On this final day of 2024, we bring you a special video edition to help prime your portfolio for 2025.
Welcome to your post-holiday video edition of the 5 Bullets!
As you ease into your day, you won&rsquo;t want to miss some never-before-seen content forecasting one of the biggest investment trends for 2025.
In fact, exactly two weeks ago, Paradigm&rsquo;s top minds convened in Baltimore &mdash; where trading pro and former hedge fund manager Enrique Abeyta issued a monumental New Year&rsquo;s prediction.
He posed one intriguing question: Which Mag 7 mainstay will lose over 30% in market cap?
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In fact, Enrique believes, a major tech player&rsquo;s meteoric rise might be coming to an end.
And he&rsquo;s here to outline how this company will shock investors and financial media alike as he compares this scenario to a well-known plunge during the dot-com crash.
However, Enrique remains optimistic about this tech giant&rsquo;s long-term future, suggesting its value could eventually double. Or even increase tenfold.
Click above to view Enrique&rsquo;s surprise 2025 forecast&hellip; While you enjoy a lazy day in your pajamas (if you&rsquo;re into that sorta thing).
Best regards,
Emily Clancy Paradigm Pressroom&rsquo;s 5 Bullets

Enrique-marketcap

Paradigm Pressroom’s 5 Bullets is a daily e-letter covering the economy and the markets, reaching 120,000 paying subscribers of the renowned financial publishing firm Paradigm Press.

Paradigm Pressroom's 5 Bullets

Paradigm’s top minds convened in Baltimore — where trading pro and former hedge fund manager Enrique Abeyta issued a monumental New Year’s prediction. 


Mega-Cap Meltdown in 2025

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />The (New) Mexican-American War
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The trade war with Mexico is on hold. A shooting war, however, might be imminent.
We&rsquo;ll get to the tariff situation shortly. But another matter takes precedence this morning.
&ldquo;I expect a shooting war between Mexico and the U.S. in the near future,&rdquo; said Jim Rickards yesterday in a brief note to Rickards&rsquo; Strategic Intelligence readers.
&ldquo;The Mexican drug cartels are planning to use drones for aerial attacks on Immigration and Customs Enforcement. This is war. Trump, [Secretary of State Marco] Rubio and [Defense Secretary Pete] Hegseth won't put up with it for much longer.&rdquo;
I haven&rsquo;t had a chance to draw out Jim on the topic yet&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> But it&rsquo;s not an outlandish prediction in light of recent events&hellip;
<ul>
<li>Monday, Jan. 27: The State Department warned against travel to the area around Reynosa, Mexico &mdash; just across the Rio Grande from McAllen, Texas &mdash; describing &ldquo;frequent gun battles occurring in and around Reynosa in the late night and early morning hours.&rdquo; There&rsquo;ve also been routine sightings of &ldquo;improvised explosive devices&rdquo; &mdash; or in plain English, roadside bombs</li>
</ul>
<ul>
<li>Yesterday: The U.S. consulate in Nuevo Laredo &mdash; on the other side of the Rio Grande from Laredo, Texas &mdash; reported several gunfights throughout the city. U.S. government personnel were advised to &ldquo;shelter in place.&rdquo;</li>
</ul>
And that&rsquo;s in just one Mexican state, Tamaulipas.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> In his inauguration speech, Donald Trump promised to designate Mexican drug cartels as &ldquo;foreign terrorist organizations&rdquo; &mdash; presumably a first step toward military attacks on the cartels.
When he was still in Congress, Trump&rsquo;s national security adviser Mike Waltz sponsored a bill that would have authorized the use of force against the cartels.
Thing is, a battle with the cartels would be no cakewalk. Their capabilities are formidable &mdash; drones, roadside bombs, surface-to-air missiles.
It would be like Afghanistan &mdash; but on America&rsquo;s doorstep, says Cato Institute scholar Brandan Buck: &ldquo;Sending U.S. Special Operations into a direct confrontation with the Mexican cartels would pit them against a near-peer competitor, who, like the Taliban, would likely enjoy the direct or tacit support of the local populace and the luxury of hiding in punishing terrain.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> A more sane approach was proposed yesterday by Sen. Mike Lee (R-Utah).
In a thread on X, Lee proposed a remedy laid out by the framers of the Constitution &mdash; that Congress grant &ldquo;letters of marque and reprisal.&rdquo;
"Letters of marque and reprisal,&rdquo; he said, &ldquo;are government-issued commissions that authorize private citizens (privateers) to perform acts that would otherwise be considered piracy, like attacking enemy ships during wartime. Privateers are rewarded with a cut of the loot they bring home.&rdquo;
How would it work here? "Congress could issue letters of marque and reprisal authorizing private security firms or specially trained civilians to intercept cartel operations, particularly those involving drug shipments or human trafficking across borders," Lee said. "Focus on disrupting supply lines, capturing high-value targets or seizing assets like boats, vehicles, cash, gold or equipment used in criminal activities."
The usual suspects in liberal media are dismissive &mdash; The Daily Beast, for example, calling it a &ldquo;crazy plan.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> But is it crazier than the alternative?
The day after the 9/11 attacks in 2001, Rep. Ron Paul (R-Texas) proposed that Congress issue letters of marque and reprisal to bring Osama bin Laden and crew to justice.
&ldquo;When we retaliate for this horror we have suffered, we must be certain that only the guilty be punished,&rdquo; he said. &ldquo;More killing of innocent civilians will only serve to flame the fires of war and further jeopardize our security. Congress should consider its constitutional authority to grant letters of marque and reprisal to meet our responsibility.&rdquo;
Would it have worked? Maybe, maybe not. But we know for sure what did not work &mdash; 20 years of &ldquo;forever wars&rdquo; that killed over 7,000 U.S. troops&hellip; as well as 4.5 million foreigners (whose survivors hold a grudge against the U.S. government)... while adding $8 trillion to the national debt.
(Those figures come from the authoritative Costs of War Project at Brown University.)
We&rsquo;ll see what unfolds on the border in the weeks and months ahead. It&rsquo;s not headline news, not today &mdash; but that&rsquo;s all the more reason for us to give it top priority today.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Trump&rsquo;s (Narrow) Tariff Window
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Now for the tariff situation: &ldquo;There's a storm cloud with a silver lining to Trump's approach,&rdquo; says Dan Amoss, lead analyst for our Jim Rickards unit.
As we chronicled in real-time yesterday, Trump&rsquo;s threatened tariffs against Mexico are on hold for 30 days. After we hit the &ldquo;send&rdquo; button, Trump&rsquo;s threatened tariffs against Canada were also paused for a month. Both Ottawa and Mexico City have promised to beef up border security.
An added 10% tariff on Chinese goods, however, is taking effect today. Beijing has responded with a 15% tariff on selected U.S. goods.
With the last-minute climb-downs by both the Canadian and Mexican governments, there&rsquo;s a lot of &ldquo;winning&rdquo; gloating on social media.
But those &ldquo;wins&rdquo; are only temporary &mdash; which comes back to the uncertainty we mentioned yesterday and Friday.
&ldquo;The storm cloud,&rdquo; says Dan, &ldquo;is the disruption to status quo channels of trade, currency and capital movements that make it hard for businesses and households to plan. The uncertainty freezes activity, which in turn sets off a chain of events that could be unpleasant.&rdquo;
Thing is, it&rsquo;s that uncertainty that&rsquo;s the key to Trump&rsquo;s art-of-the-deal mindset. &ldquo;For Trump to keep winning, he needs to remain unpredictable and willing to do wild-man stuff,&rdquo; says Dan &mdash; &ldquo;to force an incentive on trade counterparties to be first in line to sue for peace to avoid the tariff &lsquo;stick.&rsquo;&rdquo;
The problem is when Trump&rsquo;s wins turn into corporate America&rsquo;s losses. &ldquo;Too much uncertainty for too long can do permanent damage to capital formation and employer-employee skill matches,&rdquo; says Dan. If Trump pushes his luck, Dan believes companies will pull in their horns the way they did during COVID, albeit to a lesser degree.
Solution: &ldquo;Trump should just make clear rules of the road, and business can adapt,&rdquo; Dan says. &ldquo;But timing is of the essence.
&ldquo;Trump will be a wild man for perhaps two&ndash;six months. Then he'll need to convey stability and vision for what (more or less) sustainable trade arrangements will be.
&ldquo;I'm rooting for Trump,&rdquo; Dan concludes &mdash; &ldquo;but the path is narrow and loaded with constraints and pitfalls.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Amid that backdrop this morning, the major U.S. stock indexes are in the green. But they&rsquo;re still below where they sat before the tariff news broke Friday afternoon.
The S&amp;P 500 is up a half percent and back over 6,000. At its peak on Friday, it was in record territory over 6,100.
Tariffs will presumably take a back seat to earnings as the week goes on. Google parent Alphabet will report its numbers after the close today &mdash; and Amazon on Thursday. At that point, six of the &ldquo;Magnificent 7&rdquo; names will have reported. (The seventh, Nvidia, releases its figures closer to the end of February.)
Precious metals continue to rally &mdash; and for once, it&rsquo;s silver and the mining stocks outpacing gold. The Midas metal is up nearly three-quarters of a percent to $2,834. But silver is up nearly 1.4%, touching the $32 level and challenging its mid-December highs. The HUI index of mining stocks is likewise challenging its mid-December peak at 320.
Crude has pulled back below $73. Crypto is stuck in the mud, Bitcoin under $100,000 and Ethereum a hair below $2,800.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Will Ukraine Become &ldquo;Trump&rsquo;s War&rdquo;?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> It seems Donald Trump is determined to keep the Russia-Ukraine war going to assure U.S. access to rare earth elements.
Of course, neither mainstream nor alternative media are framing it that way, so it falls to us.
&ldquo;We&rsquo;re looking to do a deal with Ukraine where they&rsquo;re going to secure what we&rsquo;re giving them with their rare earth and other things,&rdquo; Trump told reporters in the Oval Office yesterday. &ldquo;We want a guarantee. We&rsquo;re handing them money hand over fist.&rdquo;
In case you&rsquo;re a newer reader, rare earths are a group of essential minerals used in everything from your smartphone to hybrid car batteries to guided missile systems. They&rsquo;re not really &ldquo;rare&rdquo; except in the sense that miners have to sift through ungodly quantities of rock and dirt to get at them.
Late last year, Sen. Lindsey Graham (R-South Carolina) said he expected Trump to &ldquo;do a deal to get our money back, to enrich ourselves with rare earth minerals&hellip; Ukraine&rsquo;s ready to do a deal with us, not the Russians. So it&rsquo;s in our interest to make sure that Russia doesn&rsquo;t take over the place.&rdquo;
Here&rsquo;s the problem: Many of Ukraine&rsquo;s rare earth deposits lie in the east of the country &mdash; territory populated by Russian speakers and now controlled by Russia. Russia will not give up this territory without a fight to the death.
Is that what Trump is willing to take on?
As Jim Rickards told his readers yesterday, &ldquo;The choice for Trump is whether he wants the war to end quickly (mostly on Putin&rsquo;s terms) or wants it to continue in which case it will quickly become known as &lsquo;Trump&rsquo;s War.&rsquo;&rdquo;
Reminder: Trump&rsquo;s Ukraine envoy, retired Lt. Gen. Keith Kellogg, is tasked with reaching a settlement to the war by the end of April.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Mailbag I: Tariffs and the Elites
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Isn't it interesting that taxes (in the form of tariffs) are the leading policy to make America great again?&rdquo; a reader writes.
&ldquo;For decades, Americans have been told that free trade, capitalism and democracy work for everyone. They'll get ahead if they work hard, create value and play by the rules. But that's not what happened. Instead, wealth and power concentrate at the top, while people are left working harder every day just to stay in place.
&ldquo;The system isn't broken &mdash; it's designed this way. Economic stratification isn't a bug; it's a feature. Tariffs and trade deals, policies and regulations, aren't about fairness or efficiency; they're about control. Governments don't create value; they allocate it, deciding who wins and who loses. For the last 60 years, those decisions have overwhelmingly benefited corporate elites, financial speculators and political insiders.
&ldquo;As a result, America has shifted from a nation of 'producers' to a nation of 'consumers.' The drive to create, build and innovate has been replaced with dependency on wages, debt and cheap imports. And when people feel powerless to change their circumstances, they either tune out, fight each other or look for false saviors (King Trump).
&ldquo;The partisan fight of left versus right is a deliberate distraction. What the elites work so painstakingly to conceal is the long game of the takers pillaging the makers. The problem isn't capitalism or socialism &mdash; it's a system that rewards rent-seekers over value creators. The game will remain rigged until people realize the truth and act to break the rent-seekers&rsquo; dominance.
&ldquo;The real question is: What will it take to play a different game?
&ldquo;It looks like we're going to find out.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag II: Tariffs and Mind-Altering Substances
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I would like to take a philosophical break from the usual banter about tariffs,&rdquo; writes another &mdash; &ldquo;particularly one of the main espoused reasons for them, &lsquo;the stopping of fentanyl into the U.S.&rsquo;
&ldquo;From my perspective I somewhat reckon this back to the Prohibition period when alcohol was made illegal in the U.S. I don't recall reading from the history of that period where the U.S. placed blame on other countries for the alcohol being smuggled into our country &mdash; then placing tariffs on them to get it to stop being sent from overseas to the U.S.
&ldquo;With that I ask why do we blame other countries for the substance abuse problem here?
&ldquo;Should it not be our problem to find the &lsquo;why&rsquo; for the rampant substance abuse here and &lsquo;fix that&rsquo;? You can call it fentanyl, acid, pot, alcohol, benzodiazepine, hydrocodone or whatever you want &mdash; they are all abused to &lsquo;cover up something.&rsquo;
&ldquo;I have read multiple reports that the majority of imported drugs come through major ports of entry and not through very rural, out-of-the-way places along the border. Should it not be our problem to have better security at our borders to find, confiscate and eliminate the illegal drugs?
&ldquo;It is also relevant to mention that these same drugs are illegally made right here in the U.S. So again why is it &lsquo;other countries&rsquo; problem&rsquo; and in trying to force them to increase border security we place additional costs on the everyday working folk of the U.S. (for it is those people who will suffer and face the dilemma of having to choose what to buy and what to do without)?
&ldquo;I doubt very seriously the upper 1% will be cutting back on their household spending due to the increased cost of basic goods and it seems these are more and more the people making the country's decisions.
&ldquo;I've been a reader of the &lsquo;5&rsquo; for a number of years enjoying the perspective/opinions of the editors as well as some of the customers.&rdquo;
Dave responds: &ldquo;As drug warriors have been discovering since Congress banned nonmedical use of opiates and cocaine in 1914,&rdquo; writes Jacob Sullum at Reason, &ldquo;prohibition creates a strong financial incentive to evade any obstacles that the government manages to erect between suppliers and consumers.
&ldquo;That problem is compounded in the case of fentanyl, which is cheap to produce and highly potent, making it possible to smuggle large numbers of doses in small packages.&rdquo;
Sullum spotlights a 2018 report from the American Enterprise Institute &mdash; which concluded that even if Washington somehow stopped all direct fentanyl sales to the U.S., &ldquo;enterprising dealers [would] simply sell into nations such as the U.K., repackage the product and then resell it into the U.S."
So yes, you&rsquo;re right. As the military analyst William Schryver tweets, &ldquo;Fentanyl use in the United States is an indicator of socioeconomic despair and spiritual malaise.&rdquo;
But it&rsquo;s a lot easier for politicians to blame foreign devils, no?
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 1900868446

The trade war with Mexico is on hold. A shooting war, however, might be imminent.

The Coming Border War

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />What&rsquo;s a Tariff Anyway?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> With tariffs turning the markets upside down this morning, perhaps it&rsquo;s a good time to step back and think about the basic things.
Like, what is a tariff anyway?
Maybe you know &mdash; or think you know &mdash; but if survey data is to be believed, more than half of your fellow Americans do not.
The market research firm Ipsos polled nearly 1,100 Americans in December. Courtesy of Statista, here are the results.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4yXJNnbJwWc7pbg8Vc9Ia6/1c63e5eb31546957327ae8049c1d0281/Tariff.png" alt="Tariff" width="540px" />
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> There&rsquo;s a problem, though: Even the &ldquo;correct&rdquo; answer as pinpointed by the pollsters is loaded with an assumption.
Yes, the &ldquo;importer&rdquo; pays the tariff up-front. But then what? Well, the importer might choose to eat some of that cost. But the rest gets passed along to the wholesaler&hellip; and then the retailer&hellip; and ultimately the consumer.
Saying that tariffs are paid by &ldquo;importers&rdquo; is the same sort of misdirection Democrats employ when they say that corporate income taxes are paid by &ldquo;rich, greedy corporations.&rdquo;
No, it&rsquo;s a cost that &mdash; like any other cost &mdash; gets passed on down the line.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5tyOdLqldJ6R23emeAkAZj/6ac1a4c02bca6811ecf5560541b31b66/RandTweet.png" alt="rand tweet" width="540px" /> <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2ZcpwuBNHMBVyVvICQosSW/6adf6fa030e1676457bd7cfa07ccfe41/JustinTweet.png" alt="justin tweet" width="540px" />
So with that essential background, let&rsquo;s pose a question&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Are you willing to pay a dime a gallon more for gasoline to stop the flow of fentanyl from Canada into the United States?
To be clear, I don&rsquo;t know whether it&rsquo;ll be exactly a dime. No one does. It might be more, it might be less. But that&rsquo;s the essence of the bargain Donald Trump is asking you to make.
Actually, he&rsquo;s not asking: You don&rsquo;t have a choice. Tariffs are a tax, after all, even if you don&rsquo;t pay them directly.
He didn&rsquo;t put it in such concrete terms yesterday. He said only, &ldquo;THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!).&rdquo;
As you might be aware, effective tomorrow goods from Canada and Mexico will be subject to a new 25% tariff, while goods from China will be subject to a new 10% tariff (above and beyond the existing ones).
It seems his main beef with Canada is a failure &ldquo;to devote sufficient attention and resources or meaningfully coordinate with United States law enforcement partners to effectively stem the tide of illicit drugs.&rdquo;
There are exemptions to the tariffs. Most notably, Canadian oil will be taxed at 10%, not 25%.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Setting a lower tariff for such energy products is Trump telling on himself,&rdquo; writes Liz Wolfe at Reason this morning &mdash; &ldquo;admitting that tariffs will in fact raise prices.&rdquo;
Hmmm&hellip; The lower energy tariff and the &ldquo;PAIN&rdquo; comment is vaguely reminiscent of events three years ago.
When Vladimir Putin rose to Joe Biden&rsquo;s bait and invaded Ukraine, Biden tried to brace everyday Americans for higher energy prices with warnings like, &ldquo;Defending freedom will have costs for us.&rdquo;
The argument didn&rsquo;t land well. In the end, Biden chose to evade those costs. He offset rising gasoline prices by draining the U.S. Strategic Petroleum Reserve at a pace no president did before. With the reserve still at a 41-year low, that option is foreclosed to Trump.
So much for the big picture. Let&rsquo;s move on to the market impact&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Uncertainty
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> As the morning wears on, it seems Washington and Mexico City have come to terms to forestall the Mexico-targeted tariffs. But for how long?
Trump says he will &ldquo;immediately pause&rdquo; the tariffs for one month after Mexican president Claudia Sheinbaum announced a deployment of troops to the Mexico-U.S. border.
Where this leaves business owners like Nicolas Palazzi, we don&rsquo;t know. He&rsquo;s the founder of a wine-and-spirits distributor in Brooklyn employing 21 people. About 20% of his imports come from Mexico.
&ldquo;Is it for a day, is it a political flex or is it something that will last for four years?&rdquo; he asked a BBC reporter ahead of the initial tariff announcement Saturday.
He says his small Mexican suppliers might not survive a prolonged spate of tariffs. &ldquo;Can you really plan? No.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />That same uncertainty extends to the markets writ large &mdash; steep swings as the new week began, now being tempered by the Mexican truce, however temporary.
What was a 600-point drop in the Dow Industrials has now been trimmed to less than 150 as we check our screens. That said, the S&amp;P 500 has nonetheless given up the 6,000 level&hellip; and the Nasdaq is still down nearly 1%.
A rally in the U.S. dollar index past 110 has now turned into a reversal on the day, below 109.
Crude rallied hard when trading opened for a new week Sunday night, but now most of those gains have evaporated, a barrel of West Texas intermediate up less than a quarter at $72.76. And a steep drop in energy stocks has turned into a rally.
Gold is in record territory at $2,818, silver up as well to $31.57.
Crypto, however, is a hot mess. Bitcoin sits below $99,000 and Ethereum took a wicked spill of over 25%. From lows beneath $2,400, ETH has recovered to nearly $2,700 now.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />A Post-DeepSeek Shopping List
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />With the benefit of a week&rsquo;s hindsight, the winners and losers from <a href="https://paradigmpressroom.com/post/decoding-deepseek">the DeepSeek story</a> are coming into view &mdash; and the trading possibilities are attractive indeed.
For one thing, Paradigm trading pro Enrique Abeyta says it was only the AI-related stocks that took the initial hit. &ldquo;Monday was one of the biggest down days in the stock market in recent history. But in the S&amp;P 500, four stocks went UP for every one went down.&rdquo;
By the end of last week, the S&amp;P logged a 2.7% gain for the month of January. All else being equal, a strong January bodes well for the rest of the year. (Only twice in the last two decades was this not true &mdash; 2018 and 2011.)
Meanwhile, the stocks that did take a hit comprise &ldquo;<a href="https://media.paradigmpressgroup.com/enlarged-images/ttr-issue-img-02-03-25-img-2.png?vid2=f7584bb8d0f8b4ef03ea4a2a79cb9ffebd5601637dfb4b221b21055bfe10aa56fb9565c7166c12ea93687031263ed97489aead8f437e4ddd1cfcbcd5e6a6bb06&amp;utm_campaign=TTR_ISSUE_02.03.25&amp;utm_source=Iterable&amp;itbl_templateId=16364831&amp;itbl_campaignId=12483930&amp;utm_medium=Email">a very interesting list</a> of stocks to buy,&rdquo; Enrique ventures.
&ldquo;Almost all of these stocks have had strong charts with supportive technical characteristics. They also have had good earnings momentum. Plus, the stocks still managed to stay above their long-term 200-day moving average despite the sell-off.&rdquo;
An example he cites in today&rsquo;s edition of our sister e-letter Truth &amp; Trends &mdash; the data center infrastructure firm Vertiv Holdings (VRT). The share price bounced off its moving average and analysts&rsquo; earnings estimates keep rising.
&ldquo;Rising estimates are the single best driver of stock prices in the intermediate term,&rdquo; he reminds us. &ldquo;When you see estimates going up, the stock almost always follows.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Follow-Ups
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />For the record: The &ldquo;Doomsday Clock&rdquo; is closer to midnight than it&rsquo;s ever been in its 78-year history.
On Friday the Bulletin of the Atomic Scientists issued its annual update to the clock that symbolizes the risk of nuclear Armageddon. They inched it forward one second &mdash; 89 seconds to midnight.
&ldquo;The war in Ukraine, now in its third year, looms over the world; the conflict could become nuclear at any moment because of a rash decision or through accident or miscalculation,&rdquo; says the Bulletin&rsquo;s statement. &ldquo;The nuclear arms control process is collapsing, and high-level contacts among nuclear powers are totally inadequate given the danger at hand.&rdquo;
This is true; the back-and-forth that Washington and Moscow implemented after the Cuban Missile Crisis in 1962, and continued for the duration of the Cold War? It&rsquo;s nowhere to be found now.
A year ago, we <a href="https://paradigmpressroom.com/post/90-seconds-to-armageddon">devoted</a> all 5 of our Bullets to the Doomsday Clock and why it&rsquo;s even closer to midnight now than it was back in the early &rsquo;60s. It&rsquo;s relevant to our financial beat in the sense that if nuclear war breaks out&hellip; there won&rsquo;t be any markets or economy for us to talk about.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Thursday is the deadline by which the Trump administration is supposed to outline a plan to release the remaining redacted JFK assassination files.
On Jan. 22, Trump ordered the &ldquo;full and complete release&rdquo; of all the files. However, the order has loopholes big enough to accommodate JFK&rsquo;s 1961 Lincoln Continental limo.
Attorney Lawrence Schnapf sued the Biden administration in 2022 when Biden failed to release the records as required by law. (Indeed, Biden handed control of them to the CIA.) He&rsquo;s dubious about Trump&rsquo;s commitment to follow through.
&ldquo;The president could have simply directed the archivist to remove all redactions in the assassination records in its possession and make them available to the American people,&rdquo; he writes at the JFK Facts Substack. Instead, the language of the order opens the way &ldquo;for agencies who have been resisting disclosure for over six decades to demand further postponements.&rdquo;
It&rsquo;s going to take public pressure to get full disclosure. With that in mind, two Republicans and one Democrat in the U.S. House are circulating <a href="https://cohen.house.gov/media-center/press-releases/congressmen-cohen-schweikert-and-burchett-write-trump-seeking-release?utm_source=substack&amp;utm_medium=email">a &ldquo;Dear Colleague&rdquo; letter</a> for other congressmembers to sign.
Seldom do I think &ldquo;call your congressman&rdquo; is worthwhile advice. But perhaps it might make a difference in this case. (You can find your rep by zip code <a href="https://www.house.gov/representatives/find-your-representative">at this link</a>.)
As I wrote to mark the 60th anniversary&hellip; the JFK assassination was the moment when Americans&rsquo; trust in &ldquo;the system&rdquo; first began to erode, and the post-WWII sense that life would keep getting better and better took its first major blow.
If we want a return to the real prosperity of that era, shared by the masses&hellip; and not the fake financialized prosperity enjoyed only by a few&hellip; perhaps it can start with full JFK disclosure.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />From a Skeptical Reader&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;I am skeptical. Very skeptical,&rdquo; writes a reader who nonetheless overcame his skepticism <a href="https://pro.paradigm-press.info/m/2408662">while watching The Prophecy, featuring Paradigm&rsquo;s newest editor Mason Sexton</a> &mdash; and he subscribed to Mason&rsquo;s one-of-a-kind trading service,The Map.
&ldquo;I'm not a mystic or spiritualist. I do however agree with the premise of market moods (markets made up of humans) that can be affected by cosmic events.
&ldquo;So I bought it.
&ldquo;Why? Two main reasons:
<ol>
<li>&ldquo;I want to understand shorting better, as I want to play the rise and fall of markets. Very intriguing.</li>
<li>&ldquo;Results are results. If I can make back what I spent on the program it's worth it.</li>
</ol>
&ldquo;It's funny because Paradigm always has this showmanship thing, and it's clear to me you are uncomfortable with this one. And that could be what pushed me over the edge.
&ldquo;Let's see how it goes! I'm here for the ride.&rdquo;
Dave responds: Glad you took the plunge.
Over the last few days as I&rsquo;ve been introducing Mason to readers, I&rsquo;ve given zero emphasis to the more, ummm, esoteric aspects of his strategy. I figured it&rsquo;s just better to let Mason <a href="https://pro.paradigm-press.info/m/2408662">lay out that part in his own words</a>.
But it&rsquo;s not altogether new territory for me. One sleepy summer day several years ago, I mused at length in these virtual pages about the link between the 11-year sunspot cycle and &ldquo;mass excitability&rdquo; in society and the markets.
My tentative conclusion was that while the link was compelling, it didn&rsquo;t translate to anything you could do to consistently make money in the markets.
But I didn&rsquo;t know about Mason at the time; back then distribution of his research was limited only to the highest of high-end clients.
Across a 45-year career, he seems to have figured it out &mdash; albeit with some even more &ldquo;mystical&rdquo; elements thrown in the mix.
That&rsquo;s all I&rsquo;ll say about it now &mdash; except that the results can&rsquo;t be argued with. <a href="https://pro.paradigm-press.info/m/2408662">Go ahead and watch Mason&rsquo;s presentation and decide for yourself</a>.
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 1155353293

With tariffs turning the markets upside down this morning, perhaps it’s a good time to step back and think about the basic things.



Trump’s Tariff Torrent

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Trump&rsquo;s Ticking Time Bomb
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> It was an ominous development that got lost in the shuffle on New Year&rsquo;s Day &mdash; amid the car-ramming in New Orleans and the truck bombing in Las Vegas.
The U.S. government once again bumped up against the debt ceiling.
Uncle Sam is unable to borrow anything more than the $36.2 trillion he has already &mdash; and won&rsquo;t be able to until Congress acts.
The Treasury Department has implemented &ldquo;extraordinary measures&rdquo; to make sure Uncle Sam doesn&rsquo;t blow past his credit limit &mdash; borrowing from government pension funds and the like.
All new issuance of Treasury debt is suspended until March 14.
The new Treasury Secretary Scott Bessent promised during his confirmation hearings that &ldquo;the United States is not going to default on its debt if I&rsquo;m confirmed.&rdquo;
Well, no it&rsquo;s not. It never has. But that&rsquo;s not the problem.
The real problem comes once Congress acts and lifts the debt ceiling again &mdash; as it always does.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;What&rsquo;s different now,&rdquo; says Paradigm&rsquo;s newest editor Mason Sexton, &ldquo;is that because interest rates are now so high &mdash; it&rsquo;s really starting to snowball.&rdquo;
In his exclusive blockbuster interview this week called The Prophecy &mdash; <a href="https://pro.paradigm-press.info/m/2408326">you can watch right here if you&rsquo;ve not seen it already</a> &mdash; Mason reminded us that interest rates are now four times higher than they were during Donald Trump&rsquo;s first term.
Which means the national debt starts growing that much faster.
&ldquo;To give an analogy,&rdquo; he said, &ldquo;it&rsquo;s like if you have a credit card that&rsquo;s maxed out. But now, instead of paying 18% in interest, you&rsquo;re paying closer to 70% a year.&rdquo;
Maybe you&rsquo;ve heard how interest on the national debt is now a bigger line item in the federal budget than the Pentagon. That&rsquo;s the reason.
But please, don&rsquo;t get the wrong idea. Mason isn&rsquo;t just another Cassandra harping on the national debt.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />The debt is &ldquo;just one part of the ticking time bomb Trump is now facing,&rdquo; Mason said in the interview.
It&rsquo;s the confluence of the national debt with inflation (about which more below)... record-low savings rates&hellip; record-high credit card debt&hellip; housing prices out of reach for the middle class&hellip; and the list goes on.
And while the Treasury says its drop-dead date is March 14&hellip; Mason says the real date to watch for a convergence of these crises is March 20.
That&rsquo;s 48 days away.
If you&rsquo;ve already watched the interview, you already know why he&rsquo;s so confident about that date. <a href="https://pro.paradigm-press.info/m/2408326">And if you haven&rsquo;t, we encourage you to watch and find out</a>.
If you&rsquo;re still on the fence about whether to make the time commitment to watch, let me remind you of the uncanny calls he&rsquo;s made over a 45-year career in the markets&hellip;
<ul>
<li>He called the start of an 18-year bull market in 1982</li>
<li>He called the crash of 1987, still the biggest one-day drop in stock market history</li>
<li>He anticipated the 2008 financial crisis and the time to get back in the market</li>
<li>He called the top and bottom in the COVID year of 2020.</li>
</ul>
Note well that Mason has a knack for timing major turning points in the market &mdash; both up and down. And he expects many such turning points in the months beyond March 20.
&ldquo;There will be many tradeable rallies and dips along the way,&rdquo; he says. &ldquo;This is going to be a period of maximum volatility. It will almost be like the Olympic moguls in skiing. Up and down and back.&rdquo;
It&rsquo;s a period when many of your friends and neighbors will be in a panic &mdash; watching their account balances shrink, wondering what&rsquo;s really going on. But you&rsquo;ll already know. And you&rsquo;ll prosper. Because you&rsquo;ll be armed with the knowledge you gained <a href="https://pro.paradigm-press.info/m/2408326">the moment you started watching </a><a href="https://pro.paradigm-press.info/m/2408326">The Prophecy</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Friday Market Miscellany
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />As far as the S&amp;P 500 is concerned, the DeepSeek panic is over.
At last check, the index was up three-quarters of a percent on the day to 6,115 &mdash; only three points off its record close a week ago yesterday.
The Nasdaq is up even stronger as the week winds down &mdash; rallying 1.25% as we write to 19,928. That&rsquo;s 1.1% below its record close in mid-December.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Helping fuel the rally today is Magnificent 7 behemoth Apple &mdash; up nearly 1.5% despite reporting a drop in iPhone sales.
Mr. Market seems to put more importance on the fact that &mdash; as CNBC puts it &mdash; &ldquo;services, which includes App Store purchases, payments and advertising, are becoming a bigger part of the overall business, lifting Apple&rsquo;s profit margin.&rdquo;
Well, that might be news to CNBC, but as far as Paradigm&rsquo;s income investing pro Zach Scheidt is concerned, that&rsquo;s been key to Apple&rsquo;s appeal for many years now. Way back In 2017, he called that steady stream of recurring revenue Apple&rsquo;s &ldquo;secret profit center.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Elsewhere, the big market story today is gold &mdash; which is on track to notch its first weekly and monthly close over $2,800.
At last check, the bid is up to $2,813. The action in silver and the mining stocks suggests the current gold rally might have some legs. Silver broke through $31 this week for the first time since mid-December and the HUI index of mining stocks likewise burst past the 300 level.
Crude continues its slide of recent days, now $72.67. After a furious run-up past $79, all the gains of this month have vanished.
Uncertainty hangs over the oil market amid Donald Trump&rsquo;s threatened tariffs against Canada and Mexico. Supposedly they kick in tomorrow &mdash; or maybe they won&rsquo;t. Perhaps oil imports will be exempted &mdash; or maybe not. Gee, it&rsquo;s not as if businesspeople have to make plans around any of this, right?
Bitcoin hovers over $105,000 amid news that the SEC has given its blessing to a new ETF that allows you to buy exposure to both Bitcoin and Ethereum with a single ticker. The Bitwise Bitcoin and Ethereum ETF still needs to clear a couple of more paperwork hurdles before it starts trading.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The Federal Reserve&rsquo;s preferred measure of inflation shows&hellip; no progress against inflation for months now.
When Fed officials talk about their 2% inflation target, the number they have in mind is something called &ldquo;core PCE&rdquo; issued by the Commerce Department.
The latest reading on core PCE is out this morning and it shows year-over-year growth of 2.8%. Worse, that&rsquo;s up from 2.6% six months ago.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4VJa0cC6N6Z3ovuJtfXKII/1a4473994b97989217031e39fe7d4932/1.31_5_bullets_chart.png" alt="torn money" width="540px" />
After the Fed paused its rate-cutting cycle this week, Bloomberg&rsquo;s spin on today&rsquo;s number is that &ldquo;underlying inflation remained muted in December, which should support further rate cuts.&rdquo; Hope springs eternal!
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Too Good to Be True? (DeepSeek, Continued&hellip;)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Count Paradigm tech specialist Ray Blanco among the DeepSeek skeptics.
From the get-go, he thought it seemed too good to be true &mdash; a Chinese-made AI model competitive with ChatGPT, developed with a fraction of the processor power and 1/20th of the budget?
The headlines today are bearing out something that had been rumored since at least Tuesday &mdash; that perhaps DeepSeek pulled off its feat with &ldquo;gray market&rdquo; Nvidia chips imported via Singapore.
&ldquo;It&rsquo;s true that DeepSeek actually used new methods to improve efficiency, and they do,&rdquo; Ray concedes. &ldquo;But it isn't the efficiency breakthrough it was cracked up to be.&rdquo;
Rather it&rsquo;s just one more example of incremental efficiency improvements: &ldquo;On the hardware side, compute gets cheaper and faster with every new chip generation. On the software side, engineers keep coming up with new ways to optimize and run faster on the hardware.
&ldquo;This innovation is great for U.S. AI companies on both the hardware side like Nvidia and the software side like Microsoft. Improved efficiency in training and running AI models actually expands the market for companies like Nvidia. It also allows companies like Microsoft to offer AI services for cheaper.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But even if DeepSeek&rsquo;s claims pan out, Ray says it doesn&rsquo;t mean the U.S. tech giants have wasted billions of dollars on the buildout of data centers.
To whatever extent AI becomes more efficient, Ray believes it will be another example of the &ldquo;Jevons Paradox,&rdquo; named after the 19th-century English economist who noticed that more efficient methods of burning coal resulted in total coal consumption rising.
&ldquo;When technology improves, we don't end up using less of it, we find more ways to use it,&rdquo; Ray says.
&ldquo;Cheaper personal computers didn't kill the computing industry, they created an explosion in demand. Cloud storage getting cheaper didn't reduce storage needs, it enabled companies to store everything.
&ldquo;The same principle applies to AI. More efficient AI doesn't mean less demand for AI chips, it means AI everywhere, in more applications, running more models, solving more problems.
&ldquo;That's why DeepSeek's efficiency gains, to the extent they are real, don't threaten Nvidia's future &mdash; they could actually strengthen it.&rdquo;
For whatever it&rsquo;s worth, NVDA is on track to end the week over $125 &mdash; about where it was trading four months ago.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Stupid Corporate Logo Infringement Tricks
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We&rsquo;re a bit late to take notice, but there&rsquo;s been an amusing development in Canadian politics&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3NeqNk5MTo7sOleGM54vO4/a23df8212979529dc8323996fd6d8e0a/MarkCarney.png" alt="im in" width="540px" />
As you might be aware, Prime Minister Justin Trudeau is stepping down as leader of the Liberal Party ahead of parliamentary elections later this year.
A new leader will be chosen on March 9. Among the people looking to take over party leadership are central banker Mark Carney &mdash; who previously ran the Bank of Canada and the Bank of England.
But whoever designed his &ldquo;M&rdquo; logo didn&rsquo;t realize it bore a close resemblance to that of a firm called MetCredit, which bills itself as &ldquo;Canada&rsquo;s debt recovery professionals.&rdquo;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7muwDDBskXW4qCgXVmfHQF/0b492a3ed46c86ff6ba2f6a0caf68941/MetCredit.png" alt="Met Credit" width="350px" />
&ldquo;That&rsquo;s a beautiful logo, Mark,&rdquo; said a tweet from CEO Brian Summerfelt &mdash; &ldquo;but we&rsquo;re apolitical.&rdquo;
Carney&rsquo;s people quickly got to work&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1RMIlYENmALvZ23dKopnNs/39fe09d1af17cbb4f649add42b6842d3/MarkCarney2.png" alt="Mark Carney" width="350px" />
As someone posted in the replies, &ldquo;Brian, you may as well get to know Mark. You will probably be calling him sometime after March 9 when the unpaid bills need collecting.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />&ldquo;Unnecessary Political Potshots&rdquo;?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Sadly, you still can&rsquo;t help yourselves from taking unnecessary political potshots at the Democrats,&rdquo; writes one of our regular correspondents/critics after <a href="https://paradigmpressroom.com/post/distillation">Wednesday&rsquo;s edition</a>.
&ldquo;In this case you created a well-written, informative article about the new AI debacle in your first bullet point.
&ldquo;BUT you just couldn&rsquo;t leave it there and had to take a shot at Kamala Harris who, in case you missed it, already lost the election. What possible benefit do your readers gain about the subject matter by referencing her? Go back and read the article again and ask yourself why you chose to deride her administration.
&ldquo;Once you realize how unnecessary her mention was, you can then seek therapy to find out why you are still haunted by the Biden (not Harris) administration. It&rsquo;s almost pathologic, best of wishes for your recovery. Perhaps in the future you can stick to the facts without obvious political bias.&rdquo;
Dave responds: Aw c&rsquo;mon, lighten up.
Apprehensive as I might be about the Trump administration&rsquo;s policies, I am relieved that for the next four years I won&rsquo;t have to listen to the likes of Antony Blinken or Jake Sullivan hectoring China or Russia or anyone else about the &ldquo;rules-based international order.&rdquo;
Earlier this week the loathsome Sen. Tom Cotton (R-Arkansas) &mdash; he&rsquo;s a perfect representation of the warmongering UniParty &mdash; described how the &ldquo;rules-based international order&rdquo; really works.
&ldquo;What matters, in the end,&rdquo; he said, &ldquo;is less whether a country is democratic or non-democratic, and more whether the country is pro-American or anti-American.&rdquo;
Quite the mask-off moment. Is it any wonder so much of the Global South wants to get as far away from the U.S. dollar as humanly possible?
Have a good weekend,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 2426133001

The national debt is reaching critical mass. 

Trump’s Ticking Time Bomb

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />From Black Monday to COVID Crash
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Mason Sexton is a financial analyst with a reputation for astonishingly accurate market predictions. His track record is nothing short of remarkable. 
In the 1980s, he accurately predicted a massive rally in stocks, bonds and gold when few believed such a thing was possible.
He foresaw the 1987 Black Monday crash, warning investors 11 days in advance. And during the 2008 financial crisis, he called the bottom with precision, helping his clients navigate treacherous waters.
<ul>
<li>But one of Mason&rsquo;s most impressive calls came during the COVID-19 pandemic. As markets plummeted in early 2020, Mason accurately predicted both the top and bottom of the crash</li>
</ul>
<ul>
<li>Furthermore, he identified 13 stocks poised for recovery just as markets began to rebound, providing investors a rare opportunity for significant gains.</li>
</ul>
This ability to navigate unprecedented economic turbulence solidified his reputation as someone who could turn chaos into opportunity.
His ability to anticipate market movements has made him a sought-after figure, with some of the most successful hedge funds paying handsomely for his advice.
But after years of working privately with elite hedge funds and corporations, Sexton returned to public forecasting in recent years, offering insights that have proven invaluable to investors.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Now Sexton has emerged with a new &ldquo;prophecy.&rdquo; He warns of a surprise shock that could begin unfolding within the next eight weeks, potentially derailing President Trump&rsquo;s second term. 
Despite current optimism surrounding Trump&rsquo;s return to office, Sexton believes the administration faces numerous challenges, including unsustainable national debt, record-low savings rates, high credit card debt, persistent inflation and a potentially unstable housing market.
As the financial world holds its breath, many are eager to learn more about Sexton&rsquo;s methods and what his latest prediction could mean for the future of the American economy.
Sexton&rsquo;s methods remain a closely guarded secret, but his track record speaks volumes. While his latest prediction warns of a looming economic &ldquo;shock&rdquo; that could unfold within weeks, it&rsquo;s his uncanny ability to consistently read market patterns that leaves many intrigued.
For those curious about how he achieves such accuracy, Sexton&rsquo;s approach offers a compelling mystery worth exploring.
[Encore presentation: Mason Sexton has kept all his predictions private, reserved for his hedge fund clients who&rsquo;ve paid him up to $10,000 per month for his uncanny market insights.
But, now, that&rsquo;s all changed&hellip;
On Jan. 29, Mason finally released a new forecast to the public: He sees a significant event on the horizon unlike anything we&rsquo;ve seen in decades. And it could hit America &mdash; in the next eight weeks!
To view the limited-time replay of this exclusive interview, The Prophecy, <a href="https://pro.paradigm-press.info/m/2407332">click here.</a>]
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Powell&rsquo;s Hawkish Pause
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;As we <a href="https://paradigmpressroom.com/post/distillation#2">predicted</a>, the Fed voted to leave its target rate for fed funds unchanged. This leaves the target rate at 4.50% as set at the December 2024 meeting,&rdquo; Jim Rickards summarizes.
&ldquo;Most of Powell&rsquo;s press conference focused on the [Fed&rsquo;s] &lsquo;dual mandate&rsquo; to maintain price stability and create jobs at the same time. This is practically impossible to do on a consistent basis,&rdquo; Jim continues.
&ldquo;Therefore, the Fed is forced to choose which part of the mandate it wants to address. The Fed&rsquo;s action on Wednesday clearly shows it is more concerned about inflation for now.
&ldquo;The increase in inflation over the past four months&rdquo; &mdash; from 2.4% in September to 2.9% in December &mdash; &ldquo;may indeed prove transitory, but there can be no assurance of that.&rdquo;
According to Jim, Powell&rsquo;s remarks yesterday can best be described as a &ldquo;hawkish pause&rdquo; which &ldquo;refers to the fact that Powell and the Fed will probably not raise rates at the March 2025 meeting either.
&ldquo;The pause may last longer than many expect,&rdquo; he concludes.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Microsoft, Meta and Tesla released their latest quarterly earnings reports yesterday, revealing mixed results for these tech giants.
Microsoft reported strong performance, with revenue increasing 12% year-over-year to $69.6 billion, surpassing analyst expectations. The company's AI business showed significant growth, reaching an annual revenue run rate of $13 billion, up 175% from the previous year.
Meta also exceeded expectations, with Q4 2024 revenue reaching $48.39 billion, a 21% increase year-over-year. The company&rsquo;s EPS for the quarter was $8.02, significantly higher than projected.
Tesla&rsquo;s results were more mixed, beating production goals but falling short on revenue and EPS estimates.
In their earnings calls, all three companies emphasized their ongoing investments in AI and cloud technologies, highlighting the importance of these sectors.
At present, TSLA shares are up 1.5% while META is up about 1.35%. MSFT shares, on the other hand, are down 6.20%.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Checking on the rest of the market, the tech-heavy Nasdaq index is down 0.30% to 19,575. Meanwhile, the S&amp;P 500 and the Dow are both in the green: each up about 0.15% to 6,045 and 44,795 respectively.
As for commodities, the price of oil is up 0.85% to $73.19 for a barrel of WTI. As for precious metals, gold and silver are both catching a bid. The yellow metal is up almost 2% to $2,843.70 per ounce, and silver is up almost 4% to $32.60.
Crypto is rallying, too. Bitcoin is up 1.5% to $105,700, and Ethereum is up 4.30% to $3,275.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />DeepSeek: FALSE?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I bet that you probably never heard of the Chinese AI venture DeepSeek before this week,&rdquo; says Paradigm&rsquo;s trading expert Enrique Abeyta. Here&rsquo;s a quick summary&hellip;
&ldquo;On Jan. 20, the same day as President Trump's inauguration, a Chinese AI startup (founded by a Chinese hedge fund manager) released a new AI model called &lsquo;R1&rsquo; that seems to line up competitively against AI models like ChatGPT,&rdquo; Enrique says.
&ldquo;They claim they developed the model with an investment of only $6 million and that it uses 80% less compute resources (including power) than existing models.
&ldquo;If you believe that they have achieved models just as good at a fraction of the cost, it means that massive investments made in AI by technology companies have been way overdone [by] hyperscalers like Alphabet, Meta and Microsoft,&rdquo; he says.
&ldquo;Stocks that benefited from these investments &mdash; led by Nvidia &mdash; [saw] an astounding loss of over $1 TRILLION in market capitalization of these leading technology companies on Jan. 27.
&ldquo;These are the most widely held stocks by regular investors as well as institutions,&rdquo; Enrique adds. And if the DeepSeek story is true, it could spell &ldquo;absolute disaster for the stock market and investors.
&ldquo;So the big question is this: Is it all true?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;You can certainly figure out relative probability,&rdquo; says Enrique. &ldquo;Here are the questions I would ask in this particular situation&hellip;
&ldquo;First question: Do we think that this relatively small Chinese startup figured out something that the most sophisticated technology companies (spending hundreds of billions of dollars) haven&rsquo;t figured out?
&ldquo;Answer: Absolutely NOT.
&ldquo;I think Big Tech was aware,&rdquo; says Enrique. &ldquo;And with their vast resources, they will take what DeepSeek has done and do it even better. This work will likely accelerate now.
&ldquo;Next question: Do we think that DeepSeek was really able to build this model with $6 million?
&ldquo;Answer: Again, NO.
&ldquo;Here&rsquo;s what Elon Musk, the most successful technology entrepreneur of all time, had to say on the subject&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/8zZXlMnqEtDTyOMpzq0mg/a3ed23580f1888f7b4fb4c7570eab57a/ChubbyTweet.png" alt="chubby tweet" width="540px" />
This was Musk&rsquo;s response to an interview, claiming DeepSeek &ldquo;had access to much more technology than they let on,&rdquo; Enrique notes.
&ldquo;To put this in context, 50,000 Nvidia H100 chips at the list price of $25K each would cost $1.25 billion &mdash; not $6 million.&rdquo;
Then there&rsquo;s <a href="https://paradigmpressroom.com/post/distillation">&ldquo;distillation&rdquo;</a>: President Trump&rsquo;s crypto czar David Sacks says there&rsquo;s &ldquo;substantial evidence&rdquo; that DeepSeek was trained on the data of other AI models.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Final question:Do we think it was a coincidence that [DeepSeek] was launched on the day of Trump&rsquo;s inauguration?
&ldquo;Answer: Absolutely NOT.
&ldquo;Like every company in China, DeepSeek is ultimately controlled by the Chinese government,&rdquo; says Enrique. &ldquo;Don&rsquo;t ever believe otherwise.
&ldquo;I think they wanted to make a splash on Trump&rsquo;s big day,&rdquo; he says. &ldquo;It didn&rsquo;t catch fire on Inauguration Day, but it did a week later.
&ldquo;Also, remember that a Chinese hedge fund manager started this company,&rdquo; Enrique says. &ldquo;Shorting billions of dollars worth of technology stocks and THEN releasing this &lsquo;news&rsquo; would have been one of the greatest trades of ALL TIME.&rdquo;
Enrique&rsquo;s takeaway? &ldquo;It&rsquo;s impossible for ordinary folks &mdash; or even the most sophisticated investors &mdash; to gain absolute certainty in situations like these.
&ldquo;But I think the probability is that DeepSeek is a DEEP FAKE.
&ldquo;As a result, I think we are seeing one of the best buying opportunities in the last five years,&rdquo; Enrique says.
&ldquo;I will show you how to do just that on Monday.&rdquo;
Stay tuned&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />DeepSeek: TRUE?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;Let&rsquo;s imagine, for a moment, DeepSeek is real&hellip; and everything they&rsquo;re telling us is true,&rdquo; says Paradigm&rsquo;s AI expert Chris Campbell, taking the other side of the true or false conundrum.&nbsp;
&ldquo;Consider Jevons Paradox,&rdquo; he says. &ldquo;In the 1800s, people thought better coal efficiency would lead to less coal use. BUT the opposite happened.
&ldquo;Coal got cheaper, and demand skyrocketed.
&ldquo;Point? AI efficiency gains won&rsquo;t reduce AI&rsquo;s role &mdash; they will make AI even more ubiquitous,&rdquo; he says.
&ldquo;While some hardware companies may struggle, the broader AI economy will accelerate &mdash; and, in our view, become more targeted,&rdquo; Chris says.
&ldquo;Lower costs for AI inference and training would widen AI usage, fueling mass adoption across industries, making AI cheaper, more accessible and ultimately more embedded in everyday life.
&ldquo;Rather than, say, relying on the more speculative artificial general intelligence (AGI) ambitions &mdash; which we tend to doubt will work.&rdquo;
Whether the DeepSeek narrative is accurate or not, Chris concludes: &ldquo;By and large, the AI story hasn&rsquo;t changed.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />This Heist Has It All
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Last weekend, the Drents Museum in Assen, Netherlands, became a crime scene after thieves used explosives to break in, targeting a Romanian archaeological exhibit.
Their prize? The Helmet of Cotofenesti, a 2,500-year-old masterpiece, plus three ancient bracelets that represent centuries of cultural heritage.
Crafted from electrum &mdash; a natural alloy of gold, silver and copper &mdash; the helmet weighs 2.2 pounds. Its intricate design features seven rows of conical buttons, dotted spirals and a pair of eyes, perhaps to ward off evil spirits or intimidate enemies.

<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/71gwLc2XyPxzi4Pe6Em33Y/be3c462ec88a3b3cf23aecaeebe66fcc/helmet.png" alt="helmet" width="250px" />

Courtesy: Wikipedia
Unearthed by a farmer&rsquo;s son in 1926 in the village of Cotofenesti, the child initially used the helmet as a toy. Later, the ancient artifact was used as a watering trough for chickens. Eventually, the helmet made its way to what would become the National History Museum of Romania in 1929.
Almost 100 years later, thieves knew exactly what they wanted, passing up modern pieces at the Drents Museum and focusing solely on historic treasures that represent Romania&rsquo;s ancient Dacian civilization.
After the theft, museum director Harry Tupan says he&rsquo;s &ldquo;intensely shocked&rdquo; by the burglary, calling it the most significant event in the institution&rsquo;s 170-year history &mdash; which is an understatement, considering such a cinematic heist.
Dutch authorities today are leaving no stone unturned, collaborating with Interpol and conducting extensive forensic investigations. Meanwhile, a burned-out vehicle discovered near the crime scene suggests this was no ordinary smash-and-grab; thieves had a carefully orchestrated plan.
&ldquo;Romania's ministry of culture has promised to take all possible steps to recover the stolen items,&rdquo; the BBC says, &ldquo;which had been loaned to the Dutch museum from Bucharest.&rdquo;
We can only assume all parties have insurance. But still&hellip;
Take care, reader! We&rsquo;ll be back tomorrow with another 5 Bullets. 
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/emily-clancy.png" alt="Emily Clancy" width="250px" align="left" />
Emily Clancy Associate editor, Paradigm Pressroom's 5 Bullets

awn-hero-img-12-16-24 Business concept. Copy space.2025 predictions symbol through a magnifying glass on papyrus

shutterstock 2488492029

Wall Street whisperer Mason Sexton has emerged with a new “prophecy,” warning of a surprise shock that could begin unfolding within the next eight weeks. 

The Market Crash of 2025

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />&ldquo;Distillation&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />So today is the first time many tech illiterates like myself are learning how the term &ldquo;distillation&rdquo; applies to something other than making adult beverages.
The news is that OpenAI, the company behind ChatGPT, is accusing the Chinese upstart DeepSeek of poaching its work to develop the AI model that&rsquo;s set the U.S. tech giants reeling.
Just to recap the whirlwind of events that began over the weekend: DeepSeek claims to have developed a large language model using only 2,048 Nvidia H800 graphics cards for the paltry cost of $5.6 million.
If DeepSeek is as efficient as it claims to be, all of Big Tech&rsquo;s assumptions about AI are thrown into a cocked hat. The billions of dollars they&rsquo;re spending for data centers, electricity generation and development personnel might be a waste.
Perhaps not surprisingly, OpenAI is crying foul &mdash; telling the Financial Times it detects evidence of &ldquo;distillation&rdquo; on the part of DeepSeek.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;There&rsquo;s a technique in AI called distillation,&rdquo; explains Donald Trump&rsquo;s AI and crypto &ldquo;czar&rdquo; David Sacks &mdash; &ldquo;when one model learns from another model [and] kind of sucks the knowledge out of the parent model.
&ldquo;And there&rsquo;s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI models, and I don&rsquo;t think OpenAI is very happy about this,&rdquo; Sacks tells Fox News.
No it is not. In an official statement, OpenAI complains that Chinese and other companies are &ldquo;constantly trying to distill the models of leading U.S. AI companies.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> So OpenAI is complaining that its &ldquo;intellectual property&rdquo; is being purloined? Pot, meet kettle.
OpenAI&rsquo;s entire business model rests on its ability to hoover up any and all content that&rsquo;s ever been posted online &mdash; and a lot of offline content, too. Otherwise, there&rsquo;s no &ldquo;language&rdquo; with which to build a large language model that plausibly mimics human expression.
Indeed, everyone from The New York Times to leading authors like John Grisham are suing OpenAI for copyright infringement. Last year an OpenAI researcher-turned-whistleblower named Suchir Balaji accused the company of outright violating U.S. copyright law. (Balaji turned up dead last November in what San Francisco police said was a suicide.)
Oh, but now when the proverbial shoe is on the other foot, OpenAI starts to whine and moan? Boo-freakin&rsquo;-hoo.
Intellectual property for me, but not for thee. That&rsquo;s OpenAI&rsquo;s attitude.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The reaction so far from the Trump administration is&hellip; measured. Refreshingly so.
Take another look at David Sacks&rsquo; remarks above. Very neutral, impartial, calling balls and strikes.
There&rsquo;s no chest-beating nationalism, no outrage about the dastardly ChiComs.
<blockquote> ➢ Background: Sacks is an impressive figure. Part of the original &ldquo;PayPal mafia&rdquo; in the late &rsquo;90s along with Peter Thiel and Elon Musk, he came on your editor&rsquo;s radar in 2021 when he stood up against <a href="https://paradigmpressroom.com/post/todays-5-bullets-is-packed-with-misinformation">the censorship-industrial complex</a> &mdash; condemning the deplatforming and demonetization of social media users who stood accused of &ldquo;hate speech&rdquo; or &ldquo;misinformation.&rdquo;</blockquote>
OpenAI&rsquo;s statement includes a line about how &ldquo;it is critically important that we are working closely with the U.S. government to best protect the most capable models from efforts by adversaries and competitors to take U.S. technology.&rdquo;
But in his Fox News interview, Sacks seems to suggest the onus for security is on American companies and not the government.
Note the neutral tone once more: "I think one of the things you're going to see over the next few months is our leading AI companies taking steps to try and prevent distillation,&rdquo; he said. &ldquo;That would definitely slow down some of these copycat models."
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Perhaps Sacks understands that in the end, &ldquo;intellectual property&rdquo; is a squishy concept &mdash; and much human progress can be chalked up to its &ldquo;theft.&rdquo;
New England&rsquo;s storied textile industry of the early 19th century was built almost entirely on &ldquo;stolen intellectual property.&rdquo; It just so happened that guys like Samuel Slater and Francis Cabot Lowell had more or less photographic memories; after observing England&rsquo;s textile mills up close, they came to America and improved on what they&rsquo;d seen in the old country.
The Patent Act of 1793 gave nearly carte blanche to Americans who &ldquo;stole intellectual property&rdquo; from other countries. &ldquo;America thus became, by national policy and legislative act, the world&rsquo;s premier legal sanctuary for industrial pirates,&rdquo; wrote economist Pat Choate in his book Hot Property: The Stealing of Ideas in an Age of Globalization. &ldquo;Any American could bring a foreign innovation to the United States and commercialize the idea, all with total legal immunity.&rdquo;
<a id="2"></a>
The full story of how DeepSeek pulled off its AI breakthrough is yet to emerge. Perhaps, as Elon Musk seems to believe, DeepSeek used a lot more Nvidia hardware than it let on.
But whatever the case, OpenAI&rsquo;s poor me protests should fall on deaf ears.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />The Fed Is Irrelevant
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Whatever the Federal Reserve does today doesn&rsquo;t matter: &ldquo;As always, the Fed is behind the curve,&rdquo; says Paradigm macro maven Jim Rickards.
Shortly after this edition of 5 Bullets hits your inbox, the Fed&rsquo;s Open Market Committee will issue its latest proclamation on interest rates. Barring an immense shock, the FOMC will leave the benchmark fed funds rate where it&rsquo;s been since mid-December &mdash; at 4.5%.
Thus, the Fed&rsquo;s rate cutting cycle will be put on hold only 4&frac12; months after it began last September.
That&rsquo;s unprecedented &mdash; at least so far in this century. Previous rate-cutting cycles took at least eight months or as long as a year.
&ldquo;The Fed is already behind the market,&rdquo; says Jim &mdash; who points out other short-term interest rates are lower than the fed funds rate. A rate called SOFR that banks charge each other is 4.34%. A one-year Treasury bill yields 4.32%.
&ldquo;This reveals that the Fed is not leading the markets to lower rates; they are following the markets,&rdquo; says Jim. &ldquo;Despite the drama and publicity surrounding Fed meetings, the Fed is irrelevant. Markets are driving rates lower with or without validation from the Fed.&rdquo;
Those lower rates are a signal the economy is slowing; indeed, Jim anticipates a recession early in Trump&rsquo;s second term.
For better or worse, the Fed will pause its rate-cutting cycle because it sees inflation moving in the wrong direction. As we&rsquo;ve chronicled regularly, the official inflation rate jumped from 2.4% in September to 2.9% in December (the most recent figure available).
At the same time, the unemployment rate is also trending higher &mdash; which under ordinary circumstances would spur the Fed to continue cutting interest rates.
&ldquo;The Fed now has to choose which threat to fight,&rdquo; Jim says. &ldquo;For now, it sees inflation as the bigger threat.&rdquo;
Anyway, if there&rsquo;s no drama from the rate decision itself, there&rsquo;s always the possibility of something unexpected from Fed chair Jerome Powell&rsquo;s press conference. We&rsquo;ll follow up tomorrow&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> As is often the case on these Fed meeting days, the stock market is treading water ahead of the announcement.
At last check, the Nasdaq is down about three-quarters of a percent &mdash; not unexpected after yesterday&rsquo;s 2% gain, which itself was not unexpected after Monday&rsquo;s 3% rout brought on by DeepSeek. The S&amp;P 500 is still holding the line on 6,000; the Dow is flat.
Gold is losing ground at $2,751 but silver has rallied to $30.76. Crude is down a bit to $73.41 after the release of the Energy Department&rsquo;s weekly inventory numbers. Bitcoin is a hair below $102,000.
After the close today, three of the &ldquo;Magnificent 7&rdquo; companies report their numbers &mdash; Microsoft, Facebook parent Meta and Tesla. A fourth, Apple, follows tomorrow.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />RFK Jr.&rsquo;s Biotech Bent
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Assuming Robert F. Kennedy, Jr. makes it through his Senate confirmation hearings today, it could be a boon for small biotech stocks.
In covering his nomination for secretary of Health and Human Services, corporate media assume RFK Jr. is hostile to all things pharma. But the reality is that he&rsquo;s &ldquo;an enthusiastic biotech investor,&rdquo; says Paradigm biotech specialist Ray Blanco.
&ldquo;I learned this,&rdquo; says Ray, &ldquo;from the news that he is going to have to divest some of his investments in the sector to prevent any potential conflicts of interest should he be confirmed to head HHS.
&ldquo;Apparently, RFK Jr. likes small breakthrough biotechs, including such leading-edge companies as gene editing pioneer CRISPR Therapeutics. I think that bodes well for future regulatory overhauls under RFK Jr.&rsquo;s leadership. He loves to criticize Big Pharma, which is well known, but I was not aware that he liked investing in small biotech.
&ldquo;Maybe we&rsquo;ll get a more even playing field and an FDA that fosters innovation and helps speed development at small companies,&rdquo; says Ray &mdash; which would certainly be a plus for the biotech names he recommends in his Catalyst Trader advisory.
&ldquo;With the JPM Healthcare Conference setting an optimistic tone for 2025,&rdquo; Ray concludes, &ldquo;we're well positioned in both the technology transformation of drug development and the more traditional breakthrough therapeutic space.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />The Presidential (Meme)Coin, Continued&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Nearly everyone has already forgotten about <a href="https://paradigmpressroom.com/post/two-executive-orders-trump-must-sign-now#4">the $TRUMP </a><a href="https://paradigmpressroom.com/post/two-executive-orders-trump-must-sign-now#4">memecoin</a> &mdash; but not Paradigm trading pro Enrique Abeyta.
As you might recall, less than 72 hours before inauguration, the incoming president issued a memecoin &mdash; a digital collector&rsquo;s item if you want to be generous about it, a digital lottery ticket if you don&rsquo;t. Either way, memecoins are pure speculations.
First problem as Enrique sees it: $TRUMP was introduced &ldquo;in a way that only more knowledgeable crypto investors could accumulate it. The Trump-affiliated companies also kept 80% of the coins that were created.
&ldquo;From a starting price of $7, $TRUMP quickly traded to above $70 by Sunday, Jan. 19. This gave the total project a value of almost $75 billion and Trump&rsquo;s stake was worth more than $50 billion.&rdquo;
Also on Sunday the 19th, &ldquo;the same groups released another coin, this time themed around his wife, Melania. That coin is called $MELANIA. It also soared but quickly took away from the value of $TRUMP, which got cut in half.
&ldquo;The way the projects are built, they now can sell these coins over a three-year period.
&ldquo;In theory, the value of the coins held by the Trump-affiliated organization is tens of billions. If they were able to sell them at or near these values, then this would be the single-biggest moneymaking endeavor of Trump's career by far.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;What do I think of these crypto ventures? I think they are disgusting and gross,&rdquo; Enrique says. [Don&rsquo;t hold back!]
&ldquo;I don&rsquo;t begrudge any individual American the opportunity to go out and introduce a meme coin. If you can do it and make a lot of money, great. I do, however, think that our public officials &mdash; especially the president &mdash; should be held to certain standards of behavior.
&ldquo;Maybe that makes me naive and not built for the current world, but I don&rsquo;t care.&rdquo; [Spoken like my fellow Xer!]
The trading and investing angle, you wonder? A major factor behind the success of the U.S. stock market is that &ldquo;we set the bar high for behavior and accomplishments,&rdquo; Enrique says.
&ldquo;If we stop holding ourselves accountable, then we risk slipping into corruption and the political malaise that has led to the relative decline of the rest of the world's economies.&rdquo; [And he <a href="https://paradigmpressroom.com/post/banana-republic-investing">knows a thing or two about that</a> from his mother&rsquo;s side of the family.]
What&rsquo;s more, &ldquo;there will likely be millions of individual investors who are fans who will go out and buy these meme coins. Many (most) of them will lose almost everything by investing in them.
&ldquo;If they did so by buying Dogecoin (or another recent favorite Fartcoin), then it&rsquo;s buyer beware. We can&rsquo;t stop people from making mistakes with their money. When they do so, however, [in] buying a worthless coin officially backed by our president they are made vulnerable to manipulation.
&ldquo;It is the duty of those of us who understand the markets to put this out in the public forum and try to protect those who don&rsquo;t have this knowledge.&rdquo;
After all, Enrique concludes, &ldquo;Those people are also the people who can least likely afford to lose the money.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Best Time to Buy Gold?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;What is the best timing to buy some gold?&rdquo; says a reader&rsquo;s brief inquiry.
The answer is there&rsquo;s no truly bad time to buy gold as a hedge to preserve your purchasing power.
That&rsquo;s even though at $2,751 today, the Midas metal sits within 30 bucks of an all-time high.
Obviously a better time to buy gold was six months ago and an even better time than that was five years ago &mdash; but I get the drift from your question that you might be buying for the first time.
If that&rsquo;s the case, don&rsquo;t hesitate to take the plunge now. Just don&rsquo;t do it all at once.
Decide how much you want to accumulate &mdash; Jim Rickards recommends 10% of your total portfolio &mdash; and start building your position over time. Use &ldquo;dollar-cost averaging.&rdquo; Buy every month or two and keep stacking.
That way, you take advantage of pullbacks in the price.
It&rsquo;s entirely possible that gold will drop to, say, $2,600 in the coming weeks &mdash; that&rsquo;s only a 5.5% drop from current levels. If that happens and you use dollar-cost averaging, you&rsquo;ll acquire some of your stash at that lower price.
If you don&rsquo;t have a dealer in mind, <a href="https://hardassetsalliance.com/?aff=FMF&amp;utm_source=400FMF&amp;utm_medium=ed-mention&amp;utm_term=the51292025&amp;utm_content=the51292025&amp;utm_campaign=the51292025">we always recommend Hard Assets Alliance</a>. To be sure, we own a stake of HAA and as such we&rsquo;ll take a small cut once you fund your account. But we acquired that stake only after seven years of proof that they do well by our customers!
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

mis-hero-img-01-29-25 Dhaka, Bangladesh- 26 Jan 2025: A close up of an iPad screen displaying the Deepseek Ai and OpenAI ChatGPT app icon.

shutterstock 2576691901

So today is the first time many tech illiterates are learning how the term “distillation” applies to something other than making adult beverages.

