It’s Not Just the Illegals

It’s Not Just the Illegals

The following meme I saw a while back comes to mind as I try to make sense of events in recent days…

(To be clear, that’s not actually a line from The Big Lebowski. At least not that I recall…)

Let’s rewind to last week. As we chronicled in Friday’s edition, everyday conservatives were learning for the first time about the extensive surveillance powers of Palantir Technologies (PLTR) — and the company’s ties to the deep state. Two decades ago, the feds effectively outsourced illegal spying to Palantir — on the theory that there are no constitutional issues if a private company does it and then turns over the data to the feds.

The gathering outrage was such that Palantir CEO Alex Karp went on CNBC last Thursday to defend his company. The interview was a disaster — torched by right and left alike. PLTR shares tanked 7.8% that day.

The very next day, the trouble in Los Angeles started breaking out — and conservative “influencers” like Laura Loomer soon went to work.

For Loomer in particular, it was quite the heel turn. Check this out from two years ago, Loomer calling out Palantir and its “Gotham” tool — as well as both Karp and Palantir chairman Peter Thiel…

As one observer on X pointed out, “MAGA spent years railing against surveillance states and big-data tyranny. Now it wants to deploy Palantir on U.S. soil.”

By the end of yesterday’s market action, PLTR shares had recovered all of their losses after Karp’s CNBC debacle. Amazing how that works…

Meanwhile, it turns out Gotham was already in use in Los Angeles before the protests and riots broke out.

Gotham was originally put into service during Washington’s forever wars in the Middle East and South Asia — supposedly enabling the U.S. military to anticipate insurgent attacks. Mission planners in Afghanistan drew on Gotham’s purported ability to cross-reference maps, intelligence briefings and incident reports.

“Local law enforcement agencies are also making use of Gotham,” independent journalist Kit Klarenberg writes at The Grayzone.

“The total number of forces worldwide using the technology is unknown, but leaked Los Angeles Police Department training documents on Gotham, including an ‘Intermediate Course’ and an ‘Advance Course,’ shed significant light on the tool’s internal workings.

“The sheer volume of data collected on citizens — whether they are law-abiding, are suspected of having committed a crime or are simply connected to individuals accused of wrongdoing — is staggering,” Klarenberg writes of the LA documents.

“This includes sex, race, names, contact details, addresses, prior warrants, mugshots, surveillance photos, personal relationships, past and current employers, tattoos, scars, piercings and other identifying features.

“Such a cutting-edge service doesn’t come cheap, and Gotham subscriptions run to millions of dollars annually. The vast windfall reaped from multiple state entities since Palantir’s inception has made the firm’s founders very wealthy indeed — Karp’s personal worth alone is currently estimated at $12.2 billion…”

Note well what Klarenberg said there: Citizens. Not illegal migrants. And it’s already going on.

Loomer and the rest are simply manufacturing consent for abuses that have been taking place for years, while they demand still more surveillance and still more control — using the riots and protests as cover.

The story is as old as it is infuriating. “You never want a serious crisis to go to waste” is the famous saying of Barack Obama’s chief of staff Rahm Emanuel.

Chris Rossini, senior fellow at the Ron Paul Institute, puts it pithily…

Never forget: The Patriot Act was written years before 9/11. It was just pulled off the shelf the instant it became convenient.

The ensuing “War on Terror” gave rise to Palantir. What new surveillance-state horrors might arise from the present moment?

A Silver Opportunity

For the first time in several days, silver is in the red. But it’s still over $36. Heck, last week $34.85 marked a 12-year high!

But it’s not just the rise in price, Paradigm’s recovering investment banker Sean Ring writes at the Rude Awakening: “Over the past week, silver has outperformed gold significantly.

“The gold-to-silver ratio has collapsed from over 100 to 90, with more room to fall. That ratio has only been this high during a few key moments of panic in history — the early 1990s recession, the 2008 global financial crisis and the COVID-19 collapse. Each time, silver screamed higher in the recovery.

“When silver outperforms gold, it’s usually a sign that confidence in paper assets is cracking, not just among the gold bugs, but among the broader class of capital allocators.

“Silver's rise coincides with Bitcoin’s recent breakout, oil’s unexpected surge and a global rejection of negative-yielding (return-free risk) assets masquerading as sovereign debt. While the Fed pretends to have things under control, the market is hedging in real-time, with commodities.”

And don’t overlook the law of supply and demand. That too ison silver’s side, according to Paradigm’s resident geologist Byron King.

“Begin with the fact that many of the world’s long-established silver districts and mines are on the backside of their productive life,” he writes today for the Daily Reckoning. “From Argentina to Mexico, to Idaho, to the Yukon, many large-scale old districts and mines have been producing metal for many decades; but they are playing out for a long list of reasons.

“Now the silver search goes further afield, looking for smaller deposits, often with lower grades, and deeper in the earth, which means more expensive to exploit, either with surface mining or via mine shafts. The takeaway is that the silver supply is tight and getting tighter.”

And then there’s demand: “At industrial scale, more and more silver goes into new products, meaning items that didn’t exist in decades past,” Byron goes on. “Consider the ubiquity of electronics (which contain silver, of course) in everything from smartphones to microwave ovens to automobiles. Now add exploding silver demand from solar panel manufacturing.

“On top of that, there’s a global-scale level of silver accumulation in various forms of stockpiles. Some of it is industrial buying by companies and nations that are thinking a decade and more ahead to feed their industries.

“Other silver buys come from central banks, such as state-level actors in Russia, India, China and more. Evidently, the leadership cadres of these nations foresee silver as a future component of a new monetary system of global trade and finance.”

And why wouldn’t they at a time Congress is on the verge of another budget blowout?

Back to Sean Ring: “Silver isn’t just an industrial metal. It’s money. Always has been. Always will be.

“In a world awash in fiat, bloated deficits, negative real rates and exploding debt-to-GDP ratios, the case for hard money is stronger than ever. Gold gets the spotlight, sure. But silver is the canary in the monetary coal mine.”

Sooner or later, Sean says we’re headed back to the 2011 high at $50. “The world is on the verge of another commodity supercycle, and silver is the cheapest ticket on the ride.”

Beyond $50, you wonder? Adjust that 2011 figure for inflation and you’re looking at $71.64. Just sayin’...

The View From Small-Business America

If it weren’t for uncertainty about tariffs and taxes, American small business would be thriving right now.

At least that’s the takeaway from the latest Small Business Optimism Index compiled by the National Federation of Independent Business.

The headline number for May is 98.8 — up from 95.8 in April and slightly above this venerable survey’s 51-year average.

“Although optimism recovered slightly in May, uncertainty is still high among small-business owners,” says NFIB chief economist Bill Dunkelberg — obliquely referring to on-again, off-again tariffs and an uncertain fate surrounding the tax provisions of the “big beautiful bill” on Capitol Hill.

Amid that backdrop, taxes now top the part of the survey where respondents are asked to identify their single most important problem.

Taxes were cited by 18% of respondents, the highest since December 2020. “Quality of labor” was identified by 16%, suggesting good help is still hard to find. Inflation is in third place at 14%.

Four categories were tied for fourth place, each cited by 9% — labor costs, regulations, cost/availability of insurance and poor sales.

Hmmm… It’s been over four years since “poor sales” registered that high. Something we’ll be watching…

As for big business, at least the publicly traded ones, the major U.S. stock indexes are all in the green today.

At last check the S&P 500 is up a quarter percent to 6,021. The Nasdaq’s gain is likewise about a quarter-percent. The Dow’s gain is less than a tenth of a percent.

While silver is losing ground, gold is holding steady at $3,320. Crude is up nearly 1% to another two-month high at $65.85.

Bitcoin seems to be coiling for another run at its $112,000 record, currently fetching just under $109k.

Grim Chuckle

What can one possibly add to this?

Mailbag: Investing… and Ethics

We love hearing from new readers (as well as our longtimers, of course!) and we especially love seeing emails like this.

“Hi Dave, I’ve recently started trading stocks and I’m so new to it that I haven’t even managed to set up my Schwab account for options trading yet. So currently just buy and sell. But I have just read your latest newsletter and it was so refreshing.

[The reader’s referring to Friday’s edition, where we first took up the outrage against Palantir.]

“I’ve read so many articles by people like [analysts for one of Paradigm’s competitors], and some of the things they say so gleefully make me want to cringe. It’s all about the money. They’re pleased that our government is looking at ways of gathering CONFIDENTIAL personal information without our consent for AI purposes, or that our national land will basically become a free-for-all — and by all, I mean of course, the wealthiest amongst us.

“So the fact that you recognize some of these limitations makes me feel a bit better. Do I want to make more money from my cash savings? Abso-blooming-lutely! But I’d like to do it without harming our environment or just completely obliterating people’s right to privacy!

“Just FYI, I did buy [ticker symbol deleted] stock, and sold every day just to take my profit and rebought. For my $2,700 investment, I made a 47.93% profit. Not bad, huh!”

Dave responds: Wow. Pretty sure you’re referring to a recent play in Altucher’s True Alpha. James Altucher and Zach Scheidt recommended call options on the company in question, but how nice to hear that you piggybacked the performance with plain-vanilla shares. Well done!

(We’re withholding the name and ticker because it’s still a live trade…)

As for ethics and investing… I’ve long cited a passage by the late newsletter legend Harry Browne: “Maximizing profits and conforming to social policies are separate endeavors,” he wrote in 1995. “You can cater to one endeavor only at the expense of the other.

“The stock exchange isn’t a pulpit. If you want to promote a particular environmental policy, political philosophy or other personal enthusiasm, do it with the profits you make from hardheaded investing."

But everyone’s got a red line, or should.

Remember that when you buy stock, you buy partial ownership in a company — however tiny that portion might be. If the company is engaged in activity that’s glaringly at odds with your conscience, don’t own it.

On the other hand… playing options on an objectionable company leaves your hands clean.

With options, you’re not investing in these companies or funding their operations. A call option is, to use the classic definition, “the right but not the obligation” to buy shares at a certain price within a certain timeframe.

You’re engaged in a speculation; the profits you make come entirely from the individuals or institutions on the other side of the trade.

So you might want to get going on options sooner rather than later. Paradigm has the perfect guide to get you started — The Ultimate Beginner’s Guide to Stock Options.

Read and enjoy — and good luck!

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets