding of the fundamentals of the faith and should be discounted as imposters.
&ldquo;They may have churches, but they are not accurate representations of evangelical Christians and do not have the numbers to be the majority of evangelicals in President Trump's base, much less the majority of his base as a whole.
&ldquo;Thanks for the free flow of opinion.&rdquo;
Dave responds: Far be it from me to get in the middle of the internecine conflicts of someone else&rsquo;s faith. Suffice to say that figures like Pastor John Hagee play an outsized and pernicious role in U.S. foreign policy under Republican administrations.
As for Trump&hellip; he nearly launched airstrikes on Iran in the summer of 2019 because Tehran shot down an American drone. It appears the only reason he didn&rsquo;t follow through is that he turned on Fox News &mdash; and Tucker Carlson talked him down during the 8:00 p.m. EDT hour.
(Incredibly, the Democrats&rsquo; platform this summer slammed Trump for holding his fire on that occasion&hellip;)
But forget 2019: Just last week Trump was egging on Israel to &ldquo;hit&rdquo; Iran&rsquo;s nuclear-energy facilities and &ldquo;worry about the rest later.&rdquo; Which, to reiterate today&rsquo;s Bullet No. 3, cannot happen without U.S. support.
Remind me again how Trump is the &ldquo;antiwar&rdquo; candidate?
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 2318800323

5-bullet-placeholder

Paradigm Pressroom's 5 Bullets

Whether he planned it or not, Musk has made himself the face of a counter-elite in the United States — maybe even more than Trump.

Elon Musk, Counter-Elite

<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" />What Is Sam Altman Afraid Of?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Sam Altman&rsquo;s OpenAI needs another round of funding. This time, the pitch he&rsquo;s making to prospective investors comes with major strings attached.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5JrUX6i0MOuDSajm9DzyJy/37dce0f3d9a49771e91a2ceb98be9e5f/ft-Headline.png" alt="FT Headline" width="400px" />
&ldquo;OpenAI has asked investors to avoid backing rival start-ups such as Anthropic and Elon Musk&rsquo;s xAI,&rdquo; reports the Financial Times &mdash; &ldquo;as it secures $6.6 billion in new funding and seeks to shut out challengers to its early lead in generative artificial intelligence.&rdquo;
No, this is not standard operating procedure. As the FT explains&hellip;
<blockquote>Venture firms are party to sensitive information about the companies they invest in, and close relationships with one company can make it difficult or contentious to also back a rival.</blockquote>
<blockquote>But exclusivity is rarely insisted on, according to VCs, and many leading firms have spread their bets in certain sectors. Sequoia Capital and Andreessen Horowitz, for instance, have backed multiple AI start-ups, including both OpenAI and xAI. [Emphasis ours]</blockquote>
The FT&rsquo;s spin is that OpenAI can get away with its demands &ldquo;because investors believe the company could dominate the next wave of AI innovation, which they argue will be as significant a shift in consumer behavior as the internet or mobile.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />That&rsquo;s one possible interpretation. Another is that Altman is using what little leverage he&rsquo;s got with investors before it slips away forever.
If you follow the fates and fortunes of the AI biz, you&rsquo;re probably aware that OpenAI has had no shortage of drama in recent months.
Of course, there was the bizarre boardroom coup late last year &mdash; in which Altman was briefly removed and then reinstated. But this year has seen several of Altman&rsquo;s top lieutenants bolt &mdash; including chief technology officer Mira Murati just last week.
Too, there&rsquo;s Altman&rsquo;s desire to transition OpenAI from a nonprofit to a for-profit model.
It&rsquo;s those plans that prompted Elon Musk &mdash; a co-founder of OpenAI back in 2015 &mdash; to sue OpenAI two months ago. Musk says Altman has committed a &ldquo;deceit of Shakespearean proportions.&rdquo;
But never mind the petty personal dramas &mdash; which by themselves would be enough to give prospective investors pause.
What&rsquo;s really got Altman&rsquo;s boxers in a wad is the revelation Musk is about to unleash six days from now at Tesla&rsquo;s investor day event. Its title is a nod to the science-fiction legend Isaac Asimov&rsquo;s collection of short stories called I, Robot.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6X8ts2wpROEJIQTMXRxrbJ/438e56b9b4d9d5b1c6269a1a4614f9e3/we_robot.jpg" alt="we, robot" width="250px" />
As we said yesterday, Musk is promising, &ldquo;This will be one for the history books&rdquo; when he takes the stage in Burbank, California next Thursday.
And it&rsquo;s the considered opinion of my senior Paradigm Press colleagues that Musk is not blowing smoke.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/47Dew1sWQ9FyvYyOLesXtI/24ee2e2c80a5957e9b6b39b1cea6990f/elon_smoking.png" alt="Elon" width="350px" />
(Yeah, I couldn&rsquo;t resist.)
Here&rsquo;s what my colleagues anticipate: Musk will take the wraps off an entirely new kind of AI. Something none of us has seen before. The most powerful AI ever. A breakthrough on par with the web 30 years ago.
And, by implication, something that will erase all of Sam Altman&rsquo;s advantages in the realm of generative AI. (It might even render the term &ldquo;generative AI&rdquo; obsolete.)
<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" />Jobs: Good News Is Bad News
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The stock market reaction to a blowout jobs report is&hellip; tepid.
It being the first Friday of October, the government is regaling us with the September job numbers. The wonks at the Bureau of Labor Statistics conjured 254,000 new jobs for the month &mdash; way more than any Wall Street economist was expecting. The three-month average works out to a healthy 186,000 &mdash; adequate to keep up with population growth.
And unlike in recent months, there&rsquo;s no divergence between the &ldquo;establishment&rdquo; survey of business owners &mdash; the number the media usually touts &mdash; and the &ldquo;household&rdquo; survey.
If anything, the household survey suggests an even more robust labor market &mdash; job gains totaling 698,000.
The official unemployment rate ticked down to 4.1%.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The major U.S. stock indexes popped in reaction to the job numbers&hellip; only to give most of it back as the morning wore on.
At last check, the S&amp;P 500 has inched up less than a tenth of a percent, back above 5,700. If that number holds, it won&rsquo;t surpass last Friday&rsquo;s record weekly close.
The muted reaction makes sense, in its own twisted good-news-is-bad-news way: If the labor market is no longer cooling off, there&rsquo;s a risk the inflation rate might start moving higher. If inflation starts taking off again, that throws a wrench in the Federal Reserve&rsquo;s plans to keep lowering interest rates and funneling more easy money toward Wall Street.
Thus, the betting in the futures market assesses 95% odds that the Fed will cut its benchmark fed funds rate only a quarter-percentage point next month &mdash; not the half point that Wall Street would prefer.
There&rsquo;s not much movement to report in the precious metals either: Gold sits at $2,655 while silver is a tantalizing nickel away from $32. In the crypto space, Bitcoin is likewise quiet at just over $61,000.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />One uncertainty hanging over the markets this week is now resolved: As you&rsquo;re likely aware, the dockworker strike is over less than 72 hours after it began.
Technically the strike is suspended until Jan. 15; the two sides came to an agreement on pay while they&rsquo;ll continue to hammer out everything else, especially automation.
Exactly why the voluble union boss Harold Daggett was so quick to back off his maximalist demands, he&rsquo;s not saying.
As for the other big uncertainty hanging over markets this week, read on&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />&ldquo;I Think That Would Be a Little&hellip;&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Update: The price of oil did not leap to $73.71 yesterday because Washington and Tel Aviv are collaborating on potential attacks targeting Iranian oil facilities.
No, the reason oil leapt to $73.71 yesterday was that Joe Biden, asked about the subject, spat out gibberish &mdash; reminding everyone that a dementia patient is still in charge of the &ldquo;rules-based international order&rdquo; for the next 3&frac12; months.
What he mumbled was impossible to capture in print. Here&rsquo;s how the Financial Times tried:
<blockquote>Asked whether the U.S. would support Israel striking Iran&rsquo;s oil facilities, Biden said: &ldquo;We&rsquo;re in discussion of that,&rdquo; although in his truncated comment the U.S. president went on to say: &ldquo;I think that would be a little... anyway.&rdquo;</blockquote>
And The Wall Street Journal:
<blockquote>Asked if he would support Israel attacking Iran&rsquo;s oil facilities, Biden replied, &ldquo;We&rsquo;re discussing that,&rdquo; before adding, &ldquo;I think that would be a little&hellip;&rdquo; and trailing off.</blockquote>
Here&rsquo;s the video. You try making heads or tails of it&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/45LYnUGTfWqZ8G41kL6584/9b828bc67a73fa063415823a8ce4607f/biden_vid.png" alt="Biden Video" />
Combine a president incapable of spitting out a coherent thought on a critical matter of war and peace&hellip; and a media that&rsquo;s too incompetent to press him with a follow-up question&hellip; and you get a dramatic spike in the oil price.
And that spike is holding today, a barrel of West Texas Intermediate up to $74.42. For perspective, it was well under $67 on Tuesday before the latest round of escalations in the Middle East.
This much is certain, as the independent journalist Max Blumenthal tweets: &ldquo;Biden has been threatening to blow up the energy infrastructure of Official Enemies since just before the Nord Stream attacks.&rdquo;
Of course, even addressing these market-moving mumblings opens me up to accusations of &ldquo;bias for Trump&rdquo; &mdash; about which more in today&rsquo;s mailbag.
<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" />Texas Tells Big Tech &ldquo;You&rsquo;re On Your Own&rdquo; for Electricity
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The following is one of our periodic reminders that AI threatens to collapse an already-fragile power grid.
The head of the utility regulator in Texas is putting Big Tech on notice: Don&rsquo;t expect to build new data centers near existing power plants in the Lone Star State.
Yesterday, Texas Public Utility Commission chair Thomas Gleeson attended a conference of the Gulf Coast Power Association. According to Bloomberg, &ldquo;AI dominated the discussion.&rdquo;
On the sidelines of that discussion, Gleeson said if data centers are built near existing power plants, it would threaten the integrity of the whole system. Big Tech will have to build its own power plants instead &mdash; at least for the next 12&ndash;15 months.
&ldquo;We can&rsquo;t afford to lose any of our resources off the system at this point, especially given those load-growth projections,&rdquo; Gleeson told Bloomberg.
In other words, Amazon won&rsquo;t be able to strike the kind of deal it did in Pennsylvania &mdash; getting exclusive access to the Susquehanna nuclear power plant. Or the kind Microsoft also got in Pennsylvania, in which the undamaged reactor at Three Mile Island will be reopened.
If you&rsquo;re not yet up to speed on the fragility of the power grid and the prodigious new demands that AI will place on it&hellip; <a href="https://paradigmpressroom.com/post/the-monster-that-ate-the-power-grid-ai" target="_blank" rel="noopener">our most recent in-depth treatment was in July</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" />Politics, Again&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Politics is rearing its ugly head in the mailbag again. I suppose it&rsquo;s inevitable &mdash; even after something as relatively anodyne as <a href="https://paradigmpressroom.com/post/teslas-endgame" target="_blank" rel="noopener">yesterday&rsquo;s edition</a>.
Under the subject line &ldquo;Bias for Trump,&rdquo; one reader wrote: &ldquo;I like the market news and stock info. I don't come for the politics. Please tone down on the ungrounded political commentary. Thanks!&rdquo;
[I do appreciate the friendly exclamation point&hellip;]
But someone else &mdash; perhaps in response to yesterday&rsquo;s mailbag section? &mdash; wasn&rsquo;t so sure about the &ldquo;bias.&rdquo; As he wrote, &ldquo;Hmmm&hellip; Don&rsquo;t you prefer Trump over Harris&hellip;?&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />And then there was one of our regulars, who it&rsquo;s fair to say leans left&hellip;
&ldquo;Quite surprised you published the quote from Ryan Grim, who I do not know. He is either a simpleton, or a writer with a distinct political agenda. To break down the Middle East conflict and the U.S. role in it into only two distinct possibilities is pure deception. Even more perplexing is the reason that you published it without question. Your political agenda to knock down the Biden/Harris administration, truth be damned, is not lost on your readership. We are not all quite as dumb as you think we are.
&ldquo;I suppose this might be the time to ask you the defining question that J.D. Vance had such a difficult time with. Did Donald Trump lose the 2020 election, yes or no? If you answer that you are looking to the future, we know where you stand. At the risk of upsetting a large conservative portion of your readership, I dare you to answer with a yes or no, no qualifiers! Good luck.
&ldquo;Don't fret too much, however: Many of us enjoy the newsletter enough regardless that we are willing to overlook any political opinions, so perhaps others will feel the same and stay with you.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />This is the problem I&rsquo;ve faced all year: I say something critical about one candidate, and people jump to the conclusion I&rsquo;m in the tank for the other. Such is the present polarized atmosphere.
The problem is made worse by the fact that Trump is not currently exercising power and Joe Biden is. Biden (or unknown others acting in his name) issues market-moving and world-changing orders; it&rsquo;s inevitable I&rsquo;d subject him to more scrutiny at this time.
With that precis, let&rsquo;s take the third reader&rsquo;s concerns item by item.
First, Ryan Grim is one of the most vital independent journalists on the scene today. He recently co-founded Drop Site News after spending seven years at The Intercept and eight years before that at HuffPost. (Not exactly right-wing outlets, either of those&hellip;)
To be clear, I have less than zero confidence that Trump can &ldquo;manage&rdquo; U.S. affairs in the Middle East any better than Biden/Harris. If anything, he&rsquo;s even more likely to gin up a disastrous war in the region to placate his most important donor (Miriam Adelson, widow of the pro-Israel casino magnate Sheldon Adelson) and his base of end-times evangelicals who think U.S. foreign policy should be an instrument to hasten the return of Jesus.
The 2020 election? To the extent I&rsquo;ve looked into it, I&rsquo;m not persuaded Trump won &mdash; and I mocked the more ludicrous claims of Sidney Powell et al. in real-time (<a href="https://5minforecast.com/2020/11/20/rigged/" target="_blank" rel="noopener">here</a> and <a href="https://5minforecast.com/2020/11/23/mainlining-hopium/" target="_blank" rel="noopener">here</a>). At the same time, it&rsquo;s risible to suggest that what happened on Jan. 6, 2021 was an &ldquo;insurrection.&rdquo;
Of course, that&rsquo;s a position that pleases no one on either side of the divide. But reality doesn&rsquo;t care about your tribal loyalties.
In any event, I thank the third reader for his polite engagement and continued readership. As always, we have only two aims here each day &mdash; 1) that you learn at least one interesting thing you didn&rsquo;t know before and 2) that you decide to come back the next day.
At least for this one critic, it seems we succeed?

shutterstock 2389974117

Sam Altman’s OpenAI needs another round of funding. This time, the pitch he’s making to prospective investors comes with major strings attached.

What Is Sam Altman Afraid Of? 

<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" />Tesla&rsquo;s Numbers Are a Nothingburger
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> In a case of Mr. Market asking, &ldquo;So what have you done for me lately?&rdquo;... shares of Tesla took a 3.5% dump yesterday. (And they&rsquo;re down another 2% today).
TSLA reported its quarterly vehicles-delivered numbers. They were in line with the expectations of Wall Street analysts &mdash; up 6.4% from a year ago.
So what&rsquo;s the problem? Well, the total for the first nine months of 2024 is still behind last year&rsquo;s pace. If the company is going to beat 2023&rsquo;s total, it&rsquo;s going to have to step on the gas &mdash; er, I guess, the accelerator.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> What are we to make of Tesla here in late 2024, the share price still well off its 2021 peak?
Your editor has been of many minds about this company over the years, informed by colleagues both past and present who have conflicting &mdash; and vigorous &mdash; opinions.
One of them first recommended Tesla to his readers in 2010, about six months after it went public. The reaction was largely skeptical, given a readership well aware of Tesla&rsquo;s reliance on generous government subsidies &mdash; including the tax breaks for buyers of electric cars. &ldquo;Never got so many letters telling us how dumb we were,&rdquo; this individual recalled.
But they didn&rsquo;t mind riding TSLA to 1,005% gains by mid-2016.
All along the way, though, skeptical colleagues said something didn&rsquo;t add up.
They didn&rsquo;t necessarily agree with the hard-core &ldquo;Tesla shorts&rdquo; who asserted Elon Musk is a fraud. But they also said it made zero sense to label Tesla a &ldquo;tech company&rdquo; &mdash; lumped in with Google and Facebook &mdash; when Tesla operates in the very capital-intensive business of building cars.
Thus, they argued, it made even less sense that Tesla&rsquo;s market cap &mdash; currently just under $800 billion &mdash; nearly equals the rest of the top 10 global automakers combined.
How can the story end, they ask, other than in tears?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The counter I&rsquo;ve heard to that argument &mdash; and the only one that rings true for me &mdash; is this: Tesla isn&rsquo;t actually an EV company and it&rsquo;s not trying to compete in the same realm with Toyota and GM.
Rather, Elon Musk launched an automaker with a long-term plan for total domination in a specialized field of AI &mdash; an entirely new kind of AI, potentially the most powerful AI humanity has ever seen.
A former colleague likens Musk&rsquo;s aims to those of Amazon in the 1990s &mdash; selling books with a long-term plan for total domination in the field of online retail.
Makes sense. The knock on Tesla for years was that it didn&rsquo;t make a profit. But still another old friend would remind me that was the knock on Amazon during AMZN&rsquo;s peak growth years. Amazon could have easily achieved a cushy 10% profit margin during that time if not for Jeff Bezos&rsquo; relentless expansion into new lines of business.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> With all of that as prologue, Elon Musk is set to make an earth-shaking announcement one week from today &mdash; Thursday Oct. 10. &ldquo;This will be one for the history books,&rdquo; he says.
And after a careful assessment of his claims, several of my current colleagues &mdash; who rarely agree on anything &mdash; concur that this is one time Musk absolutely is not blowing smoke.
Yes, Tesla shares should perform well on the heels of this announcement &mdash; certainly well enough to make the sell-off yesterday and today a footnote in the company&rsquo;s history.
But the really big money &mdash; the kind of money that could dramatically alter your retirement plans for the better &mdash; will come from a tiny AI company that my colleagues believe holds the key to Musk&rsquo;s plans.
<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" />Dockworker Strike: Election Wild Card
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> To the markets &mdash; where the stupid election looms large over both of the economic wild cards dominating the week&rsquo;s news.
&ldquo;It is now more likely we are looking at weeks rather than days as a duration for this conflict,&rdquo; Vespucci Maritime CEO Lars Jensen says of the port strike on the East and Gulf Coasts.
That&rsquo;s because for the moment, the International Longshoremen&rsquo;s Association has the tacit support of both presidential candidates.
&ldquo;American workers should be able to negotiate for better wages, especially since the shipping companies are mostly foreign flag vessels,&rdquo; says Donald Trump.
Presumably speaking on behalf of the Kamala Harris campaign, White House Press Secretary Karine Jean-Pierre promises that Joe Biden will not invoke the Taft-Hartley Act of 1947 &mdash; ordering the 45,000 strikers back to work for an 80-day &ldquo;cooling off period.&rdquo;
Taft-Hartley has long been anathema to organized labor; the last time a president invoked it was Dubya Bush during a West Coast dockworker strike in 2002.
With at least wink-and-a-nod support from both presidential candidates, the ILA is unlikely to budge in its talks with the U.S. Maritime Alliance.
And even if everyday consumers aren&rsquo;t following every detail of the back-and-forth, their collective spidey-sense is making for epic-long checkout lines at Costco&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1eqV28lqKxUFlsl78TGv0M/d6f20d0ef49f0251b77b36a768970f53/FMF-Issue-10-03-24_1_.png" alt="pub" width="540px" />
Colleague Chris Cimorelli of our Microcap Millionaire service points out that all of this comes at a potentially dicey time for the Democrats and organized labor; this year the Teamsters union opted to withhold an endorsement for president for the first time since 1996.
And we&rsquo;ll add this: Polling data suggests that private-sector unionized workers are leaning Republican to a degree they never have before. Not that there are many of them left: While unionized workers made up over 35% of the private-sector workforce in the mid-1950s, today it&rsquo;s closer to 7%.
(The political leanings of government union workers? Still overwhelmingly Democratic&hellip;)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Whether it&rsquo;s jitters about the strike and supply chains&hellip; or jitters about the Middle East (more about that in Bullet No. 3)... or another factor entirely&hellip; something is keeping a lid on the stock market this week.
The S&amp;P 500 is down about a third of a percent on the day. At 5,690 it&rsquo;s also down about 1% from its record close on Monday.
A more decisive move &mdash; up or down &mdash; could come tomorrow with the release of the September jobs numbers.
Gold is hanging tough at $2,649 &mdash; silver likewise at $31.76. The precious metals&rsquo; resilience this week is notable given a rally in the U.S. dollar relative to other major currencies; under ordinary circumstances, a rising dollar would crush gold and silver.
The price of platinum, meanwhile, has sunk below $1,000 &mdash; a level that&rsquo;s been overhead resistance since June. We bring up platinum this morning because a little over a year after Costco started selling 1-ounce gold bars, it&rsquo;s adding 1-ounce platinum bars to the lineup.
Whether they come from Costco or someone else, platinum might be a bargain right now. At times its dollar price has equaled that of gold; until about 2008, it was pricier than gold. But today gold sells for 2.6 times the price of platinum. If platinum starts playing catch-up, look out.
Bitcoin keeps drifting down, now in danger of cracking below $60,000&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" />Oil&hellip; and More Election Uncertainty
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The ever-louder war drums in the Middle East have pushed a barrel of West Texas Intermediate crude past $73 &mdash; the highest in nearly a month, up from $67.50 Tuesday morning.
The Axios news site reports that Israel is planning to launch a &ldquo;significant retaliation&rdquo; attack on Iran. That&rsquo;s according to anonymous Israeli sources who acknowledge such a gambit could lead to a full-blown regional war directly involving the United States.
(Brings to mind the old joke about Let&rsquo;s you and him fight!)
After Iran lobbed about 180 ballistic missiles at Israel on Tuesday, National Security Adviser Jake Sullivan said, "There will be severe consequences for this Iranian attack and we will work with Israel to make sure that is the case."
(Hello? How about working with Congress as the Constitution requires?)
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6X9shdHWB6hOcUr3EalzKA/0d96c1509946a96a9826842e719dedf7/FMF-Issue-10-03-24_2_.png" alt="pub" width="540px" />
Anyway, among the targets the Israelis have in mind are oil production sites inside Iran. &ldquo;While Israel is going to respond on its own,&rdquo; says Axios, &ldquo;it wants to coordinate its plans with the U.S. because of the strategic implications of the situation.&rdquo;
Hmmm&hellip; From where we sit, it&rsquo;s hard to imagine Team Biden egging on Israel&rsquo;s Prime Minister Benjamin Netanyahu to start bombing Iranian oil facilities barely a month before Election Day; the resulting higher gasoline prices would be a major gift to Trump, no?
On the other hand, it&rsquo;s very easy to imagine Netanyahu going ahead with it anyway, since it&rsquo;s an open secret he prefers Trump over Harris. Just sayin&rsquo;.
<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" />No Good Deed Goes Unpunished
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />There&rsquo;s no disaster on Earth so bad that pettifogging bureaucrats can&rsquo;t make it worse &mdash; as we&rsquo;re learning in the aftermath of Hurricane Helene.
&ldquo;An experienced helicopter pilot's mission to rescue flood victims was abruptly halted after he was threatened with arrest,&rdquo; says a story at Firehouse &mdash; a website devoted to news about firefighters and EMTs.
&ldquo;Hearing about stranded people frantically begging for help, he decided to fly his own helicopter to assist. He knew it was going to be the only way out for many.&rdquo;
Pilot and volunteer firefighter Jordan Seidhom checked for restrictions in the airspace around Lake Lure &mdash; one of the worst-hit areas. There were none.
On Saturday, he and his son/co-pilot rescued four people from Lake Lure. They reached a stranded couple on Sunday as well. Because the chopper landed on an unstable driveway, they wanted to keep the weight down &mdash; so Seidhom took the woman first, promising to come back for the man later. Upon landing, Seidhom was greeted by grateful fire and search personnel. "One guy gave me the radio frequencies so we could communicate," Seidhom tells Firehouse.
Then the fire chief &mdash; or maybe assistant chief, Seidhom isn&rsquo;t sure &mdash; shows up.
"He told me if I didn't leave the area immediately, I'd be arrested. I told him my background, but he insisted I leave, saying I was interfering with his operation."
Lo and behold, a temporary flight restriction went up over Lake Lure about a half-hour after the confrontation.
Seidhom and his son had to head home to South Carolina. The man was left stranded, separated from his wife.
The flight restriction was lifted on Monday and Seidhom went back to work &mdash; this time as part of the Carolina Emergency Response Team. No comment from anyone in officialdom in Lake Lure.
But Seidhom&rsquo;s still miffed: &ldquo;I can only imagine what the people were thinking,&rdquo; he tells the New York Post. &ldquo;You&rsquo;ve been stranded for 24, 36 hours. No way to speak with anyone. You don&rsquo;t know what&rsquo;s going on and you see a lifeline fly over and they keep going. I can only imagine what they were thinking.&rdquo;
Sheesh&hellip; The level of dysfunction here &mdash; and with a few other things in North Carolina &mdash; has a certain Maui/East Palestine vibe to it.
Then again, maybe it&rsquo;s just a Katrina redux?
<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: From JFK to Jeffrey Epstein
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Great piece of work&hellip; keep it up,&rdquo; says the first of many responses to <a href="https://paradigmpressroom.com/post/no-transparency-no-accountability">Tuesday&rsquo;s edition</a>.
&ldquo;Very good research!&rdquo; says another. &ldquo;Sickeningly insightful. Thanks for sharing it.&rdquo;
&ldquo;Very thought provoking 5 Bullets,&rdquo; says a third.
&ldquo;It is interesting that some historians point out the negative writings about a country's government and culture precede the destruction and disappearance of the country/empire.
&ldquo;The negative writings of Roman authors and historians preceded the fall of Rome. They could see its future demise in plain sight.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;I really enjoyed Tuesday&rsquo;s rant about JFK and Epstein and COVID Fauci,&rdquo; says a fourth.
&ldquo;Thank you for stirring the conspiracy pot and making me more paranoid than I was. And giving credence to those I blew off as CTs. And I do want to hear the unabridged Warren Commission details.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> One more: &ldquo;In fairness, in this political season, could you opine on Kamala's answers concerning the full release of the JFK and Epstein files, as well as Trump's?&rdquo;
Dave responds: Given the increasing uselessness of Google and Google News in recent years, I posted a query to the Perplexity AI engine. It came up empty.
&ldquo;Based on the search results provided,&rdquo; it said, &ldquo;there is no indication that Kamala Harris has made any statements on the campaign trail about opening up the remaining redacted JFK assassination records.&rdquo; Ditto for any Epstein records.
As for &ldquo;conspiracy theories&rdquo;... I took pains on Tuesday to avoid any contested facts. My critique comes back to the old line about how &ldquo;it&rsquo;s not the conspiracy, it&rsquo;s the cover-up.&rdquo; Or in the case of COVID measures, the gaslighting.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Meanwhile, I enjoy &ldquo;fall of Rome&rdquo; analogies as much as anyone. The problem is where do you place America today relative to the timeline of Rome? 
Is it the end of the republic in the first century BCE &mdash; the populares fed up with the corrupt and degenerate optimates that presumed to rule over them? (And who, then, would be the Caesar figure that emerges now?)
Is it an already-declining empire&rsquo;s power struggle reminiscent of the Year of the Five Emperors (193)?
Are we about to be cursed with desperate control freaks and power-trippers like Diocletian and Constantine (turn of the fourth century)?
Or is it really the end of the Western empire?
Even if it were the last of those possibilities, how would we know?
Because as someone once quipped &mdash; it might have been newsletter legend Doug Casey &mdash; &ldquo;It&rsquo;s not as if everyone just woke up one day in A.D. 476 and said, &lsquo;Holy s***, we&rsquo;re in the Dark Ages now!&rsquo;&rdquo;

awn-hero-img-04-19-24 NEW YORK, USA, 2. OCTOBER 2022: Elon Musk businessman silhouette on Tesla presentation, Logo of company on red background

shutterstock 2221500907

TSLA reported its quarterly vehicles-delivered numbers. They were in line with the expectations of Wall Street analysts. So what’s the problem?

Tesla’s 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" />Musk&rsquo;s Mission
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />"I've come up with a set of rules that describe our reactions to technologies,&rdquo; wrote the science-fiction legend Douglas Adams, in a collection of essays published shortly after his death in 2001.
Adams&rsquo; rules go like this&hellip;
<ol>
<li>&ldquo;Anything that is in the world when you're born is normal and ordinary and is just a natural part of the way the world works.</li>
</ol>
<ol>
<li value="2">&ldquo;Anything that's invented between when you're 15 and 35 is new and exciting and revolutionary and you can probably get a career in it.</li>
</ol>
<ol>
<li value="3">&ldquo;Anything invented after you're 35 is against the natural order of things."</li>
</ol>
Adams is a hero of Elon Musk &mdash; now 53 years old. To hear Musk tell it, Adams&rsquo; The Hitchhiker&rsquo;s Guide to the Galaxy helped him through an &ldquo;existential crisis&rdquo; at age 12.
More recently, Musk drew on the punchline to Hitchhiker&rsquo;s plot &mdash; a supercomputer declaring that the answer to the meaning of life is the number 42 &mdash; when choosing the formal launch date of his AI company xAI last year.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5qRPI1KCCFc6KCXEPmwviO/77cf52ddc949319413143f1c5e62f8c4/Elon.png" alt="elon tweet" width="540px" />
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> "He's telling me, 'I'm gonna start from scratch an AI company 'cause I don't trust Sam Altman,'" recalls Musk biographer Walter Isaacson.
Isaacson followed Musk around for two years in preparation for the book Elon Musk, published in 2023. He reflected on the experience a few days ago during an interview with CNBC.
As you might be aware, Musk had a hand in the founding of Altman&rsquo;s OpenAI in 2015. They had a falling-out no later than 2020, when Musk hit out at what he thought was OpenAI&rsquo;s lack of transparency. By last year, he sued OpenAI &mdash; accusing it of abandoning its mission to develop AI for the betterment of humanity.
Musk is on record asserting a 10&ndash;20% probability that AI could destroy humanity. To hear Isaacson tell it, Musk has taken it upon himself to &ldquo;come in and save us from hostile AI.
&ldquo;He read Isaac Asimov, he read the robot series, he thought the robots might turn on us" &mdash; a reference to Asimov&rsquo;s collection of short stories I, Robot.
Hmmm&hellip;. it&rsquo;s a little worrisome, this savior complex. It&rsquo;s the same impulse that&rsquo;s driven Bill Gates to muck up everything from public education to public health.
But let&rsquo;s give Musk the benefit of the doubt here, especially ahead of Tesla&rsquo;s AI-themed investor day event two days from now.
As we mentioned last week, the title is a nod to Asimov&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/YNs33VECYrXrvDnYURMXU/3323aa49ca1609664d8f5985c4ee1e29/WeRobot.png" alt="we robot" width="350px" />
Musk is going all-out for this event &mdash; staging it not at a Tesla facility as he has in years gone by but on the Warner Bros. lot in Hollywood.
Paradigm&rsquo;s AI authority James Altucher is convinced it will be revolutionary: &ldquo;This has the potential to not only shake the markets,&rdquo; he says, &ldquo;but also transform the life of every man, woman and child in America.&rdquo;

If you haven&rsquo;t yet watched our interview with James&rsquo; No. 1 tech analyst Ray Blanco, you need to do so ahead of Musk&rsquo;s announcement on Thursday. <a href="https://pro.paradigm-press.info/m/2365629">Click here to watch it right away.</a>

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Resilient Stocks, Resilient Gold
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The resilience of the stock market and gold this month are remarkable in light of a strengthening dollar.
The U.S. dollar index has jumped 2% since the last day of September &mdash; a big jump in a short time when you&rsquo;re talking about currencies.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1uQyOWWIYRAYm38lgOzOjM/2a9e91e6a19a0905bfdc3c66b39cace6/FMF_5Bullets_Chart_1008.png" alt="galloping greenbacks" width="540px" />
A big driver of the move is a fall in the euro &mdash; which makes up 57% of the index.
All else being equal, a stronger dollar translates to weaker stocks and weaker gold. But not now.
The S&amp;P 500&rsquo;s record close on Sept. 30 more or less coincides with the start of the dollar rally spotlighted on the chart. But at 5,726, the index is barely two-thirds of a percent beneath that record. Gold, meanwhile, continues to hold the line on $2,600.
Elsewhere in the markets, Treasury yields continue to creep higher &mdash; the 10-year note now up to 4.05%. Bitcoin has sunk below $63,000. And silver is proving to be much more volatile than gold &mdash; well over $32 at one point on Friday, but well under $31 today.
But the real volatility is in crude &mdash; down $3.29 to $73.85.
There&rsquo;s no obvious news catalyst. Near as we can tell, Mr. Market was anticipating Israel would attack Iran yesterday to coincide with the first anniversary of the Hamas attack inside Israel. When it didn&rsquo;t happen, it was time to mash the &ldquo;sell&rdquo; button.
Not that the escalation risk has abated, of course&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Small-business owners are feeling more uncertain than ever,&rdquo; says Bill Dunkelberg, chief economist at the National Federation of Independent Business.
The NFIB is out with its monthly Small Business Optimism Index. The headline number is up slightly to 91.5 &mdash; still well below the long-term average in this survey, which goes back 50 years now.
Looking under the hood, the number that really stands out is the uncertainty index &mdash; leaping 11 points to a record 103. (In this instance, higher numbers are bad.)
&ldquo;The election will trigger adjustments to plans once the results are known,&rdquo; write Dunkelberg and colleague Holly Wade. &ldquo;The services sector is still holding up, while manufacturing and housing remain weak. In a few weeks, the picture will become much more certain for Main Street firms.&rdquo;
But in the meantime, &ldquo;uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines.&rdquo;
On the part of the survey asking respondents to identify their single most important problem, inflation is tops, cited by 23%. But the labor shortage might be starting to ease, with 17% citing &ldquo;quality of labor&rdquo; as their biggest concern &mdash; down from 21% a month earlier.
<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 Demand High, Gold Supply Low
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We&rsquo;ve spent a lot of time in recent years underscoring the demand for gold &mdash; and not nearly enough about the supply.
Demand for gold by central bankers is off the charts ever since Washington hit Moscow with unprecedented sanctions after the Russian invasion of Ukraine. For any country not on friendly terms with Washington, gold is an insurance policy.
As for supply&hellip; S&amp;P Global is out with a revealing report about recent gold discoveries. It finds there&rsquo;ve been only five of them since 2020, totaling 17 million ounces.
That&rsquo;s a drop in the proverbial bucket considering 350 deposits were discovered from 1990&ndash;2023 &mdash; totaling 2.9 billion ounces of gold, including past production.
The newer discoveries &ldquo;are scarce and smaller in size,&rdquo; writes S&amp;P&rsquo;s Paul Manalo. &ldquo;None of the discoveries made in the last 10 years have entered the list of the largest 30 gold discoveries, supporting our long-held view that the decade-long focus on older and known deposits limits the chance of finding huge discoveries in early-stage prospects.&rdquo;
His conclusion: &ldquo;The lack of quality discoveries in the recent decade does not bode well for the gold supply.&rdquo;
For years, Paradigm macroeconomics maven Jim Rickards has advised keeping a 10% gold allocation in your portfolio &mdash; preferably in your personal possession, and definitely not in a bank&rsquo;s safe-deposit box.
If you&rsquo;re already there, the next step is a well-chosen speculation in gold mining stocks. And now is an especially good time, since the stocks are lagging the metal and they&rsquo;re poised to play catch-up.
More about that tomorrow&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" /> Malice, Apathy&hellip; or Both?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;I've quite a while ago arrived at the expectation that the government is completely apathetic to the suffering of its citizens,&rdquo; a reader writes&hellip; &ldquo;but after seeing the responses to Palestine, Ohio; Lahaina, Hawaii; and now the Carolinas in the wake of Helene I can't help but ask myself, does the current administration actually wish pain and suffering onto the victims of these disasters?
&ldquo;I would have thought this close to an election that now there is a good excuse to spend more money to try to win over the hearts of voters and there would be a concerted effort to combine disaster aid with campaigning. Instead, I hear that the aid money amounts to the pocket lint of the government checkbook, and now there seem to be efforts to stop rescuers from saving people. As if all that weren't enough, I'm hearing Florida is also about to get hit with a massive storm and I can't imagine the quality of the federal aid improving any between now and then.
&ldquo;I know it's said not to attribute to malice that which can be attributed to stupidity, but I don't see why it can't simply be both, especially with how consistent the government responses have been. Why do you think it is that this is what happens every time?&rdquo;
Dave responds: Beats me. To be sure, &ldquo;DEI&rdquo; figures into the equation. Too, a lot of knowledgeable and experienced boomers are retiring &mdash; and there aren&rsquo;t enough Gen-Xers coming up to take their place.
I can say with certainty it&rsquo;s not the government steering hurricanes in the direction of &ldquo;red&rdquo; enclaves.
Meanwhile, Milton continues to make a beeline for the Tampa Bay area, which your editor called home for about three years in the &rsquo;90s. Even if the winds diminish, the surge is shaping up to be fearsome. Godspeed to anyone trying to get out of harm&rsquo;s way&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" />Vote &ldquo;Awake&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> On the subject of politics, a reader writes: &ldquo;Us? We're proudly displaying our &lsquo;Giant Comet 2024&rsquo; sign in the front yard.&rdquo;
Heh &mdash; I invoked that one in bumper sticker form <a href="https://paradigmpressroom.com/post/39-days">over the summer</a>. I like this one too&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7r6IQPSJiouV5X5arq36KU/0dea3975aa577ad6992fa5801082970a/vote.png" alt="vote" width="350px" />
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Meanwhile, after I took incoming flak from anti-Trumpers in recent days, the pro-Trumpers have to weigh in following the mailbag in <a href="https://paradigmpressroom.com/post/elon-musk-counter-elite">yesterday&rsquo;s edition</a>.
&ldquo;How many wars happened during Trump's administration?&rdquo; asks one. Another vouches for Trump&rsquo;s &ldquo;antiwar&rdquo; bonafides by saying &ldquo;when necessary, the decision is made without pre-disclosure and firmly.&rdquo; Meanwhile, one of our regulars ventures that Trump&rsquo;s approach to war and peace is &ldquo;peace through strength.&rdquo;
Maybe it&rsquo;s just me, but &ldquo;peace through strength&rdquo; does not entail 750 military bases in over 80 countries. Donald Trump did nothing to dismantle that apparatus during his first term, and he&rsquo;s made no promises to do so during his second.
Meanwhile, this &ldquo;he didn&rsquo;t start any new wars!&rdquo; thing is so tiresome.
He tore up arms control treaties with Moscow. He permanently stationed U.S. troops on Russia&rsquo;s borders. He sent lethal weaponry to Ukraine &mdash; a reckless step Barack Obama refused to take.
In the Middle East, he carried on Obama&rsquo;s policy of supporting Saudi Arabia&rsquo;s genocidal war in Yemen &mdash; directly with targeting assistance from the U.S military and indirectly with weapons sales.
I could go on, but you get the idea. I hope.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> A final thought, adding to yesterday&rsquo;s Bullet No. 1 about <a href="https://paradigmpressroom.com/post/elon-musk-counter-elite">the &ldquo;counter-elites&rdquo;</a> who are gathering around Trump&hellip;
The co-chair of Trump&rsquo;s transition team, named by Trump in August, is Howard Lutnick &mdash; CEO of the Wall Street firm Cantor Fitzgerald. From the Financial Times&hellip;
<blockquote>Lutnick said he had given more than $10 million to Trump&rsquo;s 2024 effort and another $500,000 for the transition, and had raised about $75 million for the campaign overall.</blockquote>
<blockquote>The investor, who has known the Republican nominee for years and even appeared in 2008 on Trump&rsquo;s NBC show The Celebrity Apprentice, previously donated to Democrats, including Hillary Clinton.</blockquote>
So like Marc Andreessen, here&rsquo;s someone else who supported Clinton only eight years ago but has decided to glom onto Trump because that&rsquo;s where he sees his bread buttered now.
And Trump is perfectly fine with that arrangement. He welcomes anyone into his circle who engages in enough flattery.
Interviewed last week by our favorite political reporter Michael Tracey, Lutnick said he&rsquo;s building a roster of potential appointees with &ldquo;deep, deep national security experience&rdquo; and &ldquo;deep, deep defense experience.&rdquo; He also confirmed that Jared Kushner is &ldquo;actively helping&rdquo; him to find &ldquo;talent.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1QZeTCIfAnrL2UJ6nmocek/f2c4522e7d20ebf6501a21286a464df1/michael.png" alt="michael tweet" width="540px" />
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 2269526291

According to Musk’s biographer, Elon has taken it upon himself to “come in and save us from hostile AI.”

Starting an AI Company From Scratch 

<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" />America&rsquo;s Next Move
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Your editor today attended Paradigm&rsquo;s &ldquo;America's Next Move&rdquo; conference held at the Four Seasons Hotel in Baltimore on Tuesday. 
Despite the gloomy weather, Paradigm luminaries gathered on one stage to tease out the latest trends in technology, biotech, crypto and more.
With around 400 attendees soaking up the insights, the atmosphere buzzed with excitement over topics ranging from AI-driven drug discovery to innovative income strategies.
In case you&rsquo;re wondering, we've decided against releasing full recordings of the event. The conference's success with our 400 attendees has led us to maintain an air of exclusivity.
But for those who couldn't attend, don't be discouraged. We're exploring the possibility of releasing select talks in bite-sized video segments throughout the remainder of the year.
And we still have numerous highlights from the conference to discuss today&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Paradigm&rsquo;s iconoclast investor James Altucher kicked off the event with compelling stories from his eight years of professional day trading &mdash; as well as his time living in one of the few residential buildings on Wall Street during the 2009 financial crisis.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2lnQ6uJZEQQM20CXGbRfZe/da074018745c29d659c12c9d4298fd0a/image001.jpg" alt="James at the Conference" />
He described observing the gloomy faces of traders heading into the New York Stock Exchange each morning. In an effort to raise their spirits (heh, and their risk tolerance), he even handed out M&amp;Ms and Hershey&rsquo;s bars to these weary traders.
Meanwhile, because of his proximity to CNBC&rsquo;s studio near the NYSE, James was a regular guest. But his brand of optimism eventually made him persona non grata. James&rsquo; mother even called to advise him not to smile too much on TV!
Of course, Altucher&rsquo;s journey from hedge fund manager&hellip; to day trader&hellip; to crypto evangelist has been anything but conventional. More on that later&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" />AI's Game-Changing Role
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Next up, our chief technology analyst Ray Blanco painted a vivid picture of how AI is revolutionizing drug discovery and development. 
Ray highlighted the risky business of getting a new drug to market &mdash; costing around $2.3 billion per drug and often taking over a decade. But using AI could help boost success rates while cutting costs by an impressive 90%.
He even joked we might be looking at &ldquo;Star Trek-level health care&rdquo; in the near future where advancements in AI, personalized medicine, gene editing and immunotherapy could help extend human life spans to an average 120 years.
With AI's ability to streamline processes and identify promising drug candidates, Ray&rsquo;s optimism &mdash; like Altucher&rsquo;s &mdash; was infectious.
And it&rsquo;s in this context that Ray mentioned a biotech company that specializes in developing computational software for drug discovery. (Out of respect for attendees who paid for the experience yesterday, we&rsquo;re withholding most names of stocks.)
After Ray&rsquo;s turn at the podium&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Paradigm&rsquo;s retirement-and-income specialist Zach Scheidt took center stage, focusing on income-generating strategies amid changing market conditions. 
He pointed out that as interest rates decline, dividend stocks are likely to become more appealing to investors seeking safer havens for their money.
&ldquo;Expect money to move out of high-yield accounts and into high-quality, dividend-paying stocks,&rdquo; he advised.
And Zach highlighted two &ldquo;boring&rdquo; companies that stand to benefit from growing dividends as well as AI&rsquo;s demand for electricity and data centers.
Both companies are well-positioned in this evolving landscape, providing essential infrastructure for AI development and data management.
<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" />Crypto, AI and Main Street
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />James Altucher and crypto expert Chris Campbell focused on cryptocurrency and artificial intelligence &mdash; particularly in light of the upcoming 2024 election.
James expressed confidence in the long-term prospects of cryptocurrencies, regardless of the election&rsquo;s outcome, drawing parallels between early skepticism toward the internet and current attitudes about crypto, suggesting that widespread adoption is inevitable.
&ldquo;In the long run, it doesn&rsquo;t matter who wins the presidency &mdash; crypto will go up,&rdquo; James says.
The discussion also touched on some practical applications of blockchain technology &mdash; for instance, projects like OriginTrail (TRAC) for supply-chain management and AMP for secure payments.
He also discussed the concept of tokenization, explaining how it could revolutionize asset ownership and investment opportunities.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Meanwhile, Chris&rsquo; presentation highlighted the intersection of crypto, AI and Main Street.
And leave it to Chris to introduce the word &ldquo;enantiodromia&rdquo; which suggests that as the world becomes more global, there's a countertrend toward localization. Chris would argue that both crypto and AI, often seen as global technologies, are fundamentally local in nature.
The presentation further emphasized the value of local public data, which Campbell sees as underutilized.
He underscored opportunities in local contexts such as community-focused news and weather data collection.
Chris also discussed the potential of open-source hardware and AI-driven 3D printing to solve local problems. In the realm of food production, for example, he noted how AI and robotics could significantly increase yield while reducing water usage.
Overall, Chris expressed optimism about the future in light of the potential for local, AI-driven solutions to global problems. And he concluded with a mention of a cryptocurrency that allows users to control their own data.
<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" />The Next &ldquo;Mag 7&rdquo; Stocks?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />A panel discussion had Paradigm experts and a few behind-the-scenes contributors weighing in: predictions for the next wave of dominant technology stocks &mdash; akin to today&rsquo;s &ldquo;Magnificent 7.&rdquo; 
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6MxRmzdcBD9U7IykhWy9nc/7728b0bedaffd73da613f27952e8562b/image002.jpg" alt="Panel Discussion" />
Picks included&hellip;
Again, we&rsquo;re withholding specific names today, but a colleague tells me this panel discussion might be among the first video segments released. Stay tuned!
That said, the conversation sparked lively debate &mdash; and some good-natured ribbing &mdash; about which companies truly deserve a spot on this coveted list.
<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" />Playing 10-Dimensional Chess
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />At &ldquo;America's Next Move,&rdquo; attendees were treated to a unique chess exhibition featuring James Altucher. 
Paradigm event organizers set up 10 chess tables in a line, and James took on all challengers simultaneously.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/16tCEGNqTOvAjNq4RKclVz/a10cb1214d9deca64b97515f658f20fd/James_chess.png" alt="James playing chess" />
Courtesy: Rick Barnard-Singer
As James moved from table to table, the room was filled with palpable tension. While there was no play-by-play commentary, a focused silence permeated the air, broken only by the soft sounds of chess pieces being moved.
The matches progressed at varying paces; when a game concluded, it was signaled by a brief round of applause from onlookers.
The entire exhibition lasted just over two hours. And in an impressive display of skill and mental agility, James emerged victorious in nine of the 10 matches.
The tenth game? While not technically a loss, James conceded as he anticipated inevitable defeat.
Each plucky contestant got to keep the chess set. Which James happily signed&hellip;
Take care, reader! We&rsquo;ll be back with another round of 5 Bullets tomorrow.
P.S. The markets today, you ask?
Let&rsquo;s put it this way: The contrast yesterday was striking &mdash; reminiscent of Dave&rsquo;s reflections <a href="https://paradigmpressroom.com/post/the-year-of-ai" target="_blank" rel="noopener">at the start of the year</a> about the vibe in 1939-40. War was raging in Europe and the Depression wasn&rsquo;t over at home. But tens of millions flocked to the New York World&rsquo;s Fair to see the latest and greatest in technology, eager to explore the possibilities for human progress and betterment.
Yesterday inside a hotel ballroom we had a group of 400 subscribers jazzed about the possibilities in AI, crypto and small companies that could set the world on its ear.
Outside the ballroom, the dockworkers went on strike, an event that threatens to snarl supply chains worse than during the pandemic. And the Middle East conflict escalated to startling new heights that could threaten global oil flows.
The market impact has been palpable &mdash; a barrel of West Texas Intermediate crude soaring from under $67 yesterday to over $72 today.
By the same token, the stock market took a hit, the S&amp;P 500 tumbling nearly 1% yesterday and treading water today at 5,712.
Gold is holding the line on $2,650 and silver is back within a dime of $32. Bitcoin is backsliding, under $62,000.
Yes, the world is a rough place right now. But it was a rough place 85 years ago in 1939 &mdash; and yet, people oohed and aahed at the first public demo of television. The technology changed the world and minted vast new fortunes.

shutterstock 753046666 (1)

Your editor today attended Paradigm’s “America's Next Move” conference held in Baltimore on Tuesday. We have numerous highlights to discuss today…

America’s Next Move (Highlights)

shutterstock 518213242

When Americans’ trust in “the system” first began to erode

No Transparency, No Accountability

<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" />Countdown to Supply-Chain Snags
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Sure, now the mainstream has figured out a huge port strike is about to begin&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/daA9Hawiq57sxBTN1I8HZ/be6608d6c657513c8c801471d52b6532/usa_today_headline_port_workers.png" alt="USA Today Headline" />
We started warning you back on June 11. The International Longshoremen&rsquo;s Association was at odds with the U.S. Maritime Alliance &mdash; operators of the major ports on the East Coast and Gulf Coast.
And they&rsquo;re still at odds. The current union contract expires tonight at midnight. As we said more than once last week, do not expect a Plast-minute agreement. Forty-five thousand dockworkers will walk.
If you&rsquo;re interested in the details of the dispute &mdash; the two sides are hung up on pay and the use of robotics &mdash; you can now read about that anywhere.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />As always, our aim here is to see where the puck is going, not where it is.
&ldquo;After two days, we will feel nothing from a strike,&rdquo; says Byron King &mdash; Paradigm&rsquo;s resident renaissance man. Having cut his teeth in the oil business as a geologist, and as a Navy flight officer with three decades of service&hellip; he knows a thing or two about logistics and the process of moving things from Point A to Point B.
The real trouble comes not after two days, but after two weeks: &ldquo;After two weeks, we'll see some empty space on store shelves.&rdquo; And look for the prices of gasoline, diesel and jet fuel to rise: &ldquo;The strike will affect imports of heavy crude to blend at refineries.&rdquo;
After three weeks, expect &ldquo;significant factory shutdowns as parts are not flowing. Remember how entire auto plants shut down during COVID for lack of a few chips for circuit boards? Or how vehicles were parked in fields because there were no chips for key fobs?
&ldquo;Shippers are already re-routing cargoes to the West Coast &mdash; unload in California to ship east to Virginia, for example.&rdquo; Yes, it&rsquo;s doable &mdash; but it&rsquo;s more time, more expense, more fuel burn.
The losers in all of this will be the companies most dependent on shipping through the East and Gulf Coasts: According to figures from the trade data firm ImportGenius, Walmart tops the list, followed by Ikea and Samsung.
The winners will be the railroads and long-haul truckers with more demand for their services.
Well, up to a point: Hurricane Helene has done significant damage to Interstate 40 at the North Carolina-Tennessee state line &mdash; disrupting a crucial east-west corridor.
Speaking of Helene&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" />And What About the Semiconductors?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Apart from the human toll and the economic devastation left by Hurricane Helene&hellip; there&rsquo;s the not-small factor of a hit to global semiconductor manufacturing.
First, rewind to this headline from six months ago in the daily newspaper serving Raleigh, North Carolina&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3CE1Im3oJgHZMjITIOpo4B/538de9752a004758d3af04ff954892fb/news_observer_headline_open_source.png" alt="News Observer Headline" width="400px" />
The town of Spruce Pine, North Carolina &mdash; population 2,175 &mdash; sits just south of a mining complex that&rsquo;s the world&rsquo;s sole source of high-purity quartz used in the production of silicon wafers.
&ldquo;It is rare, unheard of almost, for a single site to control the global supply of a crucial material,&rdquo; writes Ed Conway in his 2023 book Material World. &ldquo;Yet if you want to get high-purity quartz &mdash; the kind you need to make those crucibles without which you can&rsquo;t make silicon wafers &mdash; it has to come from Spruce Pine.&rdquo;
Chalk it up to a geological anomaly: Spruce Pine&rsquo;s mineral deposits &ldquo;formed 380 million years ago during the collision of Africa and North America,&rdquo; wrote Erika Morphy at TechSpot earlier this year. &ldquo;The intense heat and lack of water during their formation created quartz rock of unparalleled purity.
&ldquo;These rocks are extracted from the ground and turned into quartz gravel, which is then processed into a fine sand. The silicon is separated from other minerals and then goes through a final milling. The final product is a powder that is shipped to refineries.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Spruce Pine got more than two feet of rain from Tuesday through Saturday. 
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4UJti9QPlk1hMovpv9sGtg/0a20cb12ce21438763292502e6924709/hurricane_nc_headline.png" alt="Fossil Locator" />
Exactly what the impact is on quartz production, we don&rsquo;t know. The mine is owned by Sibelco, a privately held Belgian firm. It is, to say the least, averse to publicity.
From Conway&rsquo;s book: &ldquo;When contractors from other companies are brought in for repairs [at the plant] they are literally blindfolded and marched into the factory up to the machine they need to fix.&rdquo;
[For its part, Sibelco denies such secrecy.]
A few months ago, a Wharton professor named Ethan Mollick speculated that if the mines were to permanently halt operations for some reason, "it would likely [be] a few years of major disruption while techniques to generate alternatives were scaled up. But the disruption would be pretty catastrophic."
A permanent halt seems unlikely. But how temporary will &ldquo;temporary&rdquo; prove to be? We shall see&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" />Not as Bad as First Thought
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />One of the major indicators that was screaming &ldquo;incoming recession&rdquo; has just been erased.
On Thursday, Paradigm macro maven Jim Rickards spotlighted for us the divergence between the widely reported economic measure of gross domestic product (GDP) and the less-followed measure of gross domestic income (GDI).
&ldquo;GDP is supposed to be a near-mirror image of GDI (gross domestic income),&rdquo; he said, &ldquo;but there&rsquo;s been a wide divergence in recent quarters. GDI is growing much more slowly and may soon be declining slightly. In the past, when GDP and GDI diverge, GDI tends to be more accurate and GDP plunges quickly to re-converge with GDI.&rdquo;
Like the GDP figures, past GDI releases are subject to revisions based on new incoming data.
Lo and behold, the Commerce Department issued some upward revisions late last week. First-quarter GDI growth was revised from an annualized 1.3% to 3.0%. And second-quarter GDI growth was revised from an annualized 1.3% to 3.4%.
Your personal economic circumstances might be subpar. Your adult kids might be struggling to afford a house. Your neighbors might have had their hours cut back.
But if incomes in the aggregate are still holding up (and they are)&hellip; if relatively few people are filing first-time unemployment claims (that&rsquo;s also the case)... and if oil prices sit near three-year lows (they do)...
&hellip; then it&rsquo;s hard to say a &ldquo;recession&rdquo; is nigh &mdash; at least as economists conventionally describe it. Again, YMMV.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Speaking of the oil price, you&rsquo;d never guess a widespread war is about to break out in the Middle East.
A barrel of West Texas Intermediate begins the week up a mere 15 cents at $68.33 even though Israel is about to launch a ground invasion of Lebanon at the same time it&rsquo;s expanding an air war against the Houthis of Yemen.
Apparently no amount of geopolitical tension will move the oil price until the Straits of Hormuz are closed or a missile strikes an American warship.
Meanwhile, not much excitement in the major U.S. stock indexes. Both the S&amp;P 500 and the Nasdaq have barely budged from last Friday&rsquo;s close &mdash; which in the case of the S&amp;P was a record weekly close.
Precious metals are still reeling after their take-down on Friday. But gold continues to hold the line on $2,600 and silver on $31, so it&rsquo;s not all bad. Bitcoin, however, has slipped under the $65,000 floor that held for much of last week.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />For the record: California Gov. Gavin Newsom has vetoed the AI-regulation bill <a href="https://paradigmpressroom.com/post/intels-road-map-to-trillion-dollar-status/#3" target="_blank" rel="noopener">we mentioned</a> here last month.
In theory, there might be enough momentum for an override, but in practice there&rsquo;s little history of the California legislature spurning the governor&rsquo;s wishes. The last time it happened was during Jerry Brown&rsquo;s first stint as governor over 40 years ago.
<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" />Kristofferson&rsquo;s Future Financial Shock
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We wouldn&rsquo;t ordinarily note the passing of Kris Kristofferson in these virtual pages &mdash; except for his appearance in a financial thriller that might serve as a glimpse into the future.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2ypRdgz272Za9GkYwiFc4z/2290a299bc88b5f0ee5ec8f2234be68b/rollover_movie_poster.png" alt="Rollover" width="257px" />
The print ad oversells the sex in the movie, which was minimal (Image from MovieGoods)
Rollover, starring Kristofferson and Jane Fonda, came out in 1981. It wasn&rsquo;t a particularly good movie, and it was a box-office bomb. But its fictional backdrop had a foundation in reality &mdash; Arab financiers panicking out of the U.S. dollar, triggering a financial collapse.
We&rsquo;ve recounted the history before, but in brief: When the Iran hostage crisis broke out in November 1979 and Jimmy Carter froze Iranian assets, many wealthy people around the world &mdash; particularly in the Middle East &mdash; began to wonder if they might be next in line. The panic accelerated the following month when the Soviets invaded Afghanistan and Carter responded with a grain embargo.
Hot money flooded out of the dollar and into Swiss francs, West German marks and especially gold. Gold&rsquo;s price in dollars more than doubled in four months to a record $800 in January 1980.
We&rsquo;ve seen a similar panic since early 2022, albeit in slow motion &mdash; the de-dollarization movement among the BRICS countries and the Global South in general, after Russia invaded Ukraine and Joe Biden froze the assets of Russia&rsquo;s central bank.
Worldwide, central bank purchases of gold set a record in 2022 &mdash; and the buying has continued at a furious pace in 2023&ndash;24. Not coincidentally, the dollar price of gold has risen from barely $1,800 at the time of the Russian invasion to over $2,600 now &mdash; up 44% in a little over 2&frac12; years.
Anyway, you might want to watch Rollover sometime as a preview of coming attractions. It&rsquo;s on Prime Video and Apple TV.
➢ Personally, I also enjoyed Kristofferson in Convoy &mdash; a Sam Peckinpah vehicle dripping with the sort of 1970s contempt for authority you just don&rsquo;t see anymore. Told by a corrupt sheriff (Ernest Borgnine) that &ldquo;I am the law &mdash; don&rsquo;t you understand, I represent the law,&rdquo; Kristofferson&rsquo;s trucker character responds, &ldquo;Well, piss on you and piss on your law.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: More Property Taxes!
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;In response to my fellow Texan, I see that like most Texans, he doesn't understand how property taxes actually work,&rdquo; a reader writes after last <a href="https://paradigmpressroom.com/post/lies-statistics-and-recession" target="_blank" rel="noopener">Thursday&rsquo;s edition</a>.
[Once more unto the breach we go!]
&ldquo;When I wrote, I said I was giving the short answer. Here's the longer version.
&ldquo;Property taxes are not progressive. Within a county appraisal district, you will pay the same property tax rate whether your home value is $50,000 or $5 million. That is unlike federal income taxes where higher incomes have a higher tax rate.
&ldquo;The amount of tax you pay is not primarily determined by your appraised value. It is determined by the tax rate your taxing authorities set. For example, a school system creates a budget for the next year and sets a tax rate based on the appraised value and how much is needed to meet the budget. I live in an area where home values have gone up considerably, but I've seen my tax rate lowered twice in the last 12 years because our local taxing authorities are mostly responsible people. Based on data from Tax-Rates.org, I pay 30% less in taxes than Austin (Travis County) which is 30 miles north of me. (See the interactive map at Tax-Rates.org.)
&ldquo;In Texas, if you have the ability and desire to move, you can greatly lower your taxes. I'm retired now, but I've worked remotely for many years. I tried to get my wife to move to Pecos County. It would have cut our taxes 85%. A person living in Travis County (Austin) could cut their taxes 50% by moving next door to Lee County. In general, the population-dense areas of the state will always have higher taxes. That is because they have more irresponsible taxing authorities and a population that demands more services like elaborate sports complexes.
&ldquo;Finally, the state does limit the taxing authorities on the homesteads of people over 65. My property value has doubled since 2014, but my taxes have not come close to doubling, even without the over 65 exemption. Two years ago the state made a change to the homestead value exemption. Last year, my tax bill went from $8.2K to $5.7K. I'm a happy camper. :-)&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Local tax officials who seek to pad their budgets with higher revenues from rising property values are basically levying a windfall profits tax,&rdquo; writes another. &ldquo;Honest and competent local officials, such as where I live in rural Idaho, compensate for rising property assessments by lowering millage rates.
&ldquo;My property taxes have gone down in three of the last four years because the rising assessments have been enough to cover the county's basic budget plus growth from new arrivals, and millage rates have been reduced accordingly.&rdquo;
Dave responds: Fascinating. If only there were a way to readily quantify and distribute that sort of information for people relocating. It&rsquo;d be a lot more illuminating than the annual tax payment that you see on property listings at Zillow or Realtor.com!

shutterstock 1138863056 (1)

Sure, now the mainstream has figured out a huge port strike is about to begin…

COVID Redux

<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 BRICS Cement Their Currency Agenda
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The BRICS leaders' summit in Kazan, Russia &mdash; scheduled for Oct. 22&ndash;24 &mdash; is expected to make a significant announcement regarding its BRICS&rsquo; currency plan.
This event has been overshadowed by other geopolitical events (i.e. Ukraine, Israel, Lebanon, etc.). But according to our macroeconomics authority Jim Rickards, it could have far-reaching consequences for the U.S. dollar.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2vOSFU2RH7zRcWwmTS3tkl/83f921088bc9b9410c6e1e19e8249cce/majeed_ksa_tweet__1_.png" alt="Majeed KSA Tweet" />
This e-letter, meanwhile, has been on the case <a href="https://5minforecast.com/2014/05/14/the-de-dollarization-summit/" target="_blank" rel="noopener">since the spring of 2014</a> &mdash; when Russian and Chinese ministers used the word &ldquo;de-dollarization&rdquo; to describe the topic of a meeting they&rsquo;d convened. Later that year, the two countries struck a natural gas deal that by most accounts was priced in rubles and yuan, not dollars.
For its part, the BRICS group has expanded considerably since its inception in 2009: new members include Egypt, Ethiopia, Iran and the United Arab Emirates (UAE).
With over 20 aspiring members waiting to join &mdash; including major economies like Indonesia, Turkey and Nigeria &mdash; the bloc's economic and geopolitical influence continues to grow.
At the same time, the BRICS currency is progressing rapidly&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;The BRICS currency is very far along in establishing itself as a viable payment currency,&rdquo; Jim says. First, there is a distinction between a payment currency and a reserve currency&hellip;
&ldquo;A payment currency is the accounting unit to pay for imports and exports; it&rsquo;s really just a way of keeping score,&rdquo; Jim continues. &ldquo;Periodically, trading partners settle the score with a transfer of assets that can include commodities, dollars, euros or gold.
&ldquo;The prerequisites are&hellip;
<ul>
<li>&ldquo;An agreed-upon value (which can be fixed to another currency or pegged to gold)</li>
<li>An agreed-upon issuer (the New Development Bank, created by BRICS in 2014 and based in Shanghai, may be suitable for this purpose)</li>
<li>Secure payment channels (high-speed, encrypted digital pipelines for authenticated message traffic)</li>
<li>And digital ledgers.</li>
</ul>
&ldquo;Moving from a payment currency to a reserve currency is more difficult&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Reserves are not actual currency deposits,&rdquo; Jim notes. &ldquo;They&rsquo;re securities, such as U.S. Treasury notes or German government notes (bunds), controlled by the treasury or finance ministry of each country.
&ldquo;They are denominated in dollars or euros,&rdquo; Jim explains, &ldquo;but they are securities, not cash. The prerequisite here is a large liquid bond market, surrounded by extensive legal infrastructure.
&nbsp;&ldquo;It will take years to develop a BRICS-denominated bond market, although the process could be accelerated&hellip;
&ldquo;Members of the BRICS currency union could use surplus &lsquo;BRICS&rsquo; payment currency to buy gold bullion to hold in their reserves.
&ldquo;Russia, China and South Africa are all major gold producers and China has an extensive network of refineries so there should be ample gold available for purchase,&rdquo; he says. &ldquo;When needed for purchases or settlements, the gold could be easily sold for BRICS currency.
&ldquo;So there is a short path to making &lsquo;BRICS&rsquo; a viable reserve currency: gold&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But what does it mean for the dollar to lose its &ldquo;reserve currency&rdquo; status? 
Historically, the Dutch guilder, French franc and British pound each took their turn as the world's reserve currency, mirroring the rise and fall of these countries&rsquo; global influence.
The British pound&rsquo;s reign as the reserve currency, for instance, coincided with the height of the British Empire which, at its peak in the early 20th century, controlled an impressive quarter of the Earth&rsquo;s land surface.
However, the pound's dominance began to wane following World War I in 1914, Jim likes to remind us. This decline continued for about three decades, culminating in the Bretton Woods agreement of 1944, effectively marking the end of the pound&rsquo;s status as the primary global reserve currency.
The dollar&rsquo;s loss of reserve currency status will advance likewise: It&rsquo;s a process, not an event.
Jim&rsquo;s takeaway? &ldquo;The BRICS currency is coming soon in the role of payment currency. It will not signal the immediate end of the dollar, but it will mean the dollar will have a reduced role in total global payments.
&ldquo;It will take longer for the BRIC to become a reserve currency, although a linkage to gold could accelerate that process,&rdquo; he says.
Without a doubt, the rise of a new BRICS currency could reshape the global monetary landscape and challenge the U.S. dollar's long-standing dominance.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Is Powell a Genius?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Inflation is moving closer to 3% than to the Federal Reserve&rsquo;s preferred 2% target. This morning, the Commerce Department issued its read on &ldquo;core PCE&rdquo; which strips out &ldquo;volatile&rdquo; food and gasoline prices.
By this yardstick, consumer prices rose 0.1% in August &mdash; below the 0.2% economists expected. Meanwhile, the year-over-year inflation rate ticked up to 2.7% (moving in the wrong direction, but in line with expectations).&nbsp;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4s3Px5hQXsDnTvFh75VcYO/1e209353bf8ea0f7d2247294d5d91e0c/pce_price_indexes.png" alt="PCE Price Index Chart" />
Is Fed Chair Jerome Powell a genius? Some mainstream financial outlets think so. &ldquo;Policymakers were on the right track with the recent interest-rate cuts,&rdquo; Barron&rsquo;s affirms.
And Quincy Krosby of LPL Financial tells Reuters: &ldquo;The core year-over-year at 2.7% suggests that another round of 50 basis points needs to come under careful scrutiny unless the labor market suggests weakness.&rdquo;
How&rsquo;s the market responding to the inflation news? Of the three major U.S. indexes, only the Dow is making positive strides &mdash; up almost 1% to 42,560. But the S&amp;P 500 is barely in the green at 5,745 while the tech-heavy Nasdaq is down about 0.30% to 18,130.
Commodities? Oil is up about 0.75% to $68.15 for a barrel of WTI. But precious gold and silver have plunged 1% and 1.25% respectively to $2,671.20 per ounce and $31.94.
Crypto, meanwhile, is in the green. Bitcoin&rsquo;s gained 1.65% to $66,120 and Ethereum&rsquo;s up 1.30% to $2,694.50.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />The World&rsquo;s Largest Exporter Is Worried
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />This week, we've been reporting on an underreported potential strike as the International Longshoremen&rsquo;s Association is still at a standstill with the U.S. Maritime Alliance. The contract for 45,000 workers expires on Monday.
That said, U.S. ports aren&rsquo;t exactly world-class. &ldquo;In 2023 the Port of Los Angeles-Long Beach complex, largest in the U.S., only ranked ninth for volume among the world&rsquo;s container ports, and New York-New Jersey didn&rsquo;t crack the top 20.&rdquo;
Yes, it could create some snarls for holiday shoppers. On the other hand: &ldquo;China rightly has to worry about moving its stuff out as quickly as possible,&rdquo; says an article at FreightWaves.
&ldquo;The U.S. is the largest market for everything from cellphones to furniture to model trains made in China, the world&rsquo;s largest exporter.&rdquo;
And without automation &mdash; a key issue that&rsquo;s being thrashed out at the bargaining table &mdash; &ldquo;getting containers through those ports is like trying to push an elephant through a keyhole,&rdquo; the article adds.
<ul>
<li>&ldquo;But a union isn&rsquo;t a union without dues-paying members, so preserving jobs by keeping automation technology out of U.S. ports is always a high priority for ILA leadership even as, observers say, it compromises the efficiency of operations.&rdquo;</li>
</ul>
So who else should be worried about a strike? &ldquo;Let consumers worry about it&hellip; They&rsquo;ll be the ones paying for disruptions, delays and other assorted supply-chain snarls that will be baked into the price of whatever shiny object hits store shelves.&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" />Avoid the Self-Checkout Line
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Former Olympic athlete Meaggan Pettipiece's life was turned upside-down after a self-checkout mishap at an Indiana Walmart in March.
Despite the mother of four paying $176 for other items, Pettipiece&rsquo;s receipt showed she&rsquo;d failed to scan a ham and asparagus, valued at $67. Walmart security called the police, leading to Pettipiece's arrest for shoplifting.
During the arrest, officers found vapes and anti-nausea medication in her purse, resulting in additional charges of possession of cannabis and a controlled substance.
&ldquo;In the aftermath of the arrest, with a torrent of headlines sweeping across the state, Pettipiece resigned from her role as an NCAA Division 1 softball coach at Valparaiso University,&rdquo; The Independent reports.
&ldquo;However, it was later discovered that the machine did not register her ham and asparagus when she scanned them. Not only that, but the vapes did not contain nicotine or THC.
&ldquo;[Nor] did the anti-nausea pills belong to her,&rdquo; The Independent says. &ldquo;Instead, they belonged to an assistant coach, who reportedly asked the former All-American softball player to carry them for her during a softball game days before her arrest.&rdquo;
Good news? Last week, Indiana officials dropped all charges against Pettipiece after her lawyer filed for a dismissal earlier this month.&nbsp;
&ldquo;I&rsquo;m happy, obviously,,&rdquo; Pettipiece says, but after a five-months long &ldquo;living nightmare,&rdquo; she says: &ldquo;I lost my career, I lost my job, the life I was building and it&rsquo;s been really difficult.
&ldquo;I&rsquo;m not sure of the future,&rdquo; she adds. &ldquo;I&rsquo;d like to figure out which direction I&rsquo;m going to go in.&rdquo;
We only hope that direction leads to a good lawyer&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: More Health Care Loose Ends
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /><a href="https://paradigmpressroom.com/post/congress-cashes-in/#5" target="_blank" rel="noopener">&ldquo;Why is there a shortage of doctors in the U.S.?&rdquo;</a> asks a reader discussing health care once again today. &ldquo;Dave, you responded with some good assumptions as to the cause&hellip; 
&ldquo;Here&rsquo;s one I&rsquo;m surprised you didn&rsquo;t include: We are a litigious society. My husband was a neurosurgeon. When he retired in 2003, malpractice insurance coverage, if he was sued during the statute of limitations following his retirement, was $60,000. I hate to think what the cost is now.
&ldquo;Here&rsquo;s another thing to consider: DEI policies practiced in medical schools afford some individuals an opportunity to enter medical school. But I&rsquo;d like to see the stats on what percentage of these students actually complete medical school and continue their education with specialty residencies.
&ldquo;Here&rsquo;s the kicker: Out of nine countries, the United States spends more on medical care than any others, but is ranked dead last in the quality of care rendered.
&ldquo;The bottom line: If my husband were alive today and saw how medicine is practiced and the quality of care, he&rsquo;d die all over again.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;In early 2022, I had a heart attack,&rdquo; a second reader writes with his own health care assessment.
&ldquo;My cardiologist was in the same group that fired and sued Dr. Peter McCullough. When he released me, he told me to discontinue use of ivermectin and HCQ. I fired him and told him he should honor his Hippocratic Oath.
&ldquo;While I was in the hospital, I learned that nurses had completely lost the ability to draw blood. Every time they needed to draw blood, they stuck me, on average, five times.
&ldquo;In late 2023, I was diagnosed with the most aggressive type of prostate cancer. The tumor was removed, and I started chemotherapy. Three months later, I was scheduled to start proton radiation. During this time, I met with my proton radiation doctor. The first thing he asked was, &lsquo;Why are you taking ivermectin?&rsquo; I told him it was for COVID. His response was, &lsquo;Oh, you&rsquo;re one of those people.&rsquo;
&ldquo;My proton radiation doctor was supposed to have given me a full plan of treatment, but that did not happen. Before I started treatment, I asked him if he was treating my lymph nodes. He told me no, because it was impossible. After pushback he did the impossible and decided to treat my lymph nodes.
&ldquo;I was supposed to take 44 treatments, with a treatment every weekday. That should have required two months to complete. Due to lapses, lack of training and equipment failures it has been over six months, and I still require nine treatments.
&ldquo;The first two treatments I received did not count, because the proton radiation did not hit the markers. The markers are designed to absorb the proton radiation. Therefore, the first two treatments shot radiation into my body.
&ldquo;As bad as health care has become, it will get much worse as the WOKE continues to implement their DEI plans.&rdquo;
Emily: Dave said it yesterday: &ldquo;We don&rsquo;t do &lsquo;personal finance&rsquo; stuff around here.&rdquo; And I&rsquo;ll add today: We don&rsquo;t do personal health care stuff around here either.
Take care, reader, and enjoy your weekend!

anw-hero-img-09-27-24 brics countries currency and gold bars concept photo

shutterstock 2361411583

The BRICS leaders' summit in Kazan, Russia — scheduled for Oct. 22–24 — is expected to make a significant announcement regarding its BRICS’ currency plan.

BRICS Cements Dollar’s Demise

<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" />About That &ldquo;Solid&rdquo; Economic Data Today&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />There&rsquo;s nothing technically &ldquo;wrong&rdquo; with this headline&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7gQrX846ISOtXIrrsGfjVp/82b04d7866969c6dc7e7b3c0a54c9905/FMF-issue-09-26_1_.png" alt="pub" width="540px" />
The S&amp;P 500 did rise to a record, the economic data is solid and tech stocks are rising. (Micron Technology issued a banger of a forecast for the rest of the year; shares are up 14% on the day.)
But the headline doesn&rsquo;t paint a complete picture.
Let&rsquo;s zero in on the day&rsquo;s economic data&hellip;
<ul>
<li>The Commerce Department issued its third and final guess on second-quarter GDP growth &mdash; an annualized 3.0%, in line with Wall Street&rsquo;s expectations</li>
</ul>
<ul>
<li>First-time unemployment claims for the week gone by totaled 218,000 &mdash; below Wall Street&rsquo;s expectations, indeed a four-month low</li>
</ul>
<ul>
<li>Orders for durable goods &mdash; anything designed to last longer than three years &mdash; came in flat for August. That&rsquo;s a win compared with Wall Street&rsquo;s expectations for 2.7% drop.</li>
</ul>
So it&rsquo;s all good, right?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;My forecast of a coming recession has not changed,&rdquo; says Paradigm&rsquo;s macroeconomics maven Jim Rickards.
&ldquo;We may be in one already. It&rsquo;s happening about as expected (maybe taking a bit longer to emerge) in line with the data.&rdquo;
After today, four more days remain in the current quarter. The &ldquo;GDPNow&rdquo; forecasting tool from the Federal Reserve Bank of Atlanta is projecting 2.9% annualized growth. A very &ldquo;solid&rdquo; figure.
But Jim is among a handful of economic renegades who see an anomaly: &ldquo;GDP is supposed to be a near-mirror image of GDI (gross domestic income),&rdquo; he says, &ldquo;but there&rsquo;s been a wide divergence in recent quarters. GDI is growing much more slowly and may soon be declining slightly.
&ldquo;In the past, when GDP and GDI diverge, GDI tends to be more accurate and GDP plunges quickly to re-converge with GDI.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> A similar anomaly shows up in the job numbers.
When the Labor Department reports the job numbers on the first Friday of the month, the headline number the media fixates on is the &ldquo;establishment survey&rdquo; &mdash; so called because it&rsquo;s a survey of business establishments, asking if they&rsquo;ve added or cut payroll.
But there&rsquo;s also a &ldquo;household survey&rdquo; &mdash; which as the name suggests, is a survey asking who in a household is working and who&rsquo;s not.
The two figures &ldquo;should be about the same, but the employer survey has held up well while the household survey has recently been declining,&rdquo; says Jim. &ldquo;Again, the household survey is the more accurate of the two when the measures diverge.
&ldquo;This means the employer survey (that&rsquo;s the one that gets all the headlines) may be set to fall and move in line with the household survey. That process may have started already based on the latest employment report released on Sept. 6 in which the employer and household data were roughly the same, but both were disappointing.&rdquo;
Yep, as we mentioned at the time, the wonks at the Bureau of Labor Statistics conjured a mere 142,000 new jobs for August. The July and June numbers were revised downward.
&ldquo;This shows,&rdquo; says Jim, &ldquo;that the weakness in the labor force actually began several months ago. Worse, &ldquo;more than 100% of new jobs were part-time (when full-time jobs are netted against part-time jobs).&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Jim&rsquo;s conclusion: &ldquo;Reliable data indicates a recession while &lsquo;headline&rsquo; data says all is well. This means that when the headline data converges, the correction could be swift and brutal and catch investors off-guard.
&ldquo;A nasty stock market correction (20&ndash;30% or more in one or two months) would be the last shoe to drop.
&ldquo;Real stock values are driven by factors that are much larger than stock fundamentals and interest rates. They&rsquo;re driven by inflation, deflation, currency fluctuations and business cycles. Investors need to be aware of these cross-currents in setting their portfolio allocations. Simply cheering on higher index levels isn&rsquo;t enough.
&ldquo;Gold is often a good hedge in such scenarios, but don&rsquo;t ignore Treasury notes.&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" />Dockworker Strike Impact: Worse Than COVID?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />At least one CEO in the supply chain says it&rsquo;s too late to avert a dockworker strike come next Tuesday. The only question now is how long it lasts.
There&rsquo;s still no movement in the impasse between the International Longshoremen&rsquo;s Association and the U.S. Maritime Alliance. The current contract expires Monday. If there&rsquo;s no new deal, 45,000 workers at East Coast and Gulf Coast ports will walk.
Acting Labor Secretary Julie Su has been in contact with both sides &mdash; but unlike in the dispute at West Coast ports last year, she&rsquo;s not stepping in to mediate. The Biden administration says she&rsquo;ll negotiate only if asked by both sides to do so &mdash; and a few days ago, the union told the White House to back off.
Once a strike is underway, &ldquo;if it just lasts for a day or two, it&rsquo;s probably not a huge deal,&rdquo; says Ryan Petersen of the logistics firm Flexport.
&ldquo;If it lasts for more than a few days or more than a week, you're going to get massive cascading effects of backlog building up of cargo that needs to get moved and can't,&rdquo; he tells Yahoo Finance.
Indeed he says the impact in that case would be worse than the COVID shutdowns. &ldquo;In the COVID instance, those were caused by a huge increase in demand for goods. This is really different. This is a decrease in supply, much worse from an economic impact standpoint.&rdquo;
The biggest impact probably won&rsquo;t be with consumer goods for the holidays. What&rsquo;s most at risk appears to be auto parts, perishable foods and pharmaceuticals. Might want to call the doctor for a refill today, just in case&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" />After a September to Remember&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;October marks a critical turning point for stocks,&rdquo; says Paradigm chart hound Greg Guenthner &mdash; looking ahead to the month that begins next Tuesday.
&ldquo;It concludes the worst six months of the year for U.S. equities, kicking off the best time of year to buy stocks&hellip;
&ldquo;October not only signals a significant shift in seasonal trends &mdash; it also has a knack for bottom-ticking the market, marking the low of 13 bear markets since World War II, per the Stock Trader&rsquo;s Almanac (most recently, the Dow ripped 14% in October 2022).&rdquo;
Of course, we&rsquo;re not in a bear market right now. Checking our screens, the S&amp;P 500 is in record territory this morning at 5,741.
&ldquo;Stock market bulls aren&rsquo;t searching for potential support zones,&rdquo; says Greg. &ldquo;Instead, they&rsquo;re exploring unchecked levels of overhead supply.
&ldquo;First-half leaders are making up lost ground following the late-summer selling session. Rotation is leading to broadening participation beneath the surface. And a new leadership group is emerging: small caps. These conditions would be better described as the second year of a bull run, as opposed to the end of an ugly downtrend.&rdquo;
What about the fact it&rsquo;s an election year? Going back to the first Eisenhower-Stevenson contest of 1952, average October returns during election years look like this: Dow -1%, S&amp;P 500 -0.9%, Nasdaq -2.2%.
All of which is interesting but not necessarily useful: &ldquo;Seasonality studies serve as a road map, not a definitive forecasting tool,&rdquo; says Greg. &rdquo;In fact, the most useful information comes when markets buck seasonal trends (like they&rsquo;re doing right now).&rdquo;
His guidance: &ldquo;Remain cautious&rdquo; &mdash; and give Mr. Market time to adjust to the start of a new cycle of interest-rate cuts by the Federal Reserve. It&rsquo;s only the fourth time so far this century. Nothing dramatic, but &ldquo;stay alert for a little chop, and maybe a fake-out or two lower as we kick off Q4.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Elsewhere in the markets, the commodity complex is all over the place.
Crude has sunk another 2% today to $68.20. The pop over $72 two days ago had zero staying power. Next target? The $66 lows over earlier this month.
But that other economically sensitive commodity, copper, sits at three-month highs of $4.46 a pound. It&rsquo;s been a whale of a rebound off the sub-$4 lows in early August.
Precious metals, you ask? Gold is holding steady in record territory, the bid $2,664 at last check. Silver slipped after we went to virtual press yesterday, but now it&rsquo;s back within a dime of $32.
Bitcoin, meanwhile, has pushed past $65,000 for the first time since early August.
<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" />Trial Run?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Hmmm&hellip; 
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/55JkfkDxPYgBmR7koFgCHn/756cc16a0778301e2ae5491b2c2e6daa/FMF-issue-09-26_2_.png" alt="pub" width="540px" />
&ldquo;Prime Minister Benjamin Netanyahu has asked officials to begin discussing measures to limit the circulation of black market currency to curb illegal activity in Israel,&rdquo; says The Jerusalem Post.
&ldquo;Part of the proposal suggests limiting private ownership of large amounts of cash alternatives such as gold, silver and coins.&rdquo;
How large is &ldquo;large&rdquo;? We don&rsquo;t know.
Also under consideration is phasing out the 200-shekel note &mdash; barely $50 at current exchange rates. A separate article at Bitcoin Magazine cites the Hebrew-language newspaper Globes as saying &ldquo;most of the 200-shekel bills are not used for purchases, but for the accumulation of black capital.&rdquo;
&ldquo;In the medium term,&rdquo; says Israel&rsquo;s Ynet news site, &ldquo;the plan calls for a drastic reduction in cash use, aiming to eliminate cash transactions altogether within a few years, with payments to be made exclusively through bank transfers or credit cards.&rdquo;
Sounds as if Israel is looking to go the way of <a href="https://paradigmpressroom.com/post/the-irs-expands-its-target-list#4">India</a> &mdash; a story we&rsquo;ve been following for eight years now.
But to the best of our knowledge, Indian leaders have never suggested limiting ownership of gold. It&rsquo;s too ingrained in the culture &mdash; given as gifts, frequently passed from one generation to the next.
We&rsquo;ll be keeping an eye on this one&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: Property Taxes
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It seems we stirred the property-tax pot anew yesterday. Let&rsquo;s get right to it&hellip; 
&ldquo;In my view,&rdquo; a reader writes, &ldquo;Texas property taxes are much akin to Kamala's stupid idea of a proposed tax on unrealized gains. My property values go up so my property tax goes up. Yet I have not realized any gain. It's an unrealized paper gain that I have to pay taxes on each year.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;I have an old maxim: &lsquo;For a given level of government, they have to extract the money in some way.&rsquo;
&ldquo;Without getting into the issue of overspending on dumb things by the government, the point is taxpayers expect a certain level of services - roads, schools, police etc. So if you cut out property taxes (or income taxes) the tax revenue must be made up somewhere else.
&ldquo;That is why states with no income tax typically have high sales taxes, property taxes or various use taxes. In Florida I pay a toll nearly every time I get on a freeway to go very far. So my question for North Dakota is where else will the tax revenue come from?
&ldquo;Enjoy the 5 even when I don't always agree.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Regarding the home-rich, cash-poor elderly (of which I am one&hellip;) &mdash; that&rsquo;s why reverse mortgages exist! 
&ldquo;Pay taxes and insurance and keep the place up and you&rsquo;re mostly all set! And the reverse mortgage holder takes the valuation crash risk. Oversimplified, but not enough people are taking advantage of this &lsquo;Swiss army knife.&rsquo;&rdquo;
Dave responds: We don&rsquo;t do &ldquo;personal finance&rdquo; stuff around here, but we understand reverse mortgages are a preferred strategy of the &ldquo;die broke&rdquo; crowd. Certainly they seem like a viable option if you&rsquo;re not looking to pass on wealth to the kids or grandkids&hellip;

shutterstock 590096474

About that “solid” economic data today, there’s nothing “technically” wrong with it… 

Lies, Statistics and Recession 

<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" />Financial Foreboding
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Of all the missed warnings before the Sept. 11 attacks in 2001, some of the most compelling &mdash; and to this day, least publicized &mdash; were the financial warnings.
The attacks took place on a Tuesday morning. The previous Thursday and Friday, something funky was going down in the options markets.
Paradigm Press macroeconomic maven Jim Rickards recounted the story in his book The Death of Money: &ldquo;On Sept. 6 and 7, option bets that United Airlines stock would fall outnumbered bets it would rise by 12-to-1. Exchanges were closed on Sept. 8 and 9 for the weekend. The last trading session before the attack was Sept. 10, and on that day, option bets that American Airlines stock would fall outnumbered bets it would rise by 6-to-1.&rdquo;
There was no news to trigger that sort of action. And there was no similar action in the other airlines like Southwest or US Airways &mdash; whose jets were not involved in the attacks.
&ldquo;Seasoned traders and sophisticated computer programs recognize this pattern for what it is,&rdquo; Jim wrote &mdash; &ldquo;insider trading in advance of adverse news. Only the terrorists themselves and their social network knew that the news would be the most deadly terrorist attack in U.S. history.&rdquo;
The 9/11 Commission dodged the issue, saying the feds uncovered &ldquo;no evidence&rdquo; anyone with advance knowledge of the attacks profited.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Still, a small office within the CIA decided to dig deeper&hellip; and Jim Rickards was among nearly 200 finance pros called on to assist the effort during 2003.
Their mission: To identify market activity that would tip off another big attack.
By 2004, Jim had helped design a functioning algorithm &mdash; incorporating artificial intelligence, applied mathematics, news feeds and price feeds.
&ldquo;We had modeled terrorist trading from start to finish,&rdquo; Jim wrote, &ldquo;anticipating that the insider traders would be not the terrorists themselves but rather members of the terrorist social network. We also concluded the insider trade was likely to be executed in the options market less than 72 hours before the attack to minimize the risk of detection.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />On Aug. 7, 2006 &mdash; Jim and his colleagues spotted just this sort of activity. Once again, it was concentrated in American Airlines.
As it happened, Scotland Yard was in the process of thwarting a plot to blow up seven airliners traveling between Great Britain and North America. By the night of Aug. 9, police in and around London were able to pick up 24 suspects in a series of raids.
&ldquo;We realized that the plot was unfolding in exactly the time frame that our behavioral modeling had estimated.&rdquo;
And yet&hellip; the CIA wound up pulling the plug on the project. As Jim tells us, the agency was concerned about public perception that the feds were combing through U.S. citizens&rsquo; personal trading records. That&rsquo;s even though the system relied only on &ldquo;open source&rdquo; (publicly available) information to generate leads; if the leads needed following up, that had to go through the court system.
➢ Bonus points for government stupidity: It was this August 2006 incident that&rsquo;s cursed us ever since with the TSA&rsquo;s arbitrary and pointless 3.4-ounce limit on liquids and gels in your carry-on luggage.
<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" />Silver Shines
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Don&rsquo;t look now, but silver is back to its 2024 highs. 
The white metal closed over $32 an ounce yesterday. It&rsquo;s pulled back a bit this morning &mdash; $31.80 &mdash; but the price action is constructive.
&ldquo;Silver has been lagging gold since the summer,&rdquo; Paradigm&rsquo;s Greg Guenthner writes his Trading Desk readers today, &ldquo;but has accelerated higher this month. Not only has its year-to-date performance now surpassed gold following yesterday&rsquo;s rally of almost 5% &mdash; it&rsquo;s also right back to those May highs. This is a huge level!
&ldquo;Remember, silver can really fly in the right conditions. Gold probably needs a break after running to new highs, but a fresh breakout in silver could really get the precious metals bulls running.&rdquo;
&ldquo;$32 silver is nothing,&rdquo; affirms our floor-trading veteran Alan Knuckman of The Profit Wire. As Alan is keen to remind us, silver&rsquo;s 2011 high of $50 adjusted for inflation would be almost $70 today. (For the moment, we&rsquo;ll overlook silver&rsquo;s 1980 high, also $50 &mdash; that was a truly extreme circumstance. But if you must know, that would be $191 now.)
Gold, meanwhile, is holding onto its gains of recent days at $2,656 &mdash; close to record highs, but totally flying under the radar. The Midas metal is getting no attention from corporate media or retail investors.
&ldquo;I think this is a good thing if you are bullish on precious metals!&rdquo; says the aforementioned Greg Guenthner. &ldquo;There are lots of folks out there who will be late hopping onto this bandwagon as these names continue to break out. And the more speculative plays are beginning to catch and run.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /><a id="3"></a>As for stocks, watching the major indexes is like watching paint dry: At 5,728, the S&amp;P 500 is down less than a tenth of a percent from yesterday&rsquo;s record close.
Crude is sinking back toward $70 a barrel, even as the Financial Times reports that Israel is preparing a ground offensive in Lebanon.
Bitcoin is holding the line on the $63,000 level.
<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" />Is Altman Demanding the Impossible?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />What the hell does OpenAI founder Sam Altman want?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/p8c876adVGR03hdphaTJZ/bce1812dfc889cac57cac3372479884f/businessweek_tweet.png" alt="Businessweek Tweet" />
From Bloomberg: &ldquo;OpenAI has pitched the Biden administration on the need for massive data centers that could each use as much power as entire cities, framing the unprecedented expansion as necessary to develop more advanced artificial intelligence models and compete with China.&rdquo;
All this year we&rsquo;ve been <a href="https://paradigmpressroom.com/post/the-monster-that-ate-the-power-grid-ai" target="_blank" rel="noopener">alerting</a> you to the prodigious electricity demands that AI is making on an electric grid whose capacity is no greater now than it was in 2011.
Altman dropped in on the White House two weeks ago, trying to pass himself off as the man with a plan. He proposed the construction of several 5-gigawatt data centers around the country. &ldquo;To put that in context,&rdquo; says Bloomberg, &ldquo;5 GW is roughly the equivalent of five nuclear reactors, or enough to power almost 3 million homes.&rdquo;
Exactly what he wants from the government is fuzzy. All we get from the Bloomberg story is that &ldquo;the U.S. needs policies that support greater data center capacity.&rdquo; What policies are those, exactly? No clarity.
Also fuzzy is who Altman expects to pony up the funds for this scheme. Taking his case to the White House seems suspicious. If it&rsquo;s such a great idea, can&rsquo;t he line up private equity money on his own?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />At least one utility executive is calling BS: &ldquo;Whatever we&rsquo;re talking about is not only something that&rsquo;s never been done, but I don&rsquo;t believe it&rsquo;s feasible as an engineer, as somebody who grew up in this,&rdquo; Constellation Energy CEO Joe Dominguez tells Bloomberg.
Constellation&rsquo;s operations include an outsized presence in the mid-Atlantic &mdash; the region that&rsquo;s home to &ldquo;Data Center Alley&rdquo; in Loudoun County, Virginia. The management consulting firm ICF projects a 68% increase in the region&rsquo;s power demand by 2050.
But forget 2050: As a result of this surge in demand, other independent researchers project rolling blackouts in the mid-Atlantic by 2026, maybe even next year.
We don&rsquo;t know how all of this will play out in the end&hellip; but something&rsquo;s gotta give.
And not enough people are talking about it. So we&rsquo;ll keep shouting into the void&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" />News From Canada: CBDC, RIP
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Canadian leaders say they&rsquo;ve given up on a CBDC &mdash; a central bank digital currency.
If you&rsquo;re a newer reader, let&rsquo;s get you up to speed: Global elites envision CBDCs as the digital replacement for physical cash. The aim, as Paradigm macro maven Jim Rickards explained in 2022, is &ldquo;herding you into digital cattle chutes where you can be slaughtered with account freezes, seizures, etc.
&ldquo;In a world of CBDCs, the government will know every purchase you make, every transaction you conduct and even your physical whereabouts at the point of purchase.
&ldquo;It&rsquo;s a short step from there to negative interest rates, account freezes, tax withholding from your account and even putting you under FBI investigation if you vote for the wrong candidate or give donations to the wrong political party.&rdquo;
And yes, the concept is under consideration in the United States &mdash; following an executive order signed by Joe Biden in March 2022.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But days ago, the Bank of Canada said it&rsquo;s &ldquo;scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development.&rdquo;
Perhaps the writing was on the wall late last year, when the central bank commissioned a survey on the concept &mdash; finding 86% opposition. Among the comments: &ldquo;Horrible idea&rdquo; and &ldquo;Leave cash alone.&rdquo;
Said one: &ldquo;A digital dollar sounded great until we saw the federal government freeze private bank accounts of its own citizens for supporting a political movement it disagreed with. I have no faith at all in the system anymore.&rdquo;
As you might recall, that&rsquo;s exactly what happened in January&ndash;February 2022 when Canadian truckers swarmed the capital Ottawa to protest COVID jab mandates.
Shortly after the government froze the bank and credit card accounts of several protest leaders, the websites and phone systems of all the Big Five Canadian banks became inaccessible. To this day, Canadians speculate about whether a bank run was underway &mdash; as either a panic or a protest in response to those account freezes.
So that&rsquo;s the background to Canada&rsquo;s decision.
Canada is not alone in the English-speaking world, by the way. The Reserve Bank of Australia recently published a report concluding, &ldquo;There is no clear public interest case to issue retail CBDC in Australia as yet.&rdquo; And in the developing world, Colombia is also giving up.
As Nicholas Anthony writes for the Cato Institute, none of these central banks&rsquo; statements is binding&hellip; but they are &ldquo;a welcome change of pace.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />The Mailbag
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Let&rsquo;s return to the topic of property taxes: Amid a referendum in North Dakota to <a href="https://paradigmpressroom.com/post/no-accountability-no-shame#3">repeal property taxes</a>, we heard from a Texas reader who defended the property tax as &ldquo;not progressive like the income tax.&rdquo;
Now another Texas reader fires back: &ldquo;I was incredulous at my fellow Texan who offered that prop taxes are not progressive. Well, that may be true until your central appraisal district&rsquo;s valuation increases &mdash; kinda sorta like if your income levels increase.
&ldquo;Unlike increasing income taxes, which result, of course, from making more money to pay on those increasing taxes, when your prop taxes go up, you start eating more beans and tortillas to pay the tax fiddler.&nbsp;
&ldquo;I am talking about one's homestead &mdash; the place where you actually live. If you have a second house on the lake, beach or sixth fairway, our well-heeled brothers/sisters can typically afford the extra dollars to pay on the multimillion-dollar athletic complexes common in Tejas where the independent school districts receive the bulk of tax revenues.
&ldquo;It's called the real world.
&ldquo;My regards, and keep looking up.&rdquo;
Dave responds: The problem is even worse for the proverbial retiree living on a fixed income whose property values are rising relentlessly.
I&rsquo;d imagine there are more than a few 70-somethings in Austin who&rsquo;ve lived in the same house for the last 30 years and are finding it mighty hard to get by right about now&hellip;

shutterstock 774909604 (1)

Of all the missed warnings before the Sept. 11 attacks in 2001, some of the most compelling — and to this day, least publicized — were the financial warnings.

The Pre-9/11 Financial Omen

<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 Financial Omen Before the Shots Were Fired
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />There were hints in the days before the first assassination attempt on Donald Trump that something big was about to go down. And those hints appeared in the stock market.
Short interest in Trump Media (DJT) &mdash; that is, bets the share price would fall &mdash; spiked shortly before the gunman opened fire on Saturday July 13.
As Paradigm&rsquo;s Jim Rickards puts it, &ldquo;People or large organizations were predicting that by Monday [the 15th] the stock would plummet, something that undoubtedly would have occurred had President Trump died in Pennsylvania,
&ldquo;This could mean some had foreknowledge of the plot against President Trump&rsquo;s life and tried to profit off the coming calamity.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />For Jim, there were eerie parallels to the days leading up to the 9/11 attacks in September 2001. He even mentioned it on X-formerly-Twitter&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/51zjL1BomZIpYswVnCp62x/5e919ac3dafc29eda085512dde8d80fe/pp2_hotlist_jim_tweet.png" alt="Rickards Tweet" />
We&rsquo;ll talk more tomorrow about the backstory with Project Prophesy (spelled with an &ldquo;s&rdquo;) &mdash; which Jim developed with other financial experts for the CIA in the years immediately after 9/11.
Suffice it to say there was massive buying of put options on American and United Airlines in the three trading days before the attacks.
As we chronicled late last year, similar action in the iShares MSCI Israel ETF (EIS) showed up in the days before the Hamas attack inside Israel on Oct. 7, 2023.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Markets Today: China Stimmies vs. Glum Consumers
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The day&rsquo;s news is pushing the market up&hellip; and pulling it down at the same time.
On the pushing-up side: "China's central bank unveiled a broad package of monetary stimulus measures to revive the world's second-largest economy,&rdquo; says Bloomberg &mdash; &ldquo;underscoring mounting alarm within Xi Jinping's government over slowing growth and depressed investor confidence."
In recent days, Paradigm experts were noting on our internal e-chat that Chinese stocks were starting to take off. The iShares China Large-Cap ETF (FXI) put in a meaningful bottom two weeks ago at $25.46. The ETF rallied 8.7% through yesterday&rsquo;s close&hellip; and it&rsquo;s up another
6.9% as we write this morning at $29.58.
Easy money from a major central bank was enough to push the U.S. stock market up to start the day, but then a half-hour later&hellip;
&hellip; came the pulling-down side: The monthly consumer confidence numbers from the Conference Board absolutely stunk up the joint &mdash; falling from 105.6 in August to 98.7 in September. That&rsquo;s the steepest one-month drop in three years.
Blame it in large part on a softer job market at the same time inflation fears are not abating:
Confidence is especially poor among people ages 35&ndash;54 and earning less than $50,000 a year.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />And with that, the major U.S. stock indexes are little moved from yesterday&rsquo;s close.
For the S&amp;P 500, yesterday&rsquo;s close was a record. Checking our screens, it&rsquo;s down less than a point at 5,718. The Nasdaq is slightly in the red, the Dow is about a quarter-percent in the green.
It&rsquo;s the commodity complex that&rsquo;s on the move today, thanks to that hefty Chinese &ldquo;stimulus.&rdquo; Gold is up nearly $17 to $2,644. Silver is up 2.75% to $31.45.
Meanwhile, crude is up nearly 2% to $71.63, a three-week high. In addition to the prospect of more demand from China, it seems that the Pentagon ordering more U.S. troops to the Middle East &mdash; it won&rsquo;t say how many &mdash; is finally waking up traders to the potential for disrupted supply as Israel steps up its attacks in Lebanon.
<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" />Rural Depression = Rising Food Prices?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Rural America hasn&rsquo;t been this despondent since the early days of COVID lockdowns in 2020.
The Rural Mainstreet Index compiled by Creighton University economist Ernie Goss clocks in for the month of September at 37.5. Any reading below 50 suggests a shrinking rural economy, and this number&rsquo;s been mired below 50 for 13 straight months.
Goss compiles the index from a survey of bank CEOs in agriculture- or energy-intensive rural areas of a 10-state region stretching from Wyoming east to Illinois. He blames the current poor reading on &ldquo;weak agriculture commodity prices, sinking agriculture equipment sales and elevated input costs.&rdquo;
Uncertainty about the fate of the farm bill in Congress can&rsquo;t be helping matters. Recently a coalition of 300 farm-industry groups issued a warning that if nothing is passed, U.S. farmers will have trouble getting credit to keep operating in 2025, in light of a &ldquo;farm economy that has taken a downward spiral.&rdquo;
Yes, these groups are pleading for special favors at taxpayer expense. Today&rsquo;s not the day to get into the weeds of America&rsquo;s fouled-up farm policy. All we&rsquo;re saying is that if a meaningful number of farms shut down next year for lack of operating capital, that&rsquo;s not going to help alleviate food-price inflation.
<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" />The Fort Knox Photo Op 50 Years Later
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We&rsquo;re a day late marking an interesting 50th anniversary&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2a5doX1BopEuZyxu8cgDxD/cebd8fd9857fd3f5ca7ec4f20d5ef19f/1974-live-tweet.png" alt="1974 Live Tweet" />
On Sept. 23, 1974, the Treasury Department staged a dog-and-pony show at Fort Knox, Kentucky &mdash; where a substantial portion of the government&rsquo;s gold stash is located.
Access was strictly limited: &ldquo;A few gold bars in one of the bullion depository's 15 vault compartments were shown to members of Congress and some journalists,&rdquo; recalls Chris Powell of the Gold Anti-Trust Action Committee. &ldquo;This did nothing to verify that the rest of the U.S. government's 8,133 tonnes of gold reserves were still in the government's possession.&rdquo;
According to the folks from the Sound Money Defense League, &ldquo;the last somewhat credible examination of Fort Knox's gold was in 1953.&rdquo;
Supposedly the gold is audited every year, but the feds keep the information closely held. As we chronicled in 2017, independent researchers managed to get their hands on a paltry 134 pages of documents &mdash; and those only <a href="https://5minforecast.com/2017/03/02/in-search-of-fort-knoxs-gold/" target="_blank" rel="noopener">raised more questions than they answered</a>.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />In retrospect, it&rsquo;s fascinating that this event was staged only a few weeks after President Richard Nixon&rsquo;s resignation on Aug. 9, 1974.
Watergate and Vietnam had sapped Americans&rsquo; trust in &ldquo;the system.&rdquo; It had been barely a decade since the JFK assassination and only three years since Nixon cut the dollar&rsquo;s tie to gold, with highly inflationary consequences.
The powers that be must have felt they had to do something, however small, to make Americans believe they didn&rsquo;t live in a corrupt and decaying banana republic.
Also figuring into the mix, perhaps, was this: Days after Nixon&rsquo;s resignation, President Gerald Ford signed a bill making it legal once again for Americans to own gold bullion. It had been verboten ever since FDR issued his gold-confiscation orders in 1933.
In any event, questions still swirl: We don&rsquo;t buy into conspiracy theories that, for instance, the gold bars were replaced with gold-coated tungsten bars. But it&rsquo;s an open question whether Uncle Sam has &ldquo;leased&rdquo; these bars to commercial banks, who in turn sold that gold to Asian buyers &mdash; a complex ruse to keep a lid on the dollar price of gold.
As Powell muses, &ldquo;The bigger question about the U.S. gold reserve may be not whether there is still metal in Fort Knox but rather how many entities have a claim to it.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />An Inflationary Mailbag
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I liked your article on inflation, but stocks are still the only game in town,&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/dont-let-inflation-wreck-your-returns" target="_blank" rel="noopener">yesterday&rsquo;s edition</a>.
&ldquo;You should compare a good stock account with money in the bank or in a CD where you not only lose from less value to the dollar, but also there is no growth. There are several REITs that give good income and good growth.&rdquo;
Dave responds: Assuming 8% average annual growth in the stock market, you&rsquo;re right, 5% on a CD or a money market fund doesn&rsquo;t compare. (And that 5% will be coming down now that the Fed is cutting short-term interest rates.)
There are times when the stock market is the only game in town &mdash; but not all the time.
We spilled a lot of digital ink on the 1970s yesterday because that&rsquo;s the most extreme example from the post-WWII era of poor returns aggravated by losses from inflation. But there are others that are more recent.
At the peak of the dot-com bubble in early 2000, the S&amp;P 500 sat just over 1,500. The index bottomed in late 2002 and touched 1,500 again in late 2007 &mdash; only to collapse again amid the global financial crisis.
After bottoming once more in early 2009, the S&amp;P didn&rsquo;t return to 1,500 until early 2013. Only then did it leave that level behind for good.
That&rsquo;s 13 years of going nowhere &mdash; before you account for inflation. If you&rsquo;d put $1,000 into the S&amp;P at the top in early 2000, you&rsquo;d have waited over 16 years to break even in terms of purchasing power.
Every asset class has its season &mdash; stocks in times of prosperity, gold in times of inflation, cash in times of recession, bonds in times of deflation. (Treasury bonds were the only place you wanted to be during the &ldquo;panic vortex&rdquo; of the financial crisis in the fall of 2008.)
Of course, there will always be individual stocks that outperform the broad market no matter the season. Identifying them is one of our missions around here!
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;The inflation and consumer price data published are indeed scary,&rdquo; writes one of our longtimers, &ldquo;but in evaluating its impact we seem to omit the fact that inflation affects prices of all things, i.e., including wages and income of any kind.
&ldquo;So when the talk turns to purchasing power, this makes a huge difference.
&ldquo;A couple of mathematicians developed the &lsquo;time value of prices&rsquo; formula to address this and concluded that most things are more affordable today than they were years ago. It measures prices by the time one has to work to earn that item.&rdquo;
Dave responds: Ah yes, <a href="https://en.wikipedia.org/wiki/Pooley-Tupy_theorem" target="_blank" rel="noopener">the Pooley-Tupy theorem</a>. I have little time or patience for it.
I understand the concept. The problem with the formula is the same problem that afflicts many government statistics: They don&rsquo;t jibe with people&rsquo;s lived experience. They don&rsquo;t jibe with the fact that one wage earner could provide a middle-class lifestyle for a family a few decades ago and now it takes two.
In particular, Pooley-Tupy does not account for the ruinous increase in prices for health care and higher education &mdash; both industries controlled by crony-capitalist cartels. Cheaper TVs and cheaper cellphone service don&rsquo;t really make up for it &mdash; as we see in the excellent chart from American Enterprise Institute economist Mark Perry that we run now and then&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1whHEiyksglIAabatTuAio/eef0dc48e334b36fc3a0c4a2a7b2687d/pooley-tupy-chart.png" alt="BLS Chart" />
Tupy and Pooley try to sidestep the health care elephant in the room by pointing out that cosmetic surgery is getting cheaper relative to wages.
True. Cosmetic surgery also operates largely outside the health care cartel.
Health care spending took up 5% of GDP in 1960 &mdash; when only a few percent of adult Americans had some sort of chronic condition. In 2022, it took up 17.3% of GDP &mdash; and over half of adult Americans have a chronic condition.
Whatever you want to call that, it&rsquo;s not &ldquo;progress.&rdquo;

shutterstock 2488996835 (1)

There were hints in the days before the first assassination attempt on Donald Trump that something big was about to go down.

Financial Forewarnings (Trump Assassination Attempt)

<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" />Inflation Is Sapping Your Investment Returns
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />If you&rsquo;d plunked down $1,000 into an S&amp;P 500 index fund on this day five years ago&hellip; how much money would you have now?
The index stood at 2,962 then. Going into this morning, it was 5,702. So you&rsquo;d be sitting on $1,925. You&rsquo;d have almost doubled your money.
Not bad, right?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But hold on: What&rsquo;s your gain after you adjust for inflation?
That&rsquo;s not an academic question. Inflation affects not just the cost of gas and groceries, but the value of your investments.
After all, the money you&rsquo;re putting into the market today is money you&rsquo;re counting on to live better in the future, right?
So in reality, your gain isn&rsquo;t as impressive: After inflation, the $1,000 you put into the market five years ago is worth $1,563.
Still not bad &mdash; but not nearly as good as if inflation weren&rsquo;t a factor.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But hold on again: It can get worse. Much worse.
&ldquo;You can be long stocks in a rising stock market and still lose enormous wealth in real terms,&rdquo; says Paradigm&rsquo;s macroeconomics maven Jim Rickards.
The reason? &ldquo;Your stocks are denominated in dollars and the dollar itself can lose value even as the dollar value of stocks is going up.
&ldquo;The easiest way for the dollar to lose value is inflation (purchasing power), but there are other ways including the dollar value of gold (the best form of money) and foreign exchange markets. This type of loss sneaks up on investors because they see major stock indexes going up 10% or 20% without realizing the dollar itself might be crashing by 50% or more.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />How bad can it get? Let&rsquo;s rewind to the inflationary 1970s &mdash; soaring meat prices, gas lines, President Carter wearing a cardigan sweater while cranking down the thermostat.
In the stock market, the Dow industrials approached a record 1,000 in 1966. But that&rsquo;s as good as it got until the early 1980s.
For 14 years, the Dow kept bumping up against that barrier, unable to break through. Not until 1982 was the index able to leave 1,000 behind for good.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6dHEOZ5vAI6OJ1FegskXfN/4fe6f42929daa0378d358c5e029cc09d/14Years.png" alt="fourteen years of going nowhere" />
That&rsquo;s bad enough, right? But when you factor in the inflation of the 1970s the results are much, much worse. Think about it: 1,000 on the Dow in 1982 wasn&rsquo;t nearly as valuable as 1,000 on the Dow in 1966.
Here&rsquo;s the same chart once you adjust for the inflation rate&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/hgrVglapRu2CJwT7QNI9p/36a6f8b1eb2d8e81ddf02c5d73369185/9.23_Inflation_Adjusted_Dow-RED.png" alt="How Inflation Destroyed the Dow" />
In fact, if you&rsquo;d put $1,000 into the Dow stocks in 1966, you wouldn&rsquo;t have broken even &mdash; not in terms of your purchasing power &mdash; until 1995, almost three decades later!
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Yes, the 1970s are an extreme example. But hopefully, you now see how the erosion of the dollar&rsquo;s purchasing power can cut into your investment returns &mdash; sometimes by a substantial amount.
&ldquo;Real stock values are driven by factors that are much larger than stock fundamentals and interest rates,&rdquo; Jim sums up.
&ldquo;They are driven by inflation, deflation, currency fluctuations and business cycles. Investors need to be aware of these cross-currents in setting their portfolio allocations. Simply cheering on higher index levels is not enough.&rdquo;
Remember what we&rsquo;ve pointed out for a couple of years now: The historical evidence suggests it won&rsquo;t be until at least 2030 before the United States returns to &ldquo;normal&rdquo; 2% inflation.
Unlike the last 15 years, a secure future and comfortable retirement will now require substantial outperformance of the broad stock market.
<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" />T-Minus Eight Days Till a Dockworker Strike
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It&rsquo;s now only eight days before East Coast and Gulf Coast dockworkers will likely go on strike.
The International Longshoremen&rsquo;s Association is still at an impasse with the U.S. Maritime Alliance. The contract for 45,000 workers expires a week from today. The two sides are far apart on everything from pay to automation.
&ldquo;A sleeping giant is ready to roar on Tuesday, Oct. 1, 2024, if a new Master Contract Agreement is not in place,&rdquo; union president Harold Daggett said last week.
As we&rsquo;ve mentioned before, a one-day strike will foul up supply chains for a week. A one-week strike will have downstream effects for a month &mdash; at the very time retailers are stocking up for the holidays.
The consumer will feel the impact of anything lasting longer than &ldquo;a couple days,&rdquo; says National Retail Federation&rsquo;s Jonathan Gold.
While the Biden administration intervened to stop a freight rail strike ahead of the 2022 midterm elections &mdash; and helped negotiate a new contract for West Coast dockworkers last year &mdash; it appears the White House will stay hands-off this time.
Yes, there is an election subtext, according to Bloomberg: &ldquo;The union has warned the White House against getting involved. It has withheld endorsing a presidential candidate, though, according to Daggett, former President Donald Trump, &lsquo;promised to support the ILA in its opposition to automated terminals&rsquo; during a Mar-a-Lago meeting last fall.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />As for the markets today, the S&amp;P 500 is inching back into record territory &mdash; up a third of a percent at last check to 5,720.
Gold is also in the green, up $10 to $2,631. But silver is losing ground, back below $31. Bitcoin continues to hold the line on $63,000.
Crude is not reacting to the widening war between Israel and Hezbollah in Lebanon &mdash; a barrel of West Texas Intermediate up about a quarter to $71.29.
The only major economic indicator due this week comes Friday when the Commerce Department issues its latest read on &ldquo;core PCE&rdquo; &mdash; the Federal Reserve&rsquo;s preferred measure of inflation.
<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" />Musk Folds on Free Speech
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It&rsquo;s not the first time, but Elon Musk just totally caved on free speech.
After being banned in Brazil for the last three weeks, X-formerly-Twitter says it&rsquo;s now complied with orders from Brazil's Supreme Court in hopes the ban will be lifted.
&ldquo;The decision was a surprise move by Mr. Musk, who owns and controls X, after he said he had refused to obey what he called illegal orders to censor voices on his social network,&rdquo; says The New York Times. &ldquo;X&rsquo;s lawyers said the company had done exactly what Mr. Musk vowed not to: take down accounts that a Brazilian justice ordered removed because the judge said they threatened Brazil&rsquo;s democracy.&rdquo;
In case you&rsquo;re not aware, Brazil is something of a test tube for censorship in the Western-adjacent developing world. Enforcement is by and large a one-man show &mdash; led by a Supreme Court justice named Alexandre de Moraes.
Moraes has proven to be quite the political chameleon. When nominated to the high court in 2017, Brazil&rsquo;s left denounced him as a fascist and racist. But seven years later, he&rsquo;s hailed by the left as a hero for draconian censorship measures targeting &ldquo;disinformation&rdquo; &mdash; measures far beyond anything attempted by the U.S. government to date.
When X refused to carry out Moraes&rsquo; censorship orders three weeks ago, he ordered the platform banned in Brazil &mdash; a ban so sweeping that any Brazilian trying to access it through a VPN was subject to fines of up to $9,000 a day. (Which is a far bigger sum of money for the typical Brazilian than it is for even the typical American.)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It&rsquo;s at this time we&rsquo;ll remind you once more that as a free speech advocate, Elon Musk is fatally compromised &mdash; even, or especially, in the United States. He has to stay in the good graces of the U.S. government to keep Tesla&rsquo;s tax breaks and SpaceX&rsquo;s federal contracts.
Time and again, the accounts of everyday Americans on X get restricted or nuked altogether for the most arbitrary of reasons. But the common thread is that the accounts say something that runs afoul of conventional wisdom within the U.S. power elite.
The civil libertarian Glenn Greenwald &mdash; who&rsquo;s split his time between the United States and Brazil for the last 20 years or so &mdash; describes the state of play like this: &ldquo;The problem is governments will be able to fully censor and control the internet until all Big Tech platforms unite against it.&rdquo;
Good luck with that. <a href="https://paradigmpressroom.com/post/before-the-fed-cuts-rates-do-this/#4" target="_blank" rel="noopener">As we saw only last week</a>, Facebook/Instagram parent Meta has already failed its first test of Mark Zuckerberg&rsquo;s newfound commitment to free speech&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" />Silver at $100 an Ounce!
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We&rsquo;re used to seeing silver coins sold at crazy markups. But&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2YenKht8auSqY6eqrzvgXl/93813fedfe5f20fa90d9f47be73f7474/fmf_trump_coins.png" alt="Trump Coins" />
OK, we&rsquo;ll get to the $100 price tag for these Trump silver &ldquo;medallions&rdquo; shortly. (Reminder: Silver trades for under $31 today.)
But even before that we&rsquo;re floored by the description that says the coin consists of &ldquo;.999% silver&rdquo; &mdash; which suggests there&rsquo;s almost no silver in it.
Presumably these coins are something on the order of 99.9% silver, much like a U.S. Silver Eagle or a generic silver round.
What do you get for your $100? The website says the coins are "intended as collectible items for individual enjoyment, and not for investment purposes" and "the coins are not political and have nothing to do with any political campaign."
Well, as long as you know what you&rsquo;re getting into&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/21dfaxDWG3m3aKGthsmdj2/5f9a6bc7910f57c209f1c0c5c81a949b/fmf_geoff_sokol_tweet.png" alt="Geoff Sokol Tweet" />
Anyway, the coins go on sale Wednesday.
<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: Inflation
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />A reader has a bone to pick with the inflation chart we shared in Thursday&rsquo;s special edition, featuring Jim Rickards&rsquo; commentary on the heels of the Federal Reserve&rsquo;s rate-cut decision.
Here, for reference, is the chart, showing how the inflation rate has been falling for several months in a row&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1Q6jUqGwXEqbGb0Dj9Dp7V/dd7243a426a06b35c3860e9cd9c6f8a9/FMF_5Bullets_Chart_0919.jpg" alt="Prices Still Rising But at a Slower Clip" />
&ldquo;I am a physicist/mathematician by training,&rdquo; the reader writes. &ldquo;I think the graph does not fully illustrate the magnitude of inflation. A graph of total cumulative and compounded inflation over time (say starting in 2020) would be more illustrative. The slope of this curve would always be positive.
&ldquo;Besides a curve starting in 2020, the article could be expanded to show a curve starting in 1971, the year the U.S. left the gold standard. Also, the year I graduated from high school. Gold was $35 per ounce, gas was $0.20 per gallon, a new car was $5,000 and a home was $15,000. The graph could also include other more accurate measures of inflation than the CPI.
&ldquo;This article could segue to another article that discusses how the government further benefits from inflation by taxing asset holders for inflation. For example, if an asset appreciates 25% and 20% is due to inflation, the real appreciation (profit) is 5% but a 20% tax on the 25% gain (5%) will wipe out the entire profit.&rdquo;
Dave responds: All we were trying to do on Thursday was illustrate how the rate of inflation was falling for enough consecutive months that Fed officials felt they had leeway to cut interest rates aggressively.
And as you notice, the title on the chart says &ldquo;Prices Still Rising.&rdquo;
But we&rsquo;ll play along with you, because your points are more than valid. Here&rsquo;s a raw chart from the Federal Reserve Bank of St. Louis that shows how the price level has risen cumulatively over the last five years&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6qWh0L0VtCHhBGZwiEPyrL/7399afec6abbce2bbbab32c3cba8c216/fred_chart_1.png" alt="FRED Chart 1" />
And here&rsquo;s a chart going back to 1971, when President Nixon closed the gold window&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/BAHqXIid0ytF2N7t2x0WB/de28f2f5a349242015dff4463c7b7fa3/fred_chart_2.png" alt="FRED Chart 2" />
Also, as we can&rsquo;t emphasize enough, the Labor Department started changing the way inflation was calculated during Ronald Reagan&rsquo;s first term in the early 1980s.
Result: The official inflation rate peaked this decade at 9.1% in the summer of 2022. But if you ran the numbers the way they were before the Reagan-era changes, the actual peak was 17.3% (per the researchers at Shadow Government Statistics).
And you&rsquo;re absolutely right about how inflation cuts into your investment returns &mdash; and frequently zeroes them out altogether.
Which brings us right back to where we began today. The only way to stay ahead of inflation is with substantial investment returns that outpace both the market and the inflation rate.

shutterstock 2446491605

If you’d plunked down $1,000 into an S&P 500 index fund on this day five years ago, how much money would you have now?

Don’t Let Inflation Wreck Your Returns

<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" />Congress Profits From the &ldquo;Merchants of Death&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;It is an obvious conflict of interest when a member of Congress owns significant stock investments in a company and then votes to award the same company lucrative federal contracts,&rdquo; says Craig Holman of the watchdog group Public Citizen.
Obvious to you and me, and to members of Congress for that matter &mdash; but it still goes on.
A few days ago, reporter David Moore from the wonderfully named muckraking site Sludge dropped a story that was shocking but not surprising&hellip;
At least 50 members of Congress or their households own shares of military contractors &mdash; even while those companies &ldquo;receive hundreds of billions of dollars annually from congressionally crafted Pentagon appropriations legislation.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We feel compelled to bring this matter to your attention because it speaks to bipartisan corruption. Therefore, it&rsquo;s in no one&rsquo;s interest to talk about it on the campaign trail.
From Moore&rsquo;s report&hellip;
<blockquote>The spouse of Sen. Susan Collins (R-Maine), the ranking member of the Defense Appropriations subcommittee, holds $15,000&ndash;50,000 worth of shares in each of Boeing and RTX, as well as holdings in two other defense manufacturers. Sen. Jerry Moran (R-Kansas), another Defense Appropriations subcommittee member, holds up to $50,000 in the stock of Boeing, which received nearly $33 billion in defense contracts last year. On the Democratic side of the aisle, Sen. John Hickenlooper (D-Colo.) holds up to a quarter of a million dollars&rsquo; worth of stock in RTX&hellip;</blockquote>
<blockquote>The most widely held defense contractor stock among senators and representatives is Honeywell, an American company that makes sensors and guiding devices that are being used by the Israeli military in its airstrikes in Gaza. The second most commonly held defense stock by Congress is RTX, formerly known as Raytheon, the company that makes missiles for Israel&rsquo;s Iron Dome, among other weapons systems.</blockquote>
On the House side, Foreign Affairs Committee chair Michael McCaul (R-Texas) owns up to $2.6 million in shares of General Electric, Oshkosh Corp. and Woodward Inc. One of the Democrats on that committee, Virginia&rsquo;s Gerry Connolly, owns shares of Leidos Holdings worth up to $248,000.
How times change: In the mid-1930s, Congress held angry hearings into the companies that were labeled &ldquo;merchants of death&rdquo; &mdash; the arms-makers and banks that maneuvered to bring the United States into World War I.
Nowadays, congressmembers are just fine with such activity &mdash; as long as they get their cut of the action.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Whether or not the official action is taken for actual self-enrichment purposes is beside the point,&rdquo; says Public Citizen&rsquo;s Holman. &ldquo;This type of conflict of interest is already banned for executive branch officials and so should be for Congress as well.&rdquo;
Legislation called the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act passed a Senate committee in July. Its sponsors are Jeff Merkley (D-Oregon), Josh Hawley (R-Missouri), Jon Ossoff (D-Georgia) and Gary Peters (D-Michigan).
But the clock is ticking on the current session of Congress. Next week the priority will be to pass a fiscal 2025 budget &mdash; or more likely a &ldquo;continuing resolution&rdquo; that will buy Congress more time to pass a budget later.
Then it&rsquo;s off for the month of October to campaign. And there are only 20 days in November and December that both the House and Senate are in session. During that brief window, Congress will take up the annual defense-spending bill, called the National Defense Authorization Act. It&rsquo;s generally considered a &ldquo;must pass&rdquo; at year-end.
Don&rsquo;t look for the ETHICS Act to get the same priority.
<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" />Look Who&rsquo;s Outperforming Now
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Amid the mainstream hype about the Federal Reserve powering the Dow and the S&amp;P 500 to all-time highs, don&rsquo;t overlook this tidbit: Small-cap stocks are outperforming.
Going back to Monday Sept. 9, IWM &mdash; the small-cap Russell 2000 ETF &mdash; has leapt over 7%.
&ldquo;That&rsquo;s twice as much as the S&amp;P 500 and well beyond Papa Dow&rsquo;s meager 1.67% gain!&rdquo; points out Paradigm chart hound Greg Guenthner.
&ldquo;IWM&rsquo;s relative strength highlights two critical themes taking place beneath the surface: rotation and broadening participation.&rdquo;
Our experts have been onto the rotation story since early July &mdash; the giant &ldquo;Magnificent 7&rdquo; names taking a breather and giving room for smaller fry to play catch-up.
&ldquo;To be clear, the AI-driven rally is far from over,&rdquo; Greg says. &ldquo;But a handful of mega-cap names can&rsquo;t carry a bull market.&rdquo;
The rotation is well and truly underway now &mdash; the kind that can sustain bull runs in the major indexes.
&ldquo;It&rsquo;s time to follow the market's lead and expand our wheelhouse to include industrials, materials and even energy stocks,&rdquo; Greg concludes &mdash; &ldquo;sectors hard to come by in the Nasdaq-100.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Stocks are taking a breather today&hellip; but gold might be on track for a daily and weekly record.
At last check, the major U.S. stock indexes are all in the red &mdash; the Dow holding up best, the Nasdaq down about a half percent.
Bonds continue their post-Fed sell-off, pushing yields higher &mdash; the 10-year Treasury note now over 3.75%.
Gold is up over $30 to $2,615 while silver has pushed over $31. Whether you realize it or not, gold &lsquo;s year-to-date gain of 26% exceeds that of all the major U.S. stock indexes and the small-cap Russell 2000. (No, it doesn&rsquo;t exceed Nvidia, up nearly 150% since the first of the year.)
Whether it&rsquo;s Fed stimulus or Middle East tensions, oil is set to end the week near $72 &mdash; the highest it&rsquo;s been since the day after Labor Day.
Bitcoin is hanging onto its post-Fed gains at $63,127.
<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" />Four Outcomes&hellip; and Wall Street Is Betting on Only One
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Looking toward the rest of the year and into 2025, there are four potential outcomes for the economy&hellip;
<ol>
<li>Economic growth picks back up but inflation does not</li>
<li>Economic growth picks back up and so does inflation</li>
<li>Economic growth continues to slow and so does inflation (a &ldquo;typical&rdquo; recession)</li>
<li>Economic growth continues to slow but inflation takes off again (&ldquo;stagflation&rdquo;)</li>
</ol>
For the moment, Wall Street is placing all its bets on No. 1 &mdash; that is, the Federal Reserve has pulled off the proverbial &ldquo;soft landing.&rdquo;
But now what? The Wall Street Journal&rsquo;s Nick Timiraos &mdash; the guy the Fed calls whenever it wants to telegraph a message to the markets without calling a press conference &mdash; has an intriguing front-page story today.
&ldquo;Chief among the questions the Fed can&rsquo;t easily answer now that it is cutting: Where is the Fed taking rates and how fast will it get there?&rdquo; he writes. &ldquo;The Fed doesn&rsquo;t know on either front.&rdquo;
Confidence-inspiring, no?
The Fed has all but admitted what you&rsquo;ve known for a decade now, if you&rsquo;ve been with us that long. And if you haven&rsquo;t, keep reading&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />"Don't ever think for a minute that the central bankers know what they're doing," Paradigm&rsquo;s macro maven Jim Rickards told me during one of the first conversations we had in 2014. "They don't.&rdquo;
At the time, Jim was reflecting on all of the experiments conducted by the Fed, European Central Bank, etc. in the wake of the 2008 financial crisis.
"And that's my own view,&rdquo; Jim went on, &ldquo;but I've heard that recently from a couple central bankers. I recently spent some time with one member of the Federal Open Market Committee and another member of the Monetary Policy Committee of the Bank of England, which is the equivalent of their FOMC -- both policymakers, both central bankers.
"And they said the same thing: 'We don't know what we're doing. This is a massive experiment. We've never done this before. We try something. If it works, maybe we do a little more; if it doesn't work, we pull it away and we'll try something else.'"
And so it goes here in the 2020s. Throughout 2021, Fed chair Jerome Powell insisted inflation was &ldquo;transitory.&rdquo; When it proved to be more stubborn than he thought, he embarked in 2022 on a cycle of interest-rate increases &mdash; the steepest in over 40 years, not that he planned it that way at the outset.
Now he and his confreres have &ldquo;gone big&rdquo; with the first in a series of rate cuts &mdash; the destination and time frame both unknown.
It&rsquo;s still a &ldquo;massive experiment,&rdquo; 16 years past the financial crisis. If the Fed does pull off outcome No. 1 listed above, it will be sheer dumb luck.
<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" />An Ill Omen?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />While crashing deadline today we don&rsquo;t have the time to track down the validity of this claim. We pass it along strictly for the entertainment value&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7A0sZ0vzt5GNbEpwuqoViO/1fcaf09b8918749edf73c7ca4faec76b/mcrib_tweet.png" alt="McRib Tweet" />
<a id="5"></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" />Mailbag: Loose Ends
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />After we <a href="https://paradigmpressroom.com/post/a-tie-vote-for-president/#5" target="_blank" rel="noopener">bid farewell</a> to a reader last week who took issue with our harsh assessment of the health care sector, we got a couple of first-hand accounts to affirm that assessment.
&ldquo;Kudos to Dave's response,&rdquo; writes a member of our Omega Wealth Circle. &ldquo;When my mom (age 91 at that time) was in the emergency department at a large south Florida hospital with severe COPD symptoms (pre-COVID), she needed assistance for personal hygiene reasons.
&ldquo;There were 15 (I counted twice) hospital employees sitting in a 'pit' typing God knows only what into the most advanced laptops I had ever seen. When I asked for help they said I had to get the nurse on duty (note: I had to track the nurse down) as they were not trained or allowed to assist patients. There were 13 emergency beds, all in use... and only one (that's ONE) nurse on duty.&nbsp;
&ldquo;Needless to say, the needed help did not arrive in time, and we had to wait on another team entirely to deal with the consequences. Hopefully, they typed that up quickly.
&ldquo;I currently volunteer at a large hospital within a larger hospital system. The amount of overhead versus true care I see on an everyday basis is even more astounding than that detailed above.&nbsp;
&ldquo;I'm sure this type of inefficiency exists anywhere the government has weighed in for the 'good of the people.&rsquo;&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;As a nurse, I have to say the majority of health care is fraudulent and preventable,&rdquo; writes another reader.
&ldquo;What you eat is more important than you think. Take care of yourself, because no one else will.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;First off, I think it's a nuanced and insightful point that you make about personnel/staffing in U.S. health care,&rdquo; writes a third.
&ldquo;You are absolutely correct, that a sizable portion of people in the &lsquo;health care industry&rsquo; are paper pushers, and most of those roles would be completely unnecessary outside of the bloated bureaucratic government/insurance/health care system.
&ldquo;On the other hand, it is hard to argue with the fact that there is a definite shortage of actual &lsquo;caregivers&rsquo; who treat patients, leading to longer wait times for treatment and (unfortunately but logically) a lower standard of care due to overloaded schedules and less time to spend with patients.
&ldquo;I am curious, though. Why do we have such a noticeable shortage of doctors in the U.S. (even prior to 2020) when doctors in the U.S. are paid substantially more than those in other developed nations? Wouldn't the laws of economics tend to balance supply and demand? Even if more young people in the U.S. were not enticed to become doctors, surely more doctors from other parts of the world would be incentivized to come to the U.S.&rdquo;
Dave responds: Some of it is surely a function of a giant cohort of the population (boomers) headed into retirement, without enough younger people coming into the ranks to replace them. That&rsquo;s common to many lines of work.
But other reasons speak to the system&rsquo;s essence as a cartel. Columbia Political Review cites several factors including &ldquo;limited seats for medical school and residency.&rdquo;
Then there&rsquo;s the fact that state licensing boards are notoriously stingy in granting privileges to doctors from out of state.
Of course, they&rsquo;d always cite &ldquo;patient safety&rdquo; as the justification. But the reality is, as Jacob James Rich wrote for the Reason Foundation in 2021, &ldquo;Medical boards have used licensing regimes to rake in over $100 million annually in certification and testing fees from aspiring doctors.&rdquo;
COVID forced a rethink and reform in some states &mdash; but not nearly enough to make a difference. And in some cases, the pre-COVID restrictions have returned.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I Love Paradigm Pressroom,&rdquo; writes our final correspondent this week.
&ldquo;English is my second language, from time to time I need to stop reading to look up the meaning of a word, but this only adds to the great enjoyment that reading your magazine gives me.
&ldquo;Sometimes I cannot keep reading because I cannot stop laughing. I love your style, I love your sarcasm telling the truth of things that many of us are thinking too and want to say it so bad.
You have the platform to say it and I&rsquo;m grateful you say it with style and respect.
&ldquo;I hope your company never takes away this excellent service. Great job! Thank you so much. Take care.&rdquo;
Dave: You&rsquo;re too kind. Thank you for the unexpected lift to the spirits!

shutterstock 1485276353 (1)

A few days ago, a conflict-of-interest story dropped that was shocking but unsurprising… 

Congress Cashes In 

<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" />An Obvious &ldquo;Setup&rdquo; for Overlooked Stocks
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Today, Paradigm&rsquo;s iconoclast investor James Altucher says: &ldquo;I can't think of another time when I was looking at a setup that was this obvious.&rdquo; 
James is eyeing a catalyst for a potential microcap rally. That&rsquo;s because microcap stocks &mdash; typically defined as companies with market capitalizations under $300 million &mdash; have historically outperformed larger stocks.
And the Federal Reserve's anticipated rate cut later today could create a favorable environment for microcaps. While smaller companies often carry more debt than larger firms, lower interest rates reduce their financial burden, which can lead to increased profitability.
&ldquo;When the Fed cuts rates, it creates enormous appetite for microcaps,&rdquo; James adds. &ldquo;This is one of the greatest investment opportunities in 50 years.&rdquo;
And James is not alone in his assessment. Wall Street's biggest players are quietly shifting their billions from tech giants to these tiny stocks.
<ul>
<li>Take Stanley Druckenmiller, the billionaire who rode Nvidia&rsquo;s surge. During the second quarter this year, he sold a large tranche of Nvidia shares, investing instead in small caps. Even BlackRock, with over $10 trillion in assets, just launched a small-cap fund. Why? Because they know something big is brewing.</li>
</ul>
Although the broader market indexes have been performing well recently, they don&rsquo;t offer the same explosive growth potential as microcaps. During the COVID-19 market recovery in 2020, for instance, microcap stocks nearly tripled in value&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Indeed, the largest gains in recent years have come from smaller stocks that were once overlooked.
But small, innovative companies can deliver extraordinary returns when they find a niche and execute well. Companies like AST SpaceMobile (ASTS) &mdash; a microcap company which partnered with Verizon to expand cell service across the continental U.S. via satellite.
<ul>
<li>After announcing its partnership, ASTS shares surged by as much as 1,623% in only three months</li>
</ul>
<ul>
<li>Or consider Celsius Holdings (CELH), the energy drink maker that soared 7,451% in five years</li>
</ul>
<ul>
<li>Monster Beverage (MNST)? It was once a tiny microcap. Today, it's up a mind-bending 109,504%... That&rsquo;s equivalent to turning every $1,000 into over $1 million.</li>
</ul>
And James has unearthed gems like a $2 stock trading below its cash value, with revenues skyrocketing 2,000% in four years. &ldquo;It's like buying dollar bills for 50 cents,&rdquo; he says.
For those wanting a taste of the action without picking individual stocks, James recommends the iShares Microcap ETF (IWC). But he cautions: &ldquo;While it's fine to invest in IWC, you'll only do as well as the average microcap&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;The real magic happens when you find those diamonds in the rough,&rdquo; James says.
And finding those diamonds is James&rsquo; specialty. With a track record that includes selling two companies for eight-figure sums, he's got the Midas touch when it comes to spotting opportunities.
This afternoon, James is gearing up to invest $50,000 in a little-known microcap stock trading for less than $5. Altucher believes this stock is positioned at the intersection of three significant trends: artificial intelligence (AI), cryptocurrency&hellip; and a third opportunity he has yet to reveal.
As he prepares to make his investment, James invites you to consider joining him before the anticipated market shift occurs.
As we stand on the precipice of what could be a microcap revolution, James&rsquo; message is loud and clear: &ldquo;This is your chance to get in on the ground floor of the next Apple or Nvidia. Don't let it slip away.&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" />No-Drama Fed: Not Political, Not Panicked?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The Federal Reserve is set to cut interest rates for the first time since March 2020 &mdash; marking a pivotal moment for the markets. 
&ldquo;We&rsquo;re sticking with our 0.25% forecast for three reasons,&rdquo; says Paradigm&rsquo;s macro expert Jim Rickards.
&ldquo;The first is that this is the no-drama Fed. They&rsquo;re definitely cutting rates, but they don&rsquo;t want to appear panicky or to suggest the economy is worse off than they admit. Far from providing &lsquo;stimulus,&rsquo; a 0.50% rate cut may signal recession fears and lead to a stock sell-off.
&ldquo;The second reason is the election itself,&rdquo; Jim adds. &ldquo;Delivering a rate cut just six weeks before the presidential election would appear to favor Harris and work to Trump&rsquo;s disadvantage.
&ldquo;Still, the economy is showing signs of slowing,&rdquo; he says. &ldquo;A 0.25% cut will give Harris and the economy a boost (so they believe) without being too blatant.
&ldquo;The third reason is that more rate cuts are on the way. Third-quarter GDP growth looks healthy, at least according to the Atlanta Fed GDPNow tracker, which estimates 3% growth.
&ldquo;The Fed has two more scheduled meetings this year in November and December and will likely cut rates at both meetings,&rdquo; says Jim. &ldquo;A 0.50% rate cut can always be rolled out at some future meeting if needed.
&ldquo;In effect, the Fed is saying, &lsquo;What&rsquo;s the hurry?&rsquo;
&ldquo;A 0.25% rate cut will have the desired effect, at least in the Fed&rsquo;s eyes, without appearing too political or too panicked,&rdquo; Jim concludes.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It&rsquo;s still early in the day, but it&rsquo;s worth mentioning that the market seems to be holding its collective breath, awaiting the Fed&rsquo;s decision this afternoon. 
The three major U.S. stock indexes are just slightly in the red, with the S&amp;P 500 and tech-heavy Nasdaq seemingly paused at 5,630 and 17,630 respectively. Meanwhile, the Dow is down about 0.15% to 41,550.
Turning to commodities, crude is down 0.25% to $71 for a barrel of WTI &mdash; but that&rsquo;s considerably higher than it has been recently. (Something to do with Israeli-rigged pagers and Hezbollah in Lebanon. A wild new chapter in asymmetric warfare.)
Precious metals are holding up, with gold up 0.15% to $2,596 per ounce and silver hanging tough above $30. (More on silver in a moment.) As for crypto, Bitcoin ($59,515) and Ethereum ($2,295) are both in the red at the time of writing.
<a id="3"></a>The big economic numbers of the day are housing starts and permits &mdash; both of which blew away the expectations of Wall Street economists.
Starts rose 9.6% in August. Granted, some of that might be a pickup in construction that was disrupted by Hurricane Beryl &mdash; especially on the Gulf Coast and the Mississippi River valley. But falling mortgage rates certainly helped, too.
<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" />Silver, Solar&hellip; and Bankers
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />According to the Silver Institute, industrial demand for silver hit a record high last year. 
&ldquo;Indeed, silver demand massively exceeded silver supply for the third consecutive year in 2023, resulting in a structural market deficit of 184.3 million ounces,&rdquo; says an article at trade publication International Banker. 
That said, silver prices have fluctuated wildly for decades&hellip;
<ul>
<li>They peaked at $36 per ounce in the early 1980s, but fell for many years thereafter</li>
<li>Prices began to rise again around 2006, driven especially by strong demand from China</li>
<li>The Global Financial Crisis of 2007&ndash;2009 pushed prices nearly to $50 per ounce by April 2011</li>
<li>After that, silver prices dropped and stabilized around $20 per ounce.</li>
</ul>
But in May this year, the price of silver surpassed $30. &ldquo;Much of this support has been provided by the global silver-supply deficit that persisted for the three years through 2023, in addition to the expanding supply deficit widely predicted for 2024,&rdquo; the article notes.
As for the rest of the year, &ldquo;UBS updated its outlook for silver in May, largely due to this robust industrial demand as well as possible supply cuts in the market&rdquo; &mdash; forecasting $34 by the end of this month.
&ldquo;J.P. Morgan, meanwhile, has forecast that silver prices will average $36 per ounce by 2025, underpinned by &lsquo;strong macro fundamentals and a supportive supply and demand backdrop,&rsquo;&rdquo; International Banker says.
Getting back to industrial applications, the Silver Institute predicts an increase of 40 million ounces in the solar industry&rsquo;s demand for silver this year. But Chen Lin of Lin Asset Management believes silver demand could be even greater.
&ldquo;Once investors see the huge deficit [in] silver,&rdquo; Lin says, &ldquo;silver will go to $50 just like that &mdash; just in a heartbeat.&rdquo;
But we caution: Remember those wild price swings (see bullet points above)? Yeah&hellip; However, we point out that this article appeared in a trade pub for bankers. Interesting&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" />Ford Patents a New Revenue Stream
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Ford recently filed a patent for a system that would collect and use driver information&hellip; to display targeted advertisements in vehicles. Sounds totally safe, right?
The proposed technology would gather data on the vehicle's route, destination, speed, traffic conditions, travel history &mdash; even conversations within the car! &mdash; to create personalized ads.
Ford&rsquo;s patent is part of a larger trend on the part of automakers collecting driver data. General Motors, for example, faced criticism for sharing information about driving habits with insurers, leading to a lawsuit in Texas.
The revelation of automakers sharing driver data without warrants has prompted calls for the Federal Trade Commission to investigate. However, current consumer privacy laws do not explicitly prohibit such technologies.
But a Ford spokesman emphasizes that filing a patent does not necessarily mean the company plans to implement the technology. Riiiight. 
On second thought, maybe he has a point&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2wMVeENlLSuvPQ4NwWP4hs/965ee62fc9542f1aade7b5f5bc2508be/ford_patent.png" alt="Ford Patent" />
Image source: U.S. Patent and Trademark Office, PowerNation A 2023 patent for drivers to operate a Ford Bronco while standing up&hellip; 
Ford says patent applications should not be viewed as indicators of business or product plans (see illustration above), and that customer interests would remain a priority in decision-making processes (see illustration above).
Clearly, the data-collection patent raises concerns about privacy &mdash; especially so since automakers have resisted sharing their diagnostic data with independent repair shops. Infuriating&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: Texas Pastime and a &ldquo;Taxi&rdquo; Scam PSA
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I live in Texas where property tax complaints and discussions are a state sport,&rdquo; a reader comments on <a href="https://paradigmpressroom.com/post/no-accountability-no-shame/#3" target="_blank" rel="noopener">North Dakota&rsquo;s referendum to abolish property taxes.</a>
&ldquo;Personally, I support property taxes in preference to other forms of taxation. There are many reasons for my support, but the short answer is that everyone (except the homeless) pays the tax. And the tax is not progressive like the income tax.
&ldquo;A property tax gives everyone (from the poor to the rich) a vested interest in how the government spends the taxpayers&rsquo; hard-earned money.&rdquo;
Emily: The Tax Foundation holds a similar viewpoint, noting &ldquo;property taxes are largely rooted in the benefit principle of taxation: The people paying the property tax bills are most often the ones benefiting from the services.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2RH1wklPLbVqEUrBpnTqGx/e9f226cc59a77098e3176d9a879450e2/property_Tax_Chart.png" alt="property tax" />
<a href="https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/" target="_blank" rel="noopener">Check out the interactive map here</a>
On the other hand, do you really own your home and property if you run the risk of having it confiscated unless you fork over a regular fee to the government? Just sayin&rsquo;.&nbsp;
As for Dave highlighting <a href="https://paradigmpressroom.com/post/no-accountability-no-shame/#4" target="_blank" rel="noopener">&ldquo;taxi&rdquo; scammers in Canada,</a> a reader comments&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;If the RCMP would have made the simple observation you did &mdash; about a cord to the cigarette lighter &mdash; scammers would be starving and the RCMP would look like leaders,&rdquo; he writes.
&ldquo;I could go on a tirade about a lack of critical thinking, but words fail me. I will never get into a taxi with a cord going to the cigarette lighter. That&rsquo;s thanks to you, Dave. What an obvious solution to a problem.
&ldquo;Don&rsquo;t worry about me giving up on the 5 Bullets anytime soon.&rdquo;
We appreciate your support &mdash; particularly after the lambasting I received for Saturday&rsquo;s Kamala Harris-centric issue. Heh&hellip;
Take care! We&rsquo;ll be back tomorrow with a post FOMC meeting wrap-up&hellip;

shutterstock 1684932103

“The real magic happens when you find those diamonds in the rough,” James Altucher says.