“Distillation”

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />A Deep Breath About DeepSeek
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> OK, the initial panic is over. Time to take a deep breath. 
Well, and also time for a grim chuckle at the state of AI in America. Right, Emperor Palpatine?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2pPhBSoc22LMRk7nTJMeNA/fda33d751368afb63a3249a70811d7b2/BuybackTweet.png" alt="buyback tweet" width="540px" />
That &ldquo;cheap Chinese knockoff&rdquo; analogy is more apt than you might think, by the way &mdash; but we&rsquo;re getting ahead of ourselves.
Last night, Donald Trump said the advent of the Chinese AI engine DeepSeek is &ldquo;a wake-up call&rdquo; for the U.S. Big Tech. Gee, what was the subject line of yesterday&rsquo;s 5 Bullets?
For the record, Nvidia lost nearly $600 billion of market cap in a single day yesterday. All told, the value of the company shrank by $892 billion between its peak on Jan. 6 and its trough yesterday.
That&rsquo;s mighty close to Paradigm trading pro Enrique Abeyta&rsquo;s prediction that sometime during 2025, NVDA&rsquo;s market cap would be scalped by $1 trillion.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> So back to the big picture for AI. This morning, the question to ask is, is it really true? 
Has Big Tech poured tens of billions of dollars down a rathole for data centers and power generation and development personnel &mdash; only to be shown up by a budget Chinese operator few Americans ever heard of until two or three days ago?
Did DeepSeek really pull off a large language model equal to or better than ChatGPT at only 1/20th of the cost?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;Here&rsquo;s the reality check,&rdquo; says Paradigm AI and crypto authority James Altucher &mdash; after he had his team put DeepSeek through its paces.
&ldquo;It's good, but it's not quite the ChatGPT killer everyone's making it out to be.
&ldquo;Think of it like a Chinese knockoff of a designer handbag. From a distance, it looks pretty similar to the real thing. But up close, you start noticing the differences.
&ldquo;DeepSeek's responses often miss the mark in subtle but important ways. The kind of mistakes that might not show up in performance tests but make a big difference in real-world use.&rdquo;
Nonetheless, James concedes that DeepSeek has demonstrated that &ldquo;you don't need unlimited resources to build a decent AI model. That's what&rsquo;s making investors nervous.
&ldquo;After all, if a small team in China can build this for $6 million, what does that say about the billions being spent by tech giants?&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But there&rsquo;s something crucial that James says the mainstream is overlooking: For the U.S. tech giants, &ldquo;AI isn&rsquo;t just another product line. It&rsquo;s essential to their future.&rdquo;
That is, it&rsquo;s not just about building chatbots. These companies are in &ldquo;an arms race for the future of computing itself.
&ldquo;Microsoft learned its lesson the hard way when it dismissed smartphones as a fad. That mistake cost them an entire market. They're not about to make the same mistake with AI.
Neither is Google, Amazon, Meta or Apple.&rdquo;
Whoever wins the AI race might dominate technology for the next decade or longer, James says.
Which means two things&hellip;
<ol>
<li>&ldquo;DeepSeek isn't going to slow down AI investment.</li>
</ol>
<ol>
<li value="2">&ldquo;But it will force companies to be more transparent about their AI spending and progress.&rdquo;</li>
</ol>
Nothing wrong with that.
Thus for Nvidia and the other chipmakers, &ldquo;the future still looks bright. Whether it's tech giants building premium AI models or startups building budget versions, they all need chips. Lots of them.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;For investors, this means the AI revolution is entering its next phase,&rdquo; James concludes.
&ldquo;We're moving from the &lsquo;Wild West&rsquo; phase, when money was no object, to a more mature market where efficiency matters. This is exactly what happened with the internet, cryptocurrency and every other major tech revolution.
&ldquo;And just like in those revolutions, the real moneymaking opportunities are still ahead of us.&rdquo;
So&hellip; as I said off the top, it&rsquo;s time to take a breath. But it&rsquo;s not time to breathe easy.
That&rsquo;s because &mdash; as we&rsquo;ve been mentioning for a few days now &mdash; the newest addition to the Paradigm team anticipates an ominous period for markets during the next 60 days.
Mason Sexton says it&rsquo;s baked into the cake no matter what Donald Trump does&hellip; no matter what a Chinese AI firm does&hellip; no matter what the Federal Reserve does.
We take his prophecy seriously because of his spooky-accurate market calls going back more than 40 years now. He called the start of an epic bull market in 1982. And much more recently he called the top and bottom of the COVID crisis.
At the bottom in 2020, he recommended 13 stocks &mdash; all of which could have made you a fortune if you&rsquo;d acted on his recommendation. At the time, however, his work was available only to private clients paying up to $10,000 a month.
But what Mr. Sexton anticipates now is something Americans haven&rsquo;t witnessed in 50 years &mdash; and its impact will extend well beyond the markets and the economy.
For that reason, he sought a bigger platform &mdash; and we&rsquo;re privileged to say he chose to join forces with Paradigm Press to get the word out.
Tomorrow at 11:02 a.m. EST you can join Mason for a LIVE online event we&rsquo;re calling, simply, The Prophecy.
(Why the peculiar start time? You won&rsquo;t know if you don&rsquo;t watch.)
Your host for the event is none other than Mason&rsquo;s son, radio host Buck Sexton.
It&rsquo;s a Paradigm exclusive unlike anything we&rsquo;ve done before &mdash; and we still have a few available spots. <a href="https://signups.paradigmpress.me/2406881">Click here right away and we&rsquo;ll reserve yours</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Power to the People (and AI Data Centers)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />If James Altucher&rsquo;s thesis is correct and the knee-jerk reaction to Nvidia is overdone&hellip; then the knee-jerk reaction to the &ldquo;downstream&rdquo; AI companies is even more overdone.
We&rsquo;re thinking specifically about the electricity providers &mdash; especially the ones with nuclear power plants in their portfolios &mdash; that are best positioned to thrive from the build-out of AI data centers.
While NVDA sold off 17% yesterday, some of the &ldquo;independent power producers&rdquo; took an even bigger hit &mdash; Constellation Energy 21% and Vistra 28%, for example.
The aforementioned Enrique Abeyta says that reaction is definitely overblown.
&ldquo;The fundamental reality,&rdquo; says Enrique, &ldquo;is that the United States is facing a power crisis regardless of the level of AI power demand growth.&rdquo;
Exactly. The power grid is so rickety that folks like myself in a central swath of the country from the Upper Midwest to the Lower Mississippi Valley have been at ongoing risk of rolling blackouts since mid-2022 &mdash; months before ChatGPT broke into public consciousness.
Why? Too many coal and nuclear plants are being shut down, and there&rsquo;s nowhere near enough wind and solar capacity coming online to replace them. Nationally, the grid&rsquo;s capacity was no bigger in 2024 than it was in 2011. It has to grow, AI or no.
Besides, even if DeepSeek is everything its creators say it is, the U.S. tech giants will simply study its ins and outs (DeepSeek is open source, the code out in the wild for anyone to examine and explore) and go from there.
&ldquo;They will then build even more powerful models where the Chinese startup can&rsquo;t compete,&rdquo; Enrique says.
&ldquo;In all scenarios, the demand for power in the U.S. goes higher.&rdquo;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Beyond Tech, There&rsquo;s Opportunity
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />For as wicked as yesterday&rsquo;s sell-off was, there are pockets of strength. Paradigm chart hound Greg Guenthner sees them all over.
&ldquo;For starters,&rdquo; he says, &ldquo;I'm keeping an eye on tech names that have little involvement in the AI ecosystem.
&ldquo;While the Nasdaq Composite finished lower by more than 3% on Monday, more than 1,600 components finished the day in positive territory. Of these stocks, 150 gained more than 5%. Sharp declines in NVDA, ORCL, AVGO, MSFT, GOOG and TSLA masked many of the positives happening under the surface.&rdquo;
And outside of tech, &ldquo;consumer staples, consumer discretionary and financials all managed to post gains yesterday.&rdquo; The Dow industrial average posted a 0.7% gain at day&rsquo;s end &mdash; even though NVDA was added to the index three months ago!
Then there are the Chinese stocks: The DeepSeek buzz had a halo effect yesterday for China&rsquo;s Big Tech names like Alibaba (which still trades on the NYSE despite the delisting of several other Chinese firms in recent years). FXI, the big China ETF, posted a gain of nearly 1%.
&ldquo;NVDA is not the stock market,&rdquo; Greg reminds us &mdash; &ldquo;no matter how much the financial media insists otherwise.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Indeed for the moment, the free fall in tech has been arrested.
At last check, the Nasdaq is up 1.2% on the day, and NVDA up 3.3%. The other major indexes are in the green as well, the S&amp;P 500 up a little less than half a percent at 6,037.
We&rsquo;re headed into the meat of earnings season &mdash; with four of the &ldquo;Magnificent 7&rdquo; names set to report tomorrow and Thursday. Oh, and the Federal Reserve issues its latest proclamation on interest rates tomorrow.
Precious metals are starting to recover yesterday&rsquo;s losses, gold at $2,757 and silver back above $30. Crude is flat at $73.14. Bitcoin has recovered the $100,000 level.
One economic number of note: Durable goods orders for December surprised to the downside, falling 2.2%. But that number was skewed badly by orders for aircraft and military hardware, which are notoriously volatile month to month. Take those out and orders for &ldquo;core capital goods&rdquo; rose a solid 0.5%.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Trump Tariff Turbulence
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />What is the Trump administration&rsquo;s tariff policy, really?
The Financial Times reports that Treasury Secretary Scott Bessent &mdash; who won Senate confirmation yesterday &mdash; seeks an across-the-board tariff on all U.S. imports. It would start at 2.5% and rise gradually each month to perhaps as high as 20%, which is the number Donald Trump repeated often while campaigning last year.
The news only adds to the uncertainty about Trump&rsquo;s intentions.
A few days ago, Trump said he might impose a 10% tariff on goods from China effective this Saturday.
&ldquo;That claim should be taken seriously,&rdquo; says Paradigm&rsquo;s macro maven Jim Rickards &mdash; &ldquo;but it&rsquo;s important to understand Trump and the art of the deal.
&ldquo;At other times in recent days, Trump has said his tariffs could be 25% and that he might apply them to China, Canada and Mexico all at once. He has also threatened tariffs against the EU because they do not buy enough U.S. products and many of their members do not pay their fair share of NATO defense costs.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;There&rsquo;s an extent to which these tariff threats are real and represent good economic policy,&rdquo; Jim goes on.
&ldquo;There&rsquo;s another extent to which the tariffs may or may not be good economic policy, but they are being used as financial weapons to achieve geopolitical goals or punish those who do not act in accord with U.S. policy.
&ldquo;Finally, some of these claims may be pure theater at this point designed to give Trump leverage in upcoming negotiations.
&ldquo;That&rsquo;s the point. The target country really doesn&rsquo;t know if it&rsquo;s the early stage of a negotiation, a real policy position or a punishment for real or alleged opposition to U.S. goals. Trump likes to keep his opponents off-balance. He&rsquo;s good at it.
&ldquo;Unfortunately, he keeps investors and markets off-balance also because you don&rsquo;t know if the tariffs will stick or not or if they&rsquo;ll even be imposed.
&ldquo;All you can do as an investor is follow the news, use your best analysis as to when Trump is serious or not and place your bets accordingly.&rdquo; Jim is doing exactly that in Rickards&rsquo; Strategic Intelligence and his other publications.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Comic Relief
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />We conclude with an item from the meme-o-sphere that your editor can relate to from personal experience. Perhaps you do too?
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3Ws6RNjiADPlibvB0c6c41/d72739fa5737bf65fd0ed13063c3097f/Gas.png" alt="gas trank" width="540px" />
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 1520791115

OK, the initial panic is over. Time to take a deep breath… and also time for a grim chuckle at the state of AI in America.

