Trump’s Bitcoin Pledge

Trump Loves Crypto (but Does He Understand It?)

“I will be the pro-Bitcoin president,” said Donald Trump over the weekend as he spoke at the Bitcoin 2024 conference in Nashville.

Which begs the question: Was he not the pro-Bitcoin president when he was, you know, president of the United States previously?

Well, no, he was not. "Bitcoin, it just seems like a scam," he said a few months after leaving office in 2021. "I don't like it because it's another currency competing against the dollar."

Uh… it’s still another currency competing against the dollar. Why the change of heart?

Sorry, no clarity there. The closest we got was this: "If we don't embrace crypto and bitcoin technology, China will, other countries will. They'll dominate, and we cannot let China dominate.”

Which seemed to be good enough for the audience, chanting, “Trump! Trump! Trump!”

Anyway, to the extent Trump’s words can be taken at face value, he said several newsworthy things during his speech…

• He wants the United States to become “the crypto capital of the world”

• He wants the U.S. government to create a national “stockpile” of Bitcoin using crypto the feds seized during sundry law-enforcement investigations

• He pledges on Day 1 of his second term to fire SEC chair Gary Gensler, who’s been the crypto community’s bete noire. [Gensler’s approval of Bitcoin and Ethereum ETFs this year came only reluctantly and only at the behest of BlackRock CEO Larry Fink]

• He reiterated his pledge from last January to never allow the implementation of a CBDC, a central bank digital currency, on his watch — a promise we daresay originates with our own Jim Rickards’ viral warning about “Biden Bucks” released in June 2022.

Meanwhile, “if crypto is going to define the future,” he said, “I want it to be mined, minted and made in the USA. It's going to be… it's not going to be made anywhere else.”

How’s he going to make that happen? Seems unlikely the answer will be, “Let the free market sort it out.” Not if he wants to have a “strategic Bitcoin reserve.”

Much as your editor welcomes the no-CBDC pledge and the fire-Gensler pledge, Trump seems to be otherwise talking up a lot of government involvement… in a realm whose earliest champions sought to create a currency independent of any government influences.

And I’m not the only one noticing…

Most discouraging, however, is this: Trump didn’t say one word in over 45 minutes about DeFi — decentralized finance.

DeFi is the broad-brush name for a host of efforts to create a world with no need for financial middlemen — banking without banks, securities trading without brokerages, insurance without insurance companies.

I imagine someone will write in and tell me Trump’s playing 11-dimensional chess here — refusing to tip his hand about how he’s going to drain the financial swamp or something. More likely, though, is that his handlers haven’t even introduced him to the concept yet.

Anyway, Trump’s speech marks two milestones at once. To be sure, it’s the first open embrace of crypto by a major-party presidential nominee.

And second, it also marks a sorry evolution from crypto’s origins barely 15 years ago: Crypto is no longer something you do to poke a defiant finger in the eye of the system, or help create a better world for your fellow human.

No, now it’s just something you do to own the libs. As Trump used to say, “Sad!”

The Mighty American Consumer Cracks

It’s not a Magnificent 7 company, but it is something of a bellwether for the consumer economy — and it just whiffed on its quarterly numbers.

McDonald’s reported this morning before the opening bell: It missed Wall Street analyst expectations on both earnings and revenue.

“Industry traffic has declined in major markets like the U.S., Australia, Canada and Germany,” CEO Chris Kempczinski said on the conference call. “In several markets, we also continue to be negatively impacted by the war in the Middle East.”

Domestically, you ask? Same-store sales fell 0.7% for the quarter — not much better than the worldwide drop of 1%. U.S. foot traffic is down, too. The mighty American consumer is cracking under the pressure of inflation.

Thus, the company is extending its $5 meal deal promotion beyond the original four weeks.

Meanwhile, four more Magnificent 7 companies will report their numbers this week — starting with Microsoft after the closing bell tomorrow. Given the disappointments that Google and Tesla served up last week, traders are on tenterhooks…

In the meantime, the major U.S. stock indexes are starting a new week marginally in the green — the S&P 500 up a quarter percent to 5,473.

Precious metals are losing more ground — gold now $2,376 and silver at $27.52. Trump’s speech at Bitcoin 2024 had zero effect on the flagship crypto — oscillating all weekend between $67,000–69,000 and currently a hair over $68K.

Crude is down $1.44 to $75.72 — the lowest since early June — a move being attributed to “weak demand in China.”

➢ Worth noting: Mexico is on track to becoming an oil importer by 2030, according to projections by the country’s energy ministry. As it is, the nation’s crude output sits at a four-decade low and Mexico has dropped out of the world’s top 10 oil-producing countries.

Green Energy Reality Check

Even in deep-blue New York state, politicians are starting to acknowledge that “green energy” is running headlong into economic reality.

The Empire State has “climate” goals that include a 40% cut in carbon emissions from 1990 levels and 70% reliance on renewable electricity by 2030.

Now New York’s control-freak Gov. Kathy Hochul is acknowledging she and her comrades will have to go “a little bit slower.”

She figures it will take another three years, maybe five, to reach that goal. (At present, 29% of the state’s power comes from renewables.) “If we miss it by a couple of years, which is probably what will happen, the goals are still worthy,” she tells the Albany Times Union.

Hitting the goals on schedule would be prohibitive to the average person’s pocketbook, she admits: “The cost has both gone up so much I now have to step back and say, ‘What is the cost on the typical New York family?’”

(Gee, if only your Michigan-based editor could hear such sympathy from Gov. Gretchen Whitmer! We’re supposed to have 100% “clean” energy by 2040. Which is ludicrous considering that the two natgas power plants supplying my home, only five years old, still won’t be paid off by the time they’ll be forced out of service.)

Aside from the cost, there are the grid-stability concerns: The grid operator in New York state issued a recent report forecasting that the state’s power supply will fall at least 1,000 megawatts short of demand by 2034. (1,000 megawatts is roughly the amount of power generated by a typical nuclear reactor.)

We reiterate: The grid is nowhere near prepared to take on the added demand of electric vehicles and especially of AI datacenters. Something’s gotta give, probably starting next year.

The Metal in Those “Gold” Medals

They don’t make Olympic gold medals like they used to…

That’s one of the gold medals handed out during the London games in 1908 (auctioned by Christie’s in 2012 for over $27,000). It’s about 60% gold content.

Compare that with the 2024 “gold medal” — weighing 18.66 ounces and made up of 95.4% silver and a smattering of iron scraped from the Eiffel Tower and gold-plated. At current metal prices, that’s worth roughly $950.

In fairness, these not-much-gold gold medals are hardly new: The last actual “gold” medal was awarded in 1912, only four years after the one you see above.

As it happens, gold medalists will earn that $950 in metal value tax-free. Ditto for the $37,500 cash prize they earn from the U.S. Olympic & Paralympic Committee.

That’s up from $25,000 in 2016 — when we took note that those winnings were taxable income in the eyes of the IRS.

As Forbes tax writer Kelly Phillips Erb reminds us, “It made no difference where the Olympics were located since all prize money, bonus money and endorsements are subject to tax in the U.S., even if they were earned thousands of miles away.”

Reminder: The United States and Eritrea are the only nation-states on the planet that tax their citizens on income earned abroad.

But now there’s an Olympic carve-out: Later in 2016, Congress passed and President Obama signed a bill making Olympic winnings tax free — and it was made retroactive for the 2016 medalists.

Mailbag: The Dirty Seine, Aluminum Wiring, “Only News”

We stay with the Olympics to begin the mailbag — and the pre-Games swim in the Seine mentioned in Friday’s edition…

“When the mayor and others climbed out after their swim, I was sure Pepe Le Pew was next to come out afterward!”

Dave responds: All the cleanup efforts were for naught after those heavy rains during the opening ceremony Friday night. Two straight days of training events have been canceled.

On the subject of homebuilders opting for aluminum wiring over copper…

“During the ’60s some homebuilders in New Jersey went with cheaper aluminum wiring — until houses started burning down.

“With aluminum posing a 55 times greater risk of fire, just how likely is it that any country other than China, which does not give a crap about safety or human life, will adopt the use of aluminum wiring?”

Dave: The 55 times greater fire risk applies to homes wired with aluminum built before 1972, according to the Consumer Product Safety Commission.

That said, according to this CPSC report, “That survey encompassed only the wire connections at outlets. It did not address other types of aluminum wire connections and splices in homes that are also prone to fail. No information was developed for aluminum-wired homes built after 1972.”

“Modern aluminum wiring, installed and maintained correctly, can be perfectly safe,” says the website of one Canadian insurer. “The right aluminum wiring alongside the right maintenance program can be safe. However, home systems are often full of work done by many hands — both qualified and unqualified.”

“The 5 Bullets should be reserved for news and good news at that,” asserts our final correspondent.

“Not the promotion of another subscription. I think that's a waste of our already paid-for subscription.”

Dave: This is a gentle reminder that 5 Bullets is a free supplement to your paid subscription. Because we are independent publishers, we pay the bills primarily with the subscription revenue of readers like you.

We’re proud of the research we turn out at Paradigm Press. We think it can make a positive difference in your life. So yes, once you buy one of our products, we’re keen to sell you another.

But always, always, our aim in 5 Bullets is that you learn something new and interesting even if you choose not to act on an embedded sales pitch. Assuming you’re responding to Friday’s edition, we hope you found it interesting that the “Mag 7” stocks underperformed the S&P 500 in 2022… outperformed in 2023… and have been a mixed bag in 2024.

Thanks for the feedback. Evidently you must find valuable content most days if you were motivated to write in — so we must be doing something right?