High NA EUV

Tech Turnaround Follow-Up

Time for an update on the potential for “one of the biggest turnarounds in tech history” — as Paradigm’s AI authority James Altucher billed it here in mid-March.

Back then, James was bullish about the prospects for Intel after the company named a new CEO.

The market was bullish, too — bidding up INTC’s share price from under $20 to over $26.

Since then, INTC has sold off; as we write this morning it’s pennies under $20 again.

The market’s enthusiasm has waned. But James’ has not.

“What if I told you America's fallen tech champion is about to unleash a secret weapon that could reshape the entire semiconductor industry?” he asks now.

The new CEO, Lip-Bu Tan, is wasting no time making his mark. “Tan is slashing bureaucracy across the company,” James tells us. “He's cutting unnecessary meetings. He's requiring employees to come into the office four days a week. He's eliminating layers of management.”

By itself, that won’t move the needle for the long term.

But this will…

“The real game-changer might be Intel's upcoming 18A chip manufacturing process,” James goes on.

“Unlike its competitors, Intel has purchased two of the most advanced chipmaking machines in the world. These ‘High NA EUV’ machines cost nearly $400 million each.”

Key point: Taiwan Semiconductor, the company that’s left INTC in the dust for years now, hasn’t made the same commitment yet.

“Several customers have already expressed interest in testing Intel's 18A process,” says James. “High-volume production is expected to begin later this year.”

That’s promising on its own merits, but get this: Tan recently met with leadership from Taiwan Semi. “The companies are exploring potential collaboration opportunities,” says James.

There were rumors before Tan came on board that the two companies were feeling each other out for opportunities to collaborate. Tan taking part in the discussions as the new CEO takes the possibility to a whole new level.

“A partnership between these rivals,” says James, “would be unprecedented.

“If Tan's strategy works, Intel could reclaim its throne in chip manufacturing. If it fails, Intel might never recover.”

But James is sticking to the forecast he shared here in March — INTC has profit potential of 200–400% in the next three–five years.

Echoes of COVID

There’s an eerie resemblance between the stock market’s action this year and during the COVID year of 2020.

It’s Paradigm chart hound Greg Guenthner who brought it to our attention: “Even the setups leading into the declines mirrored each other,” he says. “In both cases, the averages were overbought and the herd was looking for a reason to take profits.

“Then, a big news event sent the public into a frenzy (spiking COVID cases and lockdowns vs. aggressive tariff negotiations).

“The markets cratered, and investors experienced sharp declines lasting several weeks, followed by a recovery taking the averages back to the scene of the crime — the area where the breakdown initially accelerated.”

To illustrate, Greg shows both drops in a single chart. This is the SPDR S&P 500 Index ETF (SPY)...

True, the COVID crash was much steeper than the 2025 correction. But several similarities remain.

“Five years ago,” Greg reminds us, “SPY snapped back to 300 and consolidated, then managed to push to new highs by late June.

“This time around, SPY has snapped back to a similar area of resistance, this time near 550. Note how this level is also where the initial drop from the highs bounced, then failed during the correction.”

For the moment, the market is moving on from tariff news. “We’re just not seeing huge price moves accompanying every single bit of tariff speculation hitting the wire.”

Here too, there’s a 2020 echo: Once the initial shock wore off and governments stepped in with “stimulus,” it was up, up and away.

If the past is prologue, “we would see new highs before the end of the third quarter.”

For the moment, however, the market continues to take a rest after last week’s big run-up. At last check the S&P 500 is down 0.4% on the day at 5,627.

If it’s excitement you’re looking for, it’s in the commodities space. For no obvious reason, oil is rebounding big-time from yesterday’s dramatic sell-off — up nearly $2.50 as we write to $59.60.

Meanwhile, gold continues to soar — up another $61 today and only five bucks away from $3,400. And silver is keeping pace, up over 2% and back above $33.

Bitcoin continues to consolidate a little over $94,000.

The Fed Is Behind the Curve

The Federal Reserve is adrift — for reasons that have nothing to do with Donald Trump haranguing Fed chair Jerome Powell to lower short-term interest rates.

The Fed has begun one of its periodic two-day meetings. Barring an out-of-nowhere shock, the Fed will announce at the conclusion tomorrow that the benchmark fed funds rate will remain unchanged at 4.5%. That’s where the rate’s been set since last December.

For the moment, the Fed is still more concerned about lingering inflation than it is about the potential for rising unemployment.

“The Fed operates under what is called the dual mandate,” says Paradigm’s macro maven Jim Rickards. “This was created by the Humphrey-Hawkins Full Employment Act of 1978. This act requires the Fed to pursue policies that promote both price stability and low unemployment.

“The idea is that if unemployment is high, it’s expected that inflation will be low so the Fed can use ‘stimulus’ in the form of rate cuts to help create jobs without having to worry about inflation. Conversely, if unemployment is low, inflation may be on the rise so the Fed could use rate hikes to cool down the inflation without having to worry about the labor market.

“The trade-off between unemployment and inflation sounds neat and tidy but it’s nonsense,” Jim goes on. “There is no trade-off.

“The early 1980s were a period of high unemployment and high inflation. The 2010s were a period of low unemployment and low inflation. The 1960s were a period of low unemployment and rising inflation. Today is a period of rising unemployment and rising inflation, although both are starting from low levels. There are an unlimited number of possible combinations of low and high.

“The point is there is no correlation. Each metric goes its own way due to a variety of factors. Neither metric is dominated by the other.

“This means that the dual mandate can be impossible to pursue much of the time. In turn, the Fed has to choose to address one part of the mandate or the other knowing it cannot address both. This process of prioritizing between two bad choices is where the Fed is today.”

Jim says if the Fed had any sense, it would take its cue from market-based interest rates such as the yield on a 1-month Treasury bill — currently 4.305%. The yield fell sharply late last year, suggesting an oncoming recession. And yet the Fed keeps the fed funds rate at a higher 4.5%.

“As always,” Jim laments, “the Fed is behind the curve.”

War on Cash Update, U.K. Edition

And now for an intriguing development in the war on cash…

“Uber is now allowing passengers across most of the U.K. to pay in cash,” reports the BBC.

The company did a test run in four cities over the last 18 months. It was so well-received it’s being rolled out nationwide — except in London.

That said, “Individual drivers can still opt out of accepting notes and coins, partly if they are worried about safety of carrying them in their vehicles.”

We took note in 2022 when more and more people across the pond were turning to cash as a means of budget discipline during lean times.

“People will be taking out cash and physically putting it into pots, saying ‘this is what I have for bills, this is what I have for food and this is what’s left’,” said Natalie Ceeney of a pro-cash organization called Cash Action Group.

Only last week, a parliamentary committee delivered a major report on the use of cash. It expressed concern for the well-being of people who still rely on it — not just the budget-minded but also, for instance, people with learning disabilities and victims of domestic abuse who don’t want to be electronically tracked by their partners.

The committee stopped short of recommending that cash acceptance by businesses be made mandatory — but if more companies like Uber get the message, it won’t take the heavy hand of government to keep cash viable.

What a turnaround from two or three years ago — when we were sounding the alarm about the end of cash and the advent of central bank digital currencies, both in the United States and elsewhere.

Not that we should ever let our guard down. I spun an outlier scenario in January under which Donald Trump might be tempted to go back on his promise that he’d never allow an American CBDC.

“Supply Chains and Stocking Up”

The title of today’s Bullet No. 5 is also the subject line of a reader’s email…

“Hi Dave — Over the years you have frequently given excellent advice re what sorts of items one might wish to stock up on under different circumstances - possible grid failure, financial collapse, COVID...

“I am curious if anyone is talking about what items are likely to become in short supply if the tariffs stay in effect and the supply chain issues become intractable. I have heard, for instance, that pharmaceuticals are largely imported from China. On the other hand, I would imagine that American companies manufacture plenty of TP (recall the run on this item in the early COVID days).

“My point being that, I would guess, a different set of items is likely to become scarce or prohibitively expensive if the current trade policy continues...

“Thanks for all you do!”

Dave responds: I didn’t realize this e-letter was so useful that way. Certainly not by design!

The problem in this instance is that “no one knows what is going to happen to U.S.-China trade,” writes Molson Hart.

We introduced you to Mr. Hart on Friday. He runs Viahart, a Texas-based maker of educational toys. Like many entrepreneurs, he’s dealing firsthand with the day-to-day uncertainty.

In a lengthy post on X over the weekend, he shared the following flowchart to illustrate the many unknowns of the present moment. When thinking about any given product, he says you should start with the question at the top and go from there…

The entire post is worth a read because it’s replete with examples of specific goods. And those consequences are in both China and the United States, he hastens to add.

“We know that there's going to be a mess,” he says. “But we don't know how it will affect us and how the people of each country will react.”

It’s still astonishing to me that none of this has made it to the front page of The Wall Street Journal.

But that’s what alternative and “decentralized” media are there for. Rest assured we’ll stay on top of the story for as long as it lasts…