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Transcript UNC 010524

UNC Jan 5 Transcript

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It&rsquo;s the most dangerous time for investors since the 1930s&hellip; and new threats to your wealth appear every week.
That&rsquo;s why we created Rickards Uncensored &mdash; a weekly Zoom broadcast that takes you deeper into Jim Rickards&rsquo; research and analysis than is possible in any other format.
Each Friday, Jim, his team and special invited guests will share their absolute latest thoughts on what&rsquo;s happening in the world &mdash; helping you navigate today&rsquo;s troubled markets.
You&rsquo;ll hear from seasoned traders&hellip; retirement specialists&hellip; commodities experts&hellip; government officials&hellip; financial heavyweights&hellip; even Jim himself.
Members of this elite team predicted the 2008 housing bubble&hellip; the gold price spikes in 2010 and 2019&hellip;&nbsp; American Airlines&rsquo; bankruptcy in 2011&hellip; Donald Trump&rsquo;s election victory in 2016&hellip; the pandemic-fueled market crash in 2020&hellip; the bond collapse in 2021&hellip; and more.
So you can count on them to tell you the unvarnished truth &mdash; regardless of how controversial it may be&hellip;
They&rsquo;ll also answer viewers&rsquo; questions, ensuring you get the answers you need.
You won&rsquo;t find a better source of information on what&rsquo;s next for the global economy&hellip; and what you should do right now. Get it all in a LIVE broadcast every Friday morning.&nbsp;

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Miscellaneous

In 2017, I told people they could make $50,000 a week with drones. People thought I was crazy.
Back then, drones were toys. Maybe you'd spot one at a tech conference or see a rich kid flying one at the park.
Most businesses had no idea what to do with them.
Eight years later, those "toys" are everywhere.
They take photos of real estate listings. They record videos at fancy parties. They spray crops and inspect power lines.
But here's the crazy part. We're still in the stone age of drone technology.
Why? Because every single drone still needs a human to fly it.
That's about to change in a big way.
<h2 class="subhead nbp">Spotlight on Drones</h2>
Earlier this month, Ukraine pulled off a modern version of a Trojan Horse.
For 18 months, Ukrainian intelligence secretly smuggled hundreds of small drones into Russia using regular trucks.
When the moment came, these hidden drones launched at once.
They destroyed at least 22 Russian bomber planes worth billions of dollars.
Each drone cost just a few hundred dollars.
Two weeks later, Israel did something similