<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />AI Needs a Rescue
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The first trial balloon about a bailout of the AI industry&hellip; went over like a lead balloon.
We chronicled it at the time: Back in November an executive at ChatGPT maker OpenAI spoke at a conference about her company getting <a href="https://paradigmpressroom.com/post/openai-wants-a-bailout">taxpayer-backed loan guarantees</a>.&nbsp;
A federal backstop like that would &ldquo;really drop the cost of financing,&rdquo; enthused CFO Sarah Friar.
The backlash was&hellip; well, furious is an understatement. Friar had to walk back her remarks on LinkedIn.
Within hours, White House AI czar David Sacks <a href="https://paradigmpressroom.com/post/no-bailout-for-you-openai">nixed the idea</a>. &ldquo;There will be no federal bailout for AI.&rdquo;
But Sacks&rsquo; role in the White House has diminished since then. And the Trump administration has <a href="https://paradigmpressroom.com/post/ai-speeding-toward-a-brick-wall">abandoned its hands-off approach to AI</a>.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Which brings us to what seems like another trial balloon &mdash; this one floated by Vice President Vance.
Reminder: Vance has a history in Silicon Valley. After giving up his law career he became a principal at one of Peter Thiel&rsquo;s firms. He accepted funding from venture capitalist Marc Andreessen and ex-Google CEO Eric Schmidt.
&ldquo;The president is supportive of the United States owning these big AI companies,&rdquo; Vance said last week during a podcast interview.
On the surface, that sounds like what the feds have already been doing over the 18 months &mdash; taking ownership stakes in everything from Intel&hellip; to U.S. Steel&hellip; to rare-earth firms like MP Materials.
But then Vance added something curious: He said Donald Trump &ldquo;likes the idea as sort of a sovereign wealth fund idea.&rdquo;
That sounded like an off-the-cuff remark. It was not. OpenAI has an entire white paper proposing a &ldquo;public wealth fund&rdquo; whose proceeds "could be distributed directly to citizens, allowing more people to participate directly in the upside of AI‑driven growth, regardless of their starting wealth or access to capital."
Is your BS detector going off? Good. Read on&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" />USA SWF?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s here we should pause to acquaint you (or reacquaint you) with what a sovereign wealth fund is.
Basically a SWF is a government-owned investment fund that can hold everything from stocks to bonds to real estate or even hedge funds.
Many SWFs got their start with bountiful mineral or energy wealth. The biggest in the world is Norway&rsquo;s, a $2.1 trillion colossus organized in 1990 with surplus revenue from North Sea oil.
Many Americans first learned about SWFs during the early phases of the 2008 financial crisis &mdash; when the oil-rich Abu Dhabi Investment Authority plowed $7.5 billion into Citigroup. At the time, it was a lifeline for Citi, but in the end it wasn&rsquo;t enough; Citi took a bailout from the U.S. government and Abu Dhabi booked a loss.
But a SWF isn&rsquo;t entirely a &ldquo;foreign&rdquo; concept: The Alaska Permanent Fund, formed in the 1970s as Alaskan crude started flowing to the lower 48 states, is now $80 billion strong.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Here&rsquo;s the problem with Uncle Sam establishing a SWF.
As perhaps you&rsquo;ve noticed from the preceding examples, governments typically create a SWF when they have a generous surplus of revenue.
As you&rsquo;re likely aware, the U.S. government does not have a surplus.
In fact, going into the Iran war, Uncle Sam&rsquo;s annual deficit relative to the size of the economy was the biggest in history outside of a war, financial crisis or pandemic. Here&rsquo;s one of these charts we can&rsquo;t share often enough&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6S6UBuMnENSfhR3CJsXdL8/523cb39bc9ed9d7e58f9b5e4dc7b55a8/FMF-issue-062426-1.png" alt="Annual budget" width="540px" />
So where&rsquo;s the seed money for the SWF supposed to come from?&nbsp;
OpenAI proposes that it come from AI companies themselves. Which sounds good in theory until you realize that precious few AI companies turn a profit &mdash; certainly not OpenAI and the other chatbot makers.&nbsp;
So how exactly is a SWF supposed to work under that circumstance? How would everyday Americans &ldquo;participate directly in the upside of AI-driven growth&rdquo;?
They would not.&nbsp;
&ldquo;A sovereign wealth fund, which almost always comes along with not having a huge deficit and debt and/or great commodity wealth, is a terrible idea for the USA,&rdquo; tweets AQR Capital chief Cliff Asness. &ldquo;More taxes to pay for [an] utterly corrupt ideologically whacko government to play with (I say this in a bipartisan way).&rdquo;
Economist Don Johnson of the MacroEdge firm is even more blunt: The purpose of the SWF chatter is to obscure the fact that AI companies will be in line for taxpayer bailout &mdash; like the banks in 2008. &ldquo;I love that we&rsquo;re rebranding TARP 2.0 (for AI companies) to sovereign wealth fund.&rdquo;
Back then it was sold to the people as absolutely necessary to prevent the financial system from collapsing. Now it&rsquo;ll be sold as absolutely necessary for America to keep its technological edge over China (and, secondarily, to prop up the stock market should it start to falter).
<a id="3"></a>
There&rsquo;s a lot more to say about the subject, but we&rsquo;ll leave it here for today. Just wanted to get the topic on the record.&nbsp;
Because it will come up again&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" />Update: SpaceX-Tesla Tie-Up
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> This whole SpaceX-Tesla merger thing is getting legs &mdash; five months after colleague Davis Wilson first suggested it.
From Paradigm AI authority James Altucher: &ldquo;I've never seen this before. Elon Musk just exercised 300,000,000 options of Tesla (TSLA) and he DID NOT SELL A SINGLE SHARE.
&ldquo;This is very unusual and extremely bad from a personal finance perspective
&ldquo;In general when someone exercises options, they lock in a profit at that point (in Elon Musk's case, it&rsquo;s a $116 BILLION [!] profit.) Once they lock in the profit, they have to pay the taxes on the profit even if the stock goes down from there.
&ldquo;In other words, when they actually sell the shares they may no longer have a profit or they may have a much smaller profit, BUT they still have to pay the full tax amount.
&ldquo;NOBODY ever does this. I can't even think of another time in history where someone exercised a significant amount of stocks and held on to every single share.
&ldquo;SO WHAT DOES THIS MEAN? Elon needed the shares (and soon!) to get more control over Tesla. Before this exercise of shares, Elon controlled 13% of Tesla. Now this brings him up to 20% control of TSLA shares. With that much control it is unlikely anyone can outvote Elon on a major decision.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Gee, what major decision might be on the horizon?
James&rsquo; answer: &ldquo;Elon is going to propose a SpaceX-Tesla merger (&lsquo;That might make Elon's life a little easier&rsquo; &mdash; the COO of SpaceX recently stated) and he wants to make sure there are zero issues. So he is giving himself much greater controlling interest even though he will have to pay tens of billions in taxes even if it could cost him billions in overpaying the taxes.
&ldquo;That's how much it&rsquo;s worth it to him to merge these two companies.
&ldquo;Who will benefit? SpaceX? Unclear. Tesla? Unclear.
&ldquo;All of the suppliers to this mega-merged company? Absolutely. And then some.
&ldquo;These are the companies we are focused on right now,
&ldquo;Again, I have never seen anything like this. But this is Elon playing chess on a board that includes: rockets to Mars, internet for the entire world, autonomous vehicles, humanoid robots, 100,000 orbital AI factories and obviously much more.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />SpaceX is in the red today, as is the Nasdaq and the S&amp;P 500.
The red on the Nasdaq is a lighter shade than it was yesterday but at last check it&rsquo;s still down nearly a half percent to 25,478 &ndash; approaching its lows of earlier this month. The S&amp;P 500 is down a tad to 7,355 while the Dow is once more showing green. (SpaceX is down about a half percent but still above its opening price of $150 last Friday.)
The market&rsquo;s next big catalyst comes after the close today &ndash; when chip darling Micron reports earnings. MU is among the semiconductor names that have soared to nosebleed heights the last couple of months. We shall see&hellip;
The picture in precious metals is positively fugly. Gold is down 3% and has sunk below $4,000 for the first time in seven months. Silver is down four bucks to $57.31, a level last seen in December.
No joy for crypto, either &ndash; Bitcoin has now been cut in half from its October 2025 peak, under $60,000 for the first time since October 2024. Ethereum has sunk below $1,600.
As for oil&hellip; here&rsquo;s a visual to help reinforce what we said yesterday about shipping volumes through the Strait of Hormuz&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3RiRJxWBwTQnp4SOP8S8lE/ea6393928e29636a3845a896feca3191/FMF-issue-062426-2.png" alt="Strait of Hormuz vessel chart" width="540px" />
Meanwhile the U.S. Energy Department&rsquo;s weekly inventory numbers show that another 9 million barrels were drained from the government&rsquo;s Strategic Petroleum Reserve. At 331 million barrels, the SPR is the lowest it&rsquo;s been since 1983. Inventories at the big private terminal in Cushing, Oklahoma now total 19 million barrels &ndash; basically the <a href="https://paradigmpressroom.com/post/tank-bottom-date-july-4">&ldquo;tank bottom&rdquo;</a> we warn about now and then.
And none of it matters to U.S. oil futures &ndash; down nearly three more bucks today and approaching $70, another level last seen in early March when the Iran war was getting cranked up.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Financial Fathers, Continued
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Now for something to pass on to the next generation.
Ahead of Father&rsquo;s Day last week, our weekly editorial meeting took an unexpected turn: The Paradigm editors rose to a challenge from our trading pro Enrique Abeyta, whose son just turned 13: What&rsquo;s the one piece of financial advice you&rsquo;d give to a 13-year old?
The answers were terrific, as Sean Ring chronicled in <a href="https://rudeawakening.info/posts/financial-fathers">last Friday&rsquo;s Rude Awakening</a>.&nbsp;
Logistical considerations didn&rsquo;t allow me to take part in the discussion. I was a little surprised no one brought up a piece of advice that precedes pretty much all the other excellent guidance that was on offer.
Avoid consumer debt.
In his 2007 book Crash Proof, money manager Peter Schiff drew a critical distinction between good debt and bad debt&hellip;
<blockquote>Capital debt, or investment debt, refers to loans made to businesses to finance capital formation, such as an automobile manufacturer building a new plant. Such loans benefit society and lead to higher living standards. The earnings the automobile company gets from its increased production enable it both to pay the interest on the debt and to repay the principal. Anything left over represents profit, which is the return on investment that a business deserves for taking risk and for successfully combining the factors of production.</blockquote>
<blockquote>Society benefits in several ways. Consumers now have more cars, workers have more jobs, savers earn interest and get their principal back and the business earns a profit, which can be used to finance still more capital investment.</blockquote>
<blockquote>Consumer debt, in contrast, refers to money lent to individuals to finance consumption. Such loans represent a waste of scarce savings that might otherwise have gone to finance capital formation. When individuals borrow to consume, there is no income-producing asset acquired. Therefore, the loans can only be repaid out of reduced future consumption.</blockquote>
<blockquote>Society does not benefit, since such loans do nothing to increase the supply of consumer goods and actually do the opposite, as borrowers consume goods that would otherwise be available for nonborrowers. Although consumer loans ultimately enable savers to be rewarded with interest, assuming they are paid, they are of no benefit to society as a whole. In fact, by redirecting savings away from capital investment, they actually undermine the higher living standards that might have been achieved in their absence.&nbsp;</blockquote>
I bolded the bits in the final paragraph to underscore a wider consideration: Every action we take in life ripples out to the rest of the world &mdash; often in ways we might not see or understand on a surface level.&nbsp;
To be clear, Schiff didn&rsquo;t characterize all consumer debt as bad. For instance, a car loan is perfectly fine if that&rsquo;s what you need to get to work; you&rsquo;re paying for it with wages you couldn&rsquo;t earn without the vehicle. It&rsquo;s not fine if you&rsquo;re having a midlife crisis and craving a convertible.
Anyway, just wanted to submit that guidance for young people on top of all the other outstanding counsel offered by my colleagues!
<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" />A (Real, Physical) Mailbag
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Today&rsquo;s mailbag section is a little different. It&rsquo;s not an email sent to <a href="mailto:feedback@paradigmpressroom.com">our inbox</a>. It&rsquo;s snail-mail &mdash; and gifts &mdash; addressed to Paradigm&rsquo;s Baltimore-area headquarters.
He runs a small manufacturing firm in New England&hellip; he&rsquo;s a faithful Jim Rickards reader&hellip; and he looked forward with anticipation to our America 76/26 event earlier this month in Philadelphia.
&ldquo;I attended Villanova University &mdash; missed Pope Leo by one year &mdash; and spent lots of time in Philly,&rdquo; he writes.
&ldquo;Traveled back last year to take close-up photos of the Liberty Bell to model and create the tooling for this celebratory piece to share in our country&rsquo;s semiquincentennial celebration! Let&rsquo;s hope for another 250 years of a FREE and democratic republic.&rdquo;
And he sent a dozen or so of these zinc die-cast Liberty Bell keychains.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7zXfxtBDHaaj4rS0dGLR2X/f2e0136f477386d3048dd13605b577fa/FMF-issue-062426-3.jpg" alt="Key chain" width="540px" />
&ldquo;Proudly Made in USA,&rdquo; the packaging says on the back. No trivial trinket, this.&nbsp;
We thank him for his generosity.&nbsp;
&ldquo;Appreciate all of your insights and ideas,&rdquo; he added in a P.S.&nbsp;
And we thank him for a reminder of why we do what we do.

FMF-issue-062426-Featured

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

Paradigm Pressroom's 5 Bullets

AI Needs a Rescue

<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" />Buffett's Sudden About-Face
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> As he approaches his 96th birthday, Warren Buffett is making a big commitment to AI. Yes, that&rsquo;s a radical departure. No, it&rsquo;s not a sign that he&rsquo;s losing his marbles.
As you might know, Buffett was notoriously gun-shy about technology investments during his many decades running Berkshire Hathaway.&nbsp;
He was adamant about investing only in things he could readily understand. Early on it was insurance (Geico). Later it was soft drinks (Coca-Cola). More recently, railroads (Burlington Northern Santa Fe).
Paradigm AI authority James Altucher once wrote a book called Trade Like Warren Buffett. &ldquo;The thing that stayed with me,&rdquo; James recalls now, &ldquo;wasn&rsquo;t a strategy or a formula. It was a question he kept coming back to: Will this company still be here in 20 years?&rdquo;
To Buffett&rsquo;s mind, precious few tech companies met that test.&nbsp;
&ldquo;He bought Apple,&rdquo; James says, &ldquo;but he always described it as a consumer products bet &mdash; loyal customers, pricing power, one of the strongest brands on Earth. The same reason he bought Heinz ketchup.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But then came Berkshire&rsquo;s commitment this month to Google.
When Buffett handed off the reins as CEO to Greg Abel at year-end 2025, Berkshire already held a small position in Google, about $4.3 billion. Abel quickly tripled that position to $16.6 billion.
And then&hellip; when Google issued $80 billion in new shares to fund its AI data center buildout&hellip; Abel stumped up $10 billion of that total.
&ldquo;Some read that as Abel going rogue, a new CEO making his mark,&rdquo; James says. &ldquo;But consider what it actually takes to get a $10 billion check out of Omaha.&nbsp;
&ldquo;Buffett remains chairman and the largest shareholder. A man who spent six decades watching technology booms from the sidelines doesn't sign off on something like this because a new CEO asked nicely.&rdquo;
Like Apple, this is a tech investment Buffett can wrap his sensible Midwestern mind around. It&rsquo;s no longer about squishy things like software; it&rsquo;s about tangible stuff now, James says &mdash; &ldquo;data centers, power grids, cooling systems. The kind of capital-intensive, durable infrastructure Buffett has always understood.&nbsp;
&ldquo;The moment AI became a construction problem, it became a Berkshire problem.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Berkshire&rsquo;s Google investment is only one data point demonstrating the AI buildout still has legs. James points to two more&hellip;
&ldquo;SpaceX closed its IPO raising $85 billion &mdash; the largest public offering in history &mdash; with a significant portion earmarked for AI compute infrastructure.&nbsp;
&ldquo;Then Nvidia surprised the bond market with a $25 billion offering of its own. Nvidia's business prints cash and hadn't needed to borrow since 2021, so when it raised $25 billion in bonds without warning, the market's response was striking &mdash; investors put in orders for more than three times what was available.
&ldquo;All told, nearly $200 billion was committed to AI infrastructure in less than a month. $85 billion from SpaceX's IPO. $10 billion from Berkshire toward Google's $80 billion AI buildout. $25 billion from Nvidia's bond raise.
&ldquo;SpaceX and Nvidia are supposed to bet on this. That's who they are. Berkshire isn't.&nbsp;
&ldquo;When all three point at the same destination in the same month, Berkshire is the one that tells you something new, because it's the one that had no reason to move, and moved anyway.&rdquo;
James&rsquo; bottom line: &ldquo;A lot of investors have watched the AI buildout and wondered whether the spending was real or whether it would eventually slow down. $200 billion in a single month answered that question pretty definitively.&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" />Markets Today: Tech Corrects
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Of course, even though the AI buildout is proceeding at a furious pace, tech stocks are going to have a washout day now and then &mdash; and today is one of them.
There&rsquo;s no obvious catalyst. The Financial Times is reaching for &ldquo;fears of rising U.S. interest rates and a recent plunge in SpaceX shares.&rdquo;&nbsp;
There was no hint of it coming yesterday other than a 1.3% pullback in the Nasdaq. But overnight South Korea&rsquo;s stock market &mdash; dominated by chipmakers Samsung and SK Hynix &mdash; cratered 10% in a day.&nbsp;
The sell-off spread westward to Europe and by early this morning Nasdaq futures were down 3%.
Paradigm trading pro Enrique Abeyta spotted this chart courtesy of Charlie Bilello, chief market strategist at the Creative Planning firm. &ldquo;It shows how much semiconductor stocks have gone up recently.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6OraSr7Vetlze73FfZHpWZ/8f6bd609ade99a8e32f09b25e86c8bfe/FMF-Issue-062326-1.png" alt="pub" width="540px" />
&ldquo;Bilello points out that the semiconductor index SOX is +233.3% in the last 14 months. That is the most since it was up 233.9% back in early 2000.&nbsp;
&ldquo;Even if we are not at THE top, these stocks need to take a break, and looks like they are starting today.&rdquo;
Checking our screens, the Nasdaq has trimmed its losses to about 1.5% on the day, but still well under 26,000. SpaceX sank briefly below its first-day trading price of $150 &mdash; but dip buyers have propelled it back to $163.
<a id="3"></a>
The S&amp;P 500 is down 1%, slipping just below 7,400. The Dow, less dominated by tech, is in the green by about a quarter percent.
The selling has spread into precious metals &mdash; gold down 1.2% to $4,139. But silver&rsquo;s getting positively pummeled &mdash; down three bucks and under $62 for the first time since December. Crypto is moribund, Bitcoin at $62,502 and Ethereum at $1,659.
<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: The State of Play
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> OK, as near as we can tell, this is not indicative of wider stresses in the retail market for fuel.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4lNQyabXvY92jQ2b6r4LB8/855b267e9e61cda03d018cedb47116dd/FMF-Issue-062326-3.png" alt="pub" width="540px" />
Naturally, other people have taken this report and exaggerated it into wild claims of the state government decreeing a statewide cap on retail fuel purchases at $50. Not true.
But make no mistake, peace deal or no the supply situation is still tight.&nbsp;
As mentioned here last week, the U.S. government&rsquo;s Strategic Petroleum Reserve has been drained to levels last seen in 1983. And the tanks at the big private-sector terminal in Cushing, Oklahoma are approaching &ldquo;operational minimums&rdquo; beyond which there&rsquo;s too much sludge mixed in with the oil and pipelines lose pressure.
And the situation in much of the rest of the world is even more dire.
Little wonder that last week Donald Trump said he reached a &ldquo;memorandum of understanding&rdquo; with Iran because otherwise &ldquo;We run out of reserves in about four weeks,&rdquo; running the risk of &ldquo;a worldwide depression.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And yet&hellip; traffic through the Strait of Hormuz continues to proceed at a fraction of its prewar levels.&nbsp;
Independent monitors say 71 vessels &mdash; not all of them oil tankers &mdash; transited the strait between Friday and Sunday. Before the war, Hormuz accommodated well over 100 vessels per day.
A handful of &ldquo;very large crude carriers&rdquo; capable of carrying 2 million barrels have departed the Persian Gulf via the strait &mdash; and that&rsquo;s a positive development. But precious few empty tankers are coming the other way to load up on new crude shipments. <a href="https://paradigmpressroom.com/post/ais-iphone-moment/#3">And don&rsquo;t forget about the barnacles</a>.
And so inventories continue to be drained&hellip; but U.S. oil futures are down again today on the expectation that supply chains will normalize any day now. At last check, we&rsquo;re down 2% to $73.31, the lowest since the big ramp up just after the war began in early March.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Alan Greenspan, 1926&ndash;2026
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Your editor could expend a lot of words on the passing of former Federal Reserve chair Alan Greenspan at age 100.
But Clint Russell of the Liberty Lockdown podcast is sparing me the trouble&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/E2hHZN8bpzH63kprlyUg4/6346ea0da32dafac1aa44b1303e9491d/FMF-Issue-062326-4.png" alt="pub" width="540px" />
It&rsquo;s interesting that even the corporate media had to distance themselves from the &ldquo;Maestro&rdquo; plaudits they gave Greenspan at the turn of the century.&nbsp;
The first paragraph of The Wall Street Journal&rsquo;s obit had to acknowledge that &ldquo;the 2008&ndash;09 global financial crisis had recast his aura of technocratic competence.&rdquo; The subhead of The New York Times&rsquo; article said &ldquo;he favored market-friendly stances that would later come to be associated with destructive financial forces.&rdquo;
Now they tell us&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: A &ldquo;New&rdquo; Law and an Old TV Set
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;What is the law Congress passed that's devastating to Roth IRAs AND 401(k) ACCOUNTS???&rdquo; a reader writes with evident alarm &mdash; but with no further details for us to go on.
Every once in a while, we&rsquo;ll get an inquiry like this out of the blue. It has nothing to do with anything we&rsquo;ve addressed in these missives &mdash; at least not recently &mdash; but clearly the individual feels a certain urgency to the situation. If time allows, I can go down a rabbit hole and see what turns up.
Fortunately, this one&rsquo;s pretty easy.&nbsp;
Seems there&rsquo;s a competing financial publisher &mdash; although it has a name that sounds like a public-policy think tank &mdash; issuing a dire warning about a &ldquo;new law&rdquo; that in fact was passed in 2019.
We&rsquo;ve mentioned it now and then ourselves. It&rsquo;s the SECURE Act &mdash; passed by a Democrat-controlled Congress and signed into law by Donald Trump.&nbsp;
It made several changes to retirement plans, but the notable one for our purposes today is that it killed the so-called stretch IRA.
The way it used to work was you could bequeath an IRA to your kids&hellip; and if they wanted, they could &ldquo;stretch&rdquo; out the withdrawals over many, many years &mdash; potentially the rest of their lives &mdash; even as the nest egg would keep compounding tax-free.
But under the SECURE Act, your heirs have to clean out the account within 10 years. That way Uncle Sam collects his precious revenue much sooner. At the time of passage, congressional bean counters figured it would generate about $15.7 billion over 10 years.
The extent to which this move is &ldquo;devastating&rdquo; varies from family to family. (And to be clear, spouses are exempt.)
Nonspouse beneficiaries can structure those withdrawals however they want &mdash; a lump sum at any time, monthly or annual withdrawals spread evenly across all 10 years, whatever.&nbsp;
But it&rsquo;s gotta be done &mdash; and it can definitely vault your heirs into a higher tax bracket than was the case before 2020.
Unfair to people who made plans based on the old rules? Absolutely. Which underscores the fact the feds can change the rules and break their promises whenever they like.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Congratulations on keeping balanced after reading all that stuff,&rdquo; a reader writes after <a href="https://paradigmpressroom.com/post/a-day-in-the-life-of-5-bullets">yesterday&rsquo;s edition</a> about how these daily dispatches come together.
That said, the picture of my work desk prompted one of our longtimers to write, &ldquo;What the he*l is the CRT and probably analog TV there for?! News clips from 1998? Enjoy the splendor of 480i graphics? DVD playing? Pong?
&ldquo;Thanks again for all your hard work (despite the prior millennium tech).&rdquo;
Dave responds: Meh, it still works. I&rsquo;ve got a little Roku box on top of it. It&rsquo;s not as if I need to monitor Iran&rsquo;s Press TV in glorious 4K resolution.
Actually, I&rsquo;m not sure I&rsquo;ve ever thrown away a CRT TV that&rsquo;s still functional &mdash; there&rsquo;s another one equipped with a Roku that&rsquo;s within eyeshot of the home treadmill. Thrift!

FMF-Issue-062326-2

Buffett’s Sudden About-Face

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />We Appreciate the Praise, But&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;The 5 is the only place I get my &lsquo;news&rsquo; anymore,&rdquo; a reader wrote to us some years back &mdash; using this e-letter&rsquo;s bygone nickname. &ldquo;It's clear to me you call it like you see it with no political bias whatsoever. So keep doing what you're doing!&rdquo;
Affirmed another: &ldquo;The only news I get is here and from a couple of mainly financial newsletters.&rdquo;
We were aghast. In response, we paraphrased the cereal commercials of days gone by &mdash; this daily dispatch is only part of a well-balanced informational diet.
Around the same time, a reader requested &ldquo;For Dave: I&rsquo;d be interested in a description of your daily informational intake.&rdquo;
Nor was he the only one.
It was a great question &mdash; especially considering my own background with 20 years in the TV news racket. I&rsquo;ve been out for nearly as long, but the news-junkie part of me never went away. I&rsquo;ll never tire of coming across a story that makes me say, &ldquo;Holy $#*%!&rdquo;... and I hope that zeal comes through to you in these missives.
I promised back then to divulge my daily informational diet, more than once &mdash; but didn&rsquo;t get around to delivering until 2022.
What follows is a 2026 update: Look for many revisions if you saw the 2025 version&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />For starters, I&rsquo;m compelled to point out that at the core of this e-letter are the paradigms &mdash; the ways of looking at markets and the economy &mdash; developed by our own experts at Paradigm Press. Without that, I&rsquo;d be just another rando on the internet.
Jim Rickards&rsquo; input &mdash; especially in the early years of his work with our firm &mdash; has been seminal. Of course, James Altucher provides a crucial window into the worlds of artificial intelligence and crypto.
Enrique Abeyta brings us 30 years of trading know-how. Ray Blanco is ahead of the curve in tech and biotech. Zach Scheidt&rsquo;s passion for income and value investing is second to none. Our recovering investment banker, the inimitable Sean Ring, never lacks for something lively to say. Byron King has been my colleague for 19 years, keeping a pulse on energy and natural resources &ndash; now joined by Matt Badiali.
Basically, I have the same level of access to their ideas as do members of our VIP level of service called the Omega Wealth Circle &mdash; only I get paid to read our editors&rsquo; work instead of the other way around!
[As long as I brought it up: Are you intrigued by the idea of all-you-can-eat access to everything we publish? That&rsquo;s what our Omega Wealth Circle offers. The key advantage is the substantial savings you achieve over subscribing to all of our services individually.
The Omega Wealth Circle isn&rsquo;t for everyone&hellip; and we don&rsquo;t open membership to just anyone. But if you already have two or more subscriptions with us, you can expect an invitation sooner or later.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />&ldquo;So Where Does Dave Get His News?&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />My day begins at 5:00 a.m. Eastern Time. First thing, I skim the news alerts that crossed my iPad overnight. (More about those later.)
From there, it&rsquo;s a regimented sequence that goes like this&hellip;
<ul>
<li>Front page of The New York Times. Like it or not, the Times&rsquo; front page sets the agenda for mainstream discourse in these United States &mdash; and its longevity in that regard is formidable. When I was growing up, the Gray Lady was part of an influential troika along with CBS News and Time magazine. The latter two have faded into irrelevance, but the Times endures &mdash; even as much of the rest of corporate media are now owned by only a half-dozen companies. Ignore it at your peril</li>
</ul>
<ul>
<li>The BBC iPad app: Here too, it&rsquo;s a case of &ldquo;know thine enemy.&rdquo; A shame, really. As a young man in pre-internet days, I listened faithfully to the BBC World Service&rsquo;s straight-arrow coverage on a shortwave radio. Its correspondents were everywhere! But the Beeb was already going downhill in the mid-1990s&hellip; and by 2002&ndash;03, it was just one more useless mouthpiece for the George Bush-Tony Blair death march toward endless war. Still&hellip; the BBC retains the same cachet around the world that the Times has here at home</li>
</ul>
<ul>
<li>Financial Times: I scan the front-page stories, but for any number of reasons &mdash; including decades of habit &mdash; I devote more attention to&hellip;</li>
</ul>
<ul>
<li>The Wall Street Journal: Here, every front-page story &mdash; including the &ldquo;What&rsquo;s News&rdquo; summary &mdash; gets at least enough attention from me to decide whether I should read beyond the first paragraph.</li>
</ul>
Ideally, I burn through all of that in about 20 minutes. Then it&rsquo;s off to the rest of my morning activities before I settle in for the day in earnest and resume my morning news cruise.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />I check a handful of other sources before applying fingers to keyboard&hellip;
There&rsquo;s Ed Steer&rsquo;s Gold &amp; Silver Digest &ndash; a subscriber-only e-letter that&rsquo;s a comprehensive window on the precious metals markets. But equally valuable are the crowdsourced links to financial news items I might not come across otherwise.
Meanwhile, geopolitics can always move markets, and it pays to know what sort of trouble the U.S. government is stirring up around the world. For over a quarter-century, Antiwar.com has been second-to-none in this regard &mdash; going all the way back to Bill Clinton&rsquo;s Kosovo war in 1999.
As noted in the 2025 edition, I gave up on the Drudge Report in 2024.&nbsp;
Since last year I&rsquo;ve also given up the &ldquo;Reason Roundup&rdquo; column posted each morning by Reason magazine. Just useless under its present editor.
But I still keep up with currency maven and old friend Chuck Butler, proprietor of the venerable Daily Pfennige-letter.
<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" />Social Media (Mostly X)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />When X was still called Twitter, I was able to peruse the site without an account. Elon Musk made me break down and get one.
I&rsquo;ve managed to resist the site&rsquo;s addictive qualities&hellip; although within the last year I&rsquo;ve begun <a href="https://x.com/gonigam">occasionally commenting and reposting</a>.&nbsp;
Then and now, by following a dozen or so key accounts, I discover&hellip;
<ol>
<li>Pithy hot takes that help punctuate these daily missives and</li>
<li>More news I might not discover anywhere else.</li>
</ol>
The financial accounts I follow have undergone a major overhaul since last year. Shortly after the Iran war started I had the good fortune of stumbling across three accounts that are must-follows&hellip;
<ul>
<li>Calvin Froedge, @calvinfroedge. He&rsquo;s the proprietor of Marhelm, a shipping-data platform. His BS threshold might be even lower than mine, and that&rsquo;s saying something</li>
</ul>
<ul>
<li>Don Johnson, @DonMiami3. He&rsquo;s chief economist at an outfit called MacroEdge and a keen observer of the energy markets</li>
</ul>
<ul>
<li>Carolina Lion, @CarolinaLion2. I hesitate to mention an anonymous account but he &ndash; I think it&rsquo;s a he &ndash; frequently has worthwhile things to say.&nbsp;</li>
</ul>
All three of these accounts have exercised a healthy skepticism about the prospects for a U.S.-Iran agreement&hellip; and an appropriate level of alarm about the cutoff of oil and other natural resources from the Persian Gulf region.
<ul>
<li>Meanwhile I still keep up with Don Durrett, @DonDurrett, an authority on precious metals and mining stocks.</li>
</ul>
There are also some non-financial accounts that give me fodder now and then&hellip;
<ul>
<li>Glenn Greenwald, @ggreenwald. The premier civil libertarian of the 21st century. He came to the fore during the Dubya Bush years as an old-school liberal. He&rsquo;s still an old-school liberal; it&rsquo;s the center-left of the Democratic Party that went full-on authoritarian during the 2010s</li>
</ul>
<ul>
<li>Will Schryver, @imetatronink. Fascinating military analyst. His background is an enigma but his knowledge is second-to-none. Absolute must-follow&nbsp;</li>
</ul>
<ul>
<li>Scott Horton, @scotthortonshow. His presence on X isn&rsquo;t always consistent, but that&rsquo;s because he wears so many hats now &ndash; director of the Libertarian Institute, editorial director of <a href="http://antiwar.com">Antiwar.com</a>, cohost of the Provoked podcast with Darryl Cooper, etc. But whenever he weighs in it&rsquo;s always worthwhile.</li>
</ul>
I have given up on Michael Tracey, long my favorite political reporter. Perhaps I&rsquo;ll get back into him as we get closer to the midterm elections, but last year he became zealous to a fault in attempting to debunk anything and everything related to the late financier and sexual predator Jeffrey Epstein.&nbsp;
Tracey is certainly correct that many women claiming to have been &ldquo;victimized&rdquo; while in their 20s appear to be angling for generous legal settlements. But from my perch there are still too many unanswered questions surrounding Epstein &ndash; <a href="https://paradigmpressroom.com/post/jpm-epstein-and-the-virgin-islands">especially</a> when it comes to the Virgin Islands&rsquo; lawsuit against JPMorgan Chase, <a href="https://paradigmpressroom.com/post/2025-update-from-jfk-to-jeffrey-epstein">swept</a> under the rug with a pittance of a settlement in 2023.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />You&rsquo;ll notice a lack of &ldquo;conservative&rdquo; websites on my list.
Sorry, but most of them are really subpar. Several years ago I solicited reader input about what folks were reading instead of Drudge, and I was shocked at the level of quality. Any worthwhile original reporting was buried in story after story whose only purpose was to reinforce right-wingers&rsquo; tribal identity. (Of course, the purpose of much mainstream reporting these days is to merely reinforce left-wingers&rsquo; tribal identity.)
If there is worthwhile original reporting at such conservative sites &mdash; i.e., Chuck Ross&rsquo; Russiagate coverage for The Daily Caller a few years ago &mdash; I figure I&rsquo;ll hear about it via X or the other sources listed above.
Same goes, by the way, for the premier &ldquo;alt&rdquo; financial site ZeroHedge. (I have my issues with ZH &mdash; but all the same, I&rsquo;ve been compelled to rise to its defense <a href="https://5minforecast.com/2020/02/03/in-defense-of-zero-hedge">more</a> than <a href="https://5minforecast.com/2022/02/16/mdm-alert">once</a>.)
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />News in Progress
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Because the news never stops, I stay abreast of events even as I write.
I like to think one of the unique elements of this e-letter is that of immediacy. Yes, I&rsquo;m often writing about longer-term trends&hellip; but if I can point out that there&rsquo;s something happening right this minute to underscore my point, well, so much the better.
So my iPad is set up to receive news alerts from maybe a half-dozen sources.
It&rsquo;s kind of amazing when I think about it: Modern technology can give anyone the same adrenaline rush that was once limited to folks like me who worked in a newsroom.
Long before the internet came along, every newsroom had access to a &ldquo;wire service&rdquo; furnished by an agency like The Associated Press.
When breaking news happened, the teletype would go ding-ding-ding. Would it change the lineup of tonight&rsquo;s newscast? Or the layout of tomorrow morning&rsquo;s front page? The only way to know was to get up from your desk and walk over to the machine.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4Ipo1piQnGuef0LgjvbsjR/2d5b3a476082d51a2bb8db7f57a3a536/FMF-Issue-062226-1.png" alt="United Press International" width="540px" /> I&rsquo;m just old enough to have changed the paper and ribbons on a teletype machine exactly like this one [Photo from the Salt Lake County Archives]
As newsrooms computerized in the 1985&ndash;95 timeframe, the wire services were fully integrated into those systems along with other functions like word processing, story filing, etc. No need to get up from your desk anymore; breaking news appeared at the top of everyone&rsquo;s screen at once. But well into the 21st century, the little dopamine hit that came with every &ldquo;urgent&rdquo; or &ldquo;bulletin&rdquo; (or the extremely rare &ldquo;flash&rdquo;) was still limited to newsroom types.
That all changed when Apple launched iOS 3 in 2009 &mdash; incorporating push notifications. Every news purveyor with an app could send breaking news straight to your pocket. These 5 Bullets wouldn&rsquo;t be what they are without it.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Too, I have a handful of international news channels streaming on three or four screens with the sound down. It gives me a ground-truth perspective on the news and the markets in other countries.
There&rsquo;s France 24, Germany&rsquo;s DW, Qatar&rsquo;s Al Jazeera, Russia&rsquo;s RT and China&rsquo;s CGTN, among others. Yes, they&rsquo;re all government-run and have an agenda. But they&rsquo;re way less crazy-making than American news channels. Too, having them on is kind of a throwback to my shortwave radio-listening days.
And truth be told, it&rsquo;s also a way to recreate a newsroom atmosphere in my home office &mdash; you know, with all the TVs tuned to various channels&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6LHqmgQff8SZht1y0F5IwQ/3c45c0d405312402769391c422631a2e/FMF-Issue-062226-2.png" alt="Newsroom" width="540px" /> You can take the boy out of the newsroom, but you can&rsquo;t take the newsroom out of the boy&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" />Perspective
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />If all of this sounds a little intense, well, I suppose it is.
Nor is the intensity limited to my &ldquo;working&rdquo; hours. There&rsquo;s always something urgent or important or interesting happening. Rare is the evening or weekend when I&rsquo;m not jotting something down that I think might be useful for these daily dispatches.
Which is all fine. What&rsquo;s less fine is that the intensity has been amped up to extreme levels ever since the world started flying apart in 2020.
It began with <a href="https://5minforecast.com/2023/03/10/two-weeks-to-tyranny">arbitrary lockdowns</a>&hellip; and then riots brought on <a href="https://5minforecast.com/2020/06/02/were-all-hajis-now/">in part by economic insecurity</a>&hellip; followed by a tightening noose of <a href="https://paradigmpressroom.com/post/todays-5-bullets-is-packed-with-misinformation">censorship</a>&hellip; the risk of getting <a href="https://5minforecast.com/2022/02/22/banished-left-to-die">&ldquo;financially canceled&rdquo;</a>&hellip; and the starkest <a href="https://paradigmpressroom.com/post/90-seconds-to-armageddon">threat of nuclear war in 60 years</a>.
The Trump 47 administration delivered an epic strategic blunder &ndash; a war that was <a href="https://paradigmpressroom.com/post/unconditional-surrender">supposed to be over in four days</a> and that <a href="https://paradigmpressroom.com/post/iran-a-deal-to-make-a-deal">may or may not be (tentatively) resolved now</a>. All to halt a nuclear weapons program that never existed and reopen a waterway that was open before the war began.
If I&rsquo;m not careful&hellip; I&rsquo;ll function in a chronic state of anxiety that I&rsquo;m missing an important piece of information for my writing&hellip; or for the life that my wife and I have worked so hard to create for ourselves&hellip; or both.
Gotta stay centered and have faith that I&rsquo;ll see what I need to see when I need to see it. And it&rsquo;s with that faith I&rsquo;ll often venture out for a morning hike before sitting down in the chair.
Which reminds me&hellip; I ran across this meme in 2022 and keep it on my computer desktop now. I share it with you now because, well, maybe you need it as a reminder too?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3i5Uen6Q9tHKoPQOPmgeSF/84b4145a690cf716d86efeec6179b11d/FMF-Issue-062226-3.png" alt="Friendly Reminder..." width="540px" />

FMF-Issue-062226-Featured

A Day In the Life of 5 Bullets

<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" />$40 Oil?!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Get Ready for $40 Oil &mdash; Hear Me Out&rdquo; was the headline to a piece penned last week by Paradigm trading pro Enrique Abeyta.
Provocative, for sure. Maybe he was even trying to get a rise out of oil bulls like&hellip; well, myself.
&ldquo;What if the market is already pricing in a world none of us is ready for,&rdquo; he asked &mdash; &ldquo;one where oil trades at $40 a barrel?&rdquo;
At the time of the article seven days ago, U.S. oil futures were still hovering near $80.
Yesterday, they fell below $70.&nbsp;
So let&rsquo;s follow the breadcrumbs&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />The case for $40 oil centers on the world&rsquo;s two biggest oil consumers &mdash; the United States and China.
Earlier this month we mentioned how <a href="https://paradigmpressroom.com/post/spacex-and-smoothies/#3">China slashed its oil imports</a> after the Iran war began &mdash; so much so that it offset as much as a third of the barrels lost to the Strait of Hormuz&rsquo; closure.
&ldquo;China spent the last 20 years preparing for exactly this scenario,&rdquo; Enrique says. &ldquo;While much of the world focused on maximizing efficiency, China focused on maximizing flexibility.
&ldquo;The country invested heavily in electric vehicles, liquefied natural gas infrastructure, refining capacity, coal-to-liquids technology, strategic petroleum reserves and alternative energy systems.&rdquo;
Those are heavy-duty, long-term investments. How likely is it that China will go back to its old ways once global oil flows normalize?
Meanwhile, the United States is less vulnerable to oil shocks than in previous decades because of bountiful shale oil. Twenty years ago, no one expected America to become the world&rsquo;s No. 1 crude producer. But it did in 2018.
&ldquo;During the recent crisis, the U.S. wasn&rsquo;t scrambling to secure foreign supplies,&rdquo; Enrique says. &ldquo;In many cases, it was helping supply the rest of the world.
&ldquo;For the first time in modern history, the world's largest energy importer and one of the world's largest energy producers may both be moving toward a future where oil matters a little less than it once did.
&ldquo;If that happens, the biggest surprise of the next decade won't be that oil went higher. It will be how much lower it ultimately went.&rdquo;
Thus, Enrique&rsquo;s conclusion: &ldquo;I believe there&rsquo;s a real possibility that crude oil trades below $40 per barrel within the next three years.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Still not persuaded? There&rsquo;s precedent: Look at what happened less than 15 years ago.
For most of the period 2011&ndash;2014, crude traded in a range between $80&ndash;110.&nbsp;
But by early 2014, the U.S. shale patch &mdash; only a few years old then &mdash; had blundered into massive overproduction. The OPEC nations cranked up their own production to squeeze their new American competition. Meanwhile, based on the history told in James Norman&rsquo;s book The Oil Card, it&rsquo;s highly likely the Obama administration engineered a takedown of the oil price to punish Russia for seizing the Crimean Peninsula from Ukraine.
In June 2014 crude still traded for over $100. Less than two years later, it bottomed at $26.
All that said&hellip; before we get to $40 oil, we might still be in for a face-ripping rally from current levels.&nbsp;
For that part of the story, we move today&rsquo;s mailbag section up from its usual slot to Bullet No. 2&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Oil: A Reader&rsquo;s Frustration
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;I've been kind of annoyed with the media headlines and market response in regards to the negotiations going on with Iran for almost a week now,&rdquo; writes one of our regulars.
This individual doesn&rsquo;t write often, but when he does he always puts thought into it.&nbsp;
&ldquo;Assuming that the success of the negotiations is a sure thing, we've got the demining of the strait of Hormuz, which is scheduled to take a month. Then assuming insurance companies are again willing to take on risk immediately, once all the ships stuck there leave it'll take them perhaps another month to get to their destinations.
&ldquo;Taking Trump at his word that we're going to be &lsquo;out of reserves in four weeks,&rsquo; that leaves us about a month of being &lsquo;out of reserves&rsquo; before shipments once again begin reaching their destinations. A month of being out of reserves sure doesn't sound like about $75 per barrel of oil making any sense at all.
&ldquo;Now adding some reality to that mix, where there is not only a possibility of the negotiations failing, but a significant chance of them failing, there seems to be no acknowledgement of any such possibility of failure either in the mainstream reporting or in the market prices!
&ldquo;Now that a week has almost passed since the announcement of the talks, we've got some progression of events that there still seems to be no reply to in the markets. Namely that the traffic through the strait is still heavily restricted by Iran on account of Israel still having military forces in Lebanon, and now the Iranians walking out of negotiations after Trump continued to threaten them.&nbsp;
&ldquo;I can only look at the prices and come to the conclusion that either the Dead Internet Theory also applies to markets or that the 'smart money' and insiders are so sure of the success of negotiations that they are actually not taking into account the high likelihood of things going wrong after Trump has been promising this would be over in two more weeks for a few months now.&nbsp;
&ldquo;Thanks for letting me vent about the slow-motion track wreck playing out in real-time.&rdquo;
We thank the reader for his input. Your editor&rsquo;s response follows immediately&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" />The Messy Road to &ldquo;Normal&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Jeez, what a doomer. A real panican you are.
I jest, of course.&nbsp;
Ever since Trump&rsquo;s 39th announcement of a peace deal two weeks ago, I&rsquo;ve taken pains to sprinkle these daily missives with reminders that&hellip;
<ul>
<li>Traffic through the Strait of Hormuz remains a fraction of its prewar level</li>
</ul>
<ul>
<li>Even if traffic through the strait returned to prewar levels tomorrow, it would take months to unscramble everything else that the war scrambled (production shutdowns, ships that aren&rsquo;t located where they&rsquo;re needed, etc.)</li>
</ul>
<ul>
<li>Israel could at any time monkey-wrench the agreement, to which it is not a party. (Israeli troops continue to occupy southern Lebanon.)</li>
</ul>
<ul>
<li>U.S. crude stockpiles continue to dwindle. The government&rsquo;s Strategic Petroleum Reserve is its smallest since 1983. The big private-sector hub at Cushing, Oklahoma is at &ldquo;tank bottom&rdquo; levels; if refilling doesn&rsquo;t start within days, the terminal will be physically incapable of pumping and transferring crude.</li>
</ul>
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />And yet&hellip; the drop in crude prices this month is the steepest on record outside of the COVID lockdowns in the spring of 2020. I feel your pain, dear reader.
Some of it is the aforementioned plunge in Chinese crude imports.&nbsp;
But a lot of it sure looks like a deliberate attempt by the Trump administration to distort the price signals that oil should be sending. (I&rsquo;m not singling out Trump here. As we&rsquo;ve chronicled many times before, <a href="https://paradigmpressroom.com/post/the-cia-and-the-oil-price/#3">the feds have fiddled with oil futures</a> regularly for over 40 years.)
When the world normally produces 103&ndash;106 million barrels of oil per day&hellip; and when up to 15 million of those barrels are shut in&hellip; and when the oil price is still under $100&hellip;
&hellip; well, that&rsquo;s going to encourage the world to continue consuming oil at more or less its prewar pace.&nbsp;
Put another way, prices didn&rsquo;t rise enough to make you change your fuel-consumption habits.&nbsp;
And so the reserves are running on empty.
Earlier this year in a series of podcast interviews, I listened to several oil-industry experts anticipating what the world would look like once some sort of peace deal was in place.
Their consensus was that oil prices would fall steeply on the announcement of a deal&hellip; and then when physical reality started to bite, prices would start to take off again.
These weren&rsquo;t screaming randos on the internet shoring up my own confirmation bias. They&rsquo;re sober, respected figures in the industry.
Bottom line: We might well be headed long term to a world of $40 oil. But for the moment I&rsquo;m not selling my oil stocks even though they&rsquo;re now trading at prewar levels.
Oh, and I&rsquo;m also making sure our vehicles at home stay topped up&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" />Markets Today: Summertime Stumble?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />If history continues to rhyme, the stock market is headed for a summertime stumble.
Every once in a while we spotlight a chart from Bespoke Investment Group. It compares the performance of the Nasdaq composite during the 1990s dot-com boom and the current AI boom.
It sets the starting point for the dot-com boom with the introduction of the Netscape web browser in December 1994&hellip; and the starting point for the AI boom with the rollout of ChatGPT 3.5 in November 2022.
As far as we know, the chart was last updated about two months ago&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/73YvCOFYUCCFikrGpmA6Y8/f0f1b0392582861d3cf547820ded775e/FMF-Issue-062526-1.png" alt="Nasdaq" width="540px" />
Now&hellip; look at what happened in the late summer and fall of 1998. The market had a big scare when the Russian government defaulted on its debt &mdash; which had a domino effect that took down the American hedge fund Long Term Capital Management.
From a peak of just over 2,000 in mid-July, the Nasdaq sank below 1,450 by early October &mdash; nearly a 30% drop in less than three months.
If the pattern continues to hold &mdash; and to date, it&rsquo;s been uncanny &mdash; look for a slide to begin next week or maybe after Independence Day before the index stages a recovery in mid-September.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />The big market stories today are Micron and inflation.
Chip darling Micron reported its quarterly numbers after the closing bell yesterday. They blew away the expectations of Wall Street analysts. MU shares are up 10.5% as we write &mdash; but still shy of their record close Monday.
You might think the tech sector would be rallying hard under that circumstance &mdash; and you&rsquo;d be wrong. Checking our screens the Nasdaq is down over a half percent on the day, adding to the previous three days&rsquo; losses, at 25,369.
The S&amp;P 500 is up about a third of a percent at 7,383 &mdash; more or less the midpoint of its trading range the last two months. The Dow, meanwhile, is powering nearly 1.5% higher into record territory, approaching 52,600.
➢ The biotech sector has been very kind to Paradigm readers in the last 24 hours: Microcap Millionaire readers booked a 530% gain on one pick... while Catalyst Trader readers collected 120% on another. In both cases the editors advise selling half the position while letting the rest ride.
Gold has clambered its way back over $4,000 for the moment and silver is inching higher at $57.87. Bitcoin remains under $60,000 and Ethereum well below $1,600.
The Commerce Department came out this morning with &ldquo;core PCE,&rdquo; the Federal Reserve&rsquo;s preferred measure of inflation.&nbsp;
It rings in at 3.3% year-over-year &mdash; not a surprise to Wall Street economists, but still the highest since October 2023 and nowhere near the Fed&rsquo;s 2% target.&nbsp;
With that in mind &mdash; as well as the new Fed chair Kevin Warsh saying he&rsquo;s laser-focused on &ldquo;price stability&rdquo; &mdash; futures traders assign a 60% likelihood the Fed will raise short-term interest rates by September.
<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" />Sen. Warren Gets Kinky
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Something weird happened yesterday on CNBC&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5JHYQUdtRaaHgJcAsiU9ER/765bdd8e690ae3743041c73ade74a3c5/FMF-Issue-062526-2.png" alt="CNBCpub" width="540px" />
During a live interview, Sen. Elizabeth Warren (D-Massachusetts) said, &ldquo;AI doesn't get to engage in a bunch of funky, hinky bookkeeping.&rdquo;
Somehow the cutline thrown up on the screen a few moments later changed &ldquo;hinky&rdquo; to &ldquo;kinky.&rdquo;
The interwebz had plenty of fun with it.&nbsp;
One of the more family-friendly takes came from longtime Paradigm Press friend and mining/energy financier Rick Rule: &ldquo;The only entity that gets to engage in funky, kinky bookkeeping is the government.&rdquo;&nbsp;
Word&hellip;

FMF-Issue-062526-featured

$40 Oil?!

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />AI Shuts Down Without This Substance
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In the summer of 2024 &mdash; long before the mainstream caught on &mdash; we warned that AI was becoming &ldquo;the monster that ate the power grid.&rdquo;
In the summer of 2025, the Department of Energy issued a report warning of a 100X increase in the risk of rolling blackouts by 2030 if the grid couldn&rsquo;t keep up with AI&rsquo;s exploding power demands.
As midyear 2026 approaches, here&rsquo;s what&rsquo;s changed: not much.
Yes, the grid&rsquo;s capacity is growing again after staying static from roughly 2011&ndash;2023. But it&rsquo;s nowhere near enough to keep pace with the buildout of AI data centers, which are proliferating like rabbits.
Utilities in many parts of the country are warning that during episodes of extreme heat or cold, surging demand could overload their systems. (Great timing with an El Nino bearing down this summer&hellip;)
Today we&rsquo;re delving into what could be the single-most profitable way to play the trend.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;We need copper to live a modern life,&rdquo; Paradigm natural resources pro Matt Badiali reminds us.&nbsp;
&ldquo;If you want the lights to come on when you flip the switch&hellip; you need copper. If you want to use ChatGPT or any other AI for that matter, you need more copper.&rdquo;
The power grid runs on copper&hellip; and so do those data centers.
Lately copper prices have been hovering near all-time highs of $6.50 a pound. But don&rsquo;t get the wrong idea. Matt says there&rsquo;s much more upside from here.
That&rsquo;s because he&rsquo;s seen previous copper bull markets &mdash; like the one that began at the tail end of the 2008 financial crisis. Here&rsquo;s a chart of the giant copper producer Freeport-McMoRan (FCX) along with the spot price of copper and the S&amp;P 500.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4n8oOd3QZA9aosS72qbS9j/fff6b12730c322c09e6411e042b76e3f/FMF-Issue-061726-1.png" alt="FCX" width="540px" />
&ldquo;Coming out of the crash,&rdquo; says Matt, &ldquo;Freeport&rsquo;s shares ran 400% from January 2009 to January 2011. The price of copper exploded 225% higher.&rdquo;
How does that compare with now? Take a look&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6Dpc25WCly9efiaWBWB4X1/fb7a6435b23599a7029cb9c8c4cfcdda/FMF-Issue-061726-2.png" alt="FCX" width="540px" />
&ldquo;Freeport&rsquo;s shares didn&rsquo;t start to rally until the lows in April 2025,&rdquo; says Matt. &ldquo;Since then, they rose about 130%... well below the performance from 2009. And copper prices are only up about 45%...
&ldquo;That leaves us plenty of room for bigger gains.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;And even if the copper prices stop rising for now, copper producers are about to generate massive cash flows,&rdquo; Matt goes on. &ldquo;This will be the start of a massive round of consolidation, exploration and development.
&ldquo;And it won&rsquo;t be enough.
&ldquo;It takes nearly two decades to take a copper discovery to production. And thanks to nearly a decade of underinvestment from 2012&ndash;2023, there have been far too few new discoveries.
&ldquo;According to the analysts at S&amp;P Global, new discoveries fell 90% since 1990. Since 2021, only six discoveries meet the &lsquo;major discovery&rsquo; criteria. And all the new production scheduled to come online between now and 2030 will only cover about 80% of expected demand.&rdquo;
As with gold miners, there are copper miners that fall under the category of &ldquo;majors&rdquo; and &ldquo;juniors.&rdquo; The majors are the big operators, and the safer bet for steady gains. The juniors carry more risk &mdash; but also more upside.
For majors, Matt says look at the Sprott Copper Miners ETF (COPP)... and for juniors, the Sprott Junior Copper Miners ETF (COPJ).
Matt&rsquo;s bottom line: &ldquo;If you don&rsquo;t have exposure to copper yet, you should get some now.&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" />Peace Slipping Away Already?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. oil futures are up modestly: If peace was at hand yesterday between Washington and Tehran, it&rsquo;s slipping away some today.
In the near term, the problem is Lebanon.&nbsp;
This should come as no surprise if you&rsquo;ve been keeping up with our daily missives &mdash; but Iran&rsquo;s military is underscoring its red lines in a new statement warning of a &ldquo;harsh response&rdquo; if Israel doesn&rsquo;t halt its ongoing assault on Lebanon.
On Monday a senior Trump administration official said Israeli withdrawal from Lebanon is not a condition of the U.S.-Iran agreement.&nbsp;
Today, Bloomberg published what it says is a text of the deal &mdash; it still hasn&rsquo;t been officially released by either side &mdash; and it calls on both sides &ldquo;together with their allies&rdquo; to declare an &ldquo;immediate and permanent end to the war on all fronts, including Lebanon.&rdquo;
Meanwhile, Donald Trump said the agreement is &ldquo;not final.&rdquo;
&ldquo;It&rsquo;s a memorandum of understanding, and if I don&rsquo;t like it, we&rsquo;ll go back to shooting at them, dropping bombs on their heads.&rdquo;
He didn&rsquo;t make clear whether that means the tentative deal is still subject to change&hellip; or whether he was referring to the 60 days of talks that are supposed to follow the signing ceremony for the tentative deal on Friday.
Whatever the case, he&rsquo;s clearly feeling the heat from his supporters: The president is &ldquo;facing a backlash,&rdquo; says the Financial Times. &ldquo;Tehran Accord Draws Doubts From Hawks&rdquo; is the headline on The Wall Street Journal&rsquo;s front page.
Because God forbid he do anything to displease Mark Levin and Laura Loomer.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I lean to the conclusion that the U.S. has no intention whatsoever to abide by the terms Iran is dictating,&rdquo; tweets the military analyst Will Schryver.&nbsp;
&ldquo;They just don&rsquo;t know what else to do at the moment. So they&rsquo;re buying themselves a few days to ponder the problem.&rdquo;
But let&rsquo;s say the follow-on talks proceed for 60 days starting Friday, as advertised. Then what?
&ldquo;I find it hard to believe that the discussions will lead to anything,&rdquo; writes &ldquo;Bernhard,&rdquo; the mysterious and often-perceptive analyst behind the Moon of Alabama site.
&ldquo;It is difficult to foresee what will follow in September after they fail. Trump will not want to bomb Iran just two months before the midterm elections. Iran will be reluctant to again block the Strait of Hormuz. That makes it likely that the conflict will stay unresolved and continue to simmer.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Amid this backdrop, U.S. oil futures sit at $77.71 &mdash; up more than 2% from yesterday&rsquo;s three-month lows.&nbsp;
It being Wednesday the Energy Department has released its weekly inventory figures. For the week ended last Friday, 17.2 million barrels of crude were drawn from U.S. stockpiles. That&rsquo;s both private-sector inventories plus the government&rsquo;s Strategic Petroleum Reserve.
In other words, 2.2% of the entire inventory of crude oil in this country was taken out of storage in a single week.
As Big Oil executives emphasized last month, it&rsquo;s this record drawdown of inventories that&rsquo;s helping suppress the oil price.
The problem is that we&rsquo;re approaching <a href="https://paradigmpressroom.com/post/tank-bottom-date-july-4">&ldquo;tank bottoms&rdquo;</a> soon&hellip; and it&rsquo;s going to take weeks to reopen the Strait of Hormuz even if the tentative U.S.-Iran deal goes through.
<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 New Guy at the Fed
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The stock market is treading water ahead of the Federal Reserve&rsquo;s next announcement &mdash; the first under new chair Kevin Warsh.
It&rsquo;s due for 2:00 p.m. EDT. On the one hand, it will be no surprise: The Fed will stand pat, keeping the benchmark fed funds rate steady at 3.75% &mdash; where it&rsquo;s been for the last six months. The Fed rarely delivers surprises with its scheduled proclamations; the decision is telegraphed days if not weeks in advance.
You might think the Fed is inclined to raise interest rates in light of the soaring inflation rate &mdash; from 2.4% in January to 4.2% in May.
But our Jim Rickards says Warsh and a majority of the Fed&rsquo;s Open Market Committee expect the inflation rate to ease &mdash; now that some sort of U.S.-Iran deal is (supposed to be) in the offing and energy prices will (presumably) climb down.
&ldquo;If oil prices had remained at $100 per barrel or higher, the Fed would likely raise rates. No one expects the Fed to cut rates. With oil prices falling sharply, the best course for the Fed is to do nothing.&nbsp;
&ldquo;There may be some dissent by FOMC members who want the Fed to raise rates. But most of the FOMC will support Warsh in holding rates steady for now.&rdquo;
On the other hand&hellip; once the announcement is made, Warsh will hold his first press conference as chair.&nbsp;
He&rsquo;s an unknown quantity. Traders will be watching closely for every wave of the hand and every pause for the right word, in hopes of divining Warsh&rsquo;s intentions for the next FOMC meeting at the end of July. And probably the three additional meetings before year-end.
Any surprise could take markets for a ride, one way or another. Jim Rickards will join us tomorrow for a full breakdown.
For the moment, the S&amp;P 500 is flat &mdash; just over 7,500. The Nasdaq is slightly in the red, the Dow slightly in the green. SpaceX is down 5.5% and back below $200 a share.
➢ One economic number of note: Retail sales jumped 0.9% last month, a number so high that no one among dozens of Wall Street economists saw it coming. Of course the number was skewed by rising gasoline prices. Worse, as we can&rsquo;t emphasize enough, these figures are not inflation-adjusted. If you take inflation into account, U.S. retail sales have been <a href="https://paradigmpressroom.com/post/musks-biggest-ambition/#3">pancake-flat for five years</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />When AI Makes Stuff up, Continued
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Go figure: A major consulting firm has been called out for a report about how companies use AI. Seems many of the examples were&hellip; made up by AI.
From the Financial Times&hellip;
<blockquote>A KPMG report on how AI is being used by businesses across the world exaggerated adoption of the technology with bogus case studies that appear to have been based on AI hallucinations.</blockquote>
<blockquote>The October report, &ldquo;Redefining Excellence in the Age of Agentic AI,&rdquo; made numerous false claims about the use of AI by organizations including the Swiss bank UBS, the U.K.&rsquo;s National Health Service and the public transit groups Swiss Federal Railways and Transport for London</blockquote>
The report said UBS &ldquo;integrates AI agents across investment advisory, risk management and compliance monitoring&hellip; These agents operate within a composable platform co-developed with Microsoft, enabling personalized, efficient and compliant financial journeys.&rdquo;
I mean, c&rsquo;mon, the language sounds as if it&rsquo;s AI-generated too, right? (Not that consulting firms are known for their sterling prose, but still&hellip;)
The hallucinated examples were first spotted by a research group called GPTZero &mdash; which called out another report last month by the consulting firm EY (formerly Ernst &amp; Young).&nbsp;
GPTZero&rsquo;s CEO Edward Tian says these errors &ldquo;poison the well of information.&rdquo; Gee, ya think?
<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: European Visitors Paid to Post?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After we took note last Friday of all the foreigners visiting the United States for the World Cup, <a href="https://paradigmpressroom.com/post/spacex-the-iran-connection/#4">expressing wonder at the sights of this vast land</a>, we heard from a skeptical reader.
&ldquo;I strongly suspect that these &lsquo;Europeans&rsquo; who have shown up en masse are paid actors.
&ldquo;They all seem to be reading from the same script: They all profess an amazement at Buc-ee&rsquo;s Beaver Nuggets, enormous quantities of smoked meats, clean bathrooms, the Waffle House and twerking cheerleaders.
&ldquo;I believe that the former football (real American football) player J.J. Watt is behind this. He has admitted to bankrolling &lsquo;Freddy&rsquo; the German &lsquo;tourist&rsquo; who started this narrative. I believe they are being paid to promote good old-fashioned American values, since, let&rsquo;s face it, our national mood is in the ****ter.
&ldquo;I hope you can see past this psyop.&rdquo;
Dave responds: Thanks for bursting your editor&rsquo;s bubble. Apparently at least one podcaster and some other observers on social media are one-upping you &mdash; suggesting the U.S. government is behind it all.
Come to think of it&hellip; it is a little suspicious in light of all the stories about how foreign tourism to the United States has <a href="https://www.cnn.com/2026/05/25/travel/analysis-tourism-fewer-international-visitors-2025-vis">dropped like a rock</a> since the start of Trump&rsquo;s second term&hellip; to say nothing of the stories this spring about <a href="https://www.newsweek.com/world-cup-host-cities-hotels-tickets-struggling-unsold-12003833">disappointing numbers of hotel bookings</a> in the World Cup venue cities.
But doggone it, it&rsquo;s still fun to see America through the eyes of &ldquo;Freddy&rdquo; &mdash; astonished just <a href="https://x.com/FreddyLA7/status/2064530727807463920">sitting in the stands</a> at Jordan-Hare Stadium on the Auburn University campus and thinking, The European mind cannot comprehend this.

FMF-Issue-061726-Featured

AI Shuts Down Without This Substance

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />When Trust Is Broken
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Donald Trump is at risk of repeating one of Joe Biden&rsquo;s biggest blunders.
After Russia invaded Ukraine in 2022, Biden and his national security adviser Jake Sullivan thought it would be a clever idea to punish Moscow by freezing $300 billion in U.S. Treasuries held by the Russian central bank.
Executing that freeze was easy-peasy.&nbsp;
U.S. Treasuries &ldquo;are held on a digital ledger controlled by one or more depositories around the world,&rdquo; says Paradigm macro maven Jim Rickards &mdash; who knows the plumbing of this system inside-out from his days at Citibank. &ldquo;There&rsquo;s not much more to it than a phone call or a few keystrokes.&rdquo;
The freeze had zero impact on Moscow; Russia&rsquo;s economy chugged along just fine in the years immediately following.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But the freeze had the instant effect of undermining foreigners&rsquo; confidence in U.S. Treasuries.
We&rsquo;ve said it before and we&rsquo;ll say it again: Leaders of other governments around the world started to think, If it can happen to the Russians, it can happen to us too.
&ldquo;The reason reserve managers have such confidence in Treasuries as a reserve asset is that the U.S. is perceived to have a strong rule of law,&rdquo; Jim told his Strategic Intelligence subscribers yesterday. &ldquo;Yes, it&rsquo;s easy to freeze the securities, but the U.S. won&rsquo;t do so except after due process of law or a national security emergency.&rdquo;
But neither of those contingencies applied in the case of Russia during 2022.&nbsp;
And they don&rsquo;t apply in the case of Iran now. But that&rsquo;s not stopping the Trump administration.
A few days ahead of the deal supposedly reached between Washington and Tehran this past weekend&hellip; the White House threatened to seize $24 billion of U.S. Treasuries owned by Iran.
&ldquo;These assets,&rdquo; Jim explained, &ldquo;would be used to finance the reconstruction of war damage caused by Iran to U.S. allies in the Persian Gulf, such as Kuwait and Bahrain.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;You can debate the wisdom of these proposals, but you cannot debate the fact that the U.S. is destroying trust in its own rule of law,&rdquo; Jim says.
&ldquo;Countries around the world, including major Treasury securities holders such as South Korea, Taiwan, Japan, Saudi Arabia and China, are watching these developments in Russia and Iran and asking themselves if their own holdings of Treasuries are safe.
&ldquo;What if the U.S. doesn&rsquo;t like what one of those countries is doing in foreign policy? Will the U.S. seize their securities too?&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Another point we can&rsquo;t emphasize often enough: The 2022 Russia freeze touched off a worldwide scramble for a different reserve asset &mdash; gold.
For years, Jim has said that unlike Treasuries, &ldquo;gold is a physical nondigital asset that cannot be stolen, frozen or seized provided it is in safe storage.&rdquo;
As such, global central banks started stacking gold at a record pace in&hellip; 2022.
It sticks out like the proverbial sore thumb on this chart. And if the first-quarter figures for 2026 are any indication, this year&rsquo;s buying will exceed 2025&rsquo;s total.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5rapbFBMyvQvjHQmIqsb2h/12b9531ac8bf9813e12b6bf4efa0d977/FMF-Issue-061616-1.png" alt="Accelerates" width="540px" />
And as we mentioned a few days ago, gold has just overtaken U.S. Treasuries as the biggest asset held by global central banks.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/48dJSZCcrOnHMU5624vqWe/2ea34424495e8bdc2ca2cb629cfbb3ed/FMF-Issue-061616-2.png" alt="Safety in Gold" width="540px" />
It&rsquo;s no coincidence the gold price soared from about $1,800 at the time Washington seized Russia&rsquo;s Treasury holdings to about $4,250 at year-end 2025.
What&rsquo;s the outlook for the dollar price of gold going forward? Jim returns for insight in Bullet No. 4, after we take up other matters&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />SpaceX Gains, Other Tech Names Lose
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The share price of SpaceX has sailed past $200 on its third trading day &mdash; up 57% from Thursday&rsquo;s listing price of $135.
In after-hours trading yesterday, SpaceX added an amount to its market cap that equaled the entire market cap of Starbucks. As one skeptic pointed out, Starbucks generates twice as much revenue as SpaceX.
Once the market opened today, SpaceX&rsquo;s total market cap exceeded that of Amazon&hellip; and it soon surpassed Microsoft as well. At $2.8 trillion, SpaceX is now the fourth-biggest U.S. company. (Nvidia holds the crown at just over $5 trillion. For now.)
We&rsquo;re definitely in the &ldquo;IPO hype&rdquo; phase. That&rsquo;s the first of five phases to SpaceX&rsquo;s likely trajectory over the next year as described here <a href="https://paradigmpressroom.com/post/iran-a-deal-to-make-a-deal">yesterday</a> by colleague Davis Wilson.
Some of the social media chatter is out of control. &ldquo;A no-brainer 100X&rdquo; says one rando &mdash; unaware that SpaceX would then be 10 times the size of the U.S. economy.
On the flip side, skeptics declare SpaceX is a firm that&rsquo;s still &ldquo;basically pre-revenue&rdquo; but &ldquo;trading like a meme coin.&rdquo;
True that. But as John Maynard Keynes quipped a long time ago, &ldquo;The market can remain irrational longer than you can remain solvent.&rdquo;&nbsp;
Just ask the &ldquo;Tesla shorts&rdquo; who kept betting against Elon Musk&rsquo;s other big company throughout the 2010s&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the moment, it sure looks as if hot money is flowing into SpaceX at the expense of many other tech-adjacent stocks.
While SpaceX is up 11.5% on the day, the Nasdaq Composite is down about 0.6%. And the red-hot-until-recently Philadelphia Semiconductor index (SOX) is down 3.8%.&nbsp;
Nvidia is down 1.75% as we check our screens, Microsoft 2%. IGV, the big software ETF, is on its heels again, down 1.62%.
The S&amp;P 500 is off about a quarter percent at 7,536. The Dow, with relatively limited tech exposure, is up 1% in record territory over 52,000.
Precious metals are consolidating yesterday&rsquo;s big gains &mdash; gold at $4,341 and silver just over $70. But crypto is losing ground, Bitcoin well below $66,000 and Ethereum back under $1,800.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Hormuz: &ldquo;You Go First.&rdquo; &ldquo;No, YOU Go First&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For the second day in a row, major shippers are making clear they&rsquo;re in no hurry to resume transiting the Strait of Hormuz &mdash; &ldquo;deal&rdquo; or no deal between Washington and Tehran.
The CEO of the world&rsquo;s biggest tanker operator says shipowners will likely hold off for weeks.
&ldquo;What will have to come in place is not just a simple ,agreement between the relevant countries, but it has to be material and translated into the real situations in the Strait of Hormuz, so that shipping lines can make themselves comfortable to go through,&rdquo; Mitsui OSK Lines CEO Jotaro Tamura tells the Financial Times.
That&rsquo;s on the heels of the statement we mentioned yesterday from Maersk, the No. 2 container-ship operator in the world &mdash; which pointed out that when it comes to the U.S.-Iranian agreement, &ldquo;publicly available details are still limited.&rdquo;
That remains the case today even though Vice President Vance says President Trump and Iranian Parliament Speaker Mohammad Bagher Ghalibaf have &ldquo;digitally&rdquo; signed the agreement. No confirmation on that from the Iranian side.
For that matter, there&rsquo;s confusion coming from within the U.S. side. Trump said Sunday the U.S. blockade on Iranian ports had been lifted&hellip; but in an advisory to merchant ships yesterday, the U.S. military said it remains in effect &ldquo;pending execution&rdquo; of the agreement.
Is this just a case of the left hand not knowing what the right is doing? Or is the military defying the orders of the commander in chief? (Just asking &mdash; <a href="https://5minforecast.com/2016/09/23/has-the-u-s-military-gone-rogue/">wouldn&rsquo;t be the first time</a>.)
No wonder the shippers are so skittish.
But hope springs eternal among oil traders. U.S. futures are down another five bucks on the day. At $75.64 they&rsquo;re the lowest since the early days of the war last March.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Gold $10,000 (But Maybe $3,600 First)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The bad news about gold is that Jim Rickards won&rsquo;t rule out gold sinking to $3,600. But he says even today&rsquo;s bid of $4,341 is &ldquo;an excellent entry point.&rdquo;
Yes, gold is down significantly from the late-January record &mdash; when front-month gold futures reached $5,355. But that&rsquo;s not unexpected. And $3,600 would be completely normal on the way to much higher prices.
It comes back to something Jim was told over a decade ago by the legendary commodities trader Jim Rogers: &ldquo;No commodity goes from a baseline to a permanently new high without a 50% retracement along the way.&rdquo;
Jim Rickards demonstrates how that worked with gold&rsquo;s bull market in the early years of this century: &ldquo;Using the 1999 price of $250 per ounce as a baseline and the 2011 peak of $1,900 per ounce, gold had gained $1,650 per ounce in the prior bull market.&nbsp;
&ldquo;Applying Rogers&rsquo; 50% rule, a drawdown of $825 per ounce would satisfy the condition. Subtracting $825 from $1,900 produces a target bottom of $1,075 per ounce.&rdquo;
Turns out gold bottomed around $1,050 in mid-December 2015. In 5 Bullets&rsquo; predecessor e-letter, the two Jims <a href="https://5minforecast.com/2015/12/11/rogers-and-rickards-gold-outlook/">called the bottom nearly to the day</a>.
Now Jim does the math for the present situation: &ldquo;We can reasonably date the start of the current bull market from Oct. 1, 2023, at a price of $1,845 per ounce. (Gold prices moved relatively little from 2019&ndash;2023.) The market peaked at $5,355 in January 2026. The dollar gain in that period was $3,510 per ounce.
&ldquo;A 50% drawdown of that amount is $1,755 per ounce. Subtracting that amount from $5,355 would produce a price of $3,600 per ounce to meet the 50% drawdown that the Rogers method would predict&hellip;&rdquo;
All that said, Jim won&rsquo;t rule out that we might have already seen the bottom for this cycle &mdash; $4,110 last week. Chalk it up to &ldquo;the volatile nature of commodity trading in general and gold in particular,&rdquo; he says.
&ldquo;If you own gold, hang on. If you&rsquo;re looking to buy gold, this is an excellent entry point.&rdquo;
Either way, expect &ldquo;substantial gains,&rdquo; Jim concludes &mdash; &ldquo;as a new bull market finds its legs, moves decisively past $5,000 per ounce and ultimately heads toward $10,000 per ounce &mdash; and potentially higher.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: DXYZ
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A handful of alert readers wrote in during the last 24 hours to shed light on the complaints from yesterday&rsquo;s mailbag that had your editor stumped.
The complaint was that Paradigm in general and/or James Altucher in particular had recommended shares of Destiny Tech100 Inc. (DXYZ) &mdash; the closed-end fund that was a proxy of sorts for SpaceX before SPCX went public last Friday.
Turns out it was in the portfolio of our now-defunct entry-level newsletter Technology Profits Confidential. Ray Blanco recommended it in 2024.&nbsp;
Later that year we shuttered the newsletter and folded it into Altucher&rsquo;s Investment Network. Some of Ray&rsquo;s picks made it into the Altucher portfolio &mdash; but DXYZ was not one of them. Of the cast-off names, Ray made clear in his final dispatch for TPC that &ldquo;I won&rsquo;t be continuing coverage of these plays moving forward. Be sure to plan your exits from these stocks accordingly.&rdquo;
&ldquo;I personally did well on it,&rdquo; says the reader who brought this to our attention &mdash; &ldquo;and sold it when additional info became available and price started to go down after the hype.
&ldquo;You should just tell your readers that timing is of essence when sell alerts are coming, even if international users like me can&rsquo;t subscribe to text alerts (at least now we have the app - for which I am very grateful).&nbsp;
&ldquo;Thank you for all the hard work you guys are doing to help us navigate as best as possible the news in the markets.&rdquo;
Ah, but there&rsquo;s more to the story&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;My first-ever encounter with Paradigm was a video I viewed around Christmas 2025,&rdquo; writes another reader who sheds additional light.&nbsp;
&ldquo;In the video, I&rsquo;m pretty sure, James Altucher either recommended it, or sure made DXYZ sound like a logical or attractive way to get in on the SpaceX IPO and avoid trying to get actual shares of SPCX. So I bought some.
&ldquo;Don't get me wrong, I made money on it but then it sort of languished and I sold it. But to act like this was a non-event with Paradigm is wrong. It&rsquo;s the whole way I got involved with James Altucher to start with. Maybe go back and take a look at the videos you guys were pumping out back then and see if you don&rsquo;t run across some old footage?
&ldquo;May I also respectfully suggest that perhaps you more judiciously create and send out videos and articles and conduct summits. I have been overwhelmed by the sheer volume and, at times, they actually appear to contradict one another. Or, at the very least, I find myself having to read them or watch them repeatedly to try to sort out the minor differences between them to make sure you guys haven&rsquo;t changed your stance. (DXYZ is a good example.)
&ldquo;I don&rsquo;t mean to be a whiner, but I am starting to wonder if I&rsquo;m just not cut out for the Paradigm investment world. I do have an MBA from Purdue, so it seems odd that I can&rsquo;t keep up better. Might it be your style of delivery or, again, the sheer volume that makes it difficult for me and maybe others?&rdquo;
Dave responds: OK, got it now. DXYZ was an &ldquo;unofficial&rdquo; pick mentioned in a sales promotion for Altucher&rsquo;s Investment Network.
Those picks often fly under my radar here. They&rsquo;re not something I can easily look up like the formal recommendations made in the monthly issues and special reports.
They&rsquo;re also a relatively new thing for us. Perhaps we&rsquo;ve been a touch cavalier in the way we treat them &mdash; relative to the formal recommendations in the paid publications, which of course are thoroughly screened, vetted and monitored. I&rsquo;ve flagged this matter to the Paradigm leadership team; thanks for bringing it to my attention.

