Rumor: Fund Giant Catches “the Plague”

Rumor: Fund Giant Catches “the Plague”

Every few months brings a new “crypto goes mainstream” headline. But this one could truly be a game-changer.

“Vanguard Group Inc. is weighing whether to allow trading of cryptocurrency-focused exchange-traded funds on its platform,” reports Bloomberg News — “a move that would mark a major easing of its restrictive stance toward the popular but volatile asset class.”

Vanguard has 50 million customers… who hold $11 trillion in assets.

Until now, almost everything crypto-related has been off-limits to Vanguard customers.

Not only does Vanguard not offer crypto ETFs, its customers cannot trade other firms’ crypto ETFs.

Before his death in 2019, the firm’s legendary founder Jack Bogle urged investors to avoid Bitcoin “like the plague.”

Former CEO Tim Buckley once said Vanguard would never launch a Bitcoin fund — unlike its giant rivals BlackRock (the iShares fund family) and State Street (the SPDR funds). Other Vanguard execs say crypto as an asset class is “immature” and adding it to portfolios could lead to “havoc.”

But Vanguard’s new CEO comes from… BlackRock.

Salim Ramji took over from Buckley last year, the first outsider ever to run Vanguard. When he ran BlackRock’s global ETF business, he led an initial foray into a crypto-themed ETF, long before SEC approval of the first Bitcoin ETFs in January 2024.

“As the regulatory environment becomes clearer, and as the underlying liquidity dynamics of that market become more to our satisfaction, some of those dynamics will work in our favor,” he told a Bloomberg podcast in 2021.

Today, BlackRock’s Bitcoin ETF, IBIT, has $84 billion in assets — a majority of the $142 billion held by Bitcoin ETFs.

So far, the buzz about Vanguard and crypto is just that — buzz fueled by Ramji’s background, first reported by the Crypto in America outlet.

“We continuously evaluate our brokerage offer, investor preferences and the evolving regulatory environment,” a Vanguard flack tells Bloomberg. “If and when a decision is made, clients will hear directly from Vanguard.”

[Final notice: Here’s a crypto catalyst that’s more certain: As early as today, Donald Trump is set to act on a new crypto law that our own James Altucher says “could create the LAST wave of crypto millionaires we’ll ever see.”

James and his team have identified the five coins set to prosper the most — with the potential to 7X your money or more. Give James’ latest briefing a look right here, while there’s still time.]

The Epstein Shutdown, Starting Tomorrow

There’s a lot to unpack in this headline — more than CNBC lets on.

Barring a truly unexpected development, a “partial government shutdown” is all but certain starting tomorrow.

As we mentioned on Friday, Democrats and Republicans are theoretically at odds over Obamacare subsidies — but House Speaker Mike Johnson sent members home days before the deadline to avoid a vote over the release of additional Jeffrey Epstein files.

The Epstein shutdown means a shutoff of many government economic numbers — starting with the monthly job figures due this Friday.

Thus, Wall Street is hanging onto every non-governmental data release for a glimpse into the economy’s health, or lack thereof.

The Conference Board is out with its monthly reading on consumer confidence, and it laid an egg: The number tumbled from 97.8 to 94.2. No one among dozens of Wall Street economists polled by Econoday thought it would be that low.

With that, the major U.S. stock indexes are all in the red as we write — though not by much. The S&P 500 is down a quarter percent at 6,645.

Gold continues to climb to record levels, now $3,847. But silver is pulling back to $46.62. Oil is down again today to $62.40. Bitcoin and Ethereum are little changed from 24 hours ago.

How does the stock market perform during shutdowns?

On the Paradigm Press mobile app, Enrique Abeyta reminds us the most recent one was in late 2018 and early 2019. It was also the longest, 35 days.

“The stock market got CRUSHED during that period with the S&P 500 down 16% in JUST the month of December,” he says. “We don't think THAT happens but a prolonged shutdown can have a real impact.”

Perhaps a more instructive episode is the shutdown from 2013 — because like this one, it coincided with the start of the federal government’s new fiscal year on Oct. 1.

That one lasted 16 days. The S&P 500 inched up 1.5% during that period. It rose another 6.9% by year-end.

The biggest issue with government economic data during this shutdown will come on Oct. 15.

That’s when the Bureau of Labor Statistics is scheduled to release the monthly inflation numbers.

Ordinarily that wouldn’t be a big deal — except that the mid-October release is what the Social Security Administration uses to set the annual cost of living adjustment for everyone collecting old-age benefits.

To be continued…

Gold: Time to Sell?

“When precious metal prices go up-up-up, it’s another way of stating that the value of the dollar has moved down-down-down,” says Paradigm’s mining-and-energy authority Byron King.

“And in 2025 those relative moves have been more rapid than we’re used to seeing, albeit part of a monetary trend that goes back five decades, since President Nixon took the U.S. off of what passed for a gold standard in 1971.”

Gold started the year at $2,625. Now it’s over $3,800. Silver was under $29. Now it’s over $46.

Time to sell?

That’s a complicated question, and everyone will have a different answer depending on their personal circumstances.

If you’re concerned the trend can’t continue, Byron says don’t sweat it: “The only thing that would keep precious metal prices from continuing upward would be some sort of global-scale ‘recovery’ in faith in the dollar: for example, if the U.S. government got its act together and stopped with deficit spending, etc. Fat chance, right?”

If you’re sitting on handsome profits and you need ready cash? That might be another matter.

“In my view, the last thing you want to sell is physical metal; in other words, sell your stocks or other ‘paper’ gold, etc. before unloading the actual shiny stuff.

“Because physical metal in your possession is the real McCoy, so to speak… If you own it and hold it, then it’s yours; it’s nobody else’s liability, as is the case with financial instruments.” Don’t underestimate the privacy that comes with physical gold, either. “Nobody really knows if you own metal or where you store it; not unless you tell them.”

If you don’t need to sell and you’re ready to continue to ride the wave higher — or if you haven’t caught the wave yet — Byron rattles off about a dozen names and tickers for your consideration today at The Daily Reckoning.

Coal, Glorious Coal

The White House is launching what The New York Times calls “a coordinated plan to revive the mining and burning of coal.”

In a plan that aligns tightly with Jim Rickards’ “American Birthright” thesis, the Interior Department says it will open 13.1 million acres of federal lands for coal mining. At the same time, the Energy Department is offering $625 million to upgrade existing coal plants.

Coal once generated nearly half of America’s electricity. Now it’s closer to 16% as more natural gas plants have come online, along with wind and solar.

“This is an industry that was under assault,” Interior Secretary Doug Burgum says of the regulatory environment in recent years. Coal was seen as such a dying industry that the VanEck fund family shut down its VanEck Vectors Coal ETF (KOL) at the end of 2020.

To be sure, there’s a culture-war element at work here: Energy Secretary Chris Wright said on Fox yesterday that coal was “out of fashion with the chardonnay set in San Francisco, Boulder, Colo. and New York City.”

But the revival of interest in coal might have happened anyway given the enormous demands that AI is making on the power grid — a phenomenon we’ve chronicled here since early 2024.

Even the NYT story acknowledges that “growing interest in artificial intelligence and data centers has fueled a surge in electricity demand, and utilities have decided to keep more than 50 coal-burning units open past their scheduled closure dates, according to America’s Power, an industry trade group. As the Trump administration moves to loosen pollution limits on coal power, more plants could stay open longer or run more frequently.”

The market reaction to yesterday’s announcement? Shares of industry leader Peabody Energy Corp. (BTU) leaped 9.3% yesterday, although it’s giving back some of those gains today.

Readers of Jim Rickards’ Situation Report are already well positioned to take advantage of what Jim calls “Phase II” of the White House’s “American Birthright” blueprint. If you’re not among them, click here to watch this briefing from Jim.

The Hostess With the Mostest

Perhaps you’ve never heard of her — but the doyenne of the nation’s power elite is dead.

Elizabeth Morris “Lally” Graham Weymouth was a scioness of the Graham family, owners of The Washington Post for many decades before they sold it to Amazon’s Jeff Bezos in 2013. She continued to hold the title of “senior associate editor” up until her death yesterday at age 82. Pancreatic cancer, her daughter says.

At the conclusion of my musings about Jimmy Kimmel last week, I returned to the late George Carlin’s phenomenal rant about how the wealthy and powerful in this country seek to keep Americans divided.

And only yesterday, in reply to a reader, I cited the political scientist Carroll Quigley’s passage about how the two political parties “should be almost identical, so that the American people can ‘throw the rascals out’ at any election without leading to any profound or extreme shifts in policy.”

To refresh my memory about that passage, I went back to an issue of 5 Bullets’ predecessor e-letter published in the summer of 2019. It was all about a soiree for the wealthy and powerful held every year in the Hamptons and hosted by… Lally Weymouth.

(Spooky synchronicity that she died yesterday, no?)

Weymouth’s annual bash offered a revealing glimpse into the seamy intersection of finance, politics and the media.

The guest list was truly something else. Contrary to what you might expect, Democrats and Republicans were both well represented.

Donald Trump Jr. was there and so was Rudy Giuliani. Pro-Trump finance titans like Carl Icahn and Wilbur Ross were there too. Conservative-leaning media figures like Newsmax founder Chris Ruddy and Wall Street Journal columnist Peggy Noonan were also in attendance.

They comfortably rubbed shoulders with more mainstream personalities like Florida congressmember and longtime University of Miami president Donna Shalala, former Goldman Sachs CEO Lloyd Blankfein and Financial Times columnist Gillian Tett.

That was in 2019. The 2020 bash was canceled because of COVID but the tradition appears to have been revived.

Details of recent gatherings are scarce but a recent New York Post article mentions Andrew Cuomo being in attendance this summer, no doubt trying to scare up more funds for his bid to become mayor of New York. (Say what you will, but front-runner Zohran Mamdani seems to be a true outsider!)

The 2019 affair was a rare glimpse into how wealth and power in this country really work.

Well, that and the occasional selfie featuring Donald Trump’s daughter Tiffany and Hunter Biden’s daughter Naomi — also in the Hamptons.

As seen on Tiffany Trump’s Instagram in 2018…

As George Carlin said, “It’s a big club — and you ain’t in it!”

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets