Biden Concedes to Trump

State of the Taxes

It appears Joe Biden intends to roll out his tax plans for a second term during his State of the Union speech tonight. And those plans affirm everything you read here two weeks ago.

From a Financial Times preview: “The president will target billionaires and corporate America with sweeping tax rises as part of a plan to cut the U.S.’ record national debt and boost the president’s standing with voters ahead of November’s election.

“The proposals include an increase in the minimum corporate tax from 15% to 21%, as well as a 25% minimum tax for billionaires.

“The Biden administration also intends to deny companies tax deductions on employees who are paid more than $1 million. This is expected to raise more than $250 billion, according to senior administration officials.”

Forget the merits of the plan, or lack thereof. The point is that for all but the highest-income earners, the Trump tax cuts will be made permanent — no matter who wins in November.

Reminder: The tax cuts enacted in late 2017 are set to expire at the end of next year. As I wrote on Feb. 21… if Congress does nothing, marginal tax rates would rise for a huge swath of Americans — including everyone still lucky enough to belong to the middle class.

So if you’re currently in the 22% tax bracket — for couples, that’s taxable income between $89,451–190,750 — you’d end up back in the Obama-era 25% bracket. A couple with taxable income of $150,000 would have to fork over another $1,671 to Uncle Sam.

No one in the Beltway — on either side of the aisle — wants to own that.

Whoever wins the presidency, whoever gains control of Congress, they’ll move heaven and earth to avoid that outcome.

There might not be a deal until the last minute in December 2025 — but a deal will come. It did in 2012 — when the Dubya Bush tax cuts were on the verge of expiration. Instead, Barack Obama agreed to make those Bush-era rates permanent for all but the highest-income earners.

Anywho, that’s still nearly two years away. Biden is set to say something else tonight that could have a much more immediate impact — if you act ahead of the speech.

That was the point of the 24 Hour Countdown Summit last night — where Jim Rickards introduced one of his most trusted contacts, a former congressional insider.

Folks who watched this event learned about two words Biden is likely to utter — two words that could send three stocks skyrocketing.

Look, we’ve spent all week kvetching about how Beltway types line their pockets by leveraging inside information from Congress and the White House. Here’s a rare chance to turn the tables.

Thing is, you’ll want to take action before Biden delivers his speech. Which means, as a practical matter, you’ll want to take action before the market closes today.

Watch the replay of the summit with Jim and his insider contact right away at this link — you can always come back to the rest of our Bullets later.

Time To Shine? (Poor Man’s Gold)

The time might be near for silver to start playing catch-up with gold.

Gold continues to trade in record territory today at $2,153. But at $24.32, silver remains far, far away from its $50 all-time high notched in 1980 and again in 2011.

That said, your editor is seeing a lot of silver “chart porn” on X-formerly-Twitter this week. Here’s a look at silver’s action going back to 2020…

That’s not just a lot of social-media arm-waving, says Paradigm trading pro Greg Guenthner. “We’re overdue for a move like we saw back in summer 2020,” he says on our internal e-chat.

Gunner points out that since the last short-term bear market for precious metals — dating back to late 2021 — gold has appreciated by 17% while silver has actually slipped 2%.

“I'm thinking silver has some catching up to do in the weeks ahead assuming gold maintains its momentum,” he wrote his Trading Desk subscribers moments ago. “A $25 break should get some eyeballs on the poor man's precious metal.”

If gold can notch a new weekly record by day’s end tomorrow — $2,118 or higher — that could bode well for silver. So far, so good…

As for stocks, the major U.S. indexes are green across the board. The S&P 500 is up nearly 1% to record territory of 5,149. The Nasdaq’s gain is even stronger, the Dow’s weaker.

Elsewhere, crude continues to pull back from its brief foray above the $80 level — now $78.76. And if you’ve noticed, it’s not your imagination: At $3.39, the national average price for a gallon of unleaded gasoline has rebounded to last November’s levels — and for that matter, it’s only 2 cents less than a year ago.

Bitcoin? Still quiet, still a little below record levels at $67,279.

Blackout: The Mainstream Wakes Up (Sort Of)

Nearly two years after we started warning you about the stability of the U.S. power grid, corporate media are finally waking up.

“Vast swaths of the United States are at risk of running short of power,” says The Washington Post, “as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation’s creaking power grid.”

Of course, the Post is putting more than a little spin on the story — attributing the rising demand to AI and crypto mining, and fretting that the situation “threatens to stifle the transition to cleaner energy, as utility executives lobby to delay the retirement of fossil fuel plants and bring more online.” Oh noes…

Let’s see, here’s what’s missing from the WaPo story — all of which we’ve covered in these virtual pages at one time or another…

• There’s no mention of the fact that by some estimates, the grid’s capacity is no bigger now than it was in 2011 — despite the proliferation of data centers and electric vehicles

• There’s no mention of the fact that the new solar and wind capacity that’s come online in the last decade isn’t nearly enough to make up for the coal and nuclear plants that have been shuttered

• And there’s no mention of the possibility that Americans will be in for South African-style “load shedding” — planned blackouts to ensure the power grid won’t collapse altogether.

If you’re a newer reader, we reiterate our previous guidance: Become familiar with whoever operates your regional electric “interconnection”... and keep up with its activities via a Google News alert or something similar.

Your editor is among the 42 million people who live in the yellow middle part of North America served by “MISO.” Two summers ago, MISO warned that it was at "increased risk of temporary, controlled outages to preserve the integrity of the bulk electric system” during bouts of hot summer weather.

Furthermore, MISO warned that its capacity would continue to be constrained in 2023, 2024 and beyond. That was the kick-start your editor needed to finally buy a generator and have an electrician install a breaker interlock to keep essential loads running.

And it’s not just a summertime thing: The PJM interconnection stretching between metro Philly and metro Chicago very nearly resorted to load shedding during a Christmas Eve cold snap in 2022. The planned shutdown of a coal-fired power plant in Maryland next year won’t help matters.

Every May and November, the North American Electric Reliability Corporation updates its assessment of the power grid. Last May, it warned two-thirds of the country was vulnerable to summertime load-shedding; most of us got off lucky.

The corporate media usually ignore this report — but we’ll keep you in the loop.

Unfortunately, load-shedding might be one of the stories that defines your daily life as the Flaming Twenties roll on…

Crypto, the Fragrance

Yeah, so someone thought this was a good idea…

To coincide with International Women’s Day tomorrow — and to get more women interested in crypto as an asset class — the giant crypto exchange Binance is rolling out a perfume called, well, Crypto.

“I think the goal of this is to be irreverent, to be fun, to try to push boundaries,” says Binance chief marketing officer Rachel Conlan — who’s quick to add that “we had an all-female team that worked on this.”

As an understandably skeptical write-up at TechCrunch puts it, “You might guess that the ‘CRYPTO’ scent — which is also referred to as ‘Eau de Binance’ — would smell like the final day of a tense hackathon where no one has had time to take a shower. Or maybe it smells like Sam Bankman-Fried’s jail cell. But that’s the stereotype that Conlan is trying to work against to make the crypto space seem more inclusive.”

OK, OK, so what’s it smell like?

Says Binance’s description: “This fragrance opens with refreshing notes of ozone, salt and moss, evoking the essence of a crisp and invigorating breeze. The heart notes reveal a luxurious blend of oud, mandarin and precious woods, while the base notes of amber, woody and musk provide a warm, musky-sweet and earthy aroma, exuding sophistication.”

Laying it on a little thick there, no?

Crypto (the fragrance) isn’t actually available for sale. Only about 100 bottles were made for women to sample at a high-end mall in the Gulf monarchy of Bahrain — at which point those women will be hustled to sign up for a beginner course on Binance Academy.

The first 5,000 women to complete the course will be awarded… $25 worth of the stablecoin USDT. Who could possibly resist?

[Editor’s note: Because we have no ties to crypto exchanges like Binance or Coinbase, we can make a much more attractive crypto offer at this time.

Paradigm’s James Altucher recently identified his “No. 1 coin of 2024” — and you won’t have to pay a thing to see him name it during this presentation.]

Radio Regulators Gone Wild

“Speaking of copper thieves,” a reader writes after yesterday’s edition, “a 200-foot radio station tower in Alabama was stolen without a trace.

“Even if it’s nailed down, it can be taken!

“Keep up the good work!”

Dave responds: Yeah, and it took WJLX-AM in Jasper — population 14,572 — off the air. “The community has lost its sound and lost its voice,” general manager Brett Elmore told The Associated Press last month.

Elmore speculates the guy wire was cut, toppling the tower — making it easy to cut the tower up and haul away in pieces. “Some pretty simple tools you could get from Home Depot could cut this up in no time.”

The cops have no suspects… and Elmore has no insurance.

There’s an infuriating story in here about federal bureaucracy, too.

Like many small-town AM radio stations these days, WJLX has a low-power “translator” on FM. That way, folks within reach of the FM signal can listen to the station more clearly than they can on AM radios — which these days are subject to noisy interference from nearby electronics. (That’s why some automakers are trying to do away with AM radios in new cars.)

But under Federal Communications Commision regulations, if the AM station cannot transmit for one reason or another… the FM signal has to go off the air too. You can’t make this stuff up.

There’s a happy ending, though — courtesy of the otherwise soulless corporate giant iHeartRadio (formerly Clear Channel).

An iHeart executive heard about the story and came up with a workaround. He put WJLX’s signal on the digital HD subchannel of an iHeart station in Birmingham, about 40 miles away.

Very few people own HD-capable radios, but that’s not the point: Now that WJLX once again has a full-power “originating” station, it can broadcast locally on the FM translator and stay legal.

Take that, FCC busybodies!

Best regards,

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets