Apple’s $55 Billion War Chest

Apple’s $55 Billion War Chest

Another year, another Apple product rollout… and another collective yawn from the financial and tech media, always overlooking the real story.

Shortly after Labor Day is when Apple CEO Tim Cook presides over the company’s annual dog-and-pony show.

This year’s event is set for tomorrow at 1:00 p.m. EDT. The marquee announcement, to hear the mainstream tell it, is a newer, thinner “iPhone 17 Air” to go alongside the iPhone 17 and iPhone 17 Pro.

The media are underwhelmed: “Consumers are only upgrading when they feel new features are worth it,” says CNN — “and that’s happening less often now, according to market research firm Consumer Intelligence Research Partners…

“Apple hasn’t done a seismic iPhone X-style rethinking of its phones since, well, 2017’s iPhone X,” says Ars Technica.

“The rumor mill thinks that Apple is working on a foldable iPhone — and such a device would certainly benefit from years of investment in the iPad — but if it's coming, it probably won't be this year.”

Even the Apple-centric site MacRumors can’t exhibit much excitement: “The ‌iPhone 17 Air‌'s display will measure in at 6.6 inches, and there are rumors that all ‌iPhone 17‌ models could support 120Hz ProMotion refresh rates, meaning that would no longer be a feature only for the Pro models.”

In addition, CNN can’t resist taking a swipe at Apple’s perceived deficiencies when it comes to AI.

“Unlike Android rivals Samsung and Google, which have leaned into artificial intelligence on their smartphone software, Apple Intelligence is expected to take a back seat during Tuesday’s event, even as perceptions continue that the company lags in AI…

“Earlier this year, Apple delayed a high-profile update that would have enabled Siri to act across apps and answer questions about content on your phone’s screen. The feature would have brought Siri up to speed with more sophisticated AI agents like Google’s Gemini and OpenAI’s ChatGPT.”

What the mainstream is overlooking is the possibility — even the high probability — that Apple will move to leapfrog the competition with a strategic buyout.

“We’re very open to M&A [mergers and acquisitions] that accelerates our roadmap,” Cook said this summer.

And why not, with $55 billion in cash and cash equivalents on its balance sheet? And at a time the buyout market is hotter than at any time since the record-breaking year of 2021?

A buyout is what Paradigm’s James Altucher sees coming soon — even in conjunction with the iPhone announcement tomorrow. And he’s pinpointed one tiny AI company that’s the most likely candidate.

Subscribers to Altucher’s True Alpha are already clued in to this opportunity. If you’re not among them, you owe it to yourself to check out James’ latest presentation. Make sure you watch it now before Apple’s announcement tomorrow.

About Those “Weak” Job Numbers…

What if the August job numbers aren’t as weak as they seem?

As mentioned here Friday, the wonks at the Bureau of Labor Statistics conjured a measly 22,000 new jobs for the month. The July and June numbers were revised down.

Overall monthly job creation averaged 111,000 in the first quarter… 55,000 in the second quarter… and 51,000 so far in the third.

For a long time, we’ve mentioned that the country generally needs at least 150,000 new jobs a month to keep up with population growth — and more recently, it’s perhaps closer to 200,000.

But the U.S. border has been effectively closed since last spring — after an enormous influx of migrants, both legal and otherwise, going back to 2021.

As a result, researchers at both the American Enterprise Institute and the Peterson Institute have concluded the “breakeven rate” of monthly job growth is much lower now than in years gone by.

As Peterson economist Jed Kolko puts it, “The same monthly job gain that once signaled economic stagnation now indicates the economy is keeping pace with a much slower-growing workforce.”

But conventional wisdom hasn’t caught up to this new reality. Thus, the Federal Reserve sees a dramatically slowing job market and will likely respond by cutting interest rates later this month.

But what if it’s not actually necessary? And what if a rate cut winds up reigniting the fires of inflation instead?

Stay tuned…

Indeed, the rising odds of a Fed rate cut are giving gold a lift as a new week begins.

The bid is up $50 as we write, in record territory at $3,635. Silver’s looking solid too, back over $41. Congratulations are in order for Rickards’ Insider Intel readers who bagged 103% gains this morning playing call options on a major silver miner. A clean double in just one month — and that’s just the first half of the trade!

As for the stock market, the S&P 500 is flirting with record territory again, up over a third of a percent at last check and back over 6,500. The Dow’s gain is weaker, the Nasdaq’s stronger.

Crude has rallied over 1% to $62.60. Bitcoin is stuck in the mud under $113,000 while Ethereum is staging a mild rally at $4,377.

Bogus Solutions to the Baby Bust

The Heritage Foundation thinks it has the answer to declining fertility rates.

The U.S. fertility rate has hit historic lows — under 1.6 children per woman last year, according to new figures from the CDC. In general, 2.1 is considered the “replacement rate” that keeps the population level stable.

A few days ago, The Washington Post got its hands on a five-page draft summary of a policy paper that Heritage has in the works. It blames the baby bust on “free love, pornography, careerism, the Pill, abortion, same-sex relations and no-fault divorce,” while calling for a “Manhattan Project to restore the nuclear family.”

Among the solutions it’s recommending to the Trump administration…

• New government-seeded savings accounts for married people

• Redirecting child-care funding away from programs like Head Start and toward individual families

• An executive order requiring all proposed government policies and rules to “measure their positive or negative impacts on marriage and family.”

If this all sounds like government getting up in people’s business… well, it is.

One of the Post’s anonymous sources described an internal debate going into the document’s preparation. “That paper is not a compromise between the limited government folks and the big government folks. It is an outright steamrolling of the limited government folks.”

Heritage is glossing over the real problem — one your editor addressed head-on last year when JD Vance made news with his remarks about “childless cat ladies.”

The real problem is highlighted by a new and depressing Wall Street Journal-NORC survey…

• Only 25% of Americans believe they have “a good chance of improving their standard of living” — an all-time low in data going back to 1987

• Nearly 70% believe hard work does not translate to getting ahead — a low in 15 years of survey data

• And most revealing… Over 75% doubt that children today will live a better life than their parents.

If you don’t believe your kids will live a better life than you… well, that’s a powerful disincentive to have kids in the first place, right?

That problem doesn’t get solved by new government-funded savings accounts.

It gets solved only when a middle-class lifestyle becomes affordable once again, and on a single income.

That means, among other things, an end to the health care cartel and the higher-education racket.

But there are too many vested interests in those sectors — some of which undoubtedly stroke big checks to fund Heritage’s budget.

➢ Never forget: Its conservative reputation notwithstanding, Heritage is the outfit that came up with the "individual mandate” to buy health insurance — the cornerstone of Obamacare.

Comic Relief

On the subject of your ever-dwindling purchasing power…

On a more serious note, we've been having some internal discussions here at Paradigm Press this morning — expecting a resurgence in the inflation rate.

The official number has been stuck in a channel between 2.4% on the low side and 3% on the high side for more than a year.

Get ready for that number to climb back above 3%. More to come in the days and weeks ahead…

Backdoor to a CBDC?

“Stablecoins,” says the subject line of a pithy reader email, evidently arriving from abroad.

“I hear your government just signed into law your new currency attached to your debt and blockchain. Are you happy that the government can now see exactly what you spend your money on?”

Dave responds: I don’t think your concern is altogether misplaced.

On the campaign trail last year, Donald Trump took a firm stand against a CBDC, or central bank digital currency.

“Such a currency would give a federal government — our federal government — absolute control over your money,” he said on a campaign stop in New Hampshire. “They could take your money and you wouldn’t even know it’s gone.”

But as 2024 eased into 2025, I couldn’t shake the thought that stablecoins might serve as a backdoor CBDC.

The independent economist Martin Armstrong gave voice to my qualms over the summer, pointing to a provision in the now-law GENIUS Act. From the text of the legislation…

A permitted payment stablecoin issuer shall be treated as a financial institution [and]…shall be subject to all federal laws applicable to a financial institution located in the United States including… policies and procedures to block, freeze and reject specific or impermissible transactions that violate federal or state laws, rules or regulations…

“This provision,” writes Mr. Armstrong, “is not intended to protect the world against drug smugglers and thieves. This provision is intended to grant government unlimited control over how people spend stablecoins.”

Adds Bitcoin Magazine editor Mark Goodwin: “Stablecoins can be programmed. Exactly like how we fear CBDCs will be programmed. They’re exactly the same tokenized mechanism… They can be taken out of your wallet. Your wallet can be blacklisted. A lot of the things that we fear about CBDCs are totally available within the tool set of stablecoins.”

A small step toward that digital cattle pen comes at the end of this month — when the federal government will stop issuing paper checks for Social Security, tax refunds, payments to contractors — pretty much everything.

There’s been some protest, but to no avail: “From the elderly to the Amish, and from legal migrant workers to those who are simply skeptical of anything related to the federal government, there are people filing taxes, paying bills and collecting government checks without access to computers, much less bank accounts,” says a recent Washington Times story.

“The reasons are always the same,” Jim Rickards wrote his Strategic Intelligence readers last week — “convenience and cost.

“But the result is still a loss of privacy since checks are more difficult to monitor than electronic payments.”

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets