Gold vs. Bitcoin?
Gold or Bitcoin?
It was a remarkable event in our firm’s history. For sure, our art department outdid itself…
In early 2018, we convened a debate over which was the better non-dollar asset — gold or Bitcoin.
Paradigm’s two heavyweight gurus faced off — Jim Rickards arguing for gold, James Altucher arguing for Bitcoin. Fox Business anchor Cheryl Casone served as referee.
Jim agreed to fight on enemy territory at James’ comedy club, Stand Up NY. Jim thought Bitcoin was useful only to money launderers and drug dealers. James thought gold was a useless shiny rock.
Jim emerged victorious by a split decision among the crowd.
Of course, in the interest of full disclosure, we’re compelled to chronicle what’s happened since.
On the day of the debate in January 2018, gold was testing a high it had last seen in late 2016, trading for $1,355.
Today, the bid is $3,336 — within reach of April’s all-time high, and a respectable 145% gain in seven and a half years.
Meanwhile in early 2018, Bitcoin was coming down hard from its late-2017 peak of $20,000. On the day of the debate, it was around $11,500 — a level that wouldn’t be revisited until early 2021!
Today? $109,654 — also within reach of a recent all-time high. It’s a stunning 850% gain — assuming you could stomach the volatility.
End of the story? Hardly…
The amount of change that’s taken place since January 2018 is staggering.
In 2022, central banks around the world lit a fire under gold when they started accumulating the Midas metal in record quantities — and they’re not done yet. In addition, gold emerged as the go-to asset earlier this spring when stocks and bonds sold off together (something that rarely happens).
Meanwhile, Bitcoin is nearing the peak of a reliable four-year cycle. Time to sell? Maybe not this time with the arrival of a crypto-friendly administration in Washington.
Amid this backdrop, we’re holding a rematch this year — on neutral territory.
After an election-year hiatus in 2024, the Paradigm Shift Summit is back by popular demand. And the marquee event will be an all-new face-off between Jim and James. Gold and Bitcoin. Mano a mano. No holds barred.
Our 2022 and 2023 gatherings in Las Vegas were a huge hit with your fellow readers. This time, we’re swapping Sin City for Music City: We’ll gather Thursday, Oct. 9 at the Renaissance Hotel in Nashville.
Will there be a livestream of the gold-Bitcoin debate, you ask? Afraid not. The only way to watch is to be in the room.
But there will be so much more than just the debate to make the trip worth your while.
We’ve beefed up the speaker list as we’ve beefed up our team the last couple of years. In addition to Jim and James, our existing favorites of…
- Tech and biotech specialist Ray Blanco…
- Mining and energy authority Byron King…
- Recovering investment banker and Rude Awakening editor Sean Ring…
- Income and value investing maven Zach Scheidt…
- and options pro Alan Knuckman…
Will be joined by…
- Hedge fund veteran and trading pro Enrique Abeyta
- Chart hound and Trading Desk editor Greg Guenthner
- Microcap specialist Chris Cimorelli
- and Mason Sexton, the sui generis editor of The Map.
I hope you can join me and the rest of our team in Nashville this October. If you want to learn more, here’s your formal invitation from our VP of publishing Doug Hill. No long video to watch.
Cross-Currents: Trade and Inflation
The two market-moving stories today are a renewed U.S.-China trade truce — assuming it exists — and the official May inflation numbers.
U.S. and Chinese negotiators wrapped up two days of talks in London yesterday.
At the end of those talks, the narrative that emerged is that tensions over China’s rare earth exports and other issues are over. The clock is being wound back to May 12, when an earlier round of negotiations ended with Washington imposing 30% tariffs on Chinese imports and Beijing imposing 10% tariffs on U.S. imports — a 90-day truce opening the door for more extensive negotiations.
Except that this morning, Donald Trump took to social media and said the tariff on U.S. goods from China is actually 55% — not 30%.
So what’s the deal? At this point, you know what we know.
Doesn’t do much to help businesses make long-term plans, does it?
Meanwhile, to hear the Labor Department tell it, the inflation rate is 2.4%.
That’s up from last month’s 2.3% reading… but it’s lower than the typical Wall Street economist’s expectation for 2.5%. As always, any resemblance to your own cost of living is purely coincidental.
Lower energy prices (down 3.5% year-over-year) were more than offset by higher shelter prices (up 3.9% year-over-year) and higher food prices.
None of this makes any difference for Federal Reserve policy: The Fed will once again leave short-term interest rates alone at its meeting next week, much to the consternation of the president.
Amid these cross-currents, the major U.S. stock averages are inching higher.
The S&P 500 is up another quarter-percent to 6,054 — only 90 points away from its record close in February.
We noted the gold and Bitcoin prices earlier. Silver is taking a rest, but still over $36.
Crude is screaming higher after the release of the Energy Department’s weekly inventory data — up $1.54 to $66.52, another level last seen in early April.
Taiwan: War Over Before It Began?
Now for a stunning development from overseas that Western media are only starting to pick up on: Four top members of Taiwan’s ruling party have been indicted for spying on behalf of mainland China.
Until Reuters picked up the story yesterday, Westerners knew about it only via the X feed of the well-traveled internet entrepreneur Arnaud Bertrand — an astute observer of the global scene who lived in mainland China for several years.
The accused include a one-time top aide to President Lai Ching-te and a top aide to the former foreign minister.
What makes this such a bombshell is that all four belong to the ruling Democratic Progressive Party — the anti-CCP faction that’s most in favor of declaring independence from the mainland. (For decades, Taiwan has claimed to be the legitimate government of the mainland — just as the mainland claims to be the legitimate government of Taiwan.)
The implications are mind-blowing, Bertrand writes: “It's safe to assume that every major Taiwanese defense plan, every diplomatic initiative, every presidential movement and every strategic assessment has been an open book to Beijing for the better part of a decade.”
Oh, as well as all communications between Taipei and Washington.
“The conclusion is devastating for Taiwan: China might have just achieved the ultimate expression of its own strategic doctrine - they have conquered Taiwan's strategy so completely that conquering by fighting becomes unnecessary.”
The good news for everyday Americans is that a shooting war between Washington and Beijing might well be off the table now. As your editor wrote two years ago, there’s nothing about the fate of Taiwan that’s worth the sacrifice of U.S. troops — much less risking nuclear war and the loss of Tampa or Tucson for the sake of saving Taipei.
Now if only Zelenskyy and Netanyahu would stop trying to drag America into their wars. (That is, more than is already the case…)
Consulting Is a Lucrative Grift
It’s good to be McKinsey & Co. — the bloated consultancy that over time has cursed us with everyone from Facebook’s Sheryl Sandberg to former Transportation Secretary Pete Buttigieg to Sen. Tom Cotton (R-Arkansas).
Case in point: McKinsey’s work for the media giant Warner Bros. Discovery. This week, the company announced it would spin off its cable channels like TBS and CNN into a separate company.
It’s the culmination of a three-year saga that went like this…
As the humorist Dave Barry often says, you can’t make this stuff up…
Mailbag: Caught in the Crossfire
After yesterday’s edition, one of our regulars saw fit to chime in…
“I appreciate that you look for genuine answers, Dave. So here is something to think about:
“Follow the money.
“Why are Trump and his cast of clowns manufacturing so many emergencies? Why the onerous tax regime of tariffs to fleece the working class? Why the taxpayer-funded propaganda on national TV? Why rush to eliminate the debt ceiling and push a multitrillion-dollar, deficit-blowing bill through Congress?
“Trump is burning through cash at a staggering rate. They are blowing up the checkbook as they blow up the country.
“Trump is used to living large, and he's got a whole stable of miscreants to pay. He certainly isn't going to pay them with the money he's collecting in bribes and tribute.
“Congress can't unshackle the public checkbook fast enough for Trump.
“Trump and his allies aren’t governing — they’re looting. This is a fire sale of the American republic. And it’s happening in plain sight.”
Dave responds: Always remember, Trump is first and foremost a result of the Establishment’s failures — not that the Establishment is capable of any introspection, of course.
The problem now is that normie Americans who don’t live and die by politics are caught in the crossfire of people who do live and die by politics. By now I’m getting a vague sense of what it must have been like to try living a normal life in South Central LA in the 1980s while the Crips and Bloods were fighting it out.
And as long as I brought up LA…
Notice how the administration is pursuing the route of performative confrontation… rather than actually addressing the immigration issue?
The independent reporter Lee Fang spotlighted this phenomenon a few weeks ago…
Consider the likeliest destinations of illegal migrants. Those without documentation tend to make up a significant portion of the workforce in construction, slaughterhouses, restaurants, hotels, janitorial work and gig delivery services. Yet businesses in these industries have reported few significant raids from U.S. Immigration and Customs Enforcement (ICE) agents. These pillars of the economy are virtually untouched by the supposed crackdown.
What’s more, despite ample laws that exist to prosecute employers for knowingly employing or recruiting illegal labor, Fortune 500 American executives have faced no scrutiny. You might expect the largest homebuilder in the country, KB Home, to have been bothered by ICE agents since the change in administration. But Robert McGibney, the company’s president, told investors on a recent call that “we’ve seen nothing at all related to immigration.”
See how it works? The Fortune 500 skates. Meanwhile, ICE descends on a small business in LA’s Fashion District, along with a Home Depot parking lot where migrants look for day jobs — and suddenly all hell breaks loose.
Trump gets his showdown with teh libruls… large employers of illegal migrants carry on as usual… and Palantir makes bank while law-abiding citizens will soon be subject to new horrors of surveillance.
Hopefully people wake up sooner rather than later. I’m doing my small part…
Best regards,
Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets
P.S. Remember my outlier scenario from January? The one about Trump abandoning his “no CBDC” campaign promise on the pretense that it would stop illegal migrants?
Starting to look a little more plausible now, no?