Decoding DeepSeek

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />DeepSeek: The Impact
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />When it comes to the big market-moving story of the day (week? year?)... different generations react in different ways&hellip;
<ul>
<li>Boomers: OMG, my retirement is tanking!</li>
</ul>
<ul>
<li>Xers: Ooh, I better download this DeepSeek thing.</li>
</ul>
<ul>
<li>Millennials/Zers: What&rsquo;s a sputnik?</li>
</ul>
Let&rsquo;s take each of these in reverse order. We&rsquo;ll save the market impact for last because it could easily last beyond today &mdash; and turn out to be the prelude to something even bigger.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> It was the venture capitalist Marc Andreessen &mdash; an Xer who developed the first widely used web browser in the 1990s &mdash; who piqued the curiosity of younger generations&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6D34XzbHmRLpMC9CfUxygJ/314f30b94c2cca5eed41dbed277b26fa/MarcTweet.png" alt="Marc Tweet" width="540px" />
If you&rsquo;re young enough and your public-school education was inadequate enough, Sputnik was the first artificial Earth satellite &mdash; launched by the Soviet Union in 1957.
As legend has it, the &ldquo;Sputnik moment&rdquo; was a wake-up call for Americans to get their butts in gear when it came to science and space, leading ultimately to the moon landing in 1969.
(Whether that&rsquo;s actually true is a story for another day&hellip;)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Sputnik is suddenly &ldquo;a thing&rdquo; because a little-known Chinese firm has come up with an AI model that supposedly is leapfrogging anything out of Silicon Valley to date.
DeepSeek, it&rsquo;s called. One week ago today, the company released a paper describing the model behind it. If the hype can be believed, it&rsquo;s more capable than ChatGPT &mdash; capability achieved without high-end American semiconductors.
Even more impressive, this capability was supposedly achieved at the paltry cost of $6 million, a fraction of the coin laid out by the likes of OpenAI and Google.
By yesterday, DeepSeek became the most-downloaded app at Apple&rsquo;s App Store &mdash; a fact Chinese state media are keen to trumpet this morning&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5EwNqxpQJ7TC637O0NIpEo/56b97c235c0533f86db2fd97f157e89c/GlobalBusiness.png" alt="Global Business" width="540px" />
Our Xer colleague Sean Ring put DeepSeek through its paces this weekend. &ldquo;It&rsquo;s the real deal,&rdquo; he writes in our sister e-letter The Rude Awakening.
Also significant: The company behind DeepSeek is not one of China&rsquo;s tech giants like Alibaba or Tencent. It got its start in 2021 as a side hustle for a hedge fund manager named Liang Wenfeng.
On to the market impact. That deserves a bullet of its own today&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />DeepSeek: The Fallout
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />If everything DeepSeek says is true, it blows up nearly every assumption U.S. tech companies have built into their business plans. Which is why the stock market is in a minor meltdown.
Tens of billions of dollars for data centers? Gigawatts of power consumption? Armies of developers? What if none of it is necessary?
With that, AI chip darling Nvidia is down 12.7% at last check.
As you might recall, Paradigm trading pro Enrique Abeyta&rsquo;s signature prediction for 2025 is that $1 trillion would be slashed from NVDA&rsquo;s market cap. Using NVDA&rsquo;s all-time intraday peak as the starting point &mdash; only three weeks ago today &mdash; we&rsquo;re more than 80% of the way there.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Even before DeepSeek burst on the scene, Enrique was getting &ldquo;Cisco&rdquo; vibes from Nvidia.
Cisco was one of the darlings of the dot-com boom along with Microsoft, Intel and Dell. At the peak of the bubble in 1999 and early 2000, corporate customers couldn&rsquo;t get enough of Cisco&rsquo;s routers and switches.
But the buildout of the internet got ahead of itself; as a result, sales dried up and Cisco&rsquo;s revenue ended up falling for three years before resuming a steady march higher. (Meanwhile, CSCO&rsquo;s share price still hasn&rsquo;t equaled its 2000 peak.)
&ldquo;Competitors to CSCO who were way behind either caught up with better products or with attractive pricing,&rdquo; says Enrique. &ldquo;The product wasn&rsquo;t as good, but it was a lot cheaper, more available and &lsquo;good enough.&rsquo;
&ldquo;This is what I think eventually happens to NVDA.&rdquo;
Note well: Enrique wrote that for our Truth &amp; Trends e-letter on Thursday &mdash; before DeepMind freaked out the entire U.S. tech sector.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The freakout extends beyond Nvidia, to be sure.
The chip companies are taking it the worst&hellip; but the tech giants dumping bazillions into &ldquo;large language models&rdquo; are in the red as well &mdash; Microsoft by 3% as we write, and Google parent Alphabet by 2%.
(Heh &mdash; MSFT reports earnings on Wednesday afternoon. The conference call could be interesting.)
The tech-heavy Nasdaq as a whole is down 2.3% on the day. The S&amp;P 500 is off 1.5% or 90 points &mdash; but it&rsquo;s still holding the line on 6,000. In contrast, the Dow is barely in the red.
The sell-off extends beyond stocks, too: Gold is down $40 to $2,730 and silver has broken below $30. Crude is down over a buck to $73.53. Bitcoin is back under $100,000.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> As much as today is a jolt&hellip; there&rsquo;s something else coming into view that&rsquo;s likely much bigger.
In recent days we&rsquo;ve been telling you about Mason Sexton &mdash; the newest member of the Paradigm team, a 40-plus year market veteran and perhaps the best market timer in history.
He nailed the start of an 18-year bull market in 1982. He called the crash of 1987. He called the bottom of the financial crisis in 2008&ndash;09. And at the very bottom of the COVID crash in March 2020, he recommended 13 stocks &mdash; all of which could have made you a fortune if you&rsquo;d acted on his recommendation.
While Mr. Sexton was a media sensation for his bang-on calls in the 1980s, he then dropped out of sight for over three decades &mdash; advising only high-end private clients.
But his newest big call is so important, he&rsquo;s seeking a bigger platform that can benefit everyday Americans like you.
Not just anyone, though. Only paid subscribers to a Paradigm Press publication will have access to his first event for us &mdash; this Wednesday at exactly 11:02 a.m. EST.
At that time, he&rsquo;ll tell you about a significant event on the horizon unlike anything we&rsquo;ve seen in decades.
And it could hit America in the next eight weeks.
We still have slots available for this event called The Prophecy. But they&rsquo;re filling up fast. <a href="https://signups.paradigmpress.me/2406519">You can confirm your spot and RSVP right here</a>
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />DeepSeek&rsquo;s Triumph: Made in America
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Assuming DeepSeek&rsquo;s claims are true, &ldquo;credit&rdquo; goes in large part to the Biden administration.
On Friday at our sister e-letter The Daily Reckoning, contributor Adam Sharp reminded us that in 2022, Team Biden cut off Chinese access to Nvidia&rsquo;s cutting-edge graphics processing units. At that time, those Nvidia GPUs were the only hardware suitable for AI.
&ldquo;These tech sanctions have backfired spectacularly,&rdquo; Adam writes. &ldquo;We cornered China and gave them only one way out: innovation. It appears they have met the challenge. They learned to build cutting-edge AI applications without high-end Nvidia GPUs. As a result, they can now build models for a tiny fraction of the cost we do&hellip;
&ldquo;If we had simply let China have access to top Nvidia chips, these breakthroughs probably wouldn&rsquo;t have happened for years. They wouldn&rsquo;t have needed to. And Nvidia would have sold a LOT more chips. Now China has its own competing chips, and is making the most of its hardware by maximizing efficiency.&rdquo;
But don&rsquo;t take it from us, take it from this morning&rsquo;s Financial Times&hellip;
<blockquote>After Washington banned Nvidia from exporting its most powerful chips to China, local AI companies have been forced to find innovative ways to maximise the computing power of a limited number of onshore chips &mdash; a problem Liang&rsquo;s team already knew how to solve. &ldquo;DeepSeek&rsquo;s engineers know how to unlock the potential of these GPUs, even if they are not state of the art,&rdquo; said one AI researcher close to the company.</blockquote>
That said, there&rsquo;s plenty of blame to go around. As the Council on Foreign Relations pointed out in a commentary last fall, the limits on exports of chips and chipmaking equipment began during the Trump 45 administration. Biden just piled on more of those limits.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> One final thought before we move on to other matters: Will the feds look for some &ldquo;Chinese spying&rdquo; or &ldquo;Chinese propaganda&rdquo; excuse to ban DeepSeek &mdash; just as they sought to ban TikTok?
After all, the legislation banning TikTok gives the president the authority to ban any app or website that&rsquo;s foreign-owned (or even subject to &ldquo;foreign influence&rdquo;).
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Copper&rsquo;s Moment to Shine
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> It&rsquo;s not just oil that&rsquo;s in line to get a lift from the Trump administration. There&rsquo;s copper, too.
The global mining giant Rio Tinto is hoping the White House will put an end to a 12-year permitting battle over its Resolution copper mine in Arizona. &ldquo;I do think that we have really good chances now to progress that project,&rdquo; CEO Jakob Stausholm tells the Financial Times.
Rio holds the majority stake in the project, 55%. Another global giant, BHP, owns the other 45%. Once in production, it would be the biggest copper mine in North America, meeting 25% of U.S. demand.
For all the headlines about an economic slowdown everywhere in the world except the United States, the price of copper has held up remarkably well. At $4.30 a pound this morning, it&rsquo;s down from a peak over $5 last spring&hellip; but higher than it was a year ago.
&ldquo;Copper can finally breathe now,&rdquo; says Alan Knuckman, our eyes and ears at the Chicago options exchanges. &ldquo;There&rsquo;s good risk-reward there.&rdquo;
And our metals-and-mining maven Byron King is watching for possible takeover activity. Both Rio Tinto and BHP are looking for attractive acquisitions. Stay tuned&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Air Canada Skates for an Epic Screw-up
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Now for an insane postscript to what we described last year as &ldquo;the gold heist of the century.&rdquo;
In 2023, thieves in Canada made off with 6,500 gold bars worth $14.6 million. The bars had arrived at Pearson Airport in Toronto on an Air Canada flight from Zurich, Switzerland. One of the thieves showed a phony airway bill &mdash; and that was good enough to take possession of the bars weighing about 880 pounds, which they hauled away in a box truck.
By one reckoning, that made for the sixth-biggest gold heist in history. Nine men are either under arrest or still at large.
As we mentioned in April 2024, Brink&rsquo;s sued Air Canada for fouling up the transfer of the gold. Brink&rsquo;s was out millions to a Swiss bank and a precious metals refiner &mdash; and sought full compensation from Air Canada.
Long story short, the two sides bickered in court over whether all the paperwork was filled out properly. (For its part, Brink&rsquo;s said a form with the words &ldquo;GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD-GOLD&rdquo; should have tipped someone off that the shipment deserved special care.)
For reasons left unexplained in <a href="https://nationalpost.com/news/canada/toronto-pearson-airport-gold-heist-air-canada-brinks-lawsuit">this article</a> from Canada&rsquo;s National Post, the judge ruled Air Canada owed Brink&rsquo;s compensation denominated in special drawing rights. SDRs are a sort of &ldquo;super-currency&rdquo; issued by the International Monetary Fund and circulated among governments and central banks. (It seems Air Canada&rsquo;s liability limits for baggage losses on plain-ol&rsquo; passenger flights are <a href="https://www.aircanada.com/us/en/aco/home/legal/conditions-carriage-tariffs.html#/">denominated in SDRs</a> as well. Who knew?)
At current exchange rates, the compensation of 9,988 SDRs works out to&hellip; C$18,600 or $12,921.05.
As you might imagine, Air Canada is doing the proverbial victory lap. &ldquo;We are pleased with this decision by the court upholding our position on this matter,&rdquo; says a company flack.
No official comment from Brink&rsquo;s yet. Presumably that&rsquo;s because the unofficial comment is something we couldn&rsquo;t publish in a family e-letter?
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 647587330

A little-known Chinese firm has come up with an AI model that is supposedly leapfrogging anything out of Silicon Valley to date.

Big Tech’s Wake-Up Call

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />A Spooky-Accurate Market Call
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It was the start of an epic bull market lasting nearly 18 years &mdash; and he called it nearly to the day.
There&rsquo;s a good chance you&rsquo;ve never heard of this individual. Mason Sexton is his name. He&rsquo;s kept a low profile for more than three decades. But back in the early 1980s, he was all over print and broadcast media with a series of bang-on market calls.
One of Sexton&rsquo;s most eerily accurate calls was this: On Aug. 9, 1982, he forecast &ldquo;a massive rally in stocks.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> This was a staggering forecast to make at that moment in time &ndash; a defiant stand in the face of conventional wisdom. 
The stock market had gone nowhere for 16 years &mdash; the Dow Jones Industrials unable to break through the 1,000 level and stay there.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5NuP3ZODt9QC1ePbdju2dE/43be87e0196f811bb3aae4cc619b7910/FMF_5Bullets_Chart_0123.jpg" alt="Going Nowhere" width="540px" />
And it was worse than the numbers suggested, as the inflation of the 1970s ravaged the value of investors&rsquo; portfolios.
&ldquo;By August 1982, the S&amp;P Composite Index was, in real terms, back where it had first been in August 1906,&rdquo; wrote Russell Napier in his magisterial history Anatomy of the Bear: Lessons From Wall Street&rsquo;s Four Great Bottoms.
As you might imagine, sentiment was in the toilet. The Federal Reserve under chair Paul Volcker was able to get inflation under control only by throwing the economy into a deep recession. The unemployment rate was approaching 10%. Corporate earnings were getting crushed.
How doomy was the vibe?
Three days before Mason Sexton forecast a &ldquo;massive rally in stocks&rdquo;... The Wall Street Journal cited a senior VP at Smith Barney named Alan Shaw: &ldquo;The spirit of the bear is still with us &mdash; fear of financial collapses, both banking and corporate, high interest rates, rekindled inflation, political disarray, poor second-quarter earnings and Middle East hostilities are all keeping grizzly&rsquo;s image in the fore.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> On Aug. 12, 1982 &mdash; three days after Mason Sexton made his &ldquo;massive rally in stocks&rdquo; forecast &mdash; the Dow hit a bottom that would never be seen again.
The index closed at 777 that day. Before 1982 was over, it broke through the 1,000 barrier &mdash; also a level never to be revisited.
From the bottom on Aug. 12, 1982, the Dow soared 1,409% over the next 17 years and five months &mdash; peaking at 11,723 on Jan. 14, 2000 as the tech bubble reached the bursting point.
Sexton&rsquo;s call, defying all conventional wisdom, wasn&rsquo;t a one-off.
He also called the crash of 1987, still the biggest one-day percentage drop the stock market ever registered. Of course, the media swooned.
And then Sexton dropped out of the public eye.
Oh, he was still making stunningly accurate forecasts defying the herd. But he was doing it for well-heeled private clients. Among other calls, he nailed the 2008 financial crisis and the COVID crash of 2020 &mdash; and the recoveries that followed.
How was Sexton able to time the market so well &mdash; and so consistently?
We&rsquo;re pleased to announce Mason Sexton as the newest member of the Paradigm team. That&rsquo;s right, he&rsquo;s coming back into the public eye. And you&rsquo;ll get a glimpse into his methods during a one-of-a-kind event we&rsquo;ve scheduled for next Wednesday Jan. 29 at exactly 11:02 a.m. EST.
More important, you&rsquo;ll get a heads-up on what Mason says is &ldquo;a very significant market event I believe will occur in the next eight weeks that you need to prepare for now.&rdquo;
You&rsquo;ve got a full six days to adjust your schedule to make sure you&rsquo;re in front of a screen to see what Mason&rsquo;s talking about. I promise it&rsquo;ll be worth the effort. The event is called The Prophecy &mdash; <a href="https://signups.paradigmpress.me/2405700">and we&rsquo;ll save you a seat as soon as you click this link</a>.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Elon Dumps on Stargate
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Little did I know that as I cast a skeptical eye toward Donald Trump&rsquo;s Stargate AI photo op <a href="https://paradigmpressroom.com/post/stargate">in yesterday&rsquo;s edition</a>&hellip; Elon Musk had beaten me to the punch.
&ldquo;They don&rsquo;t have the money,&rdquo; Musk tweeted late Tuesday night &mdash; referring to the chief backers of the project, SoftBank and OpenAI. He said he had it &ldquo;on good authority&rdquo; that to date, SoftBank has lined up less than $10 billion of the $500 billion needed for the next four years.
Despite Musk&rsquo;s huge public profile and social media presence, these remarks flew under the radar. Companies whose names are linked to the project all rallied 4% or better yesterday &mdash; Oracle, Nvidia, Microsoft. Arm Holdings surged nearly 16%. The giddiness spread throughout the tech sector, lifting the Nasdaq 1.3%.
Of course, leave it to the financial media to focus on the wrong thing.
Coverage in both The Wall Street Journal and the Financial Times is all about petty personal dramas &mdash; Musk&rsquo;s ongoing feud with OpenAI CEO Sam Altman, and Musk openly questioning a project that Trump has chosen to tie up with his own prestige.
In contrast, there was little attempt to explore whether Musk&rsquo;s claims might or might not be true &mdash; even though both papers&rsquo; original stories acknowledged there was zero clarity about where the $500 billion would come from.
Pathetic. <a href="https://paradigmpressroom.com/post/stargate">We&rsquo;ll stay on top of the real story</a> because the mainstream won&rsquo;t.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Alas, the &ldquo;Stargate rally&rdquo; couldn&rsquo;t last longer than a day.
At last check, the Nasdaq is down a quarter percent and back below 20,000. Apart from Oracle, all the names mentioned a few moments ago are in the red.
But the broader market is looking more stout &mdash; with the S&amp;P 500 inching up to 6,095. If that number holds at day&rsquo;s end it&rsquo;ll be a record close. The Dow is up about a half percent.
Gold is treading water at $2,753 but silver is losing ground at $30.29. Crude is down nearly a buck and below $75 for the first time in nearly two weeks.
Bitcoin rallied this morning after a tweet from crypto-friendly Sen. Cynthia Lummis (R-Wyoming), urging people to &ldquo;Stay tuned for 10 a.m.&rdquo; because &ldquo;Big things are coming.&rdquo; And as Bitcoin rallied, social media lit up like a Christmas tree&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/111aUGouURf3hErzK16z0W/05c2ceda1b6dc3ba70f9d24e853f03fe/SwanTweet.png" alt="Swan Tweet" width="540px" />
In the event, all that happened was that Lummis was named as chair of a new Senate Digital Assets Subcommittee.
Despite the letdown, Bitcoin is holding on to much of the gain it racked up after Lummis&rsquo; tweet &mdash; $104,571 as we check our screens&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Trump&rsquo;s Russia Sanctions Threat
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Someone is giving Donald Trump very bad advice about Russia and sanctions.
In a social media message directed at Vladimir Putin, Trump said the following yesterday: "Settle now, and STOP this ridiculous War! IT'S ONLY GOING TO GET WORSE. If we don't make a 'deal,' and soon, I have no other choice but to put high levels of Taxes, Tariffs and Sanctions on anything being sold by Russia to the United States, and various other participating countries."
Trump did not attach a deadline to this threat. He did instruct his Russia-Ukraine envoy, the 80-year-old retired Lt. Gen. Keith Kellogg, to reach a settlement in 100 days &mdash; basically, the end of April. (So much for ending the war in a day.)
Trump&rsquo;s bluster isn&rsquo;t altogether surprising. Ever since his election, it&rsquo;s been apparent his Ukraine strategy will differ little from Joe Biden&rsquo;s &mdash; more weapons for Ukraine, more sanctions for Russia. Only the end goal is different. It&rsquo;s no longer &ldquo;victory for Ukraine&rdquo; but rather &ldquo;a stronger position for Ukraine at the bargaining table.&rdquo;
If yesterday&rsquo;s threat is supposed to be a negotiating tactic, it won&rsquo;t work. Russia is already sanctioned to a fare-thee-well and its economy hasn&rsquo;t been wrecked yet. What can Trump do that Biden hasn&rsquo;t already?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Besides, Putin has already laid out his terms for negotiation, as Johns Hopkins historian Michael Vlahos writes: &ldquo;Putin has declared that Russia will not accept a truce, armistice or cease-fire in lieu of a permanent settlement. A long-term compact can be achieved, he insists, only by accommodating Russia&rsquo;s inviolable strategic needs.
&ldquo;Absent this, negotiation will fail, and failure would surely lead to much buyer&rsquo;s remorse and dismay among those millions who voted for Trump&rsquo;s promise to bring the fighting to an end.&rdquo;
To be sure, Trump is the victim of a &ldquo;fork&rdquo; move by Team Biden &mdash; described in our digital pages <a href="https://paradigmpressroom.com/post/biden-tries-to-fork-trump">last Friday</a> by Paradigm&rsquo;s Jim Rickards.
Vlahos says overcoming that move won&rsquo;t be easy for Trump. He&rsquo;ll have to take on both Democratic and Republican warhawks and &ldquo;break the iron narrative of &lsquo;Appeasement&rsquo; &mdash; where the only strategic choice is between war and surrender.&rdquo;
But Vlahos says it can be done &mdash; if Trump tells the whole story of how for more than a decade Washington &ldquo;relentlessly curated conflict between Russia and Ukraine, with the ultimate intent of expanding NATO and breaking Russia.&rdquo;
Trump can also come clean about Ukraine&rsquo;s losses in the war &mdash; between deaths, crippling injuries and desertions Vlahos estimates the number is at least 920,000.
For its part, Moscow is saying only that it&rsquo;s &ldquo;very closely monitoring all the rhetoric&rdquo; from Washington.
"You know that in his first iteration of the presidency,&rdquo; says Kremlin spokesman Dmitry Peskov, &ldquo;Trump was the president of America who most often resorted to sanctions methods. He likes those methods.&rdquo;
To be continued&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />The $33,000 Chevy Chevette
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Here&rsquo;s an intriguing development in the used-car market&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3VG0u1357lI4skDdIkDUck/78667741195aa7c17d659d9dc95c4664/Motor1Tweet.png" alt="Motor1 Tweet" width="540px" />
At a recent auction in Florida, a nearly mint-condition 1987 Chevrolet Chevette with only 47 miles sold for $33,000.
&ldquo;Apparently, someone really wanted a final-year Chevette in new condition,&rdquo; snarks the Motor1 site &mdash; pointing out that you can get a new Honda Civic Si for the same money.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />But that&rsquo;s not the whole story &mdash; as the veteran auto writer Eric Peters points out on his own website.
Adjusted for inflation, the Chevette&rsquo;s sticker price in 1987 &mdash; $4,995 &mdash; is just over $14,000 today.
&ldquo;That amount of money,&rdquo; says Peters, &ldquo;will not buy you anything new that has four wheels that&rsquo;s legal to put license plates on and drive &mdash; in this country, at any rate.
&ldquo;If it weren&rsquo;t for the federal government, you would be able to buy something new that&rsquo;s a lot like the &rsquo;87 Chevette only better &mdash; like the $13,000-to-start Toyota HiLux Champ pickup you&rsquo;re not allowed to buy in this country, because the federal regulatory apparat says it is not &lsquo;safe&rsquo; (meaning it is not compliant with every last pedantic jot and tittle of the Federal Motor Vehicle Safety Standards &lsquo;Bible&rsquo;) and because the apparat claims its &lsquo;emissions&rsquo; (of the dread gas carbon dioxide which is not a pollutant) are too high.&rdquo;
The Chevette is also a throwback to an era when cars had external bumpers &mdash; &ldquo;which means you could bump into things without causing damage that will cost you more than a Chevette cost back in &rsquo;87,&rdquo; Peters goes on.
&ldquo;External bumpers are no longer allowed, chiefly because chrome plating is no longer allowed.&rdquo; Which is one of many reasons Peters says &ldquo;you&rsquo;re paying as much to insure a typical new car for three years as it cost to pay off a new Chevette after about three years, back in &lsquo;87.&rdquo;
Hmmm&hellip; given all that, as well as the relative ease of maintenance compared with newer vehicles&hellip; maybe the buyer isn&rsquo;t so crazy after all?
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />AI and Electricity
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> On the subject of Stargate and AI and electricity demand, discussed at some length <a href="https://paradigmpressroom.com/post/stargate">yesterday</a>, a reader writes&hellip;
&ldquo;Fear not, Dave, I have a hunch that the power needed for the AI surge will come from small nuclear plants to be built on-site and primarily in Texas.&rdquo;
Dave: In the next four years &mdash; which is the promised timeline?
Yes, Trump is promising to cut the red tape to ensure this project gets the electricity it needs&hellip; but that&rsquo;s mighty ambitious.
I&rsquo;ll be as happy as anyone to see it come about &mdash; seeing as I&rsquo;ve been fretting in these virtual pages about the fragility of the power grid since 2022.
Too, if it comes about, the investing possibilities will be awesome. The biggest name in the space is one that our Ray Blanco has been keen on for a while &mdash; and its share price achieved a 6X gain in only eight months last year.
With any luck, many others will follow. We&rsquo;ll stay on top of it. It&rsquo;s an enormous opportunity even if Stargate never sees the light of day&hellip;
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

shutterstock 740657809

It was the start of an epic bull market lasting nearly 18 years — and Mason Sexton called it nearly to the day.

Defiance

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Stargate: Smoke and Mirrors?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> It was a brilliantly staged photo op. It was also fraudulent &mdash; and in the end, meaningless.
Less than a year into his first term as president in 1993, Bill Clinton invited Israeli and Palestinian leaders to Washington, D.C. to sign an interim peace agreement. Maybe you remember the image&hellip;

<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2iksnyCQrb3oPOVxEVS3b0/c6f5f68eb45dc2fb0d9187750845c9a0/Clinton.png" alt="clinton" width="450px" />

Bill Clinton&rsquo;s Potemkin peace deal
Understand, Slick Willie had nothing to do with negotiating the deal &mdash; which had been in the works for two years.
All that mattered to him were the &ldquo;optics&rdquo; of being seen as Israeli Prime Minister Yitzhak Rabin shook hands with PLO leader Yasser Arafat. Low-information voters half-watching their TVs from the next room would simply assume Clinton was the brilliant leader who made it all possible.
The photo op was a sham and in the end so was the agreement itself. The Palestinians got no closer to having a nation-state of their own, while Rabin so enraged Israel&rsquo;s right wing that he was assassinated two years later.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Clinton&rsquo;s sham comes to mind in light of another boomer president&rsquo;s photo op yesterday&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2L9A0YzNijYxi2vAhWr0Ot/d2a0ef35ee31d015440d6f19983471bb/DiscloseTweet.png" alt="disclose tweet" width="540px" />
Because you can&rsquo;t tell the players without a program&hellip; the fellow standing next to Trump is the Japanese tech billionaire Masayoshi Son, CEO of SoftBank Group. &ldquo;Masa&rdquo; paid a call on Trump at Mar-a-Lago last month, promising to invest $100 billion in the United States over four years.
Next to Son is Larry Ellison, chairman of Oracle, and Sam Altman, CEO of OpenAI.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> &ldquo;OpenAI and SoftBank on Tuesday said they would launch a massive U.S. artificial intelligence infrastructure project, in a move Donald Trump lauded as a &lsquo;declaration of confidence in America,&rsquo;&rdquo; reports the Financial Times.
&ldquo;The joint venture, dubbed Stargate, plans to spend $100 billion on Big Tech infrastructure projects, with the figure rising to as much as $500 billion over the next four years, the groups said.&rdquo; The number of new jobs is pegged at 100,000.
Like the Israeli-Palestinian agreement of the early &rsquo;90s, this venture had been in the works well before the president arranged a photo op to take the credit. The tech website The Information reported on the plans in March of last year &mdash; all the way down to the $100 billion figure and the &ldquo;Stargate&rdquo; name.
Also like the Israeli-Palestinian agreement 30-odd years ago, the details going forward are hazy. &ldquo;It was not immediately clear how Stargate would obtain funding,&rdquo; says the FT, &ldquo;but one person involved in the project said they intended to bring on additional investors.&rdquo; Likewise The Wall Street Journal says &ldquo;key elements&rdquo; of the scheme &ldquo;remain vague.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Another uncomfortable parallel comes to mind, this one from Trump&rsquo;s first term &mdash; the Foxconn factory.
Trump sought the credit as Foxconn, the Taiwanese electronics giant, announced plans to build a factory making TV and computer screens in the Wisconsin congressional district of House Speaker Paul Ryan. The promise was 13,000 jobs paying an average $53,900 a year plus benefits.
Less publicized was the $3 billion in subsidies Foxconn would get from the state of Wisconsin &mdash; which we said at the time worked out to $230,000 per job.
Eighteen months after the announcement in 2017, the plans were already falling apart.
By 2021, Wisconsin Public Radio reported that &ldquo;roughly 2,500 acres of land in Mount Pleasant remain in a state of construction, marked with unfinished buildings &mdash; land that was once peoples&rsquo; homes, before they were forced out to make way for the company.&rdquo;
Last year, Microsoft announced it would build a data center on the site &mdash; but now those plans are on hold. Hmmm&hellip;
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />Two Constraints on AI (and All of Digital Tech)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Back to the present: Stargate, and AI in general, faces two huge constraints that digital technology has never grappled with &mdash; until now.
The first is one we chronicled <a href="https://paradigmpressroom.com/post/the-monster-that-ate-the-power-grid-ai">throughout 2024</a> &mdash; an electric grid whose capacity is no greater now than it was in 2011.
Which was fine as long as the technology industry made steady efficiency improvements. But that&rsquo;s over now: By one estimate, a typical data center&rsquo;s computing power needs to double every three months just to keep pace with AI&rsquo;s demands.
<blockquote>➢Just in: Here&rsquo;s a fresh reminder of the demands AI is putting on the grid. Amid a cold snap on the East Coast, the grid operator PJM Interconnection is under stress. PJM serves 65 million customers in a region that includes &ldquo;Data Center Alley&rdquo; in Virginia, the biggest concentration of data centers in the country. Under an emergency alert just issued by PJM, its member utilities are barred from sending electricity to neighboring power grids. For the moment, PJM does not anticipate resorting to power rationing.</blockquote>
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> The other new constraint on digital technology&rsquo;s advancement is less widely known, but no less important &mdash; a rising cost of borrowed money.
Interest rates move in decades-long cycles &mdash; 40 years up, 40 years down, give or take. IBM&rsquo;s introduction of the first mass-market personal computer in 1981 coincided almost perfectly with a secular peak in interest rates &mdash; 15.8% on a 10-year U.S. Treasury note.
From that peak, it was generally down for the next four decades &mdash; not a straight line, of course, but a steady trajectory. The tech industry was able to ride that wave all the way down; any debt they took on for startup or expansion could be refinanced later at a lower interest rate.
But those days are over. It&rsquo;s safe to say the bottom of that falling-rate cycle came in August 2020, when the 10-year T-note yielded a paltry 0.5% (and the work-from-home crowd had just loaded up on all the electronics they&rsquo;d need for a few years).
This morning, the 10-year yield is almost 4.6%. We&rsquo;re in the early years of a new 40-year cycle of rising interest rates.
Little wonder that it&rsquo;s &ldquo;not immediately clear&rdquo; where Stargate&rsquo;s funding will come from or who the &ldquo;additional investors&rdquo; might be.
Don&rsquo;t get the wrong idea: Not every AI investment is destined to be a loser. AI has immense potential to change life for the better. But between a rickety power grid and rising interest rates, it won&rsquo;t be easy money.
The Paradigm team will keep eyes open for the best-of-breed opportunities. And they probably lie somewhere other than in Stargate. (We&rsquo;ll keep tabs on Stargate&rsquo;s progress, much as we did with Foxconn&hellip;)
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />After $100K Bitcoin, What&rsquo;s Next?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />On the plus side of the ledger, the new president is moving quickly to bring some order and predictability to crypto.
Yesterday, his acting SEC chair &ldquo;launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets,&rdquo; says an SEC press release.
At the head of the task force will be SEC commissioner Hester Peirce &mdash; widely seen as the most sensible and pro-crypto commissioner during the Biden years, when the now-departed chair Gary Gensler threw as many roadblocks in crypto&rsquo;s way as possible.
With that sort of reassurance &mdash; uhh, <a href="https://paradigmpressroom.com/post/two-executive-orders-trump-must-sign-now#4">the TRUMP </a><a href="https://paradigmpressroom.com/post/two-executive-orders-trump-must-sign-now#4">memecoin</a> notwithstanding &mdash; crypto assets are holding onto their recent gains, Bitcoin just over $104,000 as we write.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> But take Trump out of the equation: What does Bitcoin&rsquo;s price action suggest about the path forward?
&ldquo;Bitcoin has essentially traded in a sideways range since late November as it marched to its first breakout above $100K,&rdquo; says Paradigm chart hound Greg Guenthner. &ldquo;Now that it&rsquo;s beginning to turn higher again, we can begin plotting price targets in anticipation of an upside breakout.
&ldquo;If Bitcoin can get back above $105K and start to run, it will likely escape this sideways chop and produce a rally similar in magnitude to what we saw in early November when it jumped from the low $70K range to the mid $90Ks.&rdquo;
That sets a near-term target of $120,000 by March.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/UdfKaBmAryufluwesDDzZ/922b86bd94309017ecf78a82c25fc97e/FMF_5Bullets_Chart_0122.jpg" alt="if last is prologued" width="540px" />
&ldquo;Whether Trump&rsquo;s new administration is the next major catalyst for Bitcoin or not,&rdquo; says Greg, &ldquo;it&rsquo;s looking like the path of least resistance is higher in the short term.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> As for stocks, it&rsquo;s all good &mdash; with the tech-heavy Nasdaq taking the lead, up 1.3% and over 20,000 for the first time since the holidays.
At least for the moment, tech is getting a tailwind from the Stargate announcement &mdash; with Oracle up 6.7% at last check.
Also helping are boffo earnings numbers from Netflix &mdash; which apparently believes its customers&rsquo; finances are robust enough to withstand a 9.7% monthly rate increase.
Meanwhile, the S&amp;P 500 is up nearly two-thirds of a percent to 6,087 &mdash; *this* close to its record close on Dec. 6. And the Dow&rsquo;s grip on 44,000 is becoming firmer.
Undoubtedly it&rsquo;s helping stocks that the dollar is weakening relative to other major currencies. After reaching nearly 110 on Jan. 13, the U.S. dollar index sits this morning at 108.2. (Weaker dollar = stronger stocks is one of the most powerful correlations in the markets&hellip;)
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With the dollar&rsquo;s pullback, gold is quietly marching toward record levels &mdash; up another $12.50 as we write to $2,757. Alas, silver&rsquo;s in the red and so are the gold stocks.
Crude continues to pull back &mdash; now $75.47, down from $79 last Thursday.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" />Cease-Fire, but What About Shipping?
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Maybe with the cease-fire between Israel and Hamas, global shipping can return to some semblance of normal.
As you might recall, the Houthi faction that governs much of Yemen started harassing Israeli- and U.S.-linked shipping in the Red Sea in late 2023 &mdash; an act of solidarity for the Palestinians in Gaza who&rsquo;d come under attack by Israel. The U.S. military started bombing the Houthis a year ago &mdash; which only escalated the tensions.
As a result, the Red Sea was effectively shut down to Western shipping &mdash; along with the Suez Canal.
Suddenly, much of global trade was set back to the 1860s, before the canal was built. Ships headed between Asia and Europe had to take the long way around the Horn of Africa. Between extra fuel burn and overtime for crews, the typical cost of a voyage rose 40%.
The U.S. bombing campaign has been a peculiar affair. As we chronicled in late 2023, the Houthis can fire $2,000 drones &mdash; and the Navy can respond only with $2 million missiles.
But the Houthis have missiles, too &mdash; and they&rsquo;ve been so effective that in recent weeks, the aircraft carrier USS Harry Truman has been hanging out in the northern Red Sea, out of the range of Houthi salvos. (On social media, the military analyst William Schryver has taken to calling the Truman &ldquo;the USS Trembling Puppy.&rdquo;)
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Now it seems all of that is winding down with an Israel-Hamas cease-fire taking effect last Sunday. But shippers are wary.
&ldquo;If Israel stops the aggression in Gaza, and if the U.S., U.K. and Israel stop the aggression against Yemen, the Houthis will stop their operations, including attacks against navies and commercial ships,&rdquo; a Houthi spokesman tells Al Jazeera.
Western shippers, however, are proceeding with an abundance of caution. According to the FreightWaves website, only French-based CMA CGM, the world&rsquo;s third biggest shipping line, has continued to transit the Red Sea.
The biggest, Swiss-based MSC, is still keeping its distance. &ldquo;In order to guarantee the safety of our seafarers and to ensure consistency and predictability of service for our customers, MSC will continue to transit via the Cape of Good Hope until further notice,&rdquo; according to an email MSC sent to a FreightWaves reporter.
Perhaps the suits at MSC are seeing the same articles we are &mdash; Donald Trump saying he&rsquo;s &ldquo;not confident&rdquo; the cease-fire can hold, and Israel&rsquo;s prime minister Benjamin Netanyahu saying Trump has given him a guarantee he can resume the war after the first phase of the cease-fire is over.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />At Long Last
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Before we go, one major plus for Trump, for crypto and for freedom&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/ZyA05qhLmk0d1Y9mJbEnY/ce417e36355c58ade527da867baa54a4/FreeRossTweet.png" alt="free ross" width="540px" />
Yesterday, Trump pardoned and freed Ross Ulbricht &mdash; a man who never harmed anyone but who was serving two life sentences.
Imprisoned since October 2013, Ulbricht was the founder of an unregulated website called Silk Road. It was a pioneer in Tor anonymity and Bitcoin transactions, of which he took a cut to make a profit.
But the feds accused him of &ldquo;enabling&rdquo; drug dealing and money laundering.
&ldquo;None of the charges were related to either personally selling an illegal substance to anyone &mdash; Ulbricht merely ran a website that facilitated it &mdash; and none were related to causing direct harm to anyone's life or property,&rdquo; wrote Reason&rsquo;s Brian Doherty upon Ulbricht&rsquo;s sentencing in 2015.
Not only is Ulbricht out more than 11 years of his life, he&rsquo;s also out the Bitcoin the feds seized from him &mdash; about $18 billion worth at current prices. The feds sold most of that at auction over the years.
Trump promised to free Ulbricht during his appearance at the Libertarian Party&rsquo;s national convention last May &mdash; a stance out of character for someone who wants to execute drug dealers, but we&rsquo;ll take it.
Now if he can do Edward Snowden&hellip; <a href="https://paradigmpressroom.com/post/joe-biden-pardon-this-man">and Julian Assange</a>.
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

5 bullets hero surreal enigmatic picture on canvas

shutterstock 638004649

Trump announces $500 billion AI “Project Stargate.” But there are two uncomfortable parallels from recent history. 

Stargate

<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-1-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-1_2x-new.png 2x" alt="1" width="37" />Two Executive Orders Trump MUST Sign NOW
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Love him or hate him, there&rsquo;s one undeniable good from the Trump inauguration &mdash; it&rsquo;s totally upstaged the global power elite&rsquo;s annual shindig in Davos, Switzerland.
Betcha didn&rsquo;t even know the World Economic Forum was doing its thing this week, did you?
So far, the 2025 Davos headlines are a snooze. And in a way, they don&rsquo;t matter. During last year&rsquo;s gathering, we&rsquo;d chronicled how the worldly wine-and-cheese set had already <a href="https://paradigmpressroom.com/post/davos-welcomes-trump">made their peace</a> with a second Trump term.
Back home, as you&rsquo;re no doubt aware, Trump signed a flurry of executive orders upon reassuming the presidency yesterday. You can read about them anywhere &mdash; although if you&rsquo;re feeling as if you can&rsquo;t keep up, Sean Ring had a succinct and pithy rundown in <a href="https://rudeawakening.info/posts/trumps-executive-orders-and-you">today&rsquo;s Rude Awakening</a>.
For our purposes today, we want to focus on two &ldquo;EOs&rdquo; that he hasn&rsquo;t signed yet. We don&rsquo;t know whether his aides are drafting them right now &mdash; but if they&rsquo;re not, they should be.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />First: An executive order impounding the Biden administration&rsquo;s last-minute grant to Moderna Inc. (MRNA) for bird flu shots.
Buried on Page B3 of today&rsquo;s Wall Street Journal is this nugget: &ldquo;Moderna secured a $590 million package from the U.S. Health and Human Services Department to accelerate the development of its bird influenza vaccine as concerns grow about a bird flu pandemic in humans.&rdquo;
Specifically, the money will fund &ldquo;late-stage development and licensure of prepandemic mRNA-based vaccines.&rdquo;
Right. Because mRNA-based &ldquo;vaccines&rdquo; did such a bang-up job of preventing infection and transmission of COVID-19. (Joe Biden got four &ldquo;boosters&rdquo; after his initial round and contracted COVID three times.)
Trump still seems to be enormously proud of &ldquo;Operation Warp Speed,&rdquo; but he needs to put a stop to this taxpayer boondoggle immediately. It was a nice gesture yesterday to reinstate the troops who refused the jabs under Biden&hellip; but if he&rsquo;s serious about a &ldquo;Make America Healthy Again&rdquo; agenda, he needs to claw back this Moderna money immediately.
If Moderna executives want to blow their shareholders&rsquo; funds trying to find a way to make mRNA &ldquo;vaccination&rdquo; feasible, that&rsquo;s their prerogative. But Trump needs to step up and say, &ldquo;Not on our dime.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" /> Then: An executive order declassifying all the JFK files.
It&rsquo;s passing strange that Trump didn&rsquo;t sign such a document on Day 1.
Less than 24 hours before his inauguration, Trump spoke to supporters in Washington: &ldquo;In the coming days, we are going to make public the remaining records related to the assassinations of President John F. Kennedy, his brother Robert Kennedy as well as Dr. Martin Luther King Jr. and other topics of great public interest,&rdquo; Trump said. &ldquo;It&rsquo;s all going to be released, Uncle Sam.&rdquo;
The New York Times says that line got &ldquo;one of the loudest applauses of the rally.&rdquo;
Early in his inaugural address yesterday, Trump said, &ldquo;Our government confronts a crisis of trust.&rdquo;
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As I wrote in 2023, that crisis has been <a href="https://paradigmpressroom.com/post/from-jfk-to-jeffrey-epstein">building for six decades</a> ever since JFK&rsquo;s murder. Trump had a chance during his first term to throw open the files &mdash; indeed, the law commanded him to do so &mdash; but instead he caved to the wishes of his CIA chief Mike Pompeo.
Enough. If Trump is serious about restoring &ldquo;trust,&rdquo; it starts with releasing the JFK files. Oh, and the Jeffrey Epstein files, too.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-2-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-2_2x-new.png 2x" alt="2" width="37" />TikTok Is Now Trump&rsquo;s &ldquo;Hostage&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Executive orders notwithstanding, the TikTok saga is nowhere near over.
When we last delivered a &ldquo;live&rdquo; edition of these 5 Bullets on Friday, the Supreme Court unanimously upheld the law banning TikTok if its Chinese owners did not arrange a sale of TikTok&rsquo;s U.S. assets by Sunday.
Despite murmurings from the Biden administration that they wouldn&rsquo;t allow TikTok to actually go dark on Sunday, that&rsquo;s exactly what happened &mdash; which put the United States in some not-so-distinguished company&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2gXgAaFYAxWDIKARTpDCXX/c9507b0bd2da23397d1114bf04f6d9eb/RawsGlobal.png" alt="raw global tweet" width="540px" />
Later on Sunday, TikTok came back up in anticipation of an executive order by Trump.
That order came last night. But all it did was buy TikTok another 75 days before its Chinese owners have to sell TikTok&rsquo;s U.S. operations, or face a ban again. Trump is simply choosing not to enforce the law at this time.
That&rsquo;s ambiguous enough&hellip; but this is even more cryptic: As the BBC reports, Trump &ldquo;floated the possibility of a joint venture running the company, saying he was seeking a 50-50 partnership between &lsquo;the United States&rsquo; and its Chinese owner ByteDance. But he did not give any further details on how that might work.&rdquo;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Given the total lack of clarity, TikTok still can&rsquo;t be downloaded from Apple&rsquo;s App Store or Google&rsquo;s Play Store.
Apple and Google are the companies that are effectively charged with frontline enforcement of the law. No new downloads, no new users.
It seems both companies&rsquo; lawyers took to heart the following threat from neocon zealot Sen. Tom Cotton (R-Arkansas)...
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/45hX3AeRKk7ZAYOeVb5Ndk/192fc6c40c6ece099ecd7f42cb2d46a0/TomTweet.png" alt="tom tweet" width="540px" />
Yesterday morning, the venture capitalist Mike Solana suggested TikTok is now &ldquo;a hostage&rdquo; to Trump&rsquo;s agenda.
Trump seemed to confirm as much when signing the TikTok EO. Here&rsquo;s the BBC again: &ldquo;Trump also said he may impose new trade tariffs on China if a deal for the platform is not struck.&rdquo;
Yeah, so if TikTok is your preferred medium to exercise your First Amendment rights, you&rsquo;re now at the mercy of&hellip; trade talks.
However this pitiful drama ends, it ends with the rule of law becoming a much more squishy thing &mdash; and with American business owners turning much more gun-shy about whatever damn fool thing the government might do next.
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Also, we can&rsquo;t say it often enough: The law that bans TikTok allows the president &mdash; any president &mdash; to ban an app or website if he deems it to be under &ldquo;foreign influence.&rdquo; Even if it&rsquo;s 100% American owned.
The law&rsquo;s scope is breathtaking, as former Rep. Justin Amash (R-Michigan) reminds us&hellip;
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1Lp4aaJmOHW8bL7bTdS45u/2050956aaa02d8e0e151188e9e76dab6/JustinTweet.png" alt="justin tweet" width="540px" />
Word. Sen. Rand Rand Paul (R-Kentucky) is introducing a repeal bill. He&rsquo;s almost surely tilting at windmills, but we wish him well regardless.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-3-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-3_2x-new.png 2x" alt="3" width="37" />Knuckman&rsquo;s Law, Revisited
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Today is as good a time as any for a reminder about Knuckman&rsquo;s law.
Coined by Alan Knuckman, Paradigm&rsquo;s eyes and ears at the Chicago options exchanges, it&rsquo;s a simple principle: When it comes to markets and investing, don&rsquo;t react to anything Trump says for 48 hours. Give events that much time to shake out.
Trump hardly said anything about tariffs at the inauguration! Oh, but now he wants to impose 25% tariffs on Mexico and Canada as of Feb. 1! Oh, but that might just be a negotiating ploy!
There you have a handy summary of all the noise in the financial media the last 24 hours.
Is there anything about it that&rsquo;s concrete or actionable? No, there is not &mdash; unless you&rsquo;re doing very short-term trades in the Canadian dollar or Mexican peso, maybe.
Anyway, the S&amp;P 500 begins the Trump 47 era up a half percent on the day at 6,026. For the record, the S&amp;P sat at 3,850 at the start of the Biden administration&hellip; and around 2,270 at the start of the Trump 45 years.
Gold is rallying strong, up $31 to $2,739. If you&rsquo;re curious, gold was $1,875 at this time four years ago and $1,218 eight years ago.
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Silver is rallying alongside gold, up a quarter to $30.69. The HUI index of gold stocks has powered back above 300 for the first time since mid-December.
Crude is backing down from its recent run toward $80 a barrel &mdash; down nearly 2% on the day at $76.45. As with everything else, it will take time to see exactly what Trump&rsquo;s executive orders on energy will mean for actual production and prices. (Ironically, the industry might be more reluctant to &ldquo;drill, baby, drill&rdquo; than the president would like. But that&rsquo;s a story for another day&hellip;)
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-4-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-4_2x-new.png 2x" alt="4" width="37" /> A Special-Issue Inaugural (Meme)Coin
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />Bitcoin has been gyrating around all-time highs in recent days &mdash; volatility driven in part by the unexpected launch of a Trump memecoin.
As a reminder, memecoins are a variety of crypto that have no &ldquo;use case.&rdquo; They&rsquo;re not a medium of exchange, nor a unit of account nor a store of value. They&rsquo;re pure speculations &mdash; &ldquo;digital lottery tickets,&rdquo; as Paradigm&rsquo;s crypto evangelist James Altucher puts it.
TRUMP launched on Friday night, with The Donald&rsquo;s blessing &mdash; its market cap soaring from zero to nearly $15 billion by Sunday.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4a4huZ0nPEaskMFDp5mugS/c284866ff2d24e649a99b2ec23bbd8b3/TrumpMemeCoin.png" alt="trump memcoin" width="540px" />
The president had better hope for his own sake it doesn&rsquo;t turn into a &ldquo;rug pull&rdquo; &mdash; in which a memecoin is quickly bid up, only to crash and leave its &ldquo;investors&rdquo; holding the bag. As it was, TRUMP crashed 50% on Sunday when the incoming first lady launched a MELANIA coin.
Best case scenario: Trump was led astray by&hellip; someone. Ryan Selkis, a Trump supporter and former CEO of the crypto research firm Messari, warned Trump on X that whoever it was &ldquo;cost you a lot of $ and goodwill.&rdquo;
Worst case scenario: Trump got the big head, seeing what the <a href="https://paradigmpressroom.com/post/closer-to-crypto-capital-of-the-world">Hawk Tuah Girl</a> did, and said, &ldquo;Hold my beer.&rdquo;
At least a few corners of Trump-adjacent media are apoplectic. Jim Quinn at The Burning Platform spares no prisoners&hellip;
When you bilk your acolytes by issuing a worthless bull**** coin the weekend before becoming president, enriching yourself by $12 billion, how are we supposed to take you seriously when you declare you are here to serve the American people? Donate the $12 billion to the freezing, hungry Americans in NC and Georgia and the J6ers who have been abused by your government. What a scam.
<img src="https://media.paradigmpressgroup.com/fmf-assets/bullet-5-new.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/bullet-5_2x-new.png 2x" alt="5" width="37" />Mailbag: Wildfires, Transcripts
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />It seems the California wildfires are no longer &ldquo;the current thing,&rdquo; but a longtime reader from the Golden State still wishes to weigh in.
&ldquo;I am selling all of my California municipal bonds, selling my house and moving to Arizona,&rdquo; he says &mdash; &ldquo;as soon as possible.&rdquo;
Dave responds: Every new day seems to bring a horrible new wrinkle to the story.
&ldquo;Building codes and zoning have changed substantially since homes destroyed by California fires were originally built,&rdquo; tweets legal writer Margot Cleveland from The Federalist.
Not only does that translate to higher rebuilding costs, but setback requirements will prevent many homes from being rebuilt at all&hellip;
<img class="infinity-bullet" src="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left.png" srcset="https://media.paradigmpressgroup.com/fmf-assets/Paradigm_Logomark_left_2x.png 2x" align="left" />&ldquo;I wanted to provide some feedback, specifically related to emails and upsell opportunities,&rdquo; a reader writes.
&ldquo;Many of your subscribers may be interested, however, due to the length of the videos (too long). Folks that are employed and may be watching on their lunch break, etc., often do not have the time to watch every video. I love to see transcripts included along with the videos.&rdquo;
Dave: Most of our promotional presentations come with a transcript option now.
Sometimes you might have to wait a few moments for a pop-up inviting you to read the transcript, but we added that choice last year after feedback exactly like yours!
Best regards,
<img class="aligncenter" src="https://media.paradigmpressgroup.com/signatures/dave-gonigam.png" alt="Dave Gonigam" width="250px" align="left" />
Dave Gonigam Managing editor, Paradigm Pressroom's 5 Bullets

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Amid a flurry of executive orders signed by the new president, two are conspicuous by their absence. 