FMF-Issue-061616-featured

When Trust Is Broken

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Iran: &ldquo;A Deal to Make a Deal&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;We have to pass the bill so that you can find out what&rsquo;s in it.&rdquo;
Remember that? Those were the infamous words of House Speaker Nancy Pelosi during the debate over Obamacare in 2010.&nbsp;
&ldquo;Truer words were never spoken,&rdquo; said Cato Institute researcher Michael Cannon. &ldquo;Heck, Obamacare gives [the health and human services secretary] so much arbitrary power to reshape the health care sector that Congress had to pass the law so that Pelosi could find out what is in it.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> At least then the text of the bill was public knowledge. We don&rsquo;t even have that much today with the oh-so-ballyhooed Iran deal.
&ldquo;I have yet to see one authoritative list of terms both sides concur is authentic and that they will abide by,&rdquo; says retired Army combat officer Daniel Davis, host of the Daniel Davis Deep Dive podcast. &ldquo;The only thing that has been discussed thus far is a memorandum of understanding to get Phase 1 enacted so we can even begin negotiations for Phase 2.&rdquo;
&ldquo;It seems to be little more than a deal to make a deal since the nuclear issue and sanctions relief were left unresolved,&rdquo; Paradigm&rsquo;s own Jim Rickards wrote his Strategic Intelligence readers this morning.
Old acquaintance Erik Townsend, host of the Macro Voices podcast, had a pithy summary of how the Iranian side sees it&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1QGE8ek7tBjdQtQCo7fq4A/9d936d48a9fed6ad0f1e94532a6b2724/FMF-Issue-061526-1.png" alt="Erik Tweet" width="540px" />
Supposedly the &ldquo;deal to make a deal&rdquo; will be signed in Switzerland on Friday. Then maybe we can see a text? Pretty please?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> That&rsquo;s assuming U.S. and Iranian representatives even make it to the signing ceremony. There are two enormous stumbling blocks between now and Friday.
The first is the status of Tehran&rsquo;s frozen assets, rumored to be valued at $24 billion.
Iranian media say that under the deal, those assets will be restored to Tehran right away. Asked about that on CBS this morning, Vice President Vance said, &ldquo;We&rsquo;re open to a lot of things that are on the table but that doesn&rsquo;t appear anywhere in the text.&rdquo;
(At least he&rsquo;s seen the text?)
Given everything we&rsquo;ve heard from Iranian leadership in recent weeks, the immediate release of these assets appears to be non-negotiable.
And then there&rsquo;s Israel &mdash; not a party to the agreement, as Prime Minister Benjamin Netanyahu has said pointedly.
Netanyahu tried to deep-six the agreement yesterday by escalating in Lebanon &mdash; bombing metropolitan Beirut, which is a red line for Tehran.
Fox News Middle East correspondent Trey Yingst &mdash; a straight shooter despite who signs his paycheck &mdash; quoted a diplomat involved in the talks as saying, &ldquo;This is a clear attempt by Israel to sabotage the President&rsquo;s deal and drag the United States back into war.&rdquo;
It didn&rsquo;t work &mdash; this time. But Beirut is non-negotiable for Tehran. And a lot can happen between now and Friday.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Deal Arrives as &ldquo;Tank Bottoms&rdquo; Loom
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And at least until Friday, the Strait of Hormuz remains effectively closed. Here&rsquo;s a one-year chart of Hormuz traffic, placed in context.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2apgxy6H9EGv5Qa9GoBHKF/76bfbb8432e222f3abee443d2ba3e479/FMF-Issue-061526-2.png" alt="Don Tweet" width="540px" />
&ldquo;At this stage, there are no changes to our operations in the region,&rdquo; says a statement from the shipping giant Maersk. &ldquo;The announced agreement is a welcome and positive development, but publicly available details are still limited.&rdquo;
(Gee, you don&rsquo;t say&hellip;)
Even if a deal is signed Friday and everything goes swimmingly from there, it&rsquo;s going to take time to unscramble the scrambled supply chains.
Clearing the strait of mines? A six-month project. Moving vessels where they need to be? Two or three months. Restarting oil production where it&rsquo;s been shut down and then restoring to prewar levels? Another three months.&nbsp;
&ldquo;The war started in a second, but the consequences will linger on much longer,&rdquo; says Amena Bakr of the trade-data firm Kpler.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Assuming this deal is for real, it comes just in time for U.S. oil inventories.&nbsp;
As we chronicled last month, Carlyle Group commodities guru Jeff Currie said that America will be approaching &ldquo;tank bottoms&rdquo; around July 4. And an Exxon executive said the only thing keeping a lid on fuel prices during the war is the fact we&rsquo;re running down inventories.
Even CNN managed to figure that out by this weekend&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/F24KH2xgJIN7ganL9KKiI/afa64c7edb847a9160fb19fa408e9705/FMF-Issue-061526-3.png" alt="CNN Tweet" width="540px" />
As of the week ending June 5, inventories at the giant terminal in Cushing, Oklahoma totaled 21.64 million barrels. That compares with 40 million or so in normal times&hellip; and &ldquo;operational minimums&rdquo; of 20 million &mdash; beyond which there&rsquo;s too much sludge mixed in with the oil and pipelines lose pressure.
Meanwhile, the government&rsquo;s Strategic Petroleum Reserve now sits at its lowest level since August 1983.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The oil price today, you ask? Down over 5% to the lowest levels in over three months, but still over $80.
That might be as good as it gets for a while. Mr. Market hasn&rsquo;t yet absorbed the realities of how long it&rsquo;s going to take to restore energy flows to where they were before the war began. (See above.)
Elsewhere, it&rsquo;s &ldquo;risk on, baby.&rdquo; At last check, the S&amp;P 500 is up nearly 2% to 7,573 &mdash; not too far off its record close of June 2. The Nasdaq is up 3% while the Dow is settling for a 1.4% gain.
Precious metals are also rallying &mdash; gold up $110 to $4,328 and silver up two bucks, only a penny away from $70 again. Crypto is getting traction, too &mdash; Bitcoin up to $66,689 and Ethereum above $1,800 again.
One economic number of note: U.S. industrial production ticked up 0.1% in May, less than expected. Manufacturing output was flat, utilities activity shrank, mining/energy output grew. All told, 76.2% of U.S. industrial capacity was in use last month &mdash; well below the 60-year average.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />SpaceX: What&rsquo;s Next?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On Day 2 of SpaceX&rsquo;s existence as a publicly traded company, SPCX shares are trading north of $170 &mdash; up 8% from Friday&rsquo;s close and 29% from the IPO price.
But where does it go from here?
&ldquo;The chart below is my best guess for how the next year unfolds after SpaceX goes public,&rdquo; says Davis Wilson of our sister e-letter The Million Mission.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/DCJHQoSf3IvB75dVI3xry/e4297ae5709f3f3c4d2784deb506ff98/FMF-Issue-061526-4.png" alt="The Space X IPO" width="540px" />
&ldquo;We&rsquo;ve seen this movie before,&rdquo; he says. It breaks down into five phases&hellip;
<blockquote>Phase 1: IPO hype. In the brief window before IPO day, demand from retail investors for a limited number of pre-IPO shares was overwhelming. &ldquo;When disappointed investors rush into the open market to buy shares after trading begins,&rdquo; says Davis, &ldquo;It creates a natural source of upward pressure on the stock.&rdquo;</blockquote>
<blockquote>Phase 2: Insiders sell. The venture capital types, to say nothing of SpaceX employees, who&rsquo;ve owned shares for years, will want to cash out. And unlike the single &ldquo;unlock date&rdquo; that typically happens with IPOs, &ldquo;shares are expected to be released in stages from roughly July through December,&rdquo; Davis says. &ldquo;Rather than one giant wave of selling pressure, SpaceX could face a series of smaller waves as more insider shares become eligible for sale.&rdquo;</blockquote>
<blockquote>Phase 3: Investors lose interest. &ldquo;The financial media will move on to the next hot story. The next IPO will arrive&hellip; I wouldn&rsquo;t be surprised if SpaceX enters a prolonged &lsquo;dead money&rsquo; period where investors simply lose interest.&rdquo;</blockquote>
<blockquote>Phase 4: Institutions buy. &ldquo;Many large funds can't buy meaningful positions immediately after an IPO. And they don&rsquo;t want to buy at such inflated prices. Instead, they wait for the hype to fade and for insider selling to run its course.&rdquo; Neither the media nor retail investors will notice. And then&hellip;</blockquote>
<blockquote>Phase 5: Retail buys back in. &ldquo;Suddenly everyone who ignored the stock during the &lsquo;investors lose interest&rsquo; phase will decide they need exposure. That's usually how it works. People don't chase what has fallen. They chase what has already gone up.&rdquo;</blockquote>
No guarantees this is how it plays out. But Davis has seen it play out just like this many times before. &ldquo;The tickers are always different, but the underlying behavior rarely changes.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Trump Admin&rsquo;s Heavy Hand Slams Down an AI Giant
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s now apparent what the Trump administration&rsquo;s approach to AI regulation will be going forward &mdash; lurching back and forth between a light touch and a heavy hand.
The heavy hand slammed down hard last Friday on Anthropic, the Claude maker that intends to go public later this year.&nbsp;
As we mentioned at the time, Anthropic rolled out its powerful new Mythos model in April &mdash; so powerful, the company claimed, that it unearthed major vulnerabilities in nearly every operating system and web browser.&nbsp;
As such, Mythos&rsquo; initial release was limited to only a few dozen big corporate clients so they could patch their systems. A watered-down version of Mythos dubbed Fable was released to the public last week.
The whole time, Anthropic leaned hard into the Mythos-as-cyberweapon narrative, pleading for federal regulation. (When big companies plead for regulation, it&rsquo;s always to thwart up-and-coming competition.)
Regulation arrived on Friday when the feds issued an export-control order forbidding access to both Mythos and Fable by any foreign national. That&rsquo;s even if the foreign national is in the United States, and even if the foreign national works for Anthropic.
The company was given 90 minutes to comply.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Under strictures that tight, Anthropic simply revoked access to Mythos and Fable for everyone.
Social media had a field day&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3Ptw6dJAunBUhAyXwhC2yQ/1c247823a17f3fa98ac0a47d0ded0161/FMF-Issue-061526-5.png" alt="Comedic Relief" width="540px" />
If the Semafor news site is to be believed, the order resulted &ldquo;partly over suspicions that a China-linked group&rdquo; somehow accessed Fable, the consumer version of Mythos.
For his part, venture capitalist and White House AI adviser David Sacks says the feds got a warning from &ldquo;a highly credible trusted partner&rdquo; of both Anthropic and the U.S. government: Fable was subject to jailbreak. (The Financial Times reports that partner is Amazon.)
In Sacks&rsquo; telling, Anthropic CEO Dario Amodei refused to fix it &mdash; saying it was no big deal. The feds disagreed and issued their order.
This development comes after a series of mixed signals from the White House in recent weeks: Mythos spurred the White House to rethink its previous light-touch approach during April. A heavy-handed executive order <a href="https://paradigmpressroom.com/post/ai-speeding-toward-a-brick-wall">was in the works</a> during May&hellip; but <a href="https://paradigmpressroom.com/post/apples-secret-supplier/#meanwhile">then it was watered down come June</a>. Now it&rsquo;s heavy-hand time again.
You wonder if the Silicon Valley tech bros who gravitated toward Trump during the 2024 campaign are having second thoughts&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: DXYZ, Aging in Place
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> A couple of complaints filtered into the mailbag this weekend &mdash; and I&rsquo;m hard pressed to say what brought them on.
Both readers called us out &mdash; and one called out James Altucher in particular &mdash; for talking up Destiny Tech100 Inc. (DXYZ) &mdash; a closed-end fund that was an indirect way to own SpaceX pre-IPO. (Last year, SpaceX made up more than half of DXYZ&rsquo;s holdings.)
As far as I can tell, DXYZ has never been a recommendation in Altucher&rsquo;s Investment Network.&nbsp;
Over the last year, Davis Wilson of the free e-letter The Million Mission did mention DXYZ now and then &mdash; mostly to discourage people from investing. He cautioned that it traded at nearly 4x its net asset value (September 2025) and that its price was falling even as SpaceX&rsquo;s valuation was soaring (March 2026).
If our editors give readers a bum steer, we expect them to own their oversight. But again, as far as I can tell, there&rsquo;s no oversight to own here.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After your editor made a parenthetical reference <a href="https://paradigmpressroom.com/post/spacex-there-is-no-choice">in Thursday&rsquo;s edition</a> to the fact that many boomers are choosing to &ldquo;age in place&rdquo; instead of downsizing &mdash; which helps to limit the available housing stock for younger folk &mdash; we heard from one of our semi-regulars&hellip;
&ldquo;7,000 boomers a day are making the ultimate downsize,&rdquo; he writes &mdash; &ldquo;they are dying!
&ldquo;That is 2.6 million per year. That is a lot of houses becoming empty for the younger generation. What other generation is adding that kind of real estate to the market?&rdquo;
Dave responds: Valid point. It&rsquo;s a self-correcting problem in that regard &mdash; even if it&rsquo;s not happening fast enough for young and growing families.
The eventual aging out of the boomers is also why I don&rsquo;t share in the hand-wringing you hear from many experts about the future of Social Security.&nbsp;
Boomers like to think they&rsquo;re immortal &mdash; heh &mdash; but they will be falling off the rolls sooner or later.&nbsp;
It&rsquo;s still going to take some combination of higher taxes and higher retirement age to keep the system afloat longer term. When the politicians choose to act is up in the air; under the circumstances, they&rsquo;ll likely hold off until the last minute&hellip;

FMF-Issue-061526-Featured

Iran: “A Deal to Make a Deal”

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />SpaceX: The Iran Connection
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; is SpaceX&rsquo;s IPO today the reason Donald Trump called off a renewed attack on Iran yesterday?
Yesterday morning on his Truth Social platform, the president threatened to attack Iran &ldquo;VERY HARD TONIGHT.&rdquo;
But about six hours later, he declared he had &ldquo;cancelled the scheduled strikes and bombings against Iran this evening.&rdquo;
What changed?
One theory is that the Iranian side delivered damaging strikes against U.S. targets &mdash; more damaging than anyone in Washington cares to admit &mdash; and the Pentagon urged the president to hold off, allowing time to regroup.
Another theory is that a U.S. Treasury auction yesterday went poorly, with very weak demand. An escalation of the war would drive down foreign demand for Uncle Sam&rsquo;s debt even further&hellip; which would drive interest rates even higher.
But among some cynical cats on X, the consensus is that someone put a bug in the president&rsquo;s ear: You don&rsquo;t wanna mess up the SpaceX IPO tomorrow, do you?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7gb3xBCk5FKbRlPoSUnKE5/a0b9a69a2ffe76d0f17f06e6323b3f3b/FMF-Issue-061226-1.png" alt="pub" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1GENix5dhJhx4PdosYEBko/93083e61fe9b2220f5a857d923cd03a8/FMF-Issue-061226-2.png" alt="pub" width="540px" />
To no small extent, Donald Trump sees his legacy tied up with the performance of the U.S. stock market. Now is no time to throw a wrench in the works. Remember how the market swooned at the outset of the war in March?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But it wasn&rsquo;t just the threat of a renewed hot war tanking the stock market at a delicate moment.
There was also the threat the Iranian side issued against Elon Musk&rsquo;s interests in the Middle East.&nbsp;
Yesterday morning, Iran&rsquo;s semi-official Fars News Agency reported that Tehran planned to target &ldquo;all interests related to economic holdings managed by Elon Musk in West Asia&rdquo; &mdash; including a Starlink ground station.
&ldquo;The Islamic Republic of Iran reserves the right to attack all facilities related to [Musk]-managed holdings in the region and occupied territories,&rdquo; Fars quoted an &ldquo;informed source&rdquo; as saying.
There&rsquo;s precedent behind the threat: During the war&rsquo;s early days, Tehran attacked Amazon data centers in the United Arab Emirates and Bahrain.
Now, this threat did not carry the weight of coming from the news agency IRNA &mdash; the official Iranian government mouthpiece. And if you give it a moment&rsquo;s thought, the threat was almost surely a bluff: Iranian leaders know how unpopular this war is in the United States. Why would they do anything to anger millions of everyday American investors at a moment those investors are jazzed about the SpaceX IPO?
But if you&rsquo;re sitting in the White House&hellip; and you think your legacy is inextricably linked to the performance of the stock market&hellip; you&rsquo;re not going to take any chances. You&rsquo;re going to call off the attacks.
That&rsquo;s our informed speculation, anyway. Whatever the case, the shaky ceasefire looked a bit more steady as the trading day opened&hellip; and everything was on track for a smooth introduction of SpaceX as a publicly traded company.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Here We Go Again (Again)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And so the &ldquo;war&rsquo;s almost over&rdquo; trade is back on. At less than $85 a barrel, U.S. oil futures trade today at a two-month low.
Not only did Donald Trump call off a planned attack on Iran yesterday, he said &ldquo;discussions and final points have been, in both concept and great detail, approved by all parties involved.&rdquo;
Never mind that Trump has previously said a deal is nearly done 38 times before. (That count is from CNN, but it appears to check out.) Never mind that as usual the Iranian side is being much more circumspect about prospects for a deal. And never mind that Israel has an effective veto on anything Washington and Tehran might agree to.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Amid that backdrop, and the SPCX debut, the major U.S. stock indexes are just barely in the green after yesterday&rsquo;s solid gains. The S&amp;P 500 is back over 7,400 for the first time since Monday.&nbsp;
SPCX shares began trading shortly before lunchtime on the East Coast &mdash; opening at $150 each, an 11% improvement on last night&rsquo;s listing price of $135.&nbsp;
With that, Elon Musk has become the world&rsquo;s first trillionaire. (Granted, the value of a dollar ain&rsquo;t what it used to be, but still&hellip;)
In addition to SPCX&rsquo;s premiere, leveraged ETFs based on SPCX have also begun trading &mdash; a 2X ETF with the ticker SPCH and a 3X ETF with the ticker ELON.&nbsp;
(Guess Musk is out of luck if he wants to merge Tesla and SpaceX into one giant company with the ELON ticker?)
➢ Hats off to readers of Enrique Abeyta&rsquo;s The Maverick: Yesterday they collected 105% gains after six months with shares of the space name Voyager Technologies. Enrique thought it prudent to take profits on half the position ahead of the SpaceX debut.
Despite the stock market&rsquo;s sideways chop in recent days &mdash; including last Friday&rsquo;s big drop &mdash; there&rsquo;s an underlying sign of strength: Money is flowing out of the Magnificent 7 names into the broader market.
&ldquo;Take a look at RSP, the equal-weight S&amp;P 500 ETF,&rdquo; says Paradigm analyst Zach Scheidt. &ldquo;It's outperforming the traditional, mega-cap-heavy S&amp;P 500, and it's sitting within 2% of all-time highs. We're seeing the same in small caps. IWM is right up near its own highs and has led the last few sessions.
&ldquo;This tells us that the average stock is holding up well. We're getting participation from more &lsquo;healthy&rsquo; names instead of the whole market leaning on a few giants.&rdquo;
Precious metals rallied big-time yesterday after Trump called off the Iran attacks&hellip; but checking our screens gold is back under $4,200 and silver is off nearly a buck at $66.28. Bitcoin has pushed past $63,000 but Ethereum is still mired in the $1,600s.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Data Centers In Space(X)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Just days leading up to the largest IPO in history, Elon Musk unveiled something the market hasn't fully processed yet,&rdquo; says Paradigm space and tech specialist Ray Blanco.
&ldquo;Not a rocket. Not a Starlink update. Not a Grok benchmark.&rdquo;
Rather it was a satellite designed from the jump to be a data center in space. Perhaps not surprisingly, it&rsquo;s called AI1.
&ldquo;The timing is not accidental,&rdquo; Ray wrote yesterday for Altucher&rsquo;s Investment Network. &ldquo;You don't unveil your first orbital data center satellite right before the largest IPO in history by coincidence. Musk just showed the world what he's actually building with the money.&rdquo;
One AI1 satellite generates an amount of solar power equal to that needed for powering 125 homes. &ldquo;Its solar panels span 70 meters tip to tip,&rdquo; says Ray. &ldquo;That's wider than a Boeing 747.
&ldquo;To keep those chips from melting in the vacuum of space, it deploys a liquid radiator system covering 110 square meters &mdash; roughly the floor area of a decent apartment &mdash; that bleeds heat silently into the void.
&ldquo;And the detail that separates this from everything that came before: The compute payload is interchangeable.
&ldquo;The satellite could run Nvidia GPUs or Google TPUs, or SpaceX&rsquo;s own custom Terafab silicon.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Terafab is planned for a site near Austin, Texas &mdash; sitting cheek-to-jowl with Tesla&rsquo;s Gigafactory Texas complex, but 10 times the size.
It will aim for one terawatt of annual chip output &mdash; some 80% of that destined for space.
Put simply, &ldquo;The largest chip manufacturing initiative in human history is being built primarily to supply orbital infrastructure,&rdquo; Ray says.
&ldquo;This is the capital allocation decision made by what might be the most aggressive builder in the history of technology, backed by the proceeds of a $75 billion IPO.&rdquo;
As we&rsquo;ve emphasized since we first brought them to your attention last fall, orbiting data centers don&rsquo;t compete for scarce resources on Earth: Electricity comes from solar power that&rsquo;s available 24/7. No need to suck up water for cooling; space is plenty cold. And no neighbors to object.
&ldquo;The costs that remain &mdash; launch, hardware &mdash; are falling faster than anyone predicted,&rdquo; Ray goes on. &ldquo;Starship changes the launch economics the way container shipping changed global trade.&nbsp;
&ldquo;When the cost of getting a pound to orbit drops by 90%, the math on orbital compute doesn't just improve. It inverts.
<a id="4"></a>
&ldquo;The interchangeable compute payload architecture means AI1 isn't a satellite. It's a platform &mdash; the orbital equivalent of a server rack that any hyperscaler can populate with their own silicon.&rdquo;
Just wait till everyone else figures out what we&rsquo;ve been telling you for weeks: SpaceX isn&rsquo;t a rocket company. It&rsquo;s an AI company that sees the future of AI in space.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Something to Feel Good About
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Not sure if you&rsquo;ve noticed&hellip; but there are plenty of visitors to the United States for the World Cup who can make you feel good about being an American.
LIke a fellow from Germany who&rsquo;s become a social-media sensation with posts like this&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4CmrnXyN7I82nLnjZ8ISo9/635725bf94fdd928beaccc21b1539b23/FMF-Issue-061226-3.png" alt="pub" width="540px" />
Or a young woman from Sweden checking out the Hoosier State on her way to one of the venues&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5szV3nItUA6FVOb0YJXsUS/ced4ba45e3aba63fedf8a3361e4db738/FMF-Issue-061226-4.png" alt="pub" width="540px" />
Or a visitor from Japan <a href="https://x.com/japan_nobunaga/status/2064943515931660382">discovering for the first time</a> the astounding variety of ways you can order eggs for breakfast.
In recent weeks both <a href="https://dailyreckoning.com/the-missing-spirit-of-76/">Byron King</a> and <a href="https://paradigmpressroom.com/post/america-then-and-now-1976-2026/#3">yours truly</a> have mused in our respective publications about why the vibe for America&rsquo;s 250th is much more downcast compared with the Bicentennial in 1976.
In that regard, these visitors have brought us a great gift &mdash; the chance to see our country with fresh eyes.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: First They Came for the Illegals&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option/#4">My brief rant a week ago today</a> about a plan to seize illegal migrants&rsquo; bank accounts prompted a small flurry of reader reactions.
Some missed the point: &ldquo;The rights we have in the U.S. are not universal. Those people entering the U.S. illegally and taking advantage of our resources weaken all of us. If you ever choose to run for a public office I have $5,000 that I can contribute to your opponent.&rdquo;
Others raised a valid concern: &ldquo;On balance, your stance against government seizing bank accounts is a wise one, as government always overreaches.&nbsp;
&ldquo;However, my right to not have illegals (or anyone) stealing my tax dollars to enrich God knows who is important too.&nbsp;
&ldquo;Care to offer something beyond just saying NO to government, so that my tax dollars are protected from being stolen? An alternative solution perhaps?&rdquo;
Dave responds: It shouldn&rsquo;t be controversial &mdash; certainly not on &ldquo;the right&rdquo; &mdash; to strip illegal migrants of welfare benefits.
And yet&hellip; a budget bill passed in Washington last winter includes $5 billion in &ldquo;refugee and entrant assistance&rdquo; &mdash; cash benefits, health care, daycare, job programs.
Rep. Thomas Massie (R-Kentucky) offered an amendment to strip this funding from the bill &mdash; only to be shot down by House Speaker Mike Johnson and other GOP leadership. Donald Trump signed the measure into law, and then backed Massie&rsquo;s primary opponent &mdash; who won with the help of an unprecedented $15 million from the GOP donor class. Your beef (and mine) is with them.
I for one would be interested in seeing how it would work out if our leaders actually followed the Constitution&rsquo;s clear division of responsibilities: The federal government takes care of naturalization/citizenship, while immigration is left to the states.
That might sound outlandish to contemporary ears, but it&rsquo;s how things worked for our first century of existence as a country&hellip;

FMF-Issue-061226-Featured

SpaceX: The Iran Connection

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />SpaceX: There Is No Choice
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We&rsquo;ve spent days if not weeks trying to warn you off buying SpaceX shares on IPO day.
Which&hellip; in case you just emerged from a no-internet retreat in the Himalayas or something&hellip; is tomorrow.
History just isn&rsquo;t on your side. We&rsquo;ve cited the case of Facebook &mdash; down 54% in its first 12 months after going public in 2012.&nbsp;
Similar sob stories took place with Twitter (down 60%) and Robinhood (down 80%).
Yes, they all roared back to trade at many multiples of their IPO price &mdash; but, really, how many people had the patience to hold on?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> All that said &mdash; and we realize we&rsquo;re about to invoke one of the most dangerous phrases in all of investing &mdash; this time might be different.
To illustrate why, colleague Davis Wilson of our sister e-letter The Million Mission offers this analogy: Your spouse sends you to the grocery store with a shopping list from which you&rsquo;re not to deviate one iota.
The list includes Honeycrisp apples &mdash; which turn out to be $450 a pound.
You buy Honeycrisp apples, the insane price be damned. There is no choice. The list is the list.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Believe it or not, this is exactly how trillions of dollars are invested every day,&rdquo; says Davis &mdash; &ldquo;without the slightest thought given to the price paid.
&ldquo;The shoppers are index funds &mdash; like QQQ, SPY, VOO, etc.
&ldquo;The shopping list is a list of stocks that are chosen by the men and women working at Nasdaq, MSCI and Standard &amp; Poor&rsquo;s.
&ldquo;And thanks to recent rule changes at Nasdaq and MSCI, SpaceX could find itself on some very important shopping lists shortly after its IPO.&rdquo;
As you likely know, an index fund doesn&rsquo;t try to beat the market. It tries to reflect its underlying index as closely as possible.&nbsp;
&ldquo;If the index owns Nvidia, the index fund owns Nvidia,&rdquo; says Davis. &ldquo;If the index owns Microsoft, the index fund owns Microsoft. And if the index adds SpaceX, the index fund must buy SpaceX.&rdquo;
If the fund manager thinks SpaceX is too pricey, too bad &mdash; he has no choice. The list is the list.
&ldquo;Hisotorically,&rdquo; says Davis, &ldquo;newly public companies had to wait months or even years before being added to major indexes. That delay gave the market time to absorb the new shares and establish a fair price.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Not so with SpaceX &mdash; not with expectations the company will raise $75 billion at a valuation over $1.75 trillion.
&ldquo;Nasdaq recently changed its rules to allow certain mega-cap IPOs to enter the Nasdaq-100 after just 15 trading days,&rdquo; says Davis.&nbsp;
&ldquo;The Nasdaq-100 has roughly $1.4 trillion benchmarked against it through ETFs, mutual funds, retirement accounts and institutional portfolios.
&ldquo;If SpaceX entered the index with a 0.5% weighting &mdash; which it&rsquo;s expected to &mdash; those funds would need to buy roughly $6 billion worth of shares. At a 1% weighting, the figure rises to $12 billion.&rdquo;
And then there&rsquo;s MSCI &mdash; which has a similar fast track that could add qualifying companies in as little as 10 trading days.
&ldquo;Approximately $5.8 trillion is benchmarked to MSCI indexes globally,&rdquo; says Davis. &ldquo;Even a relatively small weighting could translate into another $10 billion or more of buying demand.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Add everything together and it's not difficult to envision $20&ndash;30 billion of &lsquo;forced buying&rsquo; arriving within weeks of the IPO,&rdquo; Davis says.
&ldquo;And that's before hedge funds get involved&hellip; active managers decide they need exposure&hellip; financial advisers recommend the stock to clients&hellip; and retail investors like us pile in.
&ldquo;Think about that for a second.
&ldquo;SpaceX may raise $75 billion in the IPO. Then, just days later, tens of billions of dollars of additional demand could arrive from investors who are required to buy the stock at any price.&rdquo;
In that atmosphere, valuation won&rsquo;t matter. The index fund managers must buy. There is no choice. The list is the list.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Dot-Com Echoes? Yes, But&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For all the stock market&rsquo;s choppy action in the last week, history suggests the bull market isn&rsquo;t over yet.
&ldquo;Over the past several weeks,&rdquo; says Paradigm trading pro Enrique Abeyta, &ldquo;I have seen dozens of rare technical signals that all point to the same thing: The stock market will be HIGHER in one year.
&ldquo;There have only been a few times in my 30 years as a professional investor when I have had this degree of confidence that the stock market will be higher in a year.
&ldquo;The last time was after the COVID shutdowns, when I (correctly) predicted that we would see one of the greatest periods of GDP growth since World War II.&rdquo;
For sure, Enrique sees parallels between the AI boom now and the dot-com boom of the late 1990s. But as he&rsquo;s said for several months, there&rsquo;s no indication we&rsquo;re at a &ldquo;March 2000 moment&rdquo; &mdash; when the Nasdaq began a sickening 78% slide.
At worst, he says we&rsquo;re at a June 1999 moment &mdash; in which case the Nasdaq was still up 61% a year later, a period including the first three months of the big sell-off!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> If you&rsquo;re looking for indications when &ldquo;the top is in,&rdquo; Enrique says watch the Federal Reserve.
Here&rsquo;s a chart of the fed funds target rate over the course of his career. Note the red arrows when the Fed was raising rates.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4l62ssnA5OtCl8w6nJnG9o/f05c9e11e624df02875214e9b183dc94/fmf-issue-061126-1.png" alt="pub" width="540px" />
In each case, those rate-raising cycles preceded the onset of a bear market.&nbsp;
True, the precise interval between the start of the rate-raising cycle and the start of the bear market varies. But the point now is that the Fed has not yet begun a new rate-raising cycle.&nbsp;
As such, the bull still has room to run.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> After a tough day yesterday, the major U.S. indexes are staging a modest recovery.
The S&amp;P 500 is up 0.6% at last check, back over 7,300. The Nasdaq and the Dow are both up well over three-quarters of a percent.
Gold has clambered its way back over $4,100. Silver&rsquo;s back above $64. But Bitcoin is still mired below $63,000 and Ethereum in the $1,600s.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> The big economic number today is wholesale inflation &mdash; and it&rsquo;s scary-bad, up 1.1% month-over-month and 6.5% year-over-year. It&rsquo;s the biggest increase since November 2022.
These increases feed through to the consumer with a lag &mdash; at least two months, sometimes much longer.
And you can&rsquo;t blame it all on the war driving up fuel prices. If you throw out food and energy, the year-over-year increase is still a blistering 4.9%. That means the primary culprit is a federal government that still can&rsquo;t get deficit spending under control.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Inflation and War
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I love the inflation,&rdquo; said Donald Trump yesterday in a remark that predictably went viral.
He was in the Oval Office, asked by reporters about the consumer-level inflation numbers that had just come out. At 4.2%, the official inflation rate is the highest in three years.
To be sure, those four words standing alone need context. Unfortunately, the context the president provided was an incoherent jumble &mdash; a word salad in which he seemed to suggest that people will be happy once the inflation rate starts coming back down. (If you wish, <a href="https://www.youtube.com/watch?v=OUUZOe7Bd2A">you can parse it yourself</a>. Good luck.)
Which is more or less what Buck Sexton, syndicated radio host and editor of Paradigm&rsquo;s Money &amp; Power, thinks the president is betting on.
With midterm elections less than five months away, it&rsquo;s all about perceptions &mdash; as he told his subscribers last Friday: &ldquo;Let's say tomorrow morning, investors wake up and become convinced that the Strait of Hormuz is staying open and that the worst of this is behind us. Oil prices would probably start reacting before a single thing actually changes on the ground.
&ldquo;Trump doesn't need perfection here. He needs people to feel like things are getting better. That's it.
&ldquo;The faster the White House can convince people that prices are headed in the right direction, the better everybody's life gets &mdash; including Republicans running for reelection this year.&rdquo;
In the meantime, though, even The Babylon Bee &mdash; the conservative parody site &mdash; is posting headlines like this.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2EZk6rrjRmRbYllnlgPsQ0/990c9aa0ad8988ae0cc7796fa511f269/fmf-issue-061126-2.jpg" alt="pub" width="540px" />
True, it doesn&rsquo;t lay blame for the war at Trump&rsquo;s feet. But still&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Oil traders are writing off Trump&rsquo;s latest threats to attack Iran &ldquo;VERY HARD TONIGHT.&rdquo; As we write, U.S. crude futures are up only 1.5% to $91.38.
For the first time since April, the president is suggesting U.S. forces will try to seize Iran&rsquo;s big oil terminal at Kharg Island &mdash; an undertaking that&rsquo;s no less fraught with peril now than it was then.&nbsp;
The latest shooting between the U.S. and Iranian sides began in earnest late Sunday/early Monday when a U.S. Apache helicopter was downed over the Strait of Hormuz.
The incident remains murky more than 72 hours later. Tehran hasn&rsquo;t claimed credit for bringing the copter down. Axios reports that Washington still hasn&rsquo;t determined whether the Iranians brought it down on purpose. (Yeah, I know, Axios. Still&hellip;)&nbsp;
The anonymous military blogger known as &ldquo;Big Serge&rdquo; poured cold water on Trump&rsquo;s account of what happened: &ldquo;Love the idea of a drone with the precision to spear the cockpit of a moving helicopter and then catch fire like a cheap toaster instead of exploding.&rdquo;
In any event, Washington says the pilots were rescued. And the Strait of Hormuz remains all but closed.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7RDEJ5dGIYoW3oe0EkqjA/a8834b7d3064a33b8141b5af61a15aad/fmf-issue-061126-3.png" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief: America, RIP?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> So&hellip; this is an item available at Walmart &mdash; 100 for $2.97&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2DcXzVArETDuGsLlVO823v/8b578d1c555fe240d03a73c9e2d6d064/fmf-issue-061126-4.png" alt="pub" width="540px" />
Yeah, I know, it commemorates the nation&rsquo;s 250th birthday.&nbsp;
But it also looks&hellip; like&hellip; a headstone?
Does someone know something?
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: More Property Taxes
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In an unexpected development, our reader-mail thread in recent days about <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option?vid2=f7584bb8d0f8b4ef03ea4a2a79cb9ffebd5601637dfb4b221b21055bfe10aa56fb9565c7166c12ea93687031263ed97489aead8f437e4ddd1cfcbcd5e6a6bb06&amp;utm_campaign=FMF_Issue_06.09.26_&amp;utm_source=Iterable&amp;itbl_templateId=24061820&amp;itbl_campaignId=18495542&amp;utm_medium=Email#3">a property tax referendum in Florida</a> has prompted a flurry of feedback from&hellip; California.
&ldquo;As ominous as it may sound,&rdquo; says one reader, &ldquo;California did one thing right back in the 1970s &mdash; they passed Proposition 13.
&ldquo;It limits property taxes to 1% of the purchase price of the property, with a max 2% annual increase. As a result, long-term property owners enjoy a reasonable tax burden in retirement.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;All this talk about the Florida property tax initiative reminds me of my parents dragging me to a stuffy, high school cafeteria to hear some guy named Howard Jarvis talk about Proposition 13, which was going to cut property taxes and restore the American dream,&rdquo; writes another.
&ldquo;And I remember how, over the next few years, those in charge of local governments and school districts made the most painful, most public cuts possible to punish the ignorant electorate for threatening their gravy train.
&ldquo;Ah the memories.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Proposition 13 is a subject of hot debate every election cycle,&rdquo; says a third.
&ldquo;Reading all of the feedback you've published, along with what I'm hearing out here, it's all the same and your last paragraph <a href="https://paradigmpressroom.com/post/spacex-and-smoothies">on Tuesday</a> summed it up perfectly.&nbsp;
&ldquo;The real question isn't how to shift the tax burden. The part that rarely gets brought up, but is the most important question, is what ought the government be funding in the first place. In my opinion, the answer is a helluva lot less than it currently does. The list of things my taxes fund which I find repugnant is too long to include here, and I imagine that's true for most people.&nbsp;
&ldquo;Perhaps if we'd get back to only funding actual essential services, we could figure out how to fund them without so much vitriol. Of course, that requires someone deciding for us all what is and isn't 'essential,' and those decisions are almost always made with influence from the beneficiaries/providers of said services.&nbsp;
&ldquo;It looks like we may actually avoid empirical collapse for another generation. While that is in many ways a relief, it is also somewhat of a disappointment. A clean slate would have been another chance to get it right.&nbsp;
&ldquo;The path we're on, which is likely to preserve the U.S.' status as the issuer of the world&rsquo;s reserve currency for a while longer, will certainly come with more central planning and control of the economy. Financed on the backs of the citizenry, with made-up dollars. Taxes aren't going away; the only question is how we choose to arrange the deck chairs while the band plays on.
&ldquo;You're not the only one who gets accused of cynicism BTW.&rdquo;
Dave responds: Heh.
I&rsquo;ll leave the dying-empire discussion for another time and keep the focus on California. The first reader&rsquo;s comment about &ldquo;a reasonable tax burden in retirement&rdquo; comes with a caveat, one I&rsquo;ve spotlighted before.
If a longtime California homeowner wants to downsize to a locale with low (Arizona) or no (Texas) state income taxes&hellip; he or she will take an enormous one-time hit with federal income taxes.
Under the Taxpayer Relief Act of 1997, there&rsquo;s an exemption on any capital gains you rake in from the sale of a personal residence &mdash; $250,000 for individuals, $500,000 for couples.
Even though this legislation was passed more than a generation ago, those thresholds have never been adjusted for inflation. If they were, they&rsquo;d be $515,000 for individuals and $1.03 million for couples.
And even those higher figures wouldn&rsquo;t be fair &mdash; considering that home prices have risen much faster than the inflation rate.
It hits hard everywhere &mdash; but especially in California where pretty much anyone with a paid-off house is a &ldquo;millionaire.&rdquo;
Come to think of it&hellip; You hear a lot of complaints these days about why the boomers won&rsquo;t downsize, which has the effect of shutting younger people out of homes that can accommodate growing families.&nbsp;
There are many reasons behind the phenomenon, no doubt &mdash; but the silly-low federal capital gains exemption has to be a big one&hellip;

FMF-issue-061126-featured

SpaceX: There Is No Choice

FMF-Issue-060926-Featured

SpaceX and… Smoothies?!

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />The Problem With the SpaceX IPO
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;We&rsquo;re about to watch a transfer of cash from&hellip; ordinary people to the very rich,&rdquo; said the veteran radio host John Batchelor last night.
He was speaking of SpaceX&rsquo;s IPO, set for this Friday.
He invoked the railroad boom of the 19th century &mdash; and the relentless pitches to own, say, shares of the Erie Railroad in 1870.
In both cases the appeal was that you could own a piece of the future.
But in both cases that ownership came at a ridiculously high price for everyday Americans &mdash; ridiculously high relative to the price that early investors paid.
Still, it&rsquo;s all good for those early investors, who in the case of SpaceX will cash out big-time a few months from now once the &ldquo;lockup&rdquo; period is over.
Meanwhile, if the history of other recent IPOs is any indication, everyday folks who buy in on Day 1 will be watching red on their screens for months on end. Example: Facebook shares tumbled 40% after the company went public in 2012.
Yes they roared back and Facebook, now Meta, trades for nearly 20X that initial 2012 value. But how many of those Day 1 buyers sold in disgust within a few weeks or months and booked a loss?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />Which brings us to a couple of headlines from Friday. It seems both the federal government and Wall Street are bound and determined to rope as many everyday people into this wealth transfer as possible.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/301oenxHeAtQr5QNjzFtHH/85133a0f6491e2afc301590ab9021ed1/zack_voell_x.png" alt="X Screenshot" />
Those were real headlines &mdash; although they prompted some amusing parodies as well&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4hc08U3NX5V1lLGoZoV6Vp/5e4000310a46a25f5edf3136b47e417e/arun_chopra_x.png" alt="X Screenshot" />
All kidding aside, it&rsquo;s for reasons like these that in a special email on Friday I explained why our experts are urging you to steer clear of the SpaceX IPO.
Our AI authority James Altucher&hellip; our macro maven Jim Rickards&hellip; our trading pro Enrique Abeyta&hellip; They frequently disagree, but on this point they&rsquo;re in lockstep. They don&rsquo;t want to see you take the hit that millions of Americans are setting themselves up for this week.
Besides, they&rsquo;re also in accord about a much better way to play the SpaceX frenzy &mdash; an early-stage investment tied to the growth of SpaceX with profit potential of up to 3,000% in the next two&ndash;three years.
All three of our top experts will lay out their cases during an exclusive online briefing titled The SpaceX SuperIPO Summit &mdash; tomorrow June 9 at 1:00 p.m. EDT.
They&rsquo;ll also give you a list of seven space-related stocks they believe could skyrocket along with the IPO, in a report that&rsquo;s yours FREE just for hearing their thesis. <a href="https://signups.paradigm-press.info/2526671" target="_blank" rel="noopener">Click here to instantly reserve your seat</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />After Friday&rsquo;s Rout
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />It appears the U.S. stock market will defy history today.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3a9mogpKFVsoPyg1OZV4ll/af113efac2f508c87a13951cd51074bd/odd_stats_x.png" alt="X Screenshot" />
Over the last 40 years there&rsquo;ve been 15 Fridays in which the Nasdaq took a steep tumble &mdash; including three days ago. On average, the following Monday has resulted in further 1.4% drop.
A day like this last Friday was inevitable.
The semiconductor stocks were weeks into a hyperbolic rally that couldn&rsquo;t go on forever. Apprehensions about AI were building after the chipmaker Broadcom delivered a blockbuster earnings report &mdash; but its forecast going forward didn&rsquo;t match up with Wall Street analysts&rsquo; giddy expectations.
The possibility of a continued tech meltdown today was significant: South Korea&rsquo;s KOSPI index &mdash; dominated by chipmakers Samsung and SK Hynix &mdash; collapsed 8.3% on the day. Taiwan&rsquo;s TAIEX &mdash; dominated by Taiwan Semiconductor &mdash; tumbled 3.5%.
But at last check this morning, the Nasdaq is up 1.8% on the day and the S&amp;P 500 up 1.1%.
Why the divergence?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />For once the corporate media are silent about the &ldquo;reasons&rdquo; behind today&rsquo;s rally. But from our perch, it seems pretty obvious.
Donald Trump was aboard Air Force One on Friday afternoon, headed to an appearance in Wisconsin&rsquo;s Chippewa Valley region. He mused to reporters about the possibility of the U.S. government taking ownership stakes in AI companies.
&ldquo;There&rsquo;s a concept out there where pieces could be given to the American public, where the American public essentially becomes a partner with the companies&hellip; where the American people can benefit from the success of AI and by doing that they are going to like it better.&rdquo;
Asked whether it felt strange to be &ldquo;on the same page&rdquo; in this regard with Sen. Bernie Sanders (I-Vermont) &mdash; Sanders has proposed the government take a 50% ownership stake in major AI firms &mdash; Trump said, &ldquo;As far as economics are concerned, we have certain things that are not that far apart.&rdquo;
Near as we can tell, these remarks did not become public record until after the market closed on Friday.
As we have seen frequently over the last year &mdash; indeed, it&rsquo;s a trend that&rsquo;s been very profitable for some of Paradigm&rsquo;s readership &mdash; the feds taking an ownership stake in a company can drive up that company&rsquo;s share price big-time.
Of course the chatter here is entirely hypothetical. But it&rsquo;s probably enough to give the U.S. tech market a bit of a lift today.
➢ Checking in on precious metals, they&rsquo;re licking their wounds after a severe drubbing on Friday. Gold is more or less flat at $4,336 while silver is up nearly a buck to $68.67. But as a practical matter, both metals are mired near their late-March lows.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Who Calls the Shots?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />U.S. oil futures instantly zoomed from $90 up past $95 when trading opened last night for a new week.
Let&rsquo;s reconstruct what happened while the markets were closed over the weekend.
It appeared U.S. and Iranian negotiators were making progress toward some sort of agreement. An agreement is the last thing Israeli Prime Minister Benjamin Netanyahu wants &mdash; but &ldquo;he won&rsquo;t have any choice,&rdquo; Trump told the Financial Times. &ldquo;I call the shots. I call all the shots. He doesn&rsquo;t call the shots.&rdquo;
And then, knowing it would sabotage the talks, Netanyahu ordered a series of airstrikes on Lebanon&rsquo;s capital Beirut. For weeks, Iranian leaders have said airstrikes on Beirut were a red line. Sure enough, Tehran started lobbing missiles toward Israel for the first time since the U.S.-Iranian ceasefire two months ago.
At that point, Donald Trump told the Axios website that &ldquo;I am going to call Bibi right now and tell him not to retaliate.&rdquo;
Yeah, &ldquo;Bibi&rdquo; retaliated anyway. But remember, Trump calls all the shots.
➢ Recovered history: When Netanyahu first became prime minister in 1996, he paid a call on President Bill Clinton in Washington. According to veteran diplomat Aaron David Miller&rsquo;s 2008 book The Much Too Promised Land, Netanyahu was so overbearing that after the meeting, Clinton groused to his aides, &ldquo;Who&rsquo;s the f***ing superpower here?&rdquo; <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3DyeqpoGnWvZbq1OsgkuGg/99c5e3c0e8e5b8a1d0f19120611b3be4/geiger_x.png" alt="X Screenshot" />
For the moment, however, both Tel Aviv and Tehran say they&rsquo;re holding off on further attacks &mdash; and U.S. crude futures have retreated to $91.41.
As usual, rising oil prices translate to rising inflation expectations, which translates to rising Treasury yields. The 10-year T-note is back over 4.55% &mdash; up meaningfully from 4.45% at the end of May.
Today is Day 101 of the war. The Strait of Hormuz remains effectively closed.
[Program note: The war and its market impact were a major topic &mdash; but hardly the only one &mdash; discussed last Thursday at Paradigm&rsquo;s &ldquo;America 76/26&rdquo; event featuring Jim Rickards and his team.
During a wide-ranging three-hour discussion, Jim and the analysts put out 53 (!) stocks and ETFs for your consideration. If you missed the livestream from Philadelphia, <a href="https://paradigmpresslive.com/America7626" target="_blank" rel="noopener">the replay is still available for viewing at this link</a>.]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />This one&rsquo;s been making the rounds throughout corporate America&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7xZMVQnh56A03g6gMcr5IM/4b136e0421c4bc680fc50d16a313245f/plank_meme.png" alt="Meme" />
That one guy on the left seriously needs to work on his form. Just sayin&rsquo;...
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Florida&rsquo;s Property Tax Proposal
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;Note there are two parts to this amendment,&rdquo; says the first of several thoughtful emails we got from Floridians about <a href="https://paradigmpressroom.com/post/elon-failure-is-always-an-option/#3" target="_blank" rel="noopener">a referendum that would slash property taxes for millions.</a>
&ldquo;One is the potential increase on the homestead exemption from $50K now to $150K in 2027, $250K in 2028 and then as adjusted by the legislature in following years with proviso in the meantime for CPI increases. The latter would have been welcomed years back but never instituted. The exemption for schools is not affected.
&ldquo;The other part is to limit property tax to the &lsquo;rollback&rsquo; rate and limit what can be used for the property taxes collected to &lsquo;essentials&rsquo; such as police, fire, water and sewage, infrastructure maintenance and ???. What are essential? (Rollback rate is the rate which based on the certified property appraiser rolls current assessed property values equals the same $$ collected previous fiscal year).
&ldquo;Are programs for families and elderly such as recreational courses, pools, adult daycare to be not essential and thus property tax money may not be used for them?
&ldquo;Can other &lsquo;fees&rsquo; be used &mdash; and this is where the discussion from the legislators is NO.
&ldquo;How about those rural or smaller municipalities that 80&ndash;90%-plus of their income to support a balanced budget is going to be impacted severely &mdash; will there be grants for the state? If so, those grants will have conditions, and how will this go over on their constituents?
&ldquo;Great idea but short on solid study showing impact and options.
&ldquo;Short-term fix that may lead to long-term repercussions.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;The proposal was watered down by the legislature &mdash; &lsquo;Don&rsquo;t touch education money!&rsquo; (gotta protect those teacher unions),&rdquo; another reader points out.
&ldquo;So the proposal means that in 2027 a five-year-plus homeowner in Florida will get a $150,000 reduction in their property value for the 40&ndash;50% of their property taxes that have nothing to do with education.
&ldquo;In 2028, that reduction would go to $250,000.
&ldquo;It&rsquo;s a step in the right direction, but it&rsquo;s not what Gov. DeSantis was requesting. The legislature is beholden to the schools and counties and not the citizens (despite declining student enrollment). Tax revenue has grown by many multiples of inflation and the government keeps growing to gobble it up.
&ldquo;Fiscal responsibility and taxpayer empathy don&rsquo;t exist even in &lsquo;the Free State of Florida,&rsquo; at least not at the county level.
&ldquo;It will likely go down in defeat because there will be nonstop bleating, &lsquo;What about the children?!&rsquo; (Who are completely unaffected by the property tax proposal, but it helps to raise the hysteria). And veiled threats to increase county fees to make up the difference, despite state assurances that they will not allow the counties to do that.
&ldquo;Counties won&rsquo;t tighten their belts, they&rsquo;ll just raise fees to make up for any revenue loss. The public sector never has layoffs at the state or local levels. State and local governments always grow, but never shrink.
&ldquo;Sorry, I&rsquo;ve seen this cheerleading for tax cuts and seen time and again how our &lsquo;representatives&rsquo; and government administrators cannot ever be fiscally responsible; there just isn&rsquo;t sufficient accountability because of a complicit or braindead press, term limits on reformers, a purposely uninformed populace (see former statement about the press) and greed/kingdom-building mentality of the government managers who just wait out the term-limited reformers like DeSantis.
&ldquo;Hope springs eternal, but we are dealing with a society that is prone to mass hysteria. Remember Covid and Trump Derangement Syndrome.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;The tax reduction will only apply to homesteaded Florida residences, which only account for 7% of all taxes across the state, not 75%,&rdquo; says a second-generation Floridian.
&ldquo;Commercial, rental and business properties will not be included. I look forward to voting FOR this amendment on Nov. 3 and finally getting closer to actually owning my home.&rdquo;
Dave responds: Cursory research aided by AI shows primary residences account for about 27% of local property tax revenue in Florida, not 7% &mdash; but you raise an important point of clarification, and I thank you. I should have given that number from the Tax Foundation more scrutiny.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" />&ldquo;This is a great idea for seniors and those on fixed incomes, especially if they paid off their houses,&rdquo; says our final correspondent.
&ldquo;Development frenzy has doubled and tripled tax bases in some areas (like Tampa), but you have to understand those taxes don't pay for the community developments &mdash; bonds attached to property deeds do. So where does the tax money go?
&ldquo;It's a tough issue. I would personally benefit from this, but I can see where smaller, rural areas would be hurt and the tax shift would be real. Florida has no income tax, and most cities do not levy city tax, so all of a sudden we might see 15% sales tax in some areas. Where does my no-state-income tax benefit go if my other taxes go up so high?
&ldquo;You don't get somethin&rsquo; for nothin&rsquo;.&rdquo;
Dave: And on that note, you get the last word! Thanks to everyone who wrote in. More feedback tomorrow&hellip;

fmf hero 060826

The Problem With the SpaceX IPO

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Elon: Failure Is ALWAYS an Option
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s staggering to think about, but the last time a human being walked on the moon was&hellip; 1972.
It&rsquo;s not for lack of technology. &ldquo;It&rsquo;s mostly a matter of money,&rdquo; says Paradigm&rsquo;s macroeconomics maven Jim Rickards.&nbsp;
Democrats spent money on handouts; Republicans spent money on wars. There wasn&rsquo;t much left over.
But here in 2026, &ldquo;Space is back on the front burner in a big way,&rdquo; says Jim.
&ldquo;What&rsquo;s different this time is that the effort is being privatized. Specifically, the space race is turning into a classic public-private collaboration where private-sector players provide most of the capital and technology while the government offers generous contracts to carry out NASA missions and highly classified tasks for the Pentagon.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Of course, the leader in this effort is SpaceX &mdash; which starts trading publicly as SPCX one week from today.
Compared with some of our other experts at Paradigm, Jim has had relatively little to say in recent weeks about SpaceX. But make no mistake: He&rsquo;s blown away by what SpaceX and Elon Musk have achieved.
&ldquo;Of course, SpaceX is a rocket company that plans to build thousands of its giant Starship rockets with reusable booster rockets. By delivering larger payloads and reusing the boosters, Musk expects to lower the cost of putting a kilogram into space to $185. That&rsquo;s only 1% of the historic cost of getting a payload to space.
&ldquo;Large rockets and cheap payloads are just the beginning of Musk&rsquo;s goals. SpaceX also owns Musk&rsquo;s artificial intelligence company xAI and his space-to-Earth internet company Starlink &mdash; the only profitable part of SpaceX today.
&ldquo;Musk&rsquo;s plan is to use SpaceX to launch a million or more power plants into space. These can run on &lsquo;free&rsquo; solar power 24/7. That power can then support a million space-based data centers, which can run the xAI applications more cheaply than Earth-based data centers.
&ldquo;The combination of cheap payloads, free energy, massive computing power, space-based internet and sheer scale could make Musk a monopolist of AI, energy and the internet.&nbsp;
&ldquo;Everyone else from Google to Anthropic and OpenAI would have to pay rent to Musk to tap into his energy-data nexus.
&ldquo;Of course, a lot could go wrong, but that&rsquo;s all in a day&rsquo;s work for Musk. He solves new problems with the same engineering prowess that he has used to get where he is today. Musk's view is that anything is possible as long as you don&rsquo;t defy the laws of physics.&rdquo;
And yes, things do go wrong. Like when Starship &mdash; a $100 million rocket the size of a skyscraper &mdash; exploded over the Indian Ocean two weeks ago today.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But that&rsquo;s all part of the process. &ldquo;Failure, correctly understood, is a buy signal,&rdquo; says Paradigm AI authority James Altucher &mdash; who&rsquo;s had a lot to tell his subscribers about SPCX in recent weeks.
&ldquo;Elon Musk has been mocked, shorted and written off more times than most people have tried anything serious.
&ldquo;Tesla nearly went bankrupt. He's been through congressional hearings and the kind of public humiliation that would have finished most people.
&ldquo;He's also the richest person on Earth.&rdquo;
As Musk is fond of saying, &ldquo;If things are not failing, you are not innovating enough.&rdquo;
With that in mind, &ldquo;SpaceX doesn't treat a failed launch as a setback,&rdquo; says James. &ldquo;It treats it as data.&nbsp;
&ldquo;You launch, you fail, you learn, you launch again faster than anyone thought possible.&nbsp;
&ldquo;Every Starship test since 2023 has destroyed hardware. And every one of those destroyed rockets has pushed the engineering closer to something genuinely historic: bringing launch costs from $18,500 per kilogram &mdash; where they sat for decades &mdash; down toward a number that would have sounded like science fiction five years ago.
&ldquo;When the prize is that large, markets stop grading on perfection. They start grading on progress. And every failed attempt is evidence that progress is happening.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Which is why SpaceX can get away with bucking Wall Street tradition &mdash; as it did on Wednesday.
SPCX set a price for its shares more than a week before its planned listing &mdash; $135 each. The way it usually works with an IPO is the company sets a range and then adjusts it after a few days of meetings with investors.
Elon Musk is essentially saying, &ldquo;$135 &mdash; take it or leave it.&rdquo;
The brightest minds at Paradigm &mdash; Jim Rickards, James Altucher, Enrique Abeyta &mdash; agree that you should leave it.&nbsp;
SPCX is a fantastic company &mdash; but it&rsquo;s too richly valued. At $135 a share, the big payoff might not come for several years.
Besides, Jim and James and Enrique have pinpointed an early-stage investment tied to the growth of SpaceX with much more upside potential, and a much quicker payoff. They believe it could skyrocket as much as 3,000% in the next two&ndash;three years.
With that in mind, we&rsquo;re convening an event featuring all three of these experts. We&rsquo;re calling it The SpaceX SuperIPO Summit &mdash; and it&rsquo;s set for next Tuesday at 1:00 p.m. EDT.
At this exclusive online briefing, they will&hellip;
<ul>
<li>Reveal how this SuperIPO is part of Elon Musk&rsquo;s plan to unlock an entirely new multitrillion-dollar industry around a NEW type of artificial intelligence that has been called &ldquo;the final frontier&rdquo; of the AI revolution</li>
</ul>
<ul>
<li>Discuss a NEW pre-IPO buy alert that could jump 30 times higher in the next 2&ndash;3 years&hellip; starting as soon as SpaceX goes public</li>
</ul>
<ul>
<li>Reveal a big piece of the SuperIPO puzzle everyone is missing&hellip; and that could help Elon Musk unlock 700 times more wealth than the IPO itself&nbsp;</li>
</ul>
<ul>
<li>Give you a chance to win an $8,000 Speedmaster Moonwatch Professional&hellip; the only watch NASA has ever officially certified for space missions</li>
</ul>
<ul>
<li>Give you a FREE gift just for joining. You&rsquo;ll also get a list of SEVEN space-related stocks that they believe could skyrocket along with the IPO&hellip; completely free of charge.</li>
</ul>
And much more. Again, the SpaceX SuperIPO Summit is set for next Tuesday at 1:00 p.m. EDT. <a href="https://signups.paradigm-press.info/2526337">Click here to save your seat.</a>
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Money Miscellany
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> While sky-high semiconductor stocks slipped yesterday, the medium-term outlook for the broad market remains strong.
&ldquo;The S&amp;P 500 has now traded more than 5% above its 50-day moving average for at least one month,&rdquo; says Paradigm trading pro Enrique Abeyta.&nbsp;
According to Bespoke Investment Group, that&rsquo;s happened 21 times in records going back to 1952. &ldquo;In all but one,&rdquo; Enrique tells us, &ldquo;the stock market was higher one year later!&rdquo;
That data lines up with Enrique&rsquo;s thesis that while the AI boom has parallels to the dot-com boom in the late 1990s, it is not yet that &ldquo;1999 moment&rdquo; when everything is about to fall apart.
&ldquo;Here is a chart,&rdquo; he submits, &ldquo;showing the number of the Nasdaq-100 (QQQ) members that are up at least 400% over the previous 12 months.&nbsp;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3nKSjd6vwQ4qFBY4lQhg6j/30766c3aa081abe27a1d73c72d401b20/FMF-Issue-060526-1.png" alt="Extreme Nasdaq winner" width="540px" />
&ldquo;We recently went to a high (six) that we have not seen since 2000.&nbsp;
&ldquo;Back in 2000? Twenty-two (!) of the components were up 400% or more. Think about that! Almost one in four stocks in the QQQ was a four-bagger over the previous year&hellip; wow.&nbsp;
&ldquo;THAT was a BUBBLE. Maybe we get there&hellip;&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Milestone: When it comes to the reserves maintained by the world&rsquo;s central banks, gold has just taken over U.S. Treasuries as the world&rsquo;s top asset.
A report from the European Central Bank says at year-end 2025, bullion accounted for 27% of global central bank reserve assets &mdash; up from 20% in 2024.
<a id="3"></a>In contrast, Treasuries fell from 25% to 22%.&nbsp;
Chalk it up to two factors: 1) The <a href="https://paradigmpressroom.com/post/groundhog-day-iran-edition#2">relentless gold accumulation by central banks</a> ever since Washington froze the U.S. Treasuries held by Russia&rsquo;s central bank in 2022, and 2) The big jump in the gold price during 2025, from under $2,700 to over $4,400.
That said, dollar-denominated assets still make up the biggest chunk of global reserves at 42%. The world wants to get out from under the dollar&rsquo;s thumb &mdash; but as we&rsquo;ve been wont to say over the years, &ldquo;de-dollarization&rdquo; is a process, not an event.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Abolish Property Taxes? (Sort Of&hellip;)
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> It&rsquo;s not an outright abolition of property taxes&hellip; but for many Floridians it would come close.
On Tuesday, the Florida legislature passed a resolution to amend the state constitution, radically curbing property taxes. Now it goes before the voters Nov. 3.
The measure would phase in a homestead exemption starting at $150,000 next year &mdash; jumping to $250,000 in 2028. It would also authorize the legislature to abolish property taxes altogether if it so chose.
In principle, the idea is wonderful. In practice, the problem is the same as the one we chronicled in 2012 and 2024 when North Dakota voters were given a choice to eliminate property taxes. (Both referendums went down in flames.)&nbsp;
To wit, property taxes currently make up almost 75% of local tax revenue in the Sunshine State. How would counties and municipalities make up the difference?
&ldquo;This isn't tax relief; instead, it is a shift of the tax burden,&rdquo; write the analysts at the Tax Foundation.&nbsp;
&ldquo;The state would likely need steep sales tax hikes to compensate &mdash; our <a href="https://taxfoundation.org/research/all/state/property-tax-repeal-replace-revenue">prior analysis</a> found full property tax elimination could push the combined state-local sales tax rate to over 15%, the highest in the nation.&rdquo;
<a id="4"></a>
If you&rsquo;re a Florida reader, you&rsquo;re a lot closer to the debate than we are &mdash; and we&rsquo;re interested in hearing your take.&nbsp;
Shoot us a line at <a href="mailto:feedback@paradigmpressroom.com">feedback@paradigmpressroom.com</a> and we&rsquo;ll share your input next week.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />First They Came for the Illegals&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> I know I&rsquo;m going to catch a lot of flak for what follows here. I don&rsquo;t care: This isn&rsquo;t about immigration policy, it&rsquo;s about the rights you and I are born with.
This week &mdash; in a development overlooked by both legacy and alternative media &mdash; the president signed an executive order accompanied by this post on his Truth Social platform.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5uzMaJZmJZJvBtTULi6WXz/0d01d4dc20f17623956ff95425c40dfa/FMF-Issue-060526-2.png" alt="pub" width="540px" />
OK, I get the surface objective here: Seizing illegal migrants&rsquo; bank accounts will encourage them to &ldquo;self-deport&rdquo; and leave the country on their own.&nbsp;
➢ It was the same rationale behind the now-abandoned <a href="https://paradigmpressroom.com/post/your-bank-wants-your-passport">proposal</a> that would have required you to present a passport or birth certificate to open a new bank account or even keep your current one.
But where&rsquo;s the due process?&nbsp;
As Judge Andrew Napolitano reminded us in his syndicated column a few days ago, &ldquo;The Fourth Amendment protects all persons in America &mdash; not just Americans &mdash; from warrantless searches and seizures of their &lsquo;persons, houses, papers, and effects&rsquo;.&rdquo;
Yes, compared with seizing bank accounts it&rsquo;s harder to physically track down and remove people in the country illegally.&nbsp;
Too bad. The Constitution&rsquo;s language is plain. The Framers recognized that rights denied to noncitizens will sooner or later be denied to citizens as well &mdash; at which point we&rsquo;re no longer citizens but subjects.
This won&rsquo;t stop with illegal migrants: If the feds can seize their accounts on the pretext of being in the country without the proper papers, they can seize yours for some other pretext &mdash; whether under Trump or under a future Democratic president.
<a href="https://paradigmpressroom.com/post/deport-tucker-carlson">As we documented last year</a>, former Trump administration officials speak openly about &ldquo;debanking&rdquo; Tucker Carlson simply for engaging in what they see as &ldquo;hate speech.&rdquo;
Whatever your opinion about immigration policy, this is a slippery slope&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Comic Relief
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Going into the weekend, let&rsquo;s have a triple dose of good money-themed memes that made the rounds this week&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/65PpEtp6r4Zrmnu6s2xQLa/c9ce03ac94b4e47b904f907facefc16b/FMF-Issue-060526-3.png" alt="Benjamin Graham" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3jokRGwqWnDLg56M2E6Qdg/d73c0c10a452a698ea7b247b0bfd335b/FMF-Issue-060526-4.png" alt="Monopoly" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/69Ro5dH8PHJkEXVRAT1VrF/063018491dbea794a91289bc88931ceb/image1.png" alt="pub" width="540px" />

FMF-Issue-060526-Featured

Elon: Failure Is ALWAYS an Option

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Apple&rsquo;s &ldquo;Secret Supplier&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> People laughed in 2011 when our James Altucher forecast Apple would become a $1 trillion company.
At the time its market cap was barely a third of that total. The iPhone was already becoming a mature product. How could the company possibly triple in size from there?&nbsp;
But triple it did &mdash; reaching that lofty $1 trillion milestone on Aug. 2, 2018.
Here in 2026? AAPL is valued over $4.6 trillion.&nbsp;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;I think they&rsquo;re about to be the first $10 trillion company,&rdquo; James says now.&nbsp;
OK, James isn&rsquo;t sticking his neck out here the way he was 15 years ago. The company basically has to double to reach that target. Still impressive, though.
The catalyst for that growth, you ask?
Well, that comes back to what we covered here yesterday &mdash; the run-up to WWDC, Apple&rsquo;s annual Worldwide Developers Conference next week.
Apple is about to turn the AI world on its head in two ways&hellip;
<ul>
<li>It will make &ldquo;agentic AI&rdquo; simple and accessible. As colleague Chris Campbell described it last week in Altucher Confidential, AAPL is &ldquo;throwing its ecosystem open to AI agents that reach into your apps and actually do things&mdash;book the Uber, edit the photo, compare the prices&rdquo;</li>
</ul>
<ul>
<li>It will perform essential AI tasks on your device &mdash; doing the hard work with only minimal input from a distant data center. That meets the Apple standard of simplicity, elegance and privacy.</li>
</ul>
Of course, you can buy Apple shares and wait patiently for the price to double over the next few years.
Or you can achieve far bigger gains much sooner by investing in a &ldquo;secret supplier&rdquo; to Apple &mdash; a company without which Apple will never achieve its lofty AI ambitions.
Which is exactly what James Altucher has done in the past. Only last year, in fact, he recommended shares of BTQ Technologies &mdash; a tiny stock in Apple&rsquo;s ecosystem &mdash; to a special group of his readers.
Shares shot up 1,025% in six months.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/JJqeZqWAt9zywKb3tBn8A/1d03534334993c62100d0cf339d5fdaf/FMF-Issue-060326-1.png" alt="BTQ" width="540px" />
And it&rsquo;s about to happen all over again with Apple&rsquo;s big AI reveal next Monday at WWDC.
Only this time, James thinks the profit potential is much bigger. &ldquo;Over time, over the next handful of years,&rdquo; he says, &ldquo;I think shares could soar as high as 23,519%. That&rsquo;s enough to turn $10,000 into $2.3 million.&rdquo; (How does he come up with such an exact figure? <a href="https://pro.paradigm-press.info/m/2526048">Watch here</a>.)
As mentioned yesterday, subscribers to James&rsquo; Microcap Millionaire service already know what company he&rsquo;s talking about. And they&rsquo;re scooping up shares &mdash; positioned for maximum profit once this company&rsquo;s identity becomes something &ldquo;everyone knows&rdquo; next week.
There&rsquo;s still time to act ahead of the keynote at WWDC next Monday. <a href="https://pro.paradigm-press.info/m/2526048">Click here and James will walk you through the urgent details</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Labor Day?!
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. oil futures are over $95 for the first time in nearly two weeks as it becomes evident that global oil flows won&rsquo;t normalize anytime soon.
In fact, Donald Trump himself acknowledged as much this morning in a rambling Truth Social post. He said the U.S. Navy blockade of Iranian ports might be lifted by&hellip; Labor Day.
As we&rsquo;ve tried to emphasize in these daily missives, the world doesn&rsquo;t have anywhere near that much time.&nbsp;
Even the legacy media are acknowledging as much now. Here&rsquo;s a Bloomberg chart&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6wXXHabi8O4I54E0aSYEjA/1da04ed4326ab74257ada6e39cdc6649/FMF-Issue-060326-2.png" alt="World Oil Inventories" width="540px" />
The U.S. situation is better than the world situation, but that&rsquo;s not saying much. &ldquo;Based on current trends,&rdquo; tweets SoFi chief market strategist Liz Thomas, &ldquo;the Strategic Petroleum Reserve would reach operational minimum levels around August.&rdquo;
Later today the Energy Department releases its weekly U.S. inventory figures. GasBuddy&rsquo;s Patrick De Haan says inventories of distillates (diesel, jet fuel) will likely sit at 20-year lows.
California &mdash; whose plight we&rsquo;ve chronicled now and then in recent weeks &mdash; is on track to hit &ldquo;tank bottoms&rdquo; for diesel and jet fuel by July 4. As one wag says on X, &ldquo;California is going to be a fun place to be on America&rsquo;s 250th birthday.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Speaking of America&rsquo;s 250th birthday, here&rsquo;s one more reminder that our &ldquo;America 76/26&rdquo; event headlined by Jim Rickards is coming tomorrow.
It will come to you live from Philadelphia, a short distance from Independence Hall.
The fuel situation will surely be at the top of the agenda &mdash; along with the economic &ldquo;stagflation&rdquo; reminiscent of the 1970s. Jim and crew will also tackle precious metals, the rest of the commodity complex and the defense sector.
&ldquo;We will share actionable STOCK PICKS throughout the event tied directly to these trends,&rdquo; Jim promises.&nbsp;
And we will not try to sell you on one of our premium advisories.&nbsp;
Our exclusive livestream gets underway tomorrow at 1:00 p.m. EDT. To see the full agenda, <a href="http://rickardslive.com">check out our special event page at RickardsLive.com</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Climbing the Wall of Worry
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Yes, the stock market is at all-time highs&hellip; and here&rsquo;s the most powerful indication that it&rsquo;s on track to move still higher.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6m4p6Q3Y6KtywhaIEq29ZN/80abdcc6031a3542d681be6644386859/FMF-Issue-060326-3.png" alt="CNBC" width="540px" />
The headline is totally factual. But the fact CNBC brings it up suggests that even after 3&frac12; years, this bull market is still climbing the proverbial &ldquo;wall of worry.&rdquo;
The fact you&rsquo;re seeing all manner of references to the 1999 dot-com bubble in the corporate media? Ironically, that suggests the market still has legs.
It&rsquo;s when the media stops fretting over a bubble that you should start to worry.&nbsp;
In late 1999 and early 2000, no one outside a handful of cranky contrarian newsletter editors thought the party would ever end.&nbsp;
But end it did in early 2000&hellip; and the Nasdaq ground down 78% by late 2002.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> For today, the bull is taking a breather.
All the major indexes are in the red as we write, but not much: The S&amp;P 500 is down a third of a percent, back below 7,600.
➢ Congratulations are in order for Greg Guenthner&rsquo;s Trading Desk readers &mdash; who rode the revival in software stocks to 365% gains yesterday playing call options on Zeta Global Holdings. Not bad for less than a week!
Rising oil prices are feeding through to rising inflation expectations and thus rising Treasury yields: The 30-year bond is once more knocking on the door of 5%.
Gold is sinking to its lowest since late March at $4,451. Silver is testing recent support at $73.56.
<a id="meanwhile"></a>
The relentless punishment of crypto continues: Bitcoin is below $67,000 for the first time in two months and Ethereum is down to $1,858.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Meanwhile, traders are still trying to make heads or tails of Donald Trump&rsquo;s latest executive order and its impact on the AI industry.
As we chronicled throughout the month of May, the Trump administration was revisiting its promise last year of a hands-off approach to AI regulation. An executive order was in the works, set to be signed with great fanfare on May 21.
But then the president nixed it at the last minute &mdash; concerned that it went too far and would hamstring the industry&rsquo;s ability to compete with Chinese AI.
Yesterday, amid zero fanfare, he signed an executive order that appears to be scaled down from the original.&nbsp;
In a way, it&rsquo;s a continuation of a Biden-era policy in which major AI firms share their models with the feds before they&rsquo;re released to the public.
It appears to be voluntary. The feds have a 30-day review period, down from an original 90-day proposal.
Venture capitalist David Sacks, previously the White House AI and crypto czar and an advocate of a hands-off approach, says he&rsquo;s pleased with the outcome: &ldquo;It allows our AI labs to comply with the voluntary framework without delaying new model releases.&rdquo;
Others aren&rsquo;t so sure: One former Trump AI adviser frets to The Wall Street Journal that the government is going down the slippery slope toward a scheme in which AI models will have to get a federal license before release. Ugh&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Sign of the Times
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> We present the following with no further comment&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5vKhUT30xLrR5wbnA8HKf6/eadc03a7288a31be840a04df21fed9a7/FMF-Issue-060326-4.png" alt="pub" width="540px" />
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Only 5 Bullets?
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> &ldquo;Thanks for the sidearm (even though it's not a six-shooter),&rdquo; says a note of praise from a new reader.
&ldquo;I really enjoyed the updates in the new briefing. I also appreciate that it is available for free to subscribers of one or more of your publications.
&ldquo;It is a great gesture that shows you care about your customers&mdash;a detail that is often overlooked by other sources.&rdquo;
Dave responds: You&rsquo;re too kind. And for any other newcomers who want to learn &ldquo;who we are and what we&rsquo;re all about,&rdquo; <a href="https://paradigmpressroom.com/post/who-we-are-and-what-were-all-about">there&rsquo;s this</a>.
Funny about the firearm reference: After this e-letter adopted its current name in 2022, a reader wrote in to say something to the effect of, &ldquo;Only 5 Bullets? What, you&rsquo;ve got California-level limits on magazines?&rdquo;

FMF-Issue-060326-Featured

Apple’s “Secret Supplier”

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />AI&rsquo;s iPhone Moment
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Next week is when Apple gets serious about AI. Or more to the point, next week is when Apple shows the world how serious it&rsquo;s been about AI for several years now.
You might think Apple is behind the curve. After all, Apple doesn&rsquo;t make BIG HONKING AI HEADLINES day after day the way that Nvidia, Microsoft and Google do.
But that&rsquo;s not the Apple way &mdash; as Paradigm AI authority James Altucher explained in this space two years ago.
&ldquo;Apple is taking a slower and more cautious approach to releasing customer-facing applications of AI,&rdquo; he said.
&ldquo;Apple has a history of waiting to optimize new technologies before releasing them to the market. Apple&rsquo;s slow delivery in the AI space would suggest the company believes today&rsquo;s AI technology does not meet its standards and that there's more innovation that can be squeezed out to produce the perfect product.&rdquo;
This has long been the Apple way: Let Sony screw up a digital music player&hellip; while Apple quietly perfects the iPod. Let BlackBerry and Palm make the early mistakes on a smartphone&hellip; while Apple refines the iPhone so it&rsquo;s a must-have item from Day 1.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And so it goes here. Apple&rsquo;s looking pretty smart right around now compared with the so-called hyperscalers like Microsoft and Google.
The hyperscalers are spending like mad on data centers &mdash; at a pace they&rsquo;ve never spent in their history.&nbsp;
To finance it, they&rsquo;re taking on gobs of new debt &mdash; and in the case of Google this week, issuing $80 billion in new shares.
Look at the growth trajectory posted on social media just this morning&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/guWUNLgfZjtVB9xSgWivr/57e7ca899e4edabab30198d212b05dd6/FMF-Issue-060226-1.png" alt="Trajectory" width="540px" />
Apple is taking an entirely different approach &mdash; AI on your device.
And the wraps finally come off next week during Apple&rsquo;s big annual WWDC event &mdash; the Worldwide Developers Conference.
It could be nothing less than the &ldquo;iPhone Moment&rdquo; for AI &mdash; you know, that day in 2007 when Steve Jobs unveiled the iPhone to the world.
What&rsquo;s in the works is something that Altucher Confidential readers have been hip to since late March &mdash; and that got mainstream confirmation last week from Bloomberg.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the one hand, it&rsquo;s tempting to call it a souped-up Siri &mdash; but that totally undersells the level of transformation.
Apple&rsquo;s aim is nothing less than to bring &ldquo;agentic AI&rdquo; to the masses.&nbsp;
In theory, AI agents are supposed to &mdash; for example &mdash; rebook your cancelled flight plus a rideshare plus a hotel and notify your family and work colleagues in less time than it takes you now to pull up your airline&rsquo;s app or walk to a help desk.
So far, it works better in theory than in practice. But Apple intends to make it real, and make it simple.
Again, Apple is biding its time to get everything right &mdash; and irresistible.&nbsp;
What&rsquo;s more, the hardware and computing power making it all possible? It won&rsquo;t reside in a distant data center. It&rsquo;ll be right there on your phone.
Of course, Apple can&rsquo;t pull off something this ambitious by itself&hellip; and James Altucher says he&rsquo;s found &ldquo;hard evidence that a small, $1 billion company is behind Apple&rsquo;s big push into AI.
&ldquo;This is not public knowledge. Neither Apple, nor this company, have confirmed this partnership. But I found the smoking gun.
&ldquo;It basically proves Apple is working with this company. And quite frankly, I think this has the makings of my next 1,000% winner.&rdquo;
James&rsquo; Microcap Millionaire readers are already clued in to the identity of this company. If you&rsquo;re not among them, <a href="https://pro.paradigm-press.info/m/2525964">you owe it to yourself to follow this link</a>. Because once everyone else figures it out during WWDC next Monday, it&rsquo;ll be too late to maximize the profit potential. <a href="https://pro.paradigm-press.info/m/2525964">Give it a look now</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />95 Days and Counting
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> U.S. oil futures sit at $92 this morning &mdash; giving up none of yesterday&rsquo;s monster gains.
As mentioned at the conclusion of yesterday&rsquo;s edition, Iranian leaders are fed up that Israel continues to bomb Lebanon &mdash; so they&rsquo;ve broken off their indirect talks with the United States.
Today is Day 95 of the war and Day 56 of a tenuous ceasefire.&nbsp;
&ldquo;When the war started on Feb. 28, President Trump said that it would be over quickly because of massive U.S. bombardment and the killing of practically all of Iran&rsquo;s religious, military and civilian leaders,&rdquo; says Paradigm macroeconomics authority Jim Rickards.
So as long as the stalemate drags on, &ldquo;It appears that Trump is engaged in a protracted propaganda effort. He's trying to prop up support for the war among the American people and in Congress. He&rsquo;s trying to keep the negotiations alive by combining his happy talk with threats to resume large-scale attacks on Iran if they don&rsquo;t make his claims come true.
&ldquo;Most of all, Trump seems to be trying to boost the stock market and lower gasoline prices by painting a picture of a world where the war is over soon.&rdquo;
But after 95 days, Jim says bluntly that &ldquo;the Trump show is getting old. He&rsquo;s losing credibility. Markets may soon reprice for the reality, which is a far cry from Trump&rsquo;s claims.&nbsp;
&ldquo;Investors are not ready for this. They should be.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Program note: We&rsquo;re less than 48 hours away from a special LIVE and FREE briefing that Jim Rickards and his team are hosting ahead of the nation&rsquo;s 250th birthday.
They&rsquo;ll gather not far from Independence Hall in Philadelphia on Thursday at 1:00 p.m. EDT.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6zCEpq1P3crt8ykJOlZHbn/dc65b692af8cbb50e3e2a79e413be05c/FMF-Issue-060226-2.png" alt="pub" width="540px" />
&ldquo;The headlines are moving fast,&rdquo; says Jim &mdash; &ldquo;but underneath the surface, far bigger forces are beginning to collide.&rdquo;
Among the topics on the agenda&hellip;
<ul>
<li>Inflation and its impact on Americans</li>
<li>Energy markets and the Strait of Hormuz crisis</li>
<li>Gold, commodities and hard assets</li>
<li>America First policies and resource independence</li>
<li>Key sectors and investment themes we believe could outperform ahead.</li>
</ul>
Yes, there will be names and ticker symbols &mdash; so make sure you can take notes.&nbsp;
And no, we won&rsquo;t try to sell you anything &mdash; so you don&rsquo;t have to keep your wallet handy.
<a id="3"></a>
You can check out the full agenda and reserve your spot <a href="http://rickardslive.com/">when you click here on our special event page</a>.&nbsp;
And now back to the Persian Gulf for Bullet No. 3&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Barnacleypse Now
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Even if the Strait of Hormuz reopens tomorrow, it will take months to unsnarl global supply chains &mdash; a process that will include cleaning barnacles off oil tankers and cargo ships.
Yes, barnacles.
&ldquo;Who knew that mooring your tanker or cargo ship idle in the warm Persian Gulf for three months could encourage growth of&hellip; barnacles?&rdquo; says Paradigm oil expert (and 30-year Navy veteran) Byron King.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/cWZF3PKyLWnEXnfQm6sna/2caa2315531c2b30d2bb0f1a7c08c41a/FMF-Issue-060226-3.png" alt="Barnacles" width="350px" /> And that&rsquo;s just the propeller, not the hull&hellip; [Photo posted by the shipping-data firm Marhelm on X]
&ldquo;And now it dawns upon shippers everywhere that we have hundreds of vessels unfit to sail because their hulls are fouled. Worse, even the propellers are encrusted. And no ship is going anywhere with this kind of crud on the propulsive mechanisms.&rdquo;
Or if they can, by one estimate their fuel economy is cut by 40&ndash;80%.
&ldquo;Seriously,&rdquo; Byron goes on, &ldquo;this is not a minor issue; there's no quick-fix solution because hull cleaning requires (not cheap) drydocking, and/or well-trained diving teams with specific kinds of mechanical equipment. It's not free, not by any means.
&ldquo;And then we have the &lsquo;environmental&rsquo; angle, which mandates hull-cleaning permits because this stuff is gunky and the residue must go somewhere... even in the Middle East.&nbsp;
&ldquo;Point is... &lsquo;reopening&rsquo; the Gulf via the Strait of Hormuz is not a simple task. There's no such thing as just &lsquo;turning the key,&rsquo; cranking up the ship and sailing oil, LNG and other cargos through the passageway and out onto the high seas.&rdquo;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> But barnacles are the furthest thing from Mr. Market&rsquo;s mind on this Tuesday.
All the major U.S. stock indexes are in the green and in record territory, the S&amp;P 500 now over 7,600. The big buzzy story of the day is Claude maker Anthropic filing its plans to go public. No date is set yet but it will be the second mega-IPO of the year after SpaceX and before OpenAI.
The Paradigm editors have racked up a string of winners for their readers in the last 24 hours&hellip;
<ul>
<li>101% on Unity Software calls in Altucher&rsquo;s True Alpha</li>
</ul>
<ul>
<li>20% on a leveraged Microsoft ETF and 30% on Atlassian shares in Enrique Abeyta&rsquo;s The Maverick&hellip; plus nearly 100% gains in a week on Atlassian call options</li>
</ul>
<ul>
<li>328% on Rivian calls and 700% on Apple calls in Chris Cimorelli&rsquo;s 10X Trade Club&hellip; plus a clean 10X on Virgin Galactic calls</li>
</ul>
Gold is back above $4,500, if barely. But silver is up over a buck to $75.80
Crypto is getting beaten with an ugly stick &mdash; Bitcoin approaching three-month lows just over $67,000 and Ethereum clinging to the $1,900 level.
&ldquo;No one cares about crypto right now,&rdquo; observes colleague Greg Guenthner at The Trading Desk. &ldquo;They&rsquo;re too busy making money in the memory names. We&rsquo;d be wasting our time trying to pick bottoms in these out-of-favor groups like crypto. Sure, I think they&rsquo;ll bounce eventually. But right now, the hot money is elsewhere.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Financial Follies
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> And now for a case of mistaken identity&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4ulXelVGLkvsSELXvnDrmy/57c86bd0a8521039b2f012a7de92c931/FMF-Issue-060226-4.png" alt="pub" width="540px" />
Yep, Richard Branson&rsquo;s Virgin Galactic (SPCE) has rallied hard in recent weeks &mdash; in large part because &ldquo;investors&rdquo; who don&rsquo;t know any better are plowing money into it thinking they&rsquo;re buying shares of Elon Musk&rsquo;s SpaceX (SPCX).
Of course, SPCX doesn&rsquo;t go public for another 10 days.
<ul>
<ul>➢</ul>
</ul>
Note well 
<ul>
<ul>what we mentioned a few moments ago &mdash; the 1,000% gains on SPCE call options in our</ul>
</ul>
10X Trade Club
<ul>
<ul>service. Chris Cimorelli had a solid fundamental case for SPCE back in April &mdash; but once in a while it&rsquo;s better to be lucky than good!</ul>
</ul>
The tweet above implies this is the first time anything like this has happened. Hardly.&nbsp;
Deep in our voluminous archives is an episode from 2013 in which Twitter was about to go public as TWTR &mdash; and people who didn&rsquo;t know any better bid up the shares of Tweeter, a bankrupt electronics retailer trading as TWTRQ.
And in 2021 we <a href="https://5minforecast.com/2021/02/12/blooper-trades/">drew your attention</a> to academic research demonstrating these &ldquo;blooper trades&rdquo; happen way more often than you might think.&nbsp;
What&rsquo;s more, it seems a lot of them surround Elon Musk, go figure&hellip;
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> Before we move on, a quick 5 Bullets follow-up: Amazon has abandoned its internal leaderboard tracking employees&rsquo; use of AI tools.
Last week we told you how Amazon employees are <a href="https://paradigmpressroom.com/post/the-yamanaka-secret/#4">&ldquo;running up the score&rdquo;</a> when it comes to AI agents. That is, they&rsquo;re automating useless tasks just to consume AI tokens &mdash; because Amazon was tracking token consumption on internal leaderboards.
Whelp, the leaderboard is no more.
&ldquo;Please don&rsquo;t use AI just for the sake of using AI,&rdquo; says a memo from senior VP Dave Treadwell.
&ldquo;The move highlights how tech groups&rsquo; efforts to encourage the use of AI can lead workers to try to game performance measures with pointless activity,&rdquo; says the Financial Times &mdash; &ldquo;increasing infrastructure expenses.&rdquo;
You mean, the &ldquo;compute&rdquo; from data centers isn&rsquo;t an infinite resource? Say it ain&rsquo;t so!
Which nicely tees up today&rsquo;s mailbag&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: AI Data Center Backlash
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> On the subject of AI and electricity &mdash; <a href="https://paradigmpressroom.com/post/backlash-data-centers">and the growing backlash to AI data centers</a> &mdash; a reader writes&hellip;
&ldquo;The energy solution is simple. If you build an AI center you mandatorily have to build an energy source to operate it. No plugging into the grid.&rdquo;
Dave responds: To some extent this is what&rsquo;s already happening out of necessity &mdash; to wit, the natural gas turbines running the Colossus plant in Memphis owned by SpaceX&rsquo;s xAI division. Or Microsoft&rsquo;s deal with Constellation Energy to restart the undamaged reactor at Three Mile Island in Pennsylvania, which was shuttered in 2019.
<img class="intrinsic" style="float: left; display: block;" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" align="left" /> In a related and unarguably positive development&hellip; Ohio Gov. Mike DeWine has ordered a pause to the sales tax break that data centers get in the Buckeye state.
When a sales tax exemption was first extended to data centers, the thinking was that the economic growth generated by data centers would be so massive that it would dwarf the $136 million in revenue the state would give up.
But that original $136 million estimate for 2025 turned out to be&hellip; $1.5 billion.&nbsp;
(Gee, the state&rsquo;s bean counters were off by only an order of magnitude&hellip;)
&ldquo;The numbers have triggered a firestorm inside the Ohio Statehouse,&rdquo; says the Cleveland Plain-Dealer, &ldquo;as lawmakers from both parties demanded answers about how the estimates ended up so dramatically wrong.&rdquo;
With any luck, state leaders elsewhere will take Ohio&rsquo;s cue and stop giving tax breaks and other special favors to the industry. Data centers must compete on the proverbial level playing field.