Look Who’s on the “Birthright” Train

Look Who’s on the “Birthright” Train

Hmmm… It seems Democrats are climbing aboard the Trump administration’s “American Birthright” agenda.

The “Birthright” is a term coined last year by Paradigm macroeconomics authority Jim Rickards. It was his shorthand for the White House’s ambitions to aggressively tap into the energy and mineral wealth underneath federal lands — a $150 trillion bounty.

In time, the administration’s strategy developed into one in which the federal government took ownership stakes in mining companies. Several Paradigm editors followed Jim’s “Birthright” cue with a recommendation of the rare-earth firm MP Materials. Members of Altucher’s True Alpha profited the most — 918% playing MP call options.

Then came a similar deal for USA Rare Earth. Some of our readers bagged a 191% gain on USAR in anticipation of the deal going down.

The Birthright agenda continues to evolve — especially in light of the Chinese government’s continued export controls on rare earths as well as other minerals the government sees as vital for industry and the military.

Now comes a measure in Congress called the Critical Mineral Executive Coordination Act — and it carries bipartisan support.

The chief sponsors are Sen. Tim Scott (R-South Carolina) along with two Senate Democrats — Tim Kaine of Virginia (Hillary Clinton’s running mate in 2016) and preacher-turned-politician Raphael Warnock of Georgia.

Its two key provisions are…

• Establishing a “Special Adviser to the President for Critical Minerals and Supply Chains” within the National Security Council to set up a “coordinated, government-wide strategy”

• Setting up a training program at the Foreign Service Institute — the unit of the State Department that coaches up aspiring diplomats — to focus on Washington’s “strategic competition” with Beijing.

A statement from Sen. Kaine’s office checks many of the Birthright boxes: “We need critical minerals to build chips for everything from our smartphones to our national defense apparatus. The U.S. must not cede control of global critical mineral supply chains to China.

“That is why I’m glad to co-sponsor this bipartisan legislation to establish a dedicated executive branch critical minerals czar and marshal our diplomatic corps’ expertise in this area. This commonsense and overdue step is crucial to our national security and retaining our technological edge.”

Presumably if this legislation makes it to Donald Trump’s desk, he’ll sign it. More importantly, it sets the agenda for the next president — whoever it is, no matter the party. The Birthright theme will have a long arc.

That said, we don’t want to lose sight of a Birthright development taking shape today.

Jim Rickards calls it “the most shocking policy I’ve seen in more than five decades of advising the U.S. government.”

You’ll find it in Section 1260H of the Federal Register. Jim calls it Trump’s Blacklist. “Because with these orders, the White House is banning 188 companies.”

“And when this takes full effect, I believe it will wipe out one of the most competitive industries in America — leaving just a few tiny stocks standing.

“The last time a U.S. president did something like this, one stock surged 5,000% in just five years.”

Watch Those Revisions!

The big market story of the day is… being wildly misinterpreted.

The Commerce Department is out with “core PCE” — which is the Federal Reserve’s preferred measure of inflation. When the Fed talks about its 2% inflation target, this is the number it has in mind.

The number clocks in at 3.0%. Yes, that’s a lot more than 2%. But literally no one among dozens of economists polled by Econoday figured the number would be that low; the average guess was 3.3%. What’s more, the previous month’s figure was revised down from 3.3% to 3.0%.

With that, futures traders are dialing back their expectations for interest rate hikes by the Federal Reserve: They now assign a 61% probability the Fed will hold steady at its next meeting in four weeks, pushing off the next rate hike until mid-December.

The reaction is not unexpected: “Stocks rise after data shows inflation slowed last month,” said CNBC.

Checking our screens, the Nasdaq is up 1% on the day, back over 27,000. And the S&P 500 is up a half percent, back over 7,700.

But hold on: As of today, the Commerce Department has changed its methodology for calculating core PCE.

It was right there in The Wall Street Journal last July: The agency “is tweaking its measurement of the cost of investment management, software and legal services, and it will apply changes retroactively to the past five years.”

We’ll spare you the details; trust us, they’d make your head spin. What matters is the outcome: “The effect, according to economists, will be to lower core PCE inflation.”

But even after revisions, today’s 3.0% figure is up from 2.7% nine months earlier.

While expectations for higher short-term interest rates are subsiding… longer-term rates continue their relentless rise.

The yield on a 10-year Treasury note is up to 5.28% and the 30-year bond is up to 5.63%. Once more, both of these numbers sit at new high-water marks last seen during the George W. Bush administration.

Once more, the story appears to be rising oil prices —> rising inflation expectations —> rising interest rates. U.S. oil futures are up two bucks to $91.42.

Elsewhere, gold is holding its own at $4,156 but silver’s shed another buck and it’s at risk of falling below $60 for the first time in two months.

But digital non-dollar assets are holding up all right — Bitcoin over $84,000 and Ethereum a bit below $2,700.

More about crypto next…

The Rebel Gets a Corner Office

“Five years ago this week, China banned crypto. Again,” says a retrospective by Paradigm crypto analyst Chris Campbell.

And in the United States at that time? Crypto was effectively banished to the wilderness. 

There were “zero spot Bitcoin ETFs,” Chris reminds us. Banks kept crypto at arm’s length and Washington treated the industry with suspicion.

Today, U.S. spot Bitcoin ETFs hold more than $100 billion, Wall Street firms offer digital-asset custody and tokenized assets are moving onto blockchain rails.

“Five years. Same asset. Completely different room,” Chris observes.

What made the difference? Regulation. For years, “the SEC ran a roach motel. Tokens checked in. They never checked out.”

Projects faced the constant threat of being told, Maybe you're breaking securities law, see you in court.

No more. The SEC has proposed rules giving some crypto projects a clearer path through securities law. The CFTC and Treasury are advancing crypto rules too.

Perhaps seeing the regulatory dam breaking, the Depository Trust & Clearing Corporation — a critical piece of America’s market plumbing — has already processed real transactions using tokenized securities.

“The machinery of American finance is already switching tracks,” says Chris. “The lawyers are arguing about the details.”

And the shift is altering the investment framework Chris brings to Paradigm’s flagship crypto service, Altucher’s Early-Stage Crypto Investor.

The old crypto strategy was simple: Buy the whole herd. But now, “the herd is splitting.”

Instead of buying everything, he says, watch crypto tied to payments, settlement, stablecoins and tokenized assets. “Find the assets the real economy can't live without.”

Crypto was long thought to be the rebel asset class in finance — poised to overthrow Wall Street.

Instead, it moved in — and now it’s getting a corner office.

Comic Relief

Been a few days since we’ve tried to lighten things up with something from the meme-o-sphere…

… although if you think about it, where would there be an attendant to ask you that?

Answer: New Jersey still prohibits self-serve gas. Oregon did for a long time as well — but since 2023 you’ve been able to pump your own in 20 rural counties. In the other 16, stations may designate up to half their pumps as self-serve.

Now you know…

Mailbag: Censorship (and Gold)

“Dave, I just got to reading this issue, after I had read some of the feedback to it,” a reader writes of our 2026 censorship edition. “Disappointing to say the least.”

[He means the feedback, not the issue. Heh…]

“As usual you shined a light on some of the uncomfortable things the almighty government is doing to its citizens. Seeing people take umbrage to some of the examples they find distasteful is sad, but sadly not as alarming as it should be. 

“When right or wrong is determined by someone’s opinion of who the deed is being done to, we are in troubled times indeed.

“Don't mind the criticism, it's unfounded, and bringing attention to these abuses is important work, even if it feels like pissing in the wind at times.”

Says another reader: “I understand it can be difficult at times to read hate mail. I wanted to encourage you to be of good cheer and keep doing what you do best. Your opinions are valued by me and many of your readers.”

My comment at the end of Monday’s mailbag — invoking tyranny, banana republics, currency debasement and gold — prompted the following…

“I get so tired of hearing ‘get more gold,’ whether on the global or the personal level. What practical good is a stack of gold going to do when society has collapsed into barbaric anarchy? Are you going to trade a bar gold for a bag of rice? 

“Yes, your wealth is preserved in a vault somewhere, but for when; how long before things settle out and a new currency accepted? In the mean time (split word intended), how will your stash serve your day-to-day existence? Inquiring mind wants to know.”

Dave responds: A worthy inquiry. Let’s explore…

I wasn’t necessarily talking about physical gold in your possession. If you want to buy exposure to gold in a plain-vanilla brokerage account there are several closed-end trusts with allocated gold — i.e., bars or portions of bars whose serial numbers are next to your name on a ledger. 

The point is to avoid popular instruments like GLD that might be exposed to gold futures and other paper instruments. In a genuine crisis their price in fiat currency might not jump to the same extent as real gold. (We got a whiff of this possibility during COVID.)

That should keep you covered as D.C.’s spending and the Fed’s money printing continue to erode your purchasing power, even if America descends into banana-republic status.

Now if it’s civilizational collapse you’re thinking about… 

Jim Rickards wrote an interesting article for U.S. News & World Report back in 2012, all about how the “old money” families of Europe preserved their wealth across not only generations but centuries.

“When one inquires of family members and representatives as to what it takes to preserve wealth over centuries and not just cycles, the frequent reply is ‘a third, a third and a third.’ This is shorthand for dividing one's wealth into one-third land, one-third gold and one-third fine art.

“Obviously some liquidity is needed for day-to-day expenses and some room can be made for a speculative portfolio, but the basic idea that land, gold and art outlast and outperform riskier assets such as stocks, bonds and cash seems sound when viewed from the perspective of centuries and not just years or decades.”

Across the sweep of European history, paper assets have often gone to zero. But gold, land and art endure, even under the worst circumstances.

“Gold,” Jim wrote, “can be gathered up and stuffed in a saddlebag or sewn into the lining of a coat and moved. Art can be removed from frames, rolled up and carried in one's luggage. Admittedly land cannot be moved, but with good title and patience a family can reassert its claim even generations later once interlopers have been ousted.”

Even if you’re a renter and you’re in no position to afford fine art, you can still have physical metal. Jim says for modest-sized transactions in an absolute worst-case scenario, you can still keep yourself covered with one-ounce Silver Eagles and quarter-ounce Gold Eagles.