There’s a martial arts technique the Chinese call “Dim Mak” (点 脉). The idea is to strike an opponent at a specific spot with a focused blow that inflicts instant trauma. Done properly, a well-placed hit can cause severe pain, paralysis, or even death. In fact, the Chinese call Dim Mak the “touch of death.”

Peculiarly, Dim Mak is related to another ancient Chinese technique that’s medical rather than martial, namely acupuncture. If you’re unfamiliar with acupuncture, the idea is to find nerves or other body pathways and insert thin needles to channel energy along what are called “meridians.” Done right, acupuncture heals injuries and cures illness. (And it works. I’ve used acupuncture.)

As an outsider looking in, I find this characteristically Chinese. With one hand, acupuncture can heal; with the other, Dim Mak can kill. And it’s our starting point for discussing China’s tight control over global supply chains for critical materials and metals indispensable to modern technology.

That is, we won’t discuss Chinese martial arts movies, like those starring Bruce Lee, nor will we get into how an acupuncturist can fix your aches and pains. But we will discuss how certain discrete industrial skillsets have geostrategic consequences… And how they are investable.

Welcome to the Periodic Table

Let’s begin with some chemistry, namely, a look at the periodic table.

Periodic table; rare earth elements highlighted. Courtesy KJMagnetics.com.

Don’t worry; this isn’t chemistry class, and there’s no need to solve any math or mass-balance equations. But you need to know that the periodic table is filled with what we call “critical” elements that are essential to modern tech. And that much of the industrial side of the materials and metals here is dominated by China.

Of course, the West – certainly the U.S. – produces iron and steel, as well as copper, aluminum, lead, zinc, and more. Absolutely, the West has mines, mills, refineries, and factories. The West builds buildings, bridges, ships, aircraft, cars, refrigerators, and you-name-it. So, what’s the problem?

The problem gets us back to that Chinese Dim Mak analogy above (or use the acupuncture side if you wish). Because almost all modern tech requires certain critical elements to work, beyond just steel, aluminum, copper, etc. And China controls many of these materials, in some cases up to 95% of the world’s total output.

That is, critical metals and materials are China’s Dim Mak, the “touch of death” if China so chooses.

For example, your smartphone contains about 63 out of the 92 elements in the periodic table (give or take an element or two; it depends on the make and model). The touchscreen only works because of an indium paste on the back of the glass. The vibration system requires tungsten. The screen optics use phosphors such as europium and lutetium. The integrated circuits inside contain germanium. And much more, much of it Chinese.

Or consider your car. Depending on the make and model, it may use 40 or more strong permanent magnets – made of neodymium and praseodymium, plus other elements – that do everything from moving the windows and windshield wipers to adjusting the seat to powering the fuel pump or the traction motors for an electric vehicle (EV). No Chinese metals, and your car is just a block of American steel.

On a larger scale, a Virginia-class nuclear submarine has several tons of strong magnets just in the electric drive motors, let alone everything else “electronic” inside the vessel. These systems range from the sonar dome and transceivers to computers, internal gauges, and screens that allow the crew to dive and steer the beast. The torpedoes, too, require critical materials; quite a story.

Estimate of rare earth materials inside a submarine. Credit CRS.

And while we’re talking about submarines, don’t neglect the super-strong steel alloy of the hull itself, made with an assortment of critical elements that add strength and durability to the basic iron metal. Again… Chinese materials, much to the chagrin of people at NavSea who buy these ships for the Navy.

I could go on with nearly countless examples, but you get the idea. And again – I cannot emphasize this enough! – many of these critical elements and materials originate in China. If it’s not the actual ore deposit, then it’s certainly the refinement process and downstream manufacture. China-China-China. There are no two ways around it. And absent Chinese materials, it’s that “touch of death” because the tech won’t work.

China Controls Global Supply Chains

Nothing about China’s metallurgical dominance is accidental. Since at least the 1960s – during Mao’s Cultural Revolution, no less! – China has had a long-term strategic plan to dominate key segments of the global market for critical materials and metals. Indeed, China’s first national step came in 1963, when the country’s ruling authorities established an institute to study rare earth elements (REEs), namely the so-called “lanthanide” series in the periodic table above.

Since then, for over 60 years and despite internal political turmoil and every sort of economic and social challenge, the Chinese have focused on dominating global supply chains for a long list of critical items: REEs, as we’ll amplify below, but also other metals like tungsten, antimony, indium, gallium, germanium, and more.

National capability like this begins with human resources, of course. In the 1960s, 70s, and certainly over the past forty years, China sent many of its smartest people abroad to study at then-Soviet (now Russian), U.S., European, Japanese, and Australian universities. Their assignment was to learn everything possible. Just flood the zone, so to speak, with eager and intrepid students. Bring home the knowledge.

Plus, for 60 years, Chinese researchers scoured patent offices across the globe to learn whatever was available in the records. And thus, in recent decades, China has dominated the global patent landscape. In fact, for every U.S. patent on REE tech, China files 30.

Data on global REE patent filings. Credit Congressional Research Service.

Today, China has entire universities focused on REE, as well as other critical metals, mining, metallurgy, refining, processing, and applications of these substances. That is, China has literal armies of scientists, engineers, and technical specialists in many fields; numbers in the mid-hundreds of thousands at least, and likely more.

At a personal level, over the past 20 years, I’ve attended numerous industry and scientific conferences and met many Chinese scientists and engineers who specialize in REEs, and/or a host of other metals. For example, I once met someone and asked, “What do you do?” And he replied, “I study the thermodynamic and quantum properties of lead and bismuth.”

At national political and strategic levels, China has planned its economic dominance from the top down. For example, in 1992, China passed a law designating REEs as “strategic” and barring foreigners from investing in Chinese projects. So, in China today, these kinds of resources are reserved for domestic production and downstream, value-added use.

In fact, China focused its industrial control over metals and materials with the end goal of military purposes. One angle is what’s called the “16-Character Policy” towards critical materials.

China’s 16-Character Policy. Credit Senate Armed Services Committee.

These characters became national policy in 1992 and remain legal mandates across China, particularly for mines and minerals. The translation is:

• Combine the Military and Civil.
• Combine Peace and War.
• Give Priority to Military Projects.
• Let the Military Support the Civil.

I could go on, but by now you get the point. For many decades, China has built up its capabilities and imposed export quotas on REEs and other critical metals. And China’s tight control over production and global sales always favors Chinese interests.

Of course, China welcomes foreign companies to invest there and utilize its materials, as long as China gets something in return. For example, Apple has spent 30 years building products in China (eg, iPhones). Along the way, Apple and its subsidiaries trained over 25 million Chinese in advanced technical skills and created a vast level of Tier I, II, and III suppliers throughout the nation. (Just in case you wonder why China is so advanced in, say, EVs.)

In another example, in the 2000s and 2010s, much of the global light bulb industry moved to China. This is not because China needs all the world’s light bulbs. It’s because China told foreign manufacturers that if they wanted tungsten for filaments, and later REEs for LED bulbs, they were required to build plants in China… oh, and to teach Chinese engineers and workers how to make the products.

Name just about any modern technology: batteries, EVs, computers, lighting systems, radars, lidars, robots, drones, AI, quantum computing, space development, and much else… and the foundational materials – exotic items like high-end graphite, or metals like REEs, tungsten, tin, indium, gallium, and much more – are controlled by Chinese producers and suppliers.

The Western Response

It’s not that some people in the West didn’t see what was unfolding with China and its control over critical materials. Keith Bradsher of the New York Times has long been out in front of the issue. I’ve written about the situation with Paradigm and its predecessor publishing group since the late 2000s, and I began following this problem in the 1980s when I worked on the staff of the Chief of Naval Operations.

Still, despite clear indications of what was happening, many Western governments and industry sectors were unmotivated to do anything (i.e., to spend any serious money) despite clear warnings from outside observers, if not intelligence and military services, as well as even National Laboratories like Ames, Los Alamos, Oak Ridge, Livermore, and others. It’s a long, sad tale of frustration.

But in recent years, alarm bells have rung loud and clear. It has dawned on both government and industry that so-called “tech” is just a high-end children’s lemonade stand without the primary materials that go into making the actual equipment, whether it’s iPhones or what are called “exquisite” weapons like anti-missile systems.

And now, what took China 60 years to build, with great expense, diligence, and focus, the West is trying to compress into maybe five. Yeah… good luck.

The takeaway is that REEs and many other metals and materials are vital to future tech, and without them, the West will not just lag but be unable to move far ahead at all. It’s much like that above-noted Chinese Dim Mak “touch of death” hit, but at an industrial scale. No exotic metals? Then no exotic tech. Game over.

So yes, China remains dominant, but the good news is that the West is investing and diversifying through redoubled efforts to find mineral deposits and develop mines, mills, refineries, and downstream processing. Money is moving, and at investment levels, there’s high growth potential, along with high risk, so you must always do your homework to find credible projects, government support, and some element of technology advantage.

Finally, China has been working for 60 years to dominate global markets for high-end, critical materials and metals. And the Chinese are quite good, which makes the challenge all the more daunting. But the West – and the U.S. in particular – is working to catch up. And we follow it all here at Paradigm Press.

That’s all for now. Thank you for subscribing and reading.

The post China’s Touch of Death appeared first on Daily Reckoning.

Yesterday, we did a deep dive on one of the largest gold miners in the world, Barrick (B).

Today, we’re going to explore a smaller (junior) miner.

There’s no clean definition of what makes a miner “junior”. But it generally means smaller producers, as well as companies that are in the exploration or development stage.

Junior miners can produce big gains for long-term holders. But there’s also higher risk. Political risk, execution risk, and market risk.

As an example today, we’re going to look at Aris Mining (ARIS). Aris is on the larger side for a “junior”, but I didn’t want to pick anything too small and illiquid for this newsletter, which is read by more than 100,000 people.

I don’t own the company, and Paradigm never takes money from the stocks we cover. I mention this because it’s important, especially when it comes to junior miners. The mining world is full of stock promotion and if you’re not careful, you’ll end up buying a tiny stock someone else is being paid to promote.

First up, some basic ARIS stats:

• Market cap: $3 billion
• P/E ratio: 17.8
• 2025 gold production: 257,000 oz
• 2026 gold production guidance: 300,000 to 350,000 oz
• Revenue (last 12 mo): $1.1 billion
• Net debt: $2 million (low)
• FCF: $173 million (last 12 mo)

Aris operates in South America, primarily Colombia, but also has a mine under development in Guyana.

Now let’s dig into a repeatable framework we can use to analyze junior miners.

Start With the Presentation

Whenever I’m examining a new potential mining investment, I start with the corporate presentation. Every public mining company has one.

Management knows how critical their presentation is, so they condense their best data into it. Here is Aris’ slide about their mines.

Source: Aris Mining corporate presentation

As we can see, Aris owns 4 large mining projects. Segovia, Marmato, Toroparu, and Soto Norte.

The cash cow today is Segovia, located in Colombia, South America. Segovia is a very high-grade underground mine. At a headline ~15.3 grams of gold per ton of rock, this is an elite-grade mine. Here’s what it looks like in the tunnels:

Source: Resource World

In 2026 Segovia should produce 265,000 to 300,000 ounces of gold. That’s the vast majority of the company’s current production. This number includes gold the company mined itself (about 60%), as well as gold they mill for other miners at their facilities (about 40%). Margins are higher on self-mined gold, but the “contract mining partners” is a nice topper.

The company expects to reach 300,000 ounces of gold per year at Segovia. This is their mature mine.

Aris’ goal is to reach 1 million ounces of gold produced per year. That would put them in the big leagues, but will require basically 4xing current production.

That will require all 4 projects to get fully permitted and up and running. It’s a multi-year goal.

If they can get all 4 projects humming, 1 million ounces a year is attainable. But in the mining world, getting environmental approvals and permits is a huge part of the challenge.

Political Geography

In the world of mining, politics plays a big role. Getting mines permitted depends on a company’s ability to navigate labyrinths of bureaucracy and red tape.

Three out of four of Aris’ mines are in Colombia. A country rich with natural resources, but with a mixed record on friendliness to miners.

So it’s fortunate for the company that a conservative just won the presidential election. On June 21st, President-elect Abelardo De La Espriella beat Gustavo Petro in a very close race.

On August 7th, new President De La Espriella will take office. This is a very good sign for Colombian miners. The old president was not friendly to the mining industry. The new one is pro-business and more likely to encourage regulators to issue environmental permits.

Aris’ Soto Norte site is still conducting its environmental studies, and will need to get permits in order to reach the company’s 1 million ounce a year goal.

The election of a conservative president will help with this process, but it’s no guarantee.

When we buy gold miners, junior or senior, we need to consider the geography and political environment they’re operating in. Mining is a very political sector.

So far, the management team has navigated the political side of things well. Aris’ CEO and Chairman, Neil Woodyer, is a mining vet and has assembled an experienced team of operators.

More Risk, More Reward

When we buy junior miners, we take more risk. Companies at this stage will likely need to raise money, diluting existing shareholders or adding debt. In the case of Aris, they’re already generating significant cash flows, so may not have to raise again anytime soon.

But with multiple development and exploration projects, there’s endless permitting, drilling, and construction to be done. Each takes time and money.

If companies spend it well, raising money is not a problem. It’s part of the game.

If Aris pulls off their plan, the rewards should be significant. Of course, their success will also depend on the price of gold.

And just like yesterday, this article is not an endorsement of Aris. I think the company could do well, but don’t currently own it.

It’s simply a good example of a larger junior miner. One which could be an attractive target for a gold major to acquire down the road. Aris has mines with excellent grades of gold, impressive growth, experienced management, and multiple promising mines in development.

Because juniors have a higher risk profile, sometimes it’s best to buy a diversified basket like the Sprott Junior Gold Miners ETF (SGDJ). I’ve owned this fund for years and it’s done quite well.

Since the Iran war began, juniors have pulled back significantly. I don’t believe this precious metals bull market is over. So both junior and senior miners look great here. SGDJ is a nice way to play juniors.

Have a great weekend everyone.

The post How to Invest in Junior Miners appeared first on Daily Reckoning.

Barrick Mining (B) is a gold mining giant. They also produce lots of copper, silver, lead, and other metals.

Today we’re going to do a deep dive on the company. The goal is to help readers understand just how much money miners are making today, and how they’ll spend it.

First up, Barrick’s all-in sustaining cost (AISC) to mine one ounce of gold was $1,708 in Q1 2026. Their cost-of-sales (CoS) was $1,922 (this metric includes amortization and depreciation – accounting stuff).

Gold currently trades at $4,148. So for every ounce of gold they mine, they earn over $2,000. In 2025, Barrick produced 3.26 million oz of gold. In 2026, they expect to produce 2.9 to 3.25 million oz.

In the ground, Barrick has around 85 million ounces of proven and probable gold reserves. At current rates, that’s enough to last about 28 years. More is indicated and inferred, and additional discoveries will be made. And it’s likely Barrick will acquire junior miners with attractive reserve profiles.

Cash Flowing

In the first quarter of 2026, Barrick generated about $1.2 billion in attributable free cash flow (FCF). In 2026, the company is expected to produce around $5.7 billion total FCF.

With a market cap of $64 billion, the company is trading at about 14x attributable free cash flow. It trades at a P/E ratio of 9.8x. Pretty cheap.

This is why we say miners are printing money.

Today Barrick has $7.1B in cash, and $4.7B of debt. Of course, they could pay off the debt, but they’re already fairly lean. Back in 2014 they had around $14B worth of debt. Barrick, and the industry as a whole, have shored up their balance sheets.

So that leaves a few interesting options to spend the money.

Nice Dividend Yields

Over the last 12 months, Barrick has paid a 2.5% dividend. That includes a regular quarterly $0.175 payout, plus an additional yearly payment based on FCF.

In February, Barrick announced it would aim to pay out 50% of attributable free cash flow as dividends going forward.

Based on current gold prices, this could amount to a 3.6% yield for the next year. If gold goes higher, so will the dividend. And of course, the opposite is also true.

That’s a handsome yield for a gold miner.

Stock Buybacks

Barrick has also authorized up to a $3 billion share buyback. This can be a good use of cash, depending on the price the company buys back shares at.

Buybacks reduce the total number of shares outstanding, while helping support the price. But honestly, if I owned the stock, I’d prefer higher dividends or acquisitions.

Buybacks should be utilized strategically to buy back shares when they’re dirt cheap. Sometimes companies use buybacks to push shares higher, regardless of price. Then executives can exercise their stock options more profitably. I’m not saying Barrick does this, of course. But it’s always a risk.

I expect they will utilize some of that cash to buy back shares. And at current prices, that seems like a reasonable use of funds.

Snapping Up Smaller Miners

In their Q1 earnings announcement, Barrick announced they are actively looking to do “selective acquisitions”. This is a change from their previous focus on organic growth and expansion.

Barrick has new leadership, having parted ways with long-time CEO Mark Bristow. New CEO Mark Hill has different ideas about M&A, so it’ll be very interesting to see if they begin to snap up attractive companies during this pullback.

The important takeaway here is that gold producers have bundles of cash to spend. This is a good reason to have exposure to high quality junior miners which might be targets. But please, don’t go out and just start buying junior miners you read about online. That’s a dangerous path.

Unless you’re a pro, make sure you’re following the recommendations of independent experts like our own Jim Rickards, Dan Amoss, Matt Badiali, and Byron King. Buying random juniors you find online often means you’re the target of a marketing campaign.

Ok, now let’s get back to Barrick.

Upcoming Spinoff

Barrick plans to spin off its North American mining operations by the end of 2026. The company will IPO its safer U.S. and Canadian mines, while maintaining a majority ownership. This will allow investors to choose whether they buy the “safer” North American projects, or its riskier, but very profitable operations in places like Mali.

Why? Barrick has had some problems dealing with Mali’s government and regulators. Some investors don’t like dealing with the uncertainty of emerging market exposure.

As a result of their issues in Mali, and the gold price falling, Barrick shares have fallen significantly from their recent highs. B hit a new all-time high over $54 in January and trades at $36.70 today.

Conclusion

I don’t own Barrick currently. So to be clear, this isn’t necessarily an endorsement of the stock. It’s a breakdown of how much cash miners are generating, and how they’re spending it.

However, I think Barrick should do well over coming years. Its higher-than-average dividend yield makes it attractive for income investors. And it has more copper exposure than most gold miners, which is a positive in my opinion.

Personally, I’m more focused on miners with heavy silver exposure, as well as smaller gold producers and developers.

But if you’re looking for a (relatively) stable gold miner, Barrick is a solid pick. It’s a giant of the sector.

We’ll explore some smaller gold mining stocks soon. Junior miners have fallen significantly since the Iran war began, and there are some excellent buy-the-dip opportunities out there.

The post Miners: Flush with Cash appeared first on Daily Reckoning.

Every few years, the same headline shows up.

“Iran’s regime is on its last legs.” “The mullahs are finished.” “This is the beginning of the end.”

1979. 2009. 2022. Now.

Each time, sharp people with real access said the same thing: the theocracy can’t hold. Each time, they were wrong. Confidently, expensively, repeatedly wrong.

They’re not stupid. They’re just using the wrong math.

There’s a simple, almost brutal theory that explains why. It comes from a political scientist named Bruce Bueno de Mesquita. Once you learn it, you’ll never look at a “regime on the brink” story the same way again.

The Question Nobody Asks

Here’s the question American analysts keep skipping: how many people does this leader actually need to keep happy?

It’s not the population. It’s certainly not the protesters. And the 90 million Iranians living their lives? They don’t even figure into it.

The leader doesn’t answer to them. He answers to a much smaller group Bueno de Mesquita calls the “selectorate” or the “coalition.” That’s the tiny slice of the country that actually keeps him in his chair.

In a democracy like ours, the winning coalition is huge. A president needs tens of millions of votes. Since you’ve got so many hands to grease, you get roads, schools, and a functioning economy… or else!

In Tehran, the selectorate is small. Iran’s Supreme Leader needs the IRGC commanders to be fully paid up; the senior clergy, content; and maybe a few thousand loyalists who control the guns, the oil contracts, and the mosques.

The Great Unwashed don’t matter. It may be tough to read this, but The People are utterly irrelevant to the regime’s survival. Always have been. That’s why I’ve been poo-pooing this war from Day 1. Trump flat got this wrong.

What The Donald didn’t get was a leader with a small coalition doesn’t need The People. The leader just needs to keep the selectorate happy. And a small selectorate is cheap to buy and easy to keep loyal, because each member’s slice of the pie is enormous.

Stop Counting the Wrong Votes

Every time a Western analyst says “The streets are full… this can’t last!” he’s applying democratic logic to a small coalition regime. Western analysts assume public anger translates into political danger the way it would in Ohio.

It’s nonsense.

Protesters aren’t in any coalition, let alone the one that matters. The regime can let a few hundred thousand people march, then crack down hard, because the people who actually decide whether the Supreme Leader keeps his job aren’t on the street. They’re in the barracks and the seminaries, well fed and well paid.

Bueno de Mesquita’s blunt insight, laid out in his book The Dictator’s Handbook, is that this isn’t a bug in the tyranny model. It’s the design. Small-coalition leaders spend less on public goods and more on private rewards for the few, because it’s cheaper to keep a few thousand loyalists rich than to keep 90 million citizens satisfied. Every dollar spent on the coalition buys more loyalty per dollar than a dollar spent on the public ever could.

And this isn’t a moral failing unique to Iran’s leadership. It’s the incentive facing anyone who runs a small-coalition system. Understanding that doesn’t excuse it. But it tells you where to look.

An Old Idea, Freshly Confirmed

None of this is new to anyone who’s read Machiavelli, or, for that matter, the Book of Kings. Tyrants who keep their armies and priests loyal have outlasted popular fury since the days of the Pharaoh.

The Catholic Church has watched more empires rot from the inside than any other institution on earth, precisely because it has spent 2,000 years studying which loyalties are real and which crowds are performative. Rome’s mobs cheered plenty of emperors who were toppled from inside the palace guard, not from outside the gates.

Bruce Bueno de Mesquita merely built a new model around an old truth: Power rests with those who can take it away from you, not with those who suffer under it.

Wrap Up

You don’t need to become an Iran expert to use this. You need one question, and you can apply it to any regime story you read from now on: how big is the winning coalition, and who’s actually in it?

Once you ask that question, you’ll have a tough time believing the silly “regime is finished” headlines about Iran, Russia, China, or anywhere else with a small ruling clique.

If the coalition is small, well-paid, and unified, bet on survival, no matter how loud the streets get.

If the coalition is fracturing, cutting side deals, or getting squeezed on the money that keeps it loyal, that’s the real signal. Watch the money to the colonels, not the crowd in the square.

You’re not being asked to admire the mullahs, and I don’t. You’re being asked to see the machine clearly rather than rooting for a story that keeps failing to materialize.

The real advantage here isn’t predicting Iran’s fall. It’s finally understanding why everyone else keeps getting it wrong.

The post The Small Coalition Trap appeared first on Daily Reckoning.

“We have cameras everywhere in town. You cannot get a breath of fresh air without us knowing”.

Those words were spoken by a Colorado police sergeant to a suspect at her home.

Sgt. Jamie Milliman was speaking to Chrisanna Elser, who he accused of stealing a package off someone’s porch. The interrogation was captured on Elser’s doorbell cam.

Milliman confidently told Chrisanna, “You know why we’re here.” When her husband questioned the officer about evidence, Milliman replied, “It is her. It is 100%. It is locked in.”

He proceeded to show her pictures of her Rivian electric truck in the area of the crime.

Chrisanna Elser stares in disbelief as she is accused of theft. Source: X.

The images were taken by Flock, a private surveillance company. The firm has more than 100,000 video cameras all over the U.S. Flock constantly tracks movement of vehicles and people, and sells the data to law enforcement and other agencies.

The sergeant detailed all of Chrisanna’s recent trips to the area, claiming she was “casing” houses to steal their packages. In her $100,000 electric truck.

The police officer also told Elser there was a video of her stealing the package. But since she denied being involved, he refused to show it to her.

Eventually, Chrisanna was able to find the package theft video online. The female suspect in the blurry video was also blond.

A porch pirate in its natural habitat (not Chrisanna!) – Source

This woman doesn’t look like Chrisanna Elser. Yes, she has blond hair and is probably of similar height. But she’s younger, not as skinny, has darker hair, and has much larger ears. But hey, I’m no Dick Tracy.

This blurry video, combined with Chrisanna’s car being in the general area at the time, gave the police officer a “slam dunk” case. Or so he thought.

But Chrisanna was innocent. Ironically, it was her truck’s own video cameras which saved her. Elser was able to produce a video taken by her truck at the exact time of the theft. Obviously, she wasn’t at the scene of the crime.

The Police Chief apologized, and Sgt. Milliman was given a reprimand.

RIP Privacy

Privacy in America is dying. In China, it’s already dead. The rest of the world will soon follow.

We are entering a period of total global surveillance. Straight out of a sci-fi novel.

Everything we do, online or in the real world, is tracked and surveilled.

A decade or two ago, I would have been fiercely against this. But today I have mixed feelings.

The good news is that with Big Brother watching, crime will drop. At least that’s the theory.

But the thing is, this relies on district attorneys doing their jobs. And this has been a major problem over the past 2 decades. George Soros and other political bad actors have spent over $50 million to fund the election of “progressive” DAs all over the country. And these DAs regularly let violent criminals off with taps on the wrist.

What’s the point in total surveillance if DAs let attempted murderers off with probation? If they don’t do anything about violent “street takeovers” in downtown cities? If you can shoplift all you want, as long as the value isn’t over $900?

What’s the point in spying on everyone if insane killers are caught on video murdering an innocent woman, but spared the electric chair because they are ruled mentally deficient? That’s a strong reason to carry out the sentence.

This is a big problem with the U.S. surveillance grid. I fear DAs won’t properly prosecute the crimes they capture.

Another problem is that this technology will be abused. It already is. More than a dozen police officers have been caught abusing the Flock system to track and target partners, exes, and stalk women. And those are just the ones who got caught.

And inevitably, some innocents will be convicted of crimes they didn’t commit. Like Chrisanna, their car will be spotted in the area of the crime, and if they match the suspect description, that could be enough.

Overall, a surveillance grid has the potential to nearly eliminate violent crime. We’ve already seen this in China, where theft and assaults have essentially disappeared in big cities.

With millions of cameras and microphones, citizens tend to be on their best behavior.

Is it worth the cost? Probably. But this tech can and will be abused in horrific ways.

Don’t Flock Me Bro

With more than 100,000 Flock video cameras surveilling cars and people all over the country, there are inevitably vigilantes destroying Flock and other surveillance cameras.

All it takes is a $50 cordless angle grinder. I’ve watched dozens of videos of masked men cutting down surveillance cameras.

Source: X

But this vigilantism won’t last. The grid is closing in, and getting away with such an act won’t be possible for much longer.

Already, cameras can identify individuals by their gait (unique walking style). A person’s gait is as unique as a fingerprint. So masks won’t save these vigilantes forever.

The surveillance grid is here to stay.

Realistically, we must make sure the people who have access to this powerful technology use it responsibly. That means electing reasonable and diligent people, from our local sheriff to the federal level.

Such powerful tech must be used judiciously. It can be abused in countless ways.

At the same time, it has the potential to eliminate most violent crime and theft. And I’m all for that.

The post Welcome to the Surveillance Grid appeared first on Daily Reckoning.

On June 25, 2026, the technology giant Apple Inc. (Nasdaq: AAPL) increased prices for its computer products by $100 to $500. So, a new MacBook Neo went up 17%. And a new iPad Pro jumped 25%.

That, my friends, is inflation. The company cited the rising cost of memory for the need to bump up prices. Effectively passing along the cost increase to consumers.

Inflation is a funny thing. There is the political version, which relies on the arbitrary Consumer Price Index (CPI). And then there’s the “boots on the ground” version, which is the basic cost of the stuff we buy.

The CPI theoretically tracks a basket of stuff that reflects the average consumer. But it’s nearly impossible to create an “average” across every person in America.

Today, the reported annual CPI is at 4% through the end of May. That seems a bit low. I don’t know about you, but the cost of my daily life is up far more than 4%. And I don’t need the government to gaslight me on what my daily life costs. I know it intuitively, because of the price of gasoline, food, cleaning supplies, etc.

I like to use a different basket of goods to track inflation. And it shows me that the cost of living is up 20% so far in 2026.

The Commodity Research Bureau (CRB) Index tracks the cost of raw materials. It began in 1958 and originally tracked 28 commodities. The original index tracked things like barley, flax, cottonseed oil, onions, wool tops, soybeans, etc.

Today, the index tracks 19 commodities like cocoa, aluminum, copper, coffee, gold, hogs, cattle, nickel, orange juice, etc. Oil and petroleum products make up 33% of the commodities.

That collection of commodities tracks the fundamental cost of life. These are the basic building blocks of today’s world. And as you can see, they cost more:

While this basket of commodity prices is down from their high in May, it’s still much higher than it was in January. And it turned higher again this month.

One of the principal drivers of actual inflation is transportation. Gasoline drives that increase:

The spot price of gasoline is up 75% year to date according to the futures market at the Chicago Mercantile Exchange. Diesel is up more than 40%, according to the St. Louis Federal Reserve data.

That’s a huge increase. Fuel costs hit everything we use, from the cost of grain to Amazon deliveries. And companies need to pass that cost on to consumers. That’s why we see such increases in grocery prices, especially fresh produce.

When fundamentals go up so much, so rapidly. It makes everyone feel less rich. And that influences what we do in the future. Sentiment matters. When we feel rich, we spend money. When we feel poor, we save it. And right now, the Conference Board’s Consumer Confidence Index is near Covid pandemic lows:

And when consumer confidence is low, it does not bode well for the companies that sell us stuff. It’s time to get out of consumer discretionary stocks, airlines, auto makers, and other stuff we don’t need right now.

Instead, we want to own agriculture, utilities, health care, and military contractors. That’s the stuff we can’t do without.

Today, the cost of living in the U.S. is up, so the average consumer feels poor. That will have an impact on stocks. Combine that sentiment with much higher prices and that’s not great for the broad stock market.

The post Time to Sell *These* Stocks appeared first on Daily Reckoning.

In a moment, we’ll get to economic trends and investment themes; but first… I hope you had a great Independence Day holiday: America 250.

Over the past few days, if you — and your family and friends — were in the right place you saw things you’ll remember for a long time, maybe for the rest of your life.

For example: “I’ve never seen anything like this,” texted my sister from Washington, D.C.

She was there this weekend and witnessed all-day military flybys, followed by a stupendous fireworks display. Absolutely, it was red-white-and-blue pageantry. But it was also national memory embodied in jet noise and aerial pyrotechnics.

Alas, I missed the spectacle. I was 245 miles to the west, in Pittsburgh, on the other side of the Alleghenies, doing my own thing. But I was there in spirit, as I suspect were millions of others.

Frankly, only President Trump could have made this happen. Indeed, try this thought experiment: Imagine the institutional pushback if President Somebody-Else had been in office:

• “Umm… no, we can’t fly the airplanes to Washington cuz it would interrupt our vitally critical training cycle.”
• “Umm… no, we can’t have huge fireworks cuz smoke and air pollution and net-zero.”
• “Umm… no, we can’t do public safety for big crowds cuz, y’know, criminals have rights, too.”

Love him or not, you must admit that some things happen only when the guy in the Oval Office pushes the envelope. In other words, yeah… Only Trump.

On To Other Things, Like Iran & Oil

Now, in a roundabout way those jets and big boom-boom explosions bring us to Iran. And with each passing day the outcome of the recent unpleasantness is becoming clearer: American’s overseas expedition was no mere punitive military action. It was a diplomatic earthquake and market-shaping event of long-term global scale.

Some people talk about TACO, meaning “Trump Always Chickens Out.” That’s cute, in the way that bumper stickers are cute until reality arrives wearing steel-toed boots.

And the reality is that Iran tested American patience and military power, and discovered the sharp edge: fifteen thousand airstrikes speak for themselves.

The Islamic Republic still issues communiques, parades its militia and fake missiles through Tehran, and summons rent-a-mobs to perform tired old faux-revolutionary theater. But true power is not measured by how loudly people held hostage inside a criminally mismanaged country and society can yell “Death to America!”

No, in this matter power is measured by what bankers will finance, what insurers will insure, what refiners will buy, and what ship captains will risk. And right now, Iran is on the outside looking in. Because indeed, Iran can barely sell its oil.

Per Bloomberg News, “A hoard of Iranian oil is building up at sea, as the Islamic Republic struggles to find buyers before the expiry of a 60-day window granted by Washington. More than 58 million barrels of Iranian crude and condensate was on-the-water as of July 1. … More than 90% has no clear destination.”

Yes, per that infamous “MOU” (Memorandum of Understanding) that Trump inked, the U.S. lifted sanctions-pressure from Iran, but only for a limited time.

Now, though, Iran’s problem is that refiners across the world — even in China — worry that anything they buy today may become untouchable tomorrow. And it’s how serious sanctions work; they transform every barrel into a legal problem, every cargo into a balance sheet liability. Or as the man says, “Sorry, bro, you’re uninsurable.”

Meanwhile, tankers full of other nations’ oil defy the hollow threats of the Iranian Revolutionary Guard Corps (IRGC) and transit the Strait of Hormuz via Omani territorial waters, backed by U.S. naval power.

Which brings us to geography, which defines Hormuz as a narrow maritime chokepoint through which about 20% of global petroleum has moved in recent years. Over time, uninterrupted transit through Hormuz seemed immutable; although since World War II, naval planners have worried about keeping that channel open. (Long story.)

Hormuz transit separation zones. Credit Institute for Study of War and CNN.

When kinetic conflict broke out, Iran promptly announced that Hormuz was “closed” and any transiting ships – sailing only by Iran’s permission – were required to pay tolls. For a while the threat mattered, but no more. Now, talk of closure is just another noisy, noisome Iranian claim, more propaganda than nautical reality.

On occasion in recent weeks, the IRGC has launched small rockets or drones at passing vessels. And the response was U.S. military airstrikes against well-chosen spots. Thus, it’s clear that the U.S. will bomb the tar out of Iranian targets, and fear of “Death-by-JDAM” has a way of clarifying even the most obtuse minds.

While in other news, Omani leaders have announced that they do not support Iran’s toll scheme. And Trump has declared that every dime Iran collects in “tolls” will come right back out of Iranian assets presently under seizure.

And all of this is not diplomacy like in some college government class. This is political-military-financial leverage.

Rewriting Global Rules

Now, let’s address the part of this geopolitical drama that many armchair strategists seem to have missed.

When the U.S. Navy is offshore, it doesn’t merely “show the flag.” It derisks certain dangers, and rewrites commercial assumptions. A carrier battle group reprices hull & cargo insurance. A destroyer escort changes the decision-process behind a ship-owner’s decision to sail or not. A show of persistent force alters the thinking of bankers, oil traders and refinery managers who must keep their cracking towers fed.

Meanwhile, Iran’s problem is not just oil. Because right now the theocratic dictatorship cannot convince enough ship owners to haul basic cargo to Iran’s ports. Hence, the country’s economy is in a tailspin. Inflation is catastrophic.

Iran imports a large share of its food and consumer necessities. And when cargo ships don’t call, those empty shelves are not an abstraction; they are politics by other means. And of course, few players want to do business with a pirate state that takes potshots at passing commercial traffic.

Iran’s regime can command propaganda channels, but it cannot command the trust of serious global money. And that trust is what lubricates world trade.

From the U.S. side, Iran has failed to uphold its end of the MOU and thus has not received even a dollar in unfrozen funds or Gulf development aid. Evidently, the MOU was a legal and political test to see whether the IRGC could behave rationally after losing its military and economic leverage. It failed.

The Global Rise of “Plan Bs”

Recently, the Iran conflict has entered a bizarre stage of Negotiate-but-Don’t-Negotiate, but the world still turns. And yes, during the hot combat phase oil prices spiked. But in the past few weeks they have eased. At the start of kinetic hostilities, global trade was disrupted, but now it’s beginning to rebalance.

Meanwhile, projects that once lived on the back shelf as “maybes” are now front-burner priorities: projects like cross-land pipelines, alternate ports, more LNG flexibility, refinery adjustments and attack-hardened terminals.

This is how history works. Crisis exposes weakness; the solution is to reboot and reroute. For example, oil shocks of the 1970s rewired assumptions about Alaska, the North Sea, conservation, strategic reserves and the entire idea of energy security. Eventually, new thinking led to fracking.

The current Iran shock will do something similar for the global oil markets: change pipeline systems and tanker routes, emphasize port security, increase refinery flexibility, and revive appreciation for non-Gulf production, whether offshore or onshore but certainly in underdeveloped basins with the right geology.

At the heart of the action in the Gulf, Saudi Arabia, the UAE and other producers are pushing alternative pipelines east across Oman, west to the Red Sea, and even northwesterly lines to the Med. It’s not because engineers suddenly discovered geography, but because the Iran-risk premium finally became high enough to justify the steel, pumps, terminals and security.

UAE oil line to increase exports and bypass Hormuz. Credit @saif_aldareei.

In strategic terms, this makes Hormuz less magical but not obsolete. No chokepoint disappears, but every alternate pipeline, expanded port, and reconfigured refinery reduces Iran’s leverage.

Elsewhere, China has deep economic problems after years of malinvestment in flashy, money-losing boondoggles: empty housing blocks, half-used rail corridors and local-government debt pyramids. But the Chinese are practical. They’ll reboot and move ahead.

And speaking of China, it holds solid cards in the form of supply chains for critical metals and materials that the rest of the world neglected for two generations: rare earths, graphite, magnet supply, battery chemicals. And these are not just abstract goods with odd names, they are innards of modern industry.

On the other side of the planet, Europe is a hot mess, figuratively and literally. Begin with its maniacal energy policy which has driven continent-wide deindustrialization. Crackpot net-zero mandates have made a virtue of expensive electricity. So now, as summer unfolds, entire nations sweat through heat waves while people scramble to buy imported Chinese air conditioners.

Brawl at French store over air conditioners. Credit @RMXnews, screen shot.

Then there’s the Ukraine war, a black hole for lives, money, equipment and collective Euro-political credibility. Because nothing says “stability,” and “we know what we’re doing,” and “invest here” like a festering aerospace war with Russia on the eastern front, fought amid energy scarcity, fiscal exhaustion and public distrust.

So, yes… Start thinking about the Plan B’s of the world.

USA – “Winning”

Which country benefits most from this reset? C’mon, man, take a guess… Yes, the United States of America, which returns us to America 250.

As smoke clears from the July 4^th fireworks, America has entered another phase. From seabed to space, the U.S. has newfound leverage at many levels.

In the U.S., electricity, natural gas and transport fuels are structurally cheaper than in Europe or Asia. And cheap, reliable energy is a hidden wage boost for American workers and measurable margin for American manufacturers.

Not every lost factory comes home; nothing is that clean. But the balance has changed. The old model of global trade assumed stable sea lanes, cheap freight, predictable insurance, tolerable politics and endless outsourcing.

Now add hostile regimes, chokepoints, drones, missiles and sanctions. Suddenly, a new plant in Pennsylvania or Louisiana looks less like nostalgia and more like prudence. Secure supply beats fragile supply.

As for Iran, the country is a shell of what it was six months ago. Increasingly, it’s isolated from the global economy, an awkward counterparty even for supposed friends. Buyers that once gamed Iran’s oil on black-markets now look elsewhere because U.S. and U.S.-friendly oil suppliers matter more.

Elsewhere, China must rethink its energy security. India must recalculate exposure. Europe must face the thermodynamic cost of Green fantasies. Russia, too, has issues with energy, exports, revenue and refinery capacity.

Overall, in recent months the world has relearned old lessons; that shipping lanes, energy flows and supply chains are not academic issues. Geology is destiny, abetted by downstream refining and output. And policy determines timing, which is why we now see capital shifting to safer jurisdictions, to places that can deliver molecules.

Another point is that markets are maps of power, focused on resource flows and industrial capacity. And these maps change depending on how global markets gauge confidence and credibility.

Okay, here’s where investors must pay attention. Because not every headline is a trade, nor does every crisis create fortunes. But when routes change, premiums change. When premiums change, margins change. And when margins change, capital eventually finds companies, regions and technologies that solve the problem.

Yes, those airshows and fireworks over Washington, D.C. were splendid, even glorious. But the real display of American power is spread out across the dark plains of the Republic, where fresh-poured concrete is setting and the future is being repriced in real time. That’s the true reckoning after the July 4^th celebration.

Over the weekend, America turned 250 beneath fireworks and flyovers. The world, meanwhile, received a reminder that hard power, energy, deep industry and serious money still decide outcomes.

The lesson isn’t complicated: nations that can produce and protect set terms. Everyone else negotiates from behind.

That’s all for now. Thank you for subscribing and reading.

The post The World Reprices Risk appeared first on Daily Reckoning.

Midterm elections are around the corner.

And Republicans face an uphill battle to retain control of Congress. It’s crunch time for the GOP.

But their message isn’t resonating with young voters. And that’s a problem.

Today, let’s explore why.

Leavitt Fumbles

Karoline Leavitt, President Trump’s sharp young Press Secretary, was recently on Jesse Watters’ show on Fox.

They were discussing the rise of communism within the Democratic Party. A very real threat.

Leavitt started off strong, warning that Marxist ideals were becoming mainstream on the left.

Then things veered off track (my transcript is lightly edited for clarity, you can watch the full clip on Youtube):

Watters: Some of these kids have never had a real job, and they’re complaining about things being expensive. Yes, things are expensive when you don’t have a real job. Do you think that’s getting traction? Complaining?

Leavitt: Unfortunately, I do, because this generation, my generation, I hate to say it, Gen Z and those younger than me have been raised with just silver spoons in their mouths, just getting everything handed to them.

Leavitt said laziness is part of the problem, and that young people need to pull themselves up by the bootstraps. I’m disappointed in Watters and Leavitt here. This is handing ammunition to the opposition. This clip will run in Democratic attack ads.

Things are expensive, period. And Gen Z has a right to be angry about the state of the nation. I’ll show this clearly a bit further down.

But first, let’s look at another example of the GOP’s bad affordability messaging.

Ribeyes and Lobster Tails

Congressman Troy Nehls (R – Texas) was recently asked about the affordability issue.

His reply was… not ideal.

Affordability? What are you talking about? I’m gonna get me a couple of big lobster tails. I’m gonna get me some nice ribeyes.

When asked about the 60% of Americans living paycheck-to-paycheck, he replied, “Maybe the 60% of America don’t work as hard as I do.”

Nehls and Leavitt’s poor messaging is a gift for Democrats ahead of midterms.

Nehls acknowledged that the Iran situation was causing price spikes, but stressed it would be temporary. That’s true.

The problem is that affordability is not just about oil and gas prices. It’s home prices, jobs, rent, healthcare, college, and food.

Pretending that inflation isn’t serious won’t work.

Real Problems

In 1990, the average house cost about 2.7x the median household income.

Today it’s over 5x. So buying a home is basically twice as expensive.

Source: Housing Almanac

It’s gotten so bad that the average age of a homebuyer is now 59 years old. That’s up from 35 in 1990.

The GOP’s denial that there’s an affordability problem is backfiring. And I worry it will empower socialists and communists. They at least acknowledge the problem, even though they get the solution backwards.

Dual Job Threats

The job market is brutal out there. Young people are being forced to compete with two powerful rivals: cheap imported labor, and AI.

Our nation is being flooded with immigrants, both legal and illegal, who are willing to work long hours for less pay. It started out in blue collar fields, but has crept into tech, accounting, medicine, and other high-paying jobs.

The following chart shows that since 2019, the vast majority of new jobs has gone to foreign-born workers (red line) vs American-born (green line):

Source: ZeroHedge

Extremely disturbing. As you can see, essentially zero jobs have been created for U.S.-born citizens since 2019. All the job creation has benefited immigrant workers.

So when you see great jobs numbers, remember that a huge number of them are going to non-Americans.

Sprinkle in AI disruption, and it’s an ugly picture out there. For everyone, but especially young people.

We built a system that told kids if they go to college, they’ll get a high-paying desk job. But lots of kids are graduating with $150k+ in debt, applying to hundreds of jobs, and getting no interviews.

Young people today want political leaders who at least acknowledge their problems. Republicans need to start doing so immediately.

President Trump has also been tone-deaf on this topic at times. Back in May, he gifted the Dems with a free ad.

Our colleague and friend Jim Rickards wrote the following at the time:

One sign that he may be out of touch is his recent statement that “I don’t think about Americans’ financial situation.” He was making the point that his attention is focused on the war in Iran. OK. But the line came out terribly at a time when Americans are facing high prices for gas at the pump, higher grocery prices, stagnant real incomes, higher insurance rates, higher tuition, healthcare and travel costs, and much more.

You can be certain Democrats will repeat the “I don’t care” comment endlessly in the coming midterm election.

Jim has been a tremendous supporter of Trump and the Republican party. He’s lectured on Trump’s 3-3-3 economic plan all over the country. But he calls it like he sees it. And he’s right. This is a bad strategy.

The party line appears to be that there is no affordability problem. This is false and unacceptable.

Pretending everything is fine because the stock market is at all-time highs is not going to work on Americans with little stake in it.

To succeed in the midterms and beyond, the GOP needs to get its act together. Because if they continue to pretend everything’s peachy, Republicans are going to lose.

And that means the increasingly-communist Democrats would win. They’ll promise everything, and desperate people will believe it.

If the trend continues into 2028, a Democratic president would likely mean open borders, wealth taxes, welfare for all, and lax law enforcement. A nightmare scenario.

The GOP needs to get on track, quickly. They can start by acknowledging that the problems faced by Americans are real. And then work to address them.

The post The GOP’s “Affordability” Problem appeared first on Daily Reckoning.

I have 5 charts for you today which put this crazy market into context and give some clarity on what might come next.

We’re at a fascinating crossroads for markets, geopolitics, and finance.

Let’s get started.

Semis Party Like It’s 1999

First up, semiconductor returns. The index below includes U.S. semi stocks like Nvidia, Micron, Intel, Broadcom, Marvell, Texas Instruments, and more:

Source: Charlie Bilello 

As you can see, during the dotcom bubble, semiconductor stocks soared 234% over 14 months in the period leading up to February 2000. That was the peak of the market, and tech stocks wouldn’t recover for about 15 years.

And in the past 14 months, SOX is up 237%. Reminiscent of the dotcom days.

Maybe this time is different, and yes, the stocks are more profitable today. But it’s undeniable that markets are getting bubbly. Semis are looking especially frothy. When AI spending inevitably slows down, watch out below…

+$2.99 Trillion

Over the past year, America’s federal debt jumped by $2.99 trillion.

Needless to say, our current trajectory is unsustainable. We’re paying about $1.2 trillion per year just in interest on federal government debt.

This is the key reason I believe interest rates will need to go down to near zero sometime in the next few years. Even if inflation remains above target. And it’s why I still believe holding precious metal investments is key to wealth preservation and growth.

AI Infrastructure Surpasses Humans

We all know data centers are booming. But the chart below puts it all into perspective. It compares office construction (blue) to data centers (red):

Source: Zerohedge

Simply remarkable. We’re spending more on infrastructure for AI than humans.

And since 2016, spending on data centers is up more than 10x.

But all around the country, locals are pushing back against big tech. Data centers are extremely loud. They spike local electricity prices to unaffordable levels. In some cases, they pollute the water with nitrites and other chemicals.

And most importantly, our power grid is hitting its limits. We can’t build new power plants fast enough to keep up. So eventually, the data center boom will have to slow down significantly. And that will likely mark the top of this boom/bubble.

Silver vs Stocks

Silver has had a rough few months. After rising almost 4x in a year, it has been cut in half.

The chart below compares silver to the S&P 500. As this chart rises, silver is beating stocks. When it falls, it is losing.

Source: Tavi Costa

As you can see, even at the recent highs we didn’t get anywhere near the levels we saw in 2011, when silver outperformed stocks for an extended period.

We’ve gotten our big correction, and I believe the next 5 years will be excellent for silver. It still has a long way to go to reach 2011 levels (compared to stocks). And supply deficits today are far more extreme than they ever were back then. Solar is booming and investment demand is soaring, especially in Asia.

I remain convinced silver will find new highs over the next few years. Maybe sooner.

-$246B Gambling Losses

The USA’s gambling problem is getting worse. As a whole, Americans are on track to lose $246 billion this year.

Source: Joey Politano

As we highlighted last week, Americans invest about $600 billion in 401ks every year. That number could be $850 billion if we ever learn that gambling has horrible odds.

Look, if you can afford to gamble and enjoy it, great. But many people are trying to strike it rich. And that almost never happens.

Gambling is all around us, and we should be on guard against its pernicious effects. Saving and investing should always come first.

I hope you all have a nice Independence Day weekend.

The post 5 Charts to Navigate This Chaotic Market appeared first on Daily Reckoning.

In the video below, Jim Rickards talks with Aaron Gentzler about how to navigate this dynamic period in history. They discuss the rise and fall of empires, before moving on to the importance of faith and family in today’s crazy world. Enjoy.

The post Jim Rickards on Faith and Family appeared first on Daily Reckoning.