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America at the Crossroads: Jim Rickards' 2026 Midterm Election Briefing

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Jim Rickards&rsquo; Strategic Intelligence is designed to help you prepare and profit from the coming collapse of the dollar.
It&rsquo;s masterminded by Jim Rickards, New York Times bestselling author of the The Road to Ruin, Currency Wars, The Death of Money, The New Case for Gold and more.
He&rsquo;s spent over 40 years in investment banking, international economics, political and national intelligence advisory roles. As adviser on international economics and financial threats to the Department of Defense and the U.S. intelligence community, he served as a facilitator of the first-ever financial war games conducted by the Pentagon.
To safely guide your investments, Jim has developed a revolutionary way of looking at the financial system and stock markets. He calls it &ldquo;complexity theory,&rdquo; which has been used by government intelligence agencies but never applied to the financial world.
Jim will use this theory to help you build safe investment positions in stocks, bonds, cash, art, land, precious metals and other hard assets.&nbsp;
You can get Jim&rsquo;s research every month &mdash; with weekly email updates &mdash; in Jim Rickards' Strategic Intelligence.

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Midterm Reckoning

Updates

This past Wednesday morning, America awakened to a political demolition.
Democrats won both chambers of Congress, Republican strongholds from Texas to the Carolinas cracked and California remains a one-party state of rule and ruin.
A few races remain unsettled, but the direction is unmistakable. Trump asked voters to behave as though he were on the ballot, and they obliged.
Forget the comforting explanations. This was not bad messaging, hostile media or voters failing to appreciate Washington&rsquo;s accomplishments. In 2024, President Trump and the Republicans hawked visions of economic restoration and peace. In 2025&ndash;26, they delivered high prices, foreign wars and political insiders looking after themselves.
Three forces explain the political carnage: the household affordability squeeze, a governing party that fractured its own coalition and an electorate that no longer resembles the country Republican strategists remember.
Another electorate also voted, namely the markets. Gold and silver rallied overnight as results arrived. CNBC reported spot gold at $4,044.90 and silver at $51.90 by dark:30 Eastern time.
For now, winning politicians see power. But apparently, precious metals markets see risk.
<h3>The Kitchen Table Beat the Situation Room</h3>
Begin with kitchen table issues. Reuters reported that nearly nine in ten voters identified living costs as a crucial or major consideration in their votes, while nearly two-thirds blamed Trump for high prices.
People voted against a financial squeeze they could feel at the gas pump and grocery store.
A declining inflation rate is not the same thing as an affordable life. Yes, prices have risen at a slower rate than under, say, the long-lost days of Joe Biden. But payouts for food, fuel, rent, insurance and much more remain punishing.
Or to borrow an old saying, &ldquo;It&rsquo;s the economy, stupid.&rdquo;
Of course, the Iran war compounded Trump&rsquo;s political problem. His promise of domestic improvement collided with an overseas conflict whose costs reached American households, causing energy shocks and supply chain upheavals across the globe.
Energy is not the only cause of inflation. But by its very nature, energy threads through pretty much everything: freight, farming, manufacturing and daily life.
You cannot build a durable message of prosperity while voters associate your foreign policy with their next fill-up at the gas station.
And no, it&rsquo;s not that voters endorsed socialism. It&rsquo;s more like they were firing the party responsible for their disappointment.
A ballot against the incumbent is not a signed contract to accept every plank of the opposition&rsquo;s platform. Democrats should remember this distinction before declaring an ideological revolution (although many politicians are slow learners).
<h3>Republicans Broke Their Own Coalition</h3>
The second reason for Tuesday&rsquo;s election rout was political self-sabotage.
Trump&rsquo;s 2024 coalition was a working arrangement, not a hereditary estate. His promise of an economic bargain brought voters together, but economic disappointment pulled it apart.
Surveys and polls found sharp declines in Republican support among Latinos, Black men and young voters, along with strong Democratic turnout and independents breaking toward the Democratic camp.
From the looks of things, many disillusioned conservatives stayed home. But abstention is not necessarily defection, so it&rsquo;s premature to write a long obituary for the Republican Party and its base.
Republican selection of candidates, however, already offers an ugly lesson.
Trump-backed Ken Paxton, Michael Whatley and Darline Graham lost winnable Senate contests in Texas, North Carolina and South Carolina. And that&rsquo;s what happens when people in high places allow blowhard Fox News talking heads to elevate emotion and personal loyalty over broad electoral appeal.
Trump&rsquo;s gut-level endorsements became substitutes for political craftsmanship. Local credibility matters, as does whether a nominee can reassure voters outside the party faithful.
Republicans also need to confront the contradiction between an America First sales pitch and an unfinished foreign war.
A coalition assembled around improving life at home cannot be expected to cheer indefinitely while its leaders dump attention and resources into far-distant seas and landscapes, whether Ukraine or the Persian Gulf.
<h3>The Reagan Playbook Has Expired</h3>
Now we get to a longer fuse: immigration and generational change.
America is not the country of the 1980s, the 1990s or even the early 2000s. Political organizations that campaign inside those halcyon, Reaganesque memories risk addressing a nation that no longer exists.
Since 2000, roughly 25 million naturalized citizens have become eligible voters, substantially changing the electorate.
Two decades of immigration, let alone open borders at certain periods, have reshaped the culture, communities and political constituencies.
Definitely, it&rsquo;s not Eisenhower&rsquo;s America anymore, not even Bill Clinton&rsquo;s country of 30 years ago.
The U.S. now holds vast numbers of new arrivals from Latin and South America, East and South Asia, India and Africa, with diverse racial, cultural and political backgrounds.
Immigration is not synonymous with Democratic loyalty. But the 2026 Republican retreat represents a notable failure to grab hold of persuadable voters in a changing country.
Somehow, a &ldquo;winning&rdquo; policy must defend borders and civic cohesion without treating people inside the fenceline as permanent outsiders.
Make the case to everyone that the country needs affordable energy, good education and health care, secure neighborhoods, productive work and common obligations.
Nostalgia is not a governing program.
<h3>The Hoover Warning, and a British Mirror</h3>
There&rsquo;s a useful parallel with 1930, when Herbert Hoover&rsquo;s Republicans lost 52 House seats amid the developing Depression yet retained a razor-thin election-day majority.
Then, deaths and subsequent special elections shifted House control before the next Congress convened in December 1931. It was a harbinger of what was coming.
The political danger is that repeated failure turns two years of anger into a lasting, historically rooted reputation. Once voters stop believing your economic promises, all the advertising in the world won&rsquo;t repair the damage.
Closer in time, Britain supplies a mirror.
In 2024, Labour won 411 seats with just 33.7% of the vote, while Conservatives won a mere 121. Voters punished the incumbent party for living costs, instability and infighting.
But then came Labour&rsquo;s parliamentary landslide, and now we see the current descent of Britain into a bureaucratic nanny/police state (long story).
An exhausted governing coalition can make the opposition look stronger than its underlying mandate.
Democrats would be foolish to mistake Republican collapse for unlimited permission to pursue every crackpot idea in the book. But of course, that seldom stops ideologues from driving down the road to Perdition.
<h3>Republican Defeat Does Not End a War</h3>
As far as things go with Iran, we&hellip; shall&hellip; see.
As of Election Day, Iran was bragging about its victory, Qatar was mediating talks and American bombers struck Qeshm Island to blow up a set of radar systems.
Electoral defeat gives Trump a reason to reduce the economic cost of war, but it may also tempt him toward dramatic escalation in pursuit of a foreign-policy &ldquo;win,&rdquo; if not raw revenge.
Frankly, nobody can pretend to know Trump&rsquo;s next decision.
Watch actual shipping numbers, barrels of oil and refined products, negotiations and the scale of airstrikes rather than declarations of imminent success.
A workable Iran deal could ease energy-market anxiety, although it will require two years or more of &ldquo;peace&rdquo; just to restore oil stockpiles, let alone repair damage to date.
Renewed escalation, however, would deepen the affordability problem that helped wreck Republican prospects. These are scenarios, not promises.
The worst outcome may be prolonged ambiguity: enough confrontation to keep commerce nervous and add large war-risk premiums to everything, but too little resolution to restore confidence.
A war does not become inexpensive just because Washington changes the label.
<h3>A Blue Wave Is Not a Blank Check</h3>
It&rsquo;s a total layup to predict that Democrats in the House and Senate will initiate massive investigations, legislative confrontation and recurring budget friction. Expect moves toward impeachment, accompanied by permanent political theater.
President Trump retains his veto power, but that does not make Congress irrelevant. An override requires two-thirds of members voting in each chamber, with a quorum present, not merely a Senate supermajority.
If Democrats interpret an affordability revolt as permission for punitive ideological warfare, they may quickly rebuild the coalition Republicans just squandered.
If Republicans answer defeat with denial and revenge, they may squander another opportunity.
Watch energy policy, spending disputes and whether congressional priorities touch household costs.
The important question is not who delivers the fiercest hearing-room speech. It is whether governing becomes more predictable and productive or merely more expensive and spendthrift.
<h3>Gold Sees What Washington Won&rsquo;t</h3>
The post-election precious metals mini-rally is a warning signal, not a prophecy. And of course, restrictive monetary policy and forced selling can undermine precious metals despite geopolitical uncertainty.
The immediate takeaway is that America has changed deeply in the past two decades, the Trump coalition has cracked and voters demand results.
Trump&rsquo;s political capital has disappeared much faster than campaign professionals expected. And financial capital is not immune to new policies out of Congress.
Washington can argue over the mandate. But households still have bills to pay.
So preserve your wealth, stay cautious and keep subscribed to Strategic Intelligence.
That&rsquo;s all for now. Thank you for subscribing and reading.

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Last Thursday, Elon Musk made a move that sent AST SpaceMobile, Inc. (ASTS) down 10.5% in a day.
Wall Street thinks Space Exploration Technologies Corp. (SPCX) &mdash; SpaceX &mdash; just became ASTS&rsquo;s problem. I think it just became ASTS&rsquo;s best salesman.
Here&rsquo;s what happened.
SpaceX agreed to buy a sliver of the airwaves. It will pay Grain Management about $8 billion for up to 14 megahertz (MHz) of low-band spectrum in the 800 MHz range.
Think of spectrum as lanes on a highway; low-band lanes carry signals farther and through walls.
Pending Federal Communications Commission (FCC) approval, the deal gives SpaceX a key piece it needs to become a full-fledged U.S. mobile carrier.
Wall Street panicked. AT&amp;T, Verizon, and T-Mobile fell about 6% in after-hours trading.
ASTS dropped 10.5% on Friday.
And that&rsquo;s the mistake. The market is reading this backward &mdash; because the thing that looks like a new rival is actually what makes ASTS indispensable.
<h3>Whispers From Orbit</h3>
Start with the physics. Fourteen megahertz sounds like a lot until you split it: 7 MHz for the signal going up, 7 for the signal coming down.
By my math, that tops out around 20 megabits per second (Mbps) per beam, and only if the satellites squeeze every last bit out of each channel.
That&rsquo;s per beam, not per phone. A Starlink beam covers a circle roughly 20 kilometers in radius by my estimate, or about 1,250 square kilometers. All of New York City covers less than 800.
SpaceX itself says the 800 MHz band is for coverage, reaching phones indoors, while its mid-band spectrum carries the heavy traffic. Low-band buys reach, not raw speed.
Now let&rsquo;s compare. ASTS&rsquo;s beams cover a 10-kilometer radius, about a quarter of the area, and the company expects its Block 2 satellites to approach 200 Mbps per beam.
That&rsquo;s ten times the throughput, spread over a quarter of the ground. ASTS management has also talked on calls about a path to a gigabit per beam.
ASTS also doesn&rsquo;t have to buy its spectrum. On Friday, CEO Abel Avellan posted on X that American carriers hold about 1,000 MHz of low- and mid-band spectrum that the ASTS network can tune to.
Not all of it is available to ASTS, but its carrier partners give it access to far more than 14 MHz.
<h3>Two Lanes</h3>
Until last week, besides Starlink broadband service, SpaceX was a supplier to T-Mobile for smartphone coverage. Through T-Mobile, Starlink provides satellite texting to ordinary phones, the same kind of service ASTS sells to carriers.
But by buying spectrum to sell service directly to consumers, SpaceX is moving into the carriers&rsquo; own business.
The carriers have noticed.
T-Mobile CEO Srini Gopalan has said he isn&rsquo;t interested in letting SpaceX rent T-Mobile&rsquo;s network as a mobile virtual network operator (MVNO), a carrier that runs on someone else&rsquo;s towers. On Monday, Deutsche Telekom CEO Tim H&ouml;ttges, whose company controls T-Mobile, said the same. AT&amp;T and Verizon have also passed.
Last week I noted T-Mobile quietly dropping &ldquo;with Starlink&rdquo; from its satellite page. Now we know why.
My take? SpaceX is building a carrier. But ASTS builds for carriers.
That&rsquo;s a different business, and the carriers now have every reason to lean on the partner whose only job is making their networks better.
But the market is huge and there&rsquo;s plenty of room for both companies. Wireless is a trillion-dollar-plus global industry, and SpaceX happens to be ASTS&rsquo;s ride to orbit: BlueBirds 11, 12 and 13 went up on a Falcon 9.
<h3>Been There, Boosted That</h3>
Building a fourth national network is brutal.
Dish Network, later EchoStar Corporation (SATS), spent a decade and more than $20 billion trying. By 2025 it was skipping interest payments and selling the spectrum off &mdash; about $23 billion to AT&amp;T and $17 billion to SpaceX.&nbsp;
SpaceX has deeper pockets than Dish ever did. But a national ground network still takes years to build, and the carriers&rsquo; head start is measured in decades.
That leaves a long runway for ASTS.
<h3>Can You Build Me Now?</h3>
No satellite can serve a big city&rsquo;s density from space alone. So where does a new carrier get coverage in Manhattan?
From the ground. The new 800 MHz band isn&rsquo;t compatible with SpaceX&rsquo;s current or next-generation phone satellites, which are built around 2 GHz. The Grain spectrum is meant for terrestrial service.
SpaceX reportedly plans to pair its satellites with small home cell sites called femtocells, and it has talked with Charter Communications, Inc. (CHTR) about using Charter&rsquo;s Wi-Fi hotspots and small cells.
The carriers tried home cell boxes years ago and found them hard to manage at scale, which is why AT&amp;T&rsquo;s John Stankey called SpaceX&rsquo;s rooftop plan &ldquo;not a viable strategy&rdquo; when I wrote to you last week. SpaceX has solved hard problems before, but this one takes time.
<h3>The Starship Clock</h3>
SpaceX&rsquo;s next big move from orbit is its new generation of phone satellites. The FCC just approved 15,000 of them, and SpaceX says they&rsquo;ll deliver up to 150 Mbps per user on the mid-band spectrum it bought from EchoStar.
Those satellites need Starship. As I told you two weeks ago, Flight 14 made orbit for the first time and let out 26 Starlink V3s, despite losing an engine.
That&rsquo;s real progress. But a rocket that has reached orbit once is a long way from one flying often enough to put up thousands of satellites.
SpaceX President Gwynne Shotwell says the new phone satellites start flying next year, and the FCC gives SpaceX until October 2032 to get half the constellation up and until 2035 for all of it.
ASTS needs 45 to 60 satellites for continuous coverage in its key markets, like the US, and about 90 for the world. Its Block 2 birds fly three to a SpaceX Falcon 9 and up to eight for a Jeff Bezos New Glenn.
Dozens versus thousands. That&rsquo;s the difference a big antenna makes.
SpaceX also has to choose where each dollar goes. It&rsquo;s raising $40 billion to buy Nvidia chips, and its CFO says the AI buildout pays for itself in under a year.
In my opinion, that&rsquo;s a smarter allocation, and it likely means compute comes first and a ground network comes later. The return on investment is much faster for data centers right now.
<h3>Sovereign Skies</h3>
Starlink has waited four years for a license in India, and on Tuesday, Reuters reported that Swadeshi Jagran Manch, an economic group close to India&rsquo;s ruling party, urged the government to block it.
Its concerns: a foreign satellite service could make it harder for India to shut off service in an emergency, or to keep Indian internet traffic on Indian soil.
India&rsquo;s communications ministry says security reviews are underway for every satellite operator, including ventures backed by Indian carriers.
That concern isn&rsquo;t unique to India. Governments want control of their own networks.
ASTS&rsquo;s model gives them that. The local carrier owns the customer, the spectrum and the core network. ASTS just supplies the satellites.
In New Zealand, ASTS partner 2degrees pitches its service on the promise that data never leaves the country.
Japan is taking it a step further. As I told you last week, Japan&rsquo;s Ministry of Internal Affairs and Communications has preliminarily picked the Rakuten&ndash;ASTS joint venture for J-LEO, Japan&rsquo;s program to build its own low-Earth-orbit network, worth up to about $1 billion in government capital. Japanese satellites, serving Japan, under Japanese control.
And ASTS is already inside India, the market Starlink is still fighting to enter.
In June 2025, it teamed up with Vodafone Idea, India&rsquo;s third-largest carrier, in which the Indian government is a major shareholder. Under that deal, ASTS builds and runs the satellites, while Vodafone Idea handles the spectrum, the network integration and the regulatory side in India.&nbsp;
And ASTS already has a relationship with India&rsquo;s space program: in December 2025, it launched BlueBird 6 on India&rsquo;s LVM3 rocket.
Will that create some goodwill and lead to more partnerships in the world&rsquo;s most populous country?
&nbsp;We&rsquo;ll have to wait and see, but I like the odds.
<h3>The Bruises</h3>
ASTS was above $130 in May after rising like a rocket.
It closed Monday near $51.&nbsp;
Some of that drop is on ASTS&rsquo;s ride to orbit. In April, a cryogenic leak froze a hydraulic line on New Glenn&rsquo;s upper stage, cutting thrust and leaving BlueBird 7 in an orbit too low to use.
In May, a New Glenn exploded on the pad during an engine test. Blue Origin is aiming to fly again before year-end, and that matters, because New Glenn carries eight BlueBirds at a time.
But there has been lots of good news too. The Japan deal. The launching of Bluebirds 11-13 and the shipment of Bluebirds 14-16 at the end of September, and the progress on manufacturing more satellites, to name a few.
But that hasn&rsquo;t helped shares much lately. And the whole space sector has been hit. When a group falls together, a company&rsquo;s own news gets lost.
And then there&rsquo;s short-term market reactions to news that isn&rsquo;t actually bad, as happened Friday. ASTS fell because people saw the SpaceX spectrum deal as a major threat to ASTS.
As I said up top, the market has this backward. The more of a threat SpaceX becomes to the carriers, the more they need ASTS &mdash; the one partner that hands them space coverage instead of competing for their customers.&nbsp;
The threat to them strengthens ASTS.&nbsp;
<h3>More To Come</h3>
Here&rsquo;s the calendar from here:
BlueBirds 14&ndash;16: the satellites are at the Cape. SpaceX controls its own schedule, so expect a launch date only shortly before liftoff.
October 29: the FCC votes on making another 482 MHz of spectrum available for satellite-to-phone service, the category ASTS is built for, plus an auction of 25 MHz of mid-band spectrum.
Early to mid November: ASTS&rsquo; quarterly report.
Before year-end: New Glenn&rsquo;s return to flight, which would let ASTS launch eight satellites at a time.
Anytime: a definitive Rakuten&ndash;ASTS deal in Japan, and any sign T-Mobile is shopping for a new satellite partner.
The world needs both kinds of network. ASTS is the one the carriers and countries can call their own.

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Elon Musk Just Did ASTS a Favor

On Sunday evening, Aug. 15, 1971, President Richard Nixon interrupted television programming to announce wage and price controls and the &ldquo;temporary&rdquo; suspension of the dollar&rsquo;s convertibility into gold.
In essence, he severed the dollar&rsquo;s remaining gold link under the 1944 Bretton Woods arrangement.
The dollar was no longer convertible into gold at a fixed official rate and became increasingly dependent on the judgment of politicians, central bankers and bond markets.
Nixon&rsquo;s &ldquo;temporary&rdquo; suspension has now lasted 55 years.
For more than half a century, America&rsquo;s political class has kicked the proverbial can down the road. No gold standard? Well, that&rsquo;s okay because we adopted the so-called &ldquo;petrodollar,&rdquo; right? Sorry, but the petro-part of that term is now problematic at best.
To be clear, the dollar remains the world's dominant reserve currency. No rival currency has displaced it, and the U.S. Treasury market remains central to global finance.
But reserve-currency dominance is one thing. Preserving the dollar&rsquo;s purchasing power is another.
And after 55 years of borrowing, spending and monetary experimentation, that distinction matters more than ever.
<h3>The Bond Market Sends a Warning</h3>
Last week, a Goldman Sachs trader described the U.S. Treasury market as &ldquo;totally bidless.&rdquo; In other words, buyers were scarce as bond prices plunged.
Meanwhile, Treasury Secretary Scott Bessent, who previously declared &ldquo;I am the house now,&rdquo; has acknowledged that he cannot control the bond market.
The 10-year Treasury yield has pushed above 5.3%, with the 30-year even higher. And interest rates are climbing across the economy.
Where is this headed? Just a hunch, but&hellip; NOT to a good place.
Today, the U.S. government is over $40 trillion in official debt. Interest payments absorb an increasing share of federal revenue, while Washington must continually refinance maturing obligations at increasingly expensive rates.
As debt compounds and older bonds mature, new bonds must find buyers. Rising interest rates present policymakers with an ugly menu: cut spending, raise taxes, default on obligations or reduce the real debt burden through inflation and financial repression.
So far, Washington has postponed the hard choices.
Will the dollar&rsquo;s decline occur in some cinematic-scale collapse? Will we see Weimar 2.0, with wheelbarrows full of cash to buy a few loaves of bread? Probably not.
I suspect our monetary system will continue to decay by degrees. Purchasing power may slip, the government&rsquo;s fiscal choices could narrow and refinancing everything may become costlier. And our benevolent government will likely rescue its favored few, each with a larger intervention than the last.
In other words, the dollar&rsquo;s &ldquo;last rites&rdquo; may arrive as a sequence of emergency measures rather than one final, solemn announcement from the pulpit.
But can America return to so-called &ldquo;hard&rdquo; money? To gold?
It&rsquo;s not mere nostalgia. The vast U.S. economy requires honest money, and the world economic system cannot afford a dollar that stretches, shrinks and deforms with every American fiscal emergency.
Durable monetary reform could restore a transparent link between the dollar and gold, backed by audited reserves and enforceable conversion terms. But whatever emerges need not be Bretton Woods 2.0. The goal should be restoring monetary discipline while avoiding the old system&rsquo;s structural weaknesses.
And there&rsquo;s an intriguing proposal that would put this idea directly to the test in the Treasury market.
Economist Judy Shelton has proposed a 50-year Treasury bond backed by gold.
Under her proposal, bondholders could choose at maturity between dollars and a predetermined quantity of gold.
This would force the government to compete with global markets. If investors highly value the gold option, the market would be expressing doubt about the dollar&rsquo;s long-term purchasing power. If not, the market would be expressing confidence.
It&rsquo;s just an idea for now. Still, it offers the beginnings of a market-priced yellow brick road, to borrow a line from The Wizard of Oz, between today&rsquo;s fiat dollars and a more disciplined monetary future.
But investors need not wait for Washington to get religion.
<h3>Gold Is Insurance, Miners Are Leverage</h3>
Physical gold is insurance against currency debasement, financial disruption and the slow confiscation of purchasing power through inflation.
When held outright, gold carries no counterparty risk because its value doesn&rsquo;t depend on someone else keeping a financial promise. And it has a monetary history longer than any central bank.
For retail investors, own some! Of course, don&rsquo;t borrow money to buy bullion. Don&rsquo;t chase parabolic price moves. But gold coins and bars in your possession don&rsquo;t depend on politics, promises or the solvency of a brokerage house or bank.
Gold&rsquo;s job is not to generate income. Instead, gold is a self-fulfilling promise, unlike a bank deposit, which is the bank&rsquo;s liability, or a Treasury bond, which is the government&rsquo;s liability.
Then there are shares of well-run gold-mining companies, which offer leverage to a rising gold price and a pathway to capital growth when their undervalued ounces in the ground are finally recognized.
To be sure, miners are not one-to-one substitutes for bullion. They are businesses exposed to all the upsides and downsides that occur out in the world.
Still, when revenue from gold sales rises faster than costs for labor, energy and operations, a mining company&rsquo;s cash flow can expand sharply. A company ignored at one gold price can become strategically valuable at another.
That&rsquo;s the kind of upside torque investors can buy.
With miners, look for great geology and metallurgy, manageable capital needs, safe political and legal jurisdictions, seasoned operators and enough cash to reach the next value-creating milestone.
On my end, I constantly search for measured ounces in real rock that can become real mines, versus promotional ounces forever stranded within a PowerPoint presentation.
We have several excellent gold-mining ideas in the Strategic Intelligence portfolio. But if you don&rsquo;t want to pick individual stocks, here are two mining funds that offer diversified exposure to the sector:
<ul>
<li>Sprott Gold Miners ETF (SGDM)</li>
<li>Sprott Junior Gold Miners ETF (SGDJ)</li>
</ul>
These funds hold baskets of established and junior miners, respectively, spreading company-specific risk across multiple operations and jurisdictions. They still carry substantial gold-sector risk, but reduce dependence on any single mining company.
Neither fund is part of our official portfolio, although I track both. And both have performed well over the past few years in a rising gold market.
The U.S. fiat system may not receive its last rites tomorrow. But strong, well-protected portfolios are built before the funeral, not during it.
That&rsquo;s all for now. Thank you for subscribing and reading.

AWN-alert-100926-featured

The Dollar's Original Sin

Starship Flight 14&rsquo;s schedule slipped a few times, but it finally lifted off from Starbase at 7:48 a.m. Central on Monday.
Everything started out great until the second stage separated. But then one of Starship&rsquo;s 6 second stage engines shut down early.
This was one of the Raptor Vacuum engines, the variant designed to be most efficient in space.
SpaceX said it might not be a go for orbit. But then the flight controllers checked the three sea-level Raptors the ship would need to get home. The second stage carries both vacuum and sea-level Raptors.
All three of those were healthy. So about 22 minutes into the flight they gave the go, lit an engine, and Starship entered orbit for the first time.
Earlier this month, James told you to watch one thing on Flight 14: whether the orbital burn held.
It held.
By the way, that&rsquo;s the SpaceX design philosophy at work. The whole Starship stack carries 39 engines: 33 on the booster and six on the ship.
Instead of building a rocket around one or a few huge engines, you build it around many smaller ones. (Smaller is relative. A Raptor is still a big engine, but the Saturn V&rsquo;s F-1s were more than twice as powerful.)
That buys you redundancy, and redundancy buys you safety, what the industry calls &ldquo;engine-out&rdquo; capability. An engine might eat itself, but the others can still get you where you&rsquo;re going. On Monday the ship lost one of its six and made orbit anyway.
More, smaller engines buy something else Elon cares about just as much: mass production. Nobody gets good at building something they make five of a year. Build hundreds of the same engine and you get a production line, and every engine off that line is a little cheaper and a little better than the one before it.
Every flight also puts dozens of engines through a real test instead of a handful, so SpaceX learns faster than anyone who flies big, rare engines. It&rsquo;s literally 39 real-world engine tests every time they fly.
It worked out on Monday. Starship Flight 14 opened its payload door and let out 26 Starlink V3 satellites. Elon posted that all of them were &ldquo;operating nominally.&rdquo;
<h3>Moore&rsquo;s Law, Meet Elon&rsquo;s Law</h3>
SpaceX says those 26 satellites can add up to 26 terabits per second of capacity to Starlink.
In the first 18 months of Starlink launches, from May 2019 to November 2020, SpaceX put up 955 satellites. Elon said at the time that a stack of 60 carried a bit more than 1 terabit, so by my math that whole fleet came to somewhere around 16 to 19 terabits.
Monday&rsquo;s flight beat it in one launch.
Call it Elon&rsquo;s Law. The first Starlink satellites carried about 17 gigabits apiece. A V3 is rated at about 1 terabit, roughly 60 times more, in seven years. Moore&rsquo;s Law, which doubled chip power every two years, would have delivered about 11 times over the same stretch.
The jump didn&rsquo;t come from just having a better chip, although Starlink V3 does have more modern silicon and beamformers than the original V1s. It came from a bigger satellite riding a bigger rocket. A V3 is too big for a Falcon 9 fairing but if you give it a bigger cargo bay it can fly, and then the capacity jump follows.
I&rsquo;d like to point out that Monday was a partial load. A full Starship carries 60 V3s, not 26. That&rsquo;s a lot of bandwidth!
<h3>STM Rides Elon&rsquo;s Law</h3>
Having bigger, more powerful satellites beaming radio waves from space means that you need more beamformers.
STMicroelectronics N.V. (STM) makes the beamformer chips that steer the radio beams on Starlink satellites and dishes, 7.5 billion of them delivered since 2021.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4nW8Xn3cc5axrTV9JeBn8F/b75dbb3c322b0d35b960d18fcdd05a1c/ALN-Alert093026-1.jpg" alt="STM" width="540px" />
SpaceX V3 has more capacity meaning more beams to steer.
SpaceX hasn&rsquo;t said whose chips are inside a V3, but ST has been Starlink&rsquo;s beamformer maker from the start, and I&rsquo;d be surprised if that changed.
STM should report around the end of October, based on past earnings dates. That call is the first chance to ask management about V3 and the company&rsquo;s other space chip opportunities.&nbsp;
<h3>Coming Home</h3>
We already know not everything went according to plan. They lost an engine, which changes things.
The flight was supposed to last about ten hours, orbit six times, and then splash down in the southern Pacific off Chile.
Instead the ship fired its deorbit burn a little over two hours in, after about two orbits, and came down north of Hawaii.
SpaceX gave the reason in its flight summary: &ldquo;Out of an abundance of caution given the engine issue experienced during ascent, the flight control team decided to limit the duration spent on orbit.&rdquo;
As usually happens, the splashdown was rough; the ship tipped over and burned within seconds. Of course, Starship&rsquo;s not designed to splash down in the ocean. But the booster did make a controlled descent, which is what we wanted to see.
Yes one engine malfed on the way up but what went right matters more. Every earlier Starship was suborbital, meaning not enough speed to stay up there. The ships fell back to Earth on their own whether the engines worked or not.
That was done for safety since Starship is still in testing mode. If there&rsquo;s a problem relighting the engines, and they don&rsquo;t, the vehicle is stuck up there, a huge piece of space junk. But by Flight 14, SpaceX had enough data to decide to take it to the next level.
<h3>What&rsquo;s Next</h3>
Now get ready for the big one: Flight 15.
Elon plans Flight 15 to be the first full-blown test for Starship reusability.
No more splashing down into the ocean. They&rsquo;ll try to catch Starship&rsquo;s returning second stage with &ldquo;Mechazilla&rdquo;: the tower with arms. They&rsquo;ve already done this a few times with Starship&rsquo;s first stage.
Here&rsquo;s an illustration so you see what I mean.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2ZtwlumyL1aDmDGfaTkHIt/3205d2825db910179ae15b59be87c089/ALN-Alert093026-2.jpg" alt="Flight 15 illustration" width="540px" />
Mechazilla&rsquo;s arms catch Starship returning stages. SpaceX decided to delete things like legs from the Starship design to save weight, or as Elon likes to say, &ldquo;the best part is no part.&rdquo;
Instead, they catch it with &ldquo;chopsticks.&rdquo;
Will it work? Elon puts the odds at 50 to 60%.
Right now a couple of things need to resolve first before they can attempt a real return. The FAA&rsquo;s approval covered Flight 14 only, so SpaceX needs new paperwork, and a catch means the ship has to successfully fly its full mission first.
What&rsquo;s nice if they pull this off is that they&rsquo;ll have an entire Starship second stage back at the launch site.
SpaceX engineers will be able to examine everything. What got damaged? What performed well? What tweaks do they need to make to have a rocket that can fly dozens or hundreds of times with just a fresh tank of gas?
Flight 15 could give them that opportunity.
<h3>Smart Money Moves In</h3>
Now for the question a lot of you have been asking: what happened with the September 25 unlock? I&rsquo;ve been digging into where the smart money went.
First, a quick refresher for anyone new. When a company goes public, insiders and early investors agree not to sell their shares for a set period. That&rsquo;s the lockup. When it ends, those shares are free to trade, and September 25 was one of the big dates on SpaceX&rsquo;s schedule.
The unlock wasn&rsquo;t a single day.
It kicked off a process that runs through November. The smart money moved months ahead of time.
That&rsquo;s really bullish, but to see why, you need to understand James&rsquo; &ldquo;cheat code.&rdquo;
Years ago, James built a website called Stockpickr around one simple investing idea: follow the smart money.
Big funds have to tell the SEC what they own every quarter in filings called 13Fs.
Nobody reads those things but James does. He built a business around the idea and sold it to TheStreet.com for millions.
His rule: follow the smart long-term holders &ndash; the funds that do deep homework and build a position over several quarters. Buy what they buy.
It&rsquo;s like a cheat code for investing.
<h3>They Knew the Dates</h3>
I love this part.
SpaceX&rsquo;s lockup schedule was printed in its IPO prospectus before a single share traded.
Most people never read the prospectus. But the smart money does.
Every professional investor knew what was coming in September... and October&hellip; and November. It was all there in the prospectus.
David Tepper of Appaloosa Management and Dan Loeb of Third Point are two of the best-known fund managers alive. Smart money. Both took new positions in SpaceX in June, right after the IPO, according to their second-quarter filings.
So did Andreas Halvorsen&rsquo;s Viking Global, with a brand-new stake of 1.2 million shares.
That&rsquo;s James&rsquo; cheat code working in real time.
Last week&rsquo;s unlock made about 328 million shares eligible to trade. That doesn&rsquo;t mean it all gets sold.
More shares unlock on October 9 and October 24, and then about 1.3 billion shares after SpaceX reports third-quarter results in November.
Elon himself can&rsquo;t sell a single share until June 2027.
Some insiders are selling, and that&rsquo;s normal. For example, SpaceX President Gwynne Shotwell filed to sell about $52 million of stock days before the unlock, under a trading plan she set up back in June.
That&rsquo;s only about 2.7% of the shares she owned at the IPO. Just a little slice.
Shotwell has spent more than two decades building SpaceX with Elon.
I&rsquo;d call that taking a little off the table and getting paid for all her hard work.
<h3>Following the Money to STM</h3>
James&rsquo; idea is that some of that unlocked SpaceX money would find its way into STM.
Nobody files a form that says &ldquo;sold SpaceX, bought STM,&rdquo; so that part of the story stays out of sight until the funds report.
What we can see, however, is who was already building a position in the second quarter. The number of hedge funds holding STM went from 37 to 75.&nbsp;
US institutional holdings more than doubled in a single quarter:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2BKkN3SWhPtJgtKeEWsATD/214cffaf509e1630a7c7783765a4ceba/ALN-Alert093026-3.jpg" alt="Following the money" width="324px" />
Artisan Partners, a long-term fundamental manager, singled out STM in its second-quarter letter as an early-stage piece of the AI supply chain, one it expects to benefit as AI spending spreads beyond the obvious names.
They&rsquo;re buying a business that&rsquo;s picking up speed. STM guided to about $3.70 billion of revenue this quarter and expects the fourth quarter to top $4 billion, with growth tied to AI data centers and low-Earth-orbit satellites.
These are June 30 positions, and the November filings will show who held and added since. At the end of June, by the values in those filings, STM traded near $75. Today it&rsquo;s around $53, well below our $60 buy-up-to price.
And as I mentioned earlier, Starship just put the first Starlink V3 satellites in orbit, and every one carries more of what STM makes.
<h3>More To Come</h3>
Here&rsquo;s the calendar from here:
October 9 and October 24: the next SpaceX unlocks hit.
Around the end of October: STM&rsquo;s third-quarter results, the first chance to ask management about V3.
November: SpaceX&rsquo;s third-quarter results, alongside the 1.3-billion-share unlock.
Mid-November: the next round of 13F filings, and the first look at who bought through the pullback.
Selling is part of how every IPO works. What matters is who&rsquo;s buying, and the smart money has been buying for months. We&rsquo;re still on the precipice of something huge.
Moore&rsquo;s Law has run for over half a century and made fortunes for the people who owned the companies riding it.
Elon&rsquo;s Law is just getting started.

ALN-Alert093026-featured

Elon Just Broke Moore’s Law

I&rsquo;m convinced that the next leg higher for gold is upon us, and gold&rsquo;s rebound since its July low was just the beginning of a much bigger price movement.
But rather than building a direct investment in the precious metal, I&rsquo;m focusing on a more powerful way to build wealth from gold&rsquo;s next advance.
Gold mining stocks have decisively outpaced the metal they pull out of the ground over the past year. That doesn&rsquo;t happen automatically every time gold rallies.
Understanding what&rsquo;s driving that outperformance helps explain why miners could have further to run.
Gold itself has moved higher over the past year on the back of persistent inflation, a Federal Reserve that has just resumed hiking rates and steady accumulation by central banks around the world.
What I want to focus on today is what&rsquo;s happening one level down, inside the companies that actually produce the metal.
Look at the VanEck Gold Miners ETF (GDX) against gold itself over the past year.
As of this week, GDX has gained roughly 27% over the past 12 months, while gold is up about 14%.
That&rsquo;s not a coincidence. It&rsquo;s a structural feature of how mining companies make money, and it&rsquo;s worth walking through the arithmetic.
Consider a mining company with all-in sustaining costs, or AISC, near $1,800 per ounce. AISC is the industry&rsquo;s standard measure for the ongoing costs required to produce gold and keep existing mines operating.
With gold trading near $4,300 per ounce, that leaves roughly $2,500 of margin on every ounce it produces.
Now suppose gold climbs another $500 per ounce. On the metal itself, that&rsquo;s an 11.6% gain. But look at what happens to the miner&rsquo;s margin.
That same $500 increase pushes the margin per ounce from $2,500 to $3,000, an increase of 20%.
The reason is straightforward. Many of a mining company&rsquo;s costs &mdash; labor, equipment, permitting and fixed overhead &mdash; don&rsquo;t move much when the gold price rises. So when gold rises faster than costs, more of that increase can flow through to the miner&rsquo;s bottom line.
So if gold moves 11.6%, in this case, the miner&rsquo;s margin would move 20%.
That&rsquo;s operating leverage in action. Gold prices can rise much faster than a miner&rsquo;s costs, causing margins to expand even faster than the price of gold itself.
That leverage is the real reason mining stocks can outrun bullion.
It&rsquo;s also worth noting that miners are producing this kind of outperformance while fighting a genuine headwind. Industry-wide all-in sustaining costs averaged about $1,785 per ounce in the first quarter of 2026, roughly 80% higher than the industry average in the fourth quarter of 2020.
First-quarter AISC was also up 16% from a year earlier, with royalties, fuel, power, freight and other inputs adding pressure.
The fact that mining stocks are still outpacing gold in spite of that pressure says something about the underlying strength behind this move.
It also points to where more upside could come from. If energy and other operating costs ease from here, even modestly, that relief could show up directly in these companies&rsquo; margins, on top of the leverage already at work from a rising gold price.
That combination &mdash; a higher gold price and a lower cost base &mdash; could give miners another source of upside beyond the gains they&rsquo;ve already made.
Putting it together, gold&rsquo;s uptrend looks to be resuming after this year&rsquo;s consolidation. Gold mining stocks are already running ahead of that move. And any relief on the cost side would add a further tailwind on top of the leverage already built into these businesses.
One point is worth keeping in mind. The same leverage that amplifies gains on the way up works just as forcefully in reverse. If gold&rsquo;s advance stalls or reverses, mining stocks will typically fall harder than the metal itself.
That volatility is the tradeoff for the outsized upside these companies can offer when gold is moving in your favor.

AWN-alert-092526-featured-2657353665

The $2,500 Margin Boosting Miners

Welcome to the Kevin Warsh Fed.
On Tuesday, we told readers that the Fed would leave interest rates unchanged at Wednesday&rsquo;s FOMC meeting. This would have left the federal funds target range at 3.50&ndash;3.75%, where it has been since Dec. 10, 2025.
Instead, the FOMC voted unanimously to raise the fed funds target by 0.25% to a new range of 3.75&ndash;4.00%. Notably, this was the Fed&rsquo;s first interest-rate hike in more than three years.
Here&rsquo;s the relevant part of the Fed&rsquo;s press release issued at 2:00 p.m. ET on Sept. 16, 2026:
<blockquote>The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3.75&ndash;4%, in support of the Federal Reserve&rsquo;s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.</blockquote>
<blockquote>Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.</blockquote>
<blockquote>Inflation remains elevated. Today&rsquo;s policy action will support a timelier return to the Committee&rsquo;s 2% goal. The Committee will deliver price stability.</blockquote>
It&rsquo;s difficult to see how a higher fed funds rate will have much impact on inflation. The fed funds rate is an overnight lending rate between banks. But banks, especially the largest ones, are flush with reserves held at the Fed. There is no shortage of liquidity.
More importantly, the Fed doesn&rsquo;t directly control many of the forces driving inflation. A higher fed funds rate won&rsquo;t lower oil prices, currently over $100 per barrel, and the market ultimately sets yields on 10-year Treasury notes and 30-year Treasury bonds. Mortgage and credit card rates respond to Fed policy, but they also reflect broader market conditions and credit risk.
Many of today&rsquo;s inflation pressures come from supply-side factors, particularly the price of oil, along with deficit spending and consumer borrowing. Raising the overnight rate does little to address those pressures directly.
So why raise rates now?
My view is that this rate increase was mainly performative, driven by a widespread view among economists that the Fed had to do something about inflation.
A rate hike was also considered necessary in some quarters to reinforce the idea of &ldquo;Fed independence,&rdquo; something I have long regarded as more myth than reality.
But it remains an important part of the Fed&rsquo;s institutional identity, especially when its policy decisions run contrary to President Trump&rsquo;s stated preferences.
The question now is what comes next.
September CPI data are due Oct. 14 so the Fed will get another important inflation reading before its next meeting.
And this week&rsquo;s FOMC meeting also included a Summary of Economic Projections (SEP), including forecasts on interest rates, unemployment and economic growth from Fed officials. These projections are frequently wrong, and we expect Chair Warsh will soon abandon them.
Still, one forecast deserves attention. The median SEP projection points to one additional interest-rate hike this year, with only two Fed meetings remaining.
The Fed meets next on Oct. 27&ndash;28, less than a week before the Nov. 3 midterm elections. The Fed will want to avoid any appearance of favoring Democrats or Republicans so close to Election Day, making a rate hike then less likely.
That leaves Dec. 9 as the more likely date for another hike.
We&rsquo;ll have a more detailed forecast as the October meeting approaches.
Of course, we missed this one. We&rsquo;ve made 24 consecutive interest-rate forecasts based on FOMC decisions, and this is only the second miss. That gives us a 91.7% winning percentage. Not bad, but not perfect.
In any case, the rate hike is now behind us. I don&rsquo;t expect it to have much impact on inflation, long-term rates or economic growth, but it did satisfy those demanding that the Fed act.
And Kevin Warsh can live to fight another day.

CDC-alert-091726-featured-2433927593

Warsh Breaks the Fed’s Streak

On April 19, I got on a bus at 4:15 in the morning to watch a rocket fail.
I didn't know that's what I was doing at the time. Neither did the roughly 800 other AST SpaceMobile, Inc. (ASTS) shareholders riding out to Kennedy Space Center with me.&nbsp;
Abel Avellan spoke to us over breakfast in the Saturn V building. My wife and kids were there &mdash; more excited about the rocket than the ticker, which is the correct order of priorities for a family outing at dawn.
Blue Origin's New Glenn-3 lifted off from Launch Complex 36 carrying BlueBird 7. The booster came home and landed on the drone ship, which is genuinely hard and impressive.
But the upper stage did not do its job. BlueBird 7 separated, powered on, phoned home from an orbit roughly 160 kilometers up &mdash; too low to sustain &mdash; and began the slow process of coming back down.
Now let me tell you about August 5.
<h3>August 5th, 3:49 A.M.</h3>
Three of the largest communications arrays ever deployed in low Earth orbit went to space that morning aboard a Falcon 9 from Cape Canaveral.
BlueBirds 11, 12, and 13, each carrying roughly 2,400 square feet of phased array and weighing six tons, built from a composite structure that lets them stack three-high inside a five-meter fairing.
Nobody chartered a bus for that one.
Look at where that mission sits on the launch manifest: Starlink Group 17-52 on August 1. Starlink Group 17-53 on August 4. BlueBird 11-13 on August 5.
The most important thing AST SpaceMobile has done all year was be on the third rocket that week, sandwiched between two routine cargo runs, and it went off without incident and without an audience.
There's a moment in the Apollo 13 movie that I think about often. The crew was broadcasting live television from a spacecraft on its way to the moon, and the networks didn't carry it.
Nine months after Apollo 11, moon landings had become reruns. It took an explosion and three men nearly dying to get America to change the channel back.
Attention often follows failure more than routine progress.&nbsp;
The August 5 mission was the opposite of failure. It was simply competent. That is the more important story, and it is the one that showed up in the August 10 earnings update.
<h3>The Scorecard</h3>
AST SpaceMobile has not launched commercial service yet, but is steadily moving in that direction, with beta service expected later this year and the constellation buildout expected to reach the commercialization tipping point in the first quarter of 2027.
It is a company under construction, and it should be judged the way you'd judge any half-built thing: is the build on schedule, will the money hold out, and will demand be waiting on the other side?
Here's what came out of the quarterly update:
<ul>
<li>Production is running through BlueBird 46, with satellites assembled through 42 and BlueBirds 14, 15, and 16 ready to ship&nbsp;</li>
</ul>
<ul>
<li>Target cadence of six fully assembled satellites per month, supported by over 500,000 square feet of manufacturing space and another 400,000 coming in Midland&nbsp;</li>
</ul>
<ul>
<li>$21 to $23 million per satellite, all-in, including direct materials, labor, and launch, across a constellation of 90-plus&nbsp;</li>
</ul>
<ul>
<li>13 gateways delivered to seven customers across five continents</li>
</ul>
<ul>
<li>$1.3 billion revenue backlog, including three new U.S. government awards with over $100 million of funded near-term value&nbsp;</li>
</ul>
<ul>
<li>A preliminary award in Japan worth up to roughly $1 billion in non-dilutive, non-debt government capital&nbsp;</li>
</ul>
<ul>
<li>Over $3.7 billion in cash, pro forma for July's convertible offering&nbsp;</li>
</ul>
<ul>
<li>Full-year guidance reaffirmed at $150 to $200 million&nbsp;</li>
</ul>
<h3>Blue Origin's Bad Spring</h3>
The satellites are becoming routine. The rockets, outside of SpaceX, are not.
Blue Origin&rsquo;s problems this spring cost AST more than one satellite. They cost launch cadence.
New Glenn&rsquo;s upper stage stranded BlueBird 7 in April &mdash; a cryogenic leak froze a hydraulic line and caused a thrust anomaly.
Then on May 28, a New Glenn exploded during a static fire test, destroying the rocket and damaging Launch Complex 36, Blue Origin&rsquo;s only operational orbital pad.&nbsp;
The company has since traced that failure to the main oxygen valve on one of the BE-4 engines and is targeting a return to flight this year.
The practical effect is straightforward. A Falcon 9 carries three BlueBirds. New Glenn&rsquo;s larger fairing was expected to carry up to eight. AST currently has 13 satellites in orbit and needs roughly 45 for continuous coverage in key markets &mdash; 32 more.
At three per launch that is eleven missions; at eight per launch it could have been four. Blue Origin&rsquo;s bad spring therefore delayed the path to 45 satellites by about a quarter, pushing the original year-end 2026 target into early 2027.
That schedule slip, more than the single lost satellite, is what has weighed on the stock.
<h3>One More Thing</h3>
CEO Abel Avellan said something on the call that's worth paying attention to. Asked about the company's spectrum position, he described spectrum as fuel for the business &mdash; and then added that what matters just as much is how efficiently the machine burns it.
Efficiency is in the BlueBird satellites&rsquo; phased array and the 3,900-odd patents behind it.
Everyone in this race understands the fuel part. SpaceX paid roughly $17 billion for EchoStar's airwaves. Rocket Lab bought Iridium. Amazon is acquiring Globalstar. When you can't manufacture more spectrum, you buy the companies holding it.
ASTS took a different path. Rather than purchasing a spectrum owner, it partners with the people who already own the best spectrum on earth &mdash; the mobile carriers. Sixty-plus operators covering more than three billion subscribers.
Layer the company's own spectrum holdings on top and ASTS has more access than anyone else. And ASTS didn't have to outbid anyone for most of it.
Now it looks like more spectrum is coming.&nbsp;
<ul>
<li>July 1 &mdash; the FCC approves T-Mobile's $2.9 billion transfer of its 800 MHz spectrum portfolio to Grain Management, a private investment firm. The Commission rejects Grain's requested build-out timeline and imposes a tighter one, citing "immediate consideration of D2D opportunities," and says it will defer satellite waiver requests until a direct-to-device partner is identified.&nbsp;</li>
</ul>
<ul>
<li>July 2 &mdash; AST SpaceMobile files an application to test on that exact same spectrum.&nbsp;</li>
</ul>
<ul>
<li>August 10 &mdash; the deal closes.&nbsp;</li>
</ul>
<ul>
<li>August 12 &mdash; Grain's exclusive sales agent announces the spectrum is available to utilities, enterprises, and direct-to-device satellite providers.&nbsp;</li>
</ul>
<ul>
<li>August 13 &mdash; the FCC grants ASTS's authority.&nbsp;</li>
</ul>
<ul>
<li>August 14 &mdash; testing begins.&nbsp;</li>
</ul>
It's a 30-day test authority &mdash; 100 off-the-shelf phones at two sites, running through September 12. About as boring as a regulatory filing gets.
<h3>What I'm watching</h3>
<ul>
<li>BlueBirds 14&ndash;16 shipping and the next launch window&nbsp;</li>
</ul>
<ul>
<li>First beta service announcements with strategic partners before year-end&nbsp;</li>
</ul>
<ul>
<li>Formal disclosure on the three new U.S. government awards (management has said this is coming)&nbsp;</li>
</ul>
<ul>
<li>Mid-band satellites moving into production later this year for 2027 launches&nbsp;</li>
</ul>
<ul>
<li>Progress toward ~45 low-band satellites in orbit by early 2027</li>
</ul>
So far this year, the company has doubled its array size in orbit, added three government contracts, and secured access to a billion dollars of foreign sovereign capital.
The build is on schedule. The money is there. But the price hasn't caught up.
That gap is the whole opportunity right now.
The gap closes the moment this stops being boring &mdash; and this stops being boring when commercial service lights up next year.
<h3>Don&rsquo;t Get Shaken Out</h3>
I&rsquo;ve heard from several readers this week about taking profits after ASTS&rsquo; near 12% run yesterday, or wondering if they missed the top shares hit in late May.
My response is simple: this is short-term noise in the middle of a big long-term story.
We&rsquo;re seeing these big swings across the entire space sector. Space stocks are often making almost the exact same moves at the same time without regard to what&rsquo;s playing out in the individual companies.&nbsp;
ASTS is in the middle of a once-in-a-generation space infrastructure buildout that will bring direct-to-phone high-speed connectivity everywhere.&nbsp;
When you look at ASTS&rsquo; multi-billion-dollar market potential, today&rsquo;s tops and drawdowns are going to look measly by comparison.&nbsp;
This is not a quick trade. I own ASTS personally and am holding for the long haul.
Disclosure: Ray owns shares of ASTS.

ALN-Alert-090326-Featured

The ASTS Launch Nobody Chartered a Bus For 

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Now, on to this week&rsquo;s commentary&hellip;
Last week&rsquo;s financial media was full of apocalyptic headlines: &ldquo;$40 trillion in national debt!&rdquo; &ldquo;U.S. debt in a doom loop!&rdquo; &ldquo;The end of the dollar is near!&rdquo;
Gold and bitcoin soared in lockstep with the dollar doom and gloom. If you took the headlines at face value, one would assume the dollar was already toast and U.S. Treasuries were worth no more than digital confetti.
The truth is that the dollar&rsquo;s position as the leading reserve currency is not in jeopardy. Of course, foreign exchange reserves are not simply piles of currency. They are largely held in liquid financial assets, including U.S. Treasury securities denominated in dollars.
Dollar-denominated assets will dominate global reserves for decades to come.
The reason is simple. There are few sovereign bond markets with the size, liquidity and depth of the U.S. Treasury market. Other large government bond markets, including Japan and major European markets, do not offer the same combination of scale and liquidity. King dollar will remain king.
This does not mean interest rates won&rsquo;t rise or inflation won&rsquo;t increase. Both are likely. But neither means the end of the dollar. It just means the Treasury pays more to borrow and you pay more at the gas pump and grocery store.
So, there are problems in the dollar bond markets, but debasement-trade hysteria is not a useful way to understand them.
<h3>Bessent Goes After The Bond Market</h3>
U.S. Treasury Secretary Scott Bessent has just announced a plan to address higher interest rates in U.S. Treasury securities markets and, by extension, mortgage and credit card markets. It has both long-term and short-term components.
One short-term component involves U.S. support for Japan&rsquo;s efforts to prop up the yen, including joint currency intervention and potential greater use of the Federal Reserve&rsquo;s FIMA Repo Facility. That facility allows Japan to borrow dollars against its U.S. Treasury holdings rather than selling those securities outright.
In turn, that could take pressure off U.S. interest rates. Japan is the world&rsquo;s largest foreign holder of U.S. Treasuries, with about $1.12 trillion as of June.
Another short-term component is for the Treasury to purchase longer-dated Treasury securities, specifically those in the 10- to 30-year sectors. The Treasury recently announced that it will at least double the size of certain scheduled buyback operations from $2 billion to $4 billion, with the possibility of going higher.
Treasury has also relied heavily on short-term maturities such as one-month, three-month and six-month Treasury bills in its overall financing mix. These Treasury bills generally carry lower interest rates than longer-dated notes and bonds. Greater reliance on shorter maturities can lower U.S. interest expense, at least in the short run.
Treasury bills are also prized by dealers and hedge funds because they are highly liquid and are widely used as collateral in financial transactions. Supporting liquidity at the long end while maintaining a large supply of short-term Treasury securities makes sense. Why it is causing such hysteria in the media is a bit of a mystery.
<h3>Bessent&rsquo;s 3-3-3 Gambit</h3>
The longer-term component of the Bessent Plan is sometimes referred to as the Three Arrows.
The first arrow is to keep annual deficits at 3.0% or less of GDP. The second arrow is to achieve GDP growth of 3.0% or more. The third arrow is to increase U.S. energy production by the equivalent of 3 million barrels of oil per day.
That&rsquo;s where the shorthand 3-3-3 comes from: a 3% deficit, 3% real GDP growth and 3 million additional barrels of oil equivalent per day.
Since oil output does not directly impact fiscal policy, we can leave that to one side in our analysis. The deficit and GDP growth targets, however, are critical.
The metric that really matters in terms of whether investors have confidence in U.S. Treasury securities is the U.S. debt-to-GDP ratio. It&rsquo;s silly to hyperventilate about $40 trillion as the U.S. national debt unless you put that number in the context of the GDP available to finance and roll over the debt.
Right now, gross U.S. federal debt is roughly 123% of GDP. That&rsquo;s the result of approximately $40 trillion of debt divided by roughly $32.5 trillion of annualized nominal GDP. That ratio is near the highest levels in U.S. history.
High debt-to-GDP ratios can be a drag on growth and leave governments with less room to respond to crises. A ratio of 60% is much more comfortable. A ratio of 30% is more comfortable still. The previous postwar high was reached around the end of World War II.
The annual deficit will not go down to zero. That&rsquo;s a fantasy. The level of U.S. national debt will also not go down anytime soon. That&rsquo;s another fantasy.
But that doesn&rsquo;t matter.
What does matter is whether the debt-to-GDP ratio goes down.
The way to do that is to grow the economy faster than the debt. If you can do that, the ratio goes down even if the debt goes up. That&rsquo;s Bessent&rsquo;s plan. That&rsquo;s what he meant when he said the U.S. could &ldquo;grow its way out&rdquo; of the debt problem. In theory, he was right.
For example, let&rsquo;s say annual deficits are $2 trillion so that a year from now the national debt will be $42 trillion. That&rsquo;s a 5.0% increase in the national debt.
But if GDP grows from $32.5 trillion to $34.5 trillion, that&rsquo;s a 6.2% increase. The debt-to-GDP ratio drops from roughly 123% to 121.7%. That&rsquo;s still high, but it&rsquo;s lower than the year before.
That&rsquo;s all the so-called bond market vigilantes need to see. As long as the debt-to-GDP ratio is coming down, bond investors have reason to retain confidence in U.S. Treasuries and the U.S. dollar.
The U.S. has done this before. The gross federal debt-to-GDP ratio reached roughly 119% in 1946 and was down to about 31% by 1980. That process took more than three decades and occurred under both parties using a combination of fiscal and monetary policy, strong nominal growth and inflation.
During that period, the national debt increased substantially. But GDP increased by more than 1,000%. And that was the key. If GDP grows faster than debt, the ratio comes down and America&rsquo;s fiscal position improves.
<h3>Here&rsquo;s The Dirty Little Secret</h3>
So, that&rsquo;s the plan. But there&rsquo;s a dirty little secret that Bessent has not emphasized.
When the government computes debt-to-GDP ratios, it&rsquo;s using nominal numbers, not numbers adjusted for inflation.
In the example above, GDP grew by about 6.2% while the national debt grew by 5.0%. That lowers the ratio, but it does not reveal how much of the GDP growth was real and how much was inflation.
The 6.2% nominal growth could have been 4.2% real growth plus 2.0% inflation. That&rsquo;s fairly healthy. But it could have been 2.2% real growth plus 4.0% inflation.
At 4.0% annual inflation, the purchasing power of the dollar is cut roughly in half in about 18 years and cut in half again over the next 18 years. That kind of inflation can destroy your net worth and income if you&rsquo;re not prepared.
So, how much inflation is included in the Bessent Plan? Secretary Bessent didn&rsquo;t say.
Investors should assume the worst.
The U.S. has had difficulty sustaining real growth of more than about 2.0% per year on average since the global financial crisis. If we need roughly 6.0% nominal growth to outrun the growth in debt and if we can only produce 2.0% real growth per year, then the difference has to come from inflation.
That could mean 4.0% inflation.
That&rsquo;s not a policy preference. It&rsquo;s just fifth-grade math.
In describing how the U.S. lowered its debt-to-GDP ratio dramatically between the end of World War II and 1980, I conveniently omitted the fact that consumer prices rose about 50% between 1977 and 1981.
That&rsquo;s one way the U.S. government took care of the debt problem.
I lived through that period. It was a fun time if you owned gold or real estate, if you used leverage and if you had a job that gave you a raise every few months.
It was not a fun time if you depended on fixed-income streams like annuities, insurance policies, pension plans or Social Security.
Which side of that trade are you on?

TAC-alert-082626-featured-1581679762

What If $42 Trillion Is Better Than $40 Trillion?

Imagine your doctor cuts out your melanoma tumor and tells you the surgery went well. Then she tells you the odds it comes back are uncomfortably high, and there's not a lot more to be done about it.
That's been the deal for a long time.
This morning, Merck &amp; Co., Inc. (MRK) and Moderna, Inc. (MRNA) announced that adding a drug built specifically for each individual patient &mdash; from that patient's own tumor, by a computer, in a batch of one &mdash; to the best treatment we currently have kept melanoma from coming back better than that treatment alone.
Eleven hundred and thirty-seven patients. A real trial, properly run, blinded. The gold-standard for medicine. It worked, and it worked well enough that an independent committee called it at the first scheduled checkpoint, ahead of schedule.
And it's the first time anything added to Keytruda &mdash; the current standard of care, and one of the most successful cancer drugs ever made &mdash; has improved on Keytruda by itself in this setting.&nbsp;
Plenty have tried but it&rsquo;s been a graveyard. Merck ran this trial against its own blockbuster and beat it.
Moderna more than doubled today. Merck was up over 10%. Every AI-biotech name on the board I&rsquo;ve checked went along for the ride.
I'm writing to you today because the stock move is going to get all the coverage, and it's the least interesting thing that happened this morning.
<h3>Why This Drug Is Different From Any Other</h3>
Every drug you've ever taken was made for everybody.
Somebody found a molecule that helps people with your condition, on average, and then manufactured a hundred million identical copies of it. You got one of them. It was sitting on a shelf before your doctor ever met you.
This one didn't exist until they sequenced your tumor.
There's no shelf. There's no batch. There's a single production run, made for one person, from the specific mutations in that person's cancer &mdash; mutations that exist nowhere else in their body and in no other human being alive.
That's what makes it work. Every cell in your body is constantly holding up a sample of what it's making, so that your immune system can check it.&nbsp;
Healthy cells hold up things your body recognizes. A tumor cell, because it's riddled with mutations, is holding up protein fragments that have never existed in you before.
Those fragments are the tell.&nbsp;
They're the one thing that marks a cancer cell as foreign, and they're different in every single patient.
We've known that for decades. What we couldn't do was act on it.
<h3>How It Works</h3>
Two things had to get cheap. Sequencing a tumor, and figuring out which of those fragments your particular immune system can actually see.
They sequence your genes. They sequence your tumor's genes. The computer finds every mutation that might yield a novel peptide &mdash; a protein fragment that has never existed in your body before your tumor made it.
That's hundreds to thousands of candidates.
The AI then analyzes and selects the top 34 most likely to produce an immune response from your own particular immune system, known as HLA (Human Leukocyte Antigen) type. Those top 34 get encoded into a single custom mRNA.
It goes into your dendritic cells &mdash; the generals of the immune system &mdash; which manufacture those fragments and display them on their surface. The generals carry them to your lymph nodes and show them to the killer T cells. Newly activated, those T cells go hunting for any cancer cells left behind after surgery.
This is your personal medicine. Batch size one. It will never be given to another human being.
<h3>Where The AI Comes In</h3>
Moderna's press release does not contain the word "AI." It only says the therapy is designed using the patient's tumor sample to identify its unique mutational fingerprint.
Somebody has to read that fingerprint. And the somebody is actually a something: an AI.&nbsp;
There&rsquo;s a lot that is being asked of it. A tumor throws off hundreds to thousands of mutations.&nbsp;
Only some produce a fragment your cells will actually put on display, and which ones those are depends on your particular HLA type &mdash; the most variable stretch of DNA in the entire human genome, with thousands of versions in circulation. Your neighbor's tumor could carry the exact same mutation and his immune system would never see it.
A team of immunologists could work that out for one patient. It would take them months, and cancer doesn't wait months. The AI does it in days, for every patient, at a cost that lets this be a product instead of an experiment.
This therapy is not merely improved by AI. It is impossible without it. Nobody was ever going to hand-rank a thousand mutant peptides per patient on a real world clinical timeline, which is why a thirty-year-old idea sat on the shelf until the AIs arrived.
And the AIs are still early. Moderna published a benchmark against tumors where researchers had already proven which fragments the patients' T cells recognized, and the algorithm caught 41% of them.
But it worked anyway.
That's the part I find remarkable. The AI didn't have to be perfect. It had to be good enough to load 34 shots on goal instead of one, and biology covered the rest. A first-generation AI model, in its first Phase 3, made the best cancer drug we have work better.
Now think about where the AIs go from here. Every one of these gets better with more data about which fragments actually get displayed &mdash; and that data comes out of laboratories, off instruments, one measurement at a time.
Generating the ideas is the cheap part now. Proving them is where the work is.&nbsp;
<h3>It&rsquo;s Not A Good Time To Buy Moderna</h3>
Because at over $60 billion, the stock has already priced in what hasn't happened yet.
Merck takes half the economics. Melanoma is about 15% of the PD-1 market and the adjuvant setting is a quarter of that &mdash; so today's proven indication is a sliver, split two ways.&nbsp;
There are nine trials running across lung, bladder, and kidney, with early work in pancreatic and gastric. Some of those will work. Melanoma is the friendliest possible tumor for this approach &mdash; sun damage generates mutations prolifically, which is why there were 34 good ones to choose from. Tumors with fewer mutations will be harder, and some won't work at all.
I am not paying today for outcomes we'll learn about several years from now.
<h3>What Comes Next</h3>
Almost three years ago, the first thing I wrote for you as part of the Altucher Investment Network was called "How ChatGPT Will Cure Cancer,&rdquo; you can read it <a href="https://my.paradigmpressgroup.com/article/how-chatgpt-will-cure-cancer">here</a>.&nbsp;
I didn&rsquo;t call this specific drug. But the shape of what was happening was visible then and it's even more visible now. Today it stopped being a theory and became a Phase 3 result. FDA filings will come next, and then availability to melanoma patients once approved.
Next week's issue goes deep on AI and biotech. What happened today is what it&rsquo;s all about. Stay tuned.
One more thing.
There's a lot of reasonable skepticism about AI right now, there&rsquo;s some fear, and some of it is earned.
But curing cancer is one of the very few things that can make a skeptical person feel good about artificial intelligence.
Today was one of those days.

ALN-ALert-081926-featured

An AI Just Designed a Cancer Drug That Worked

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Midterm Reckoning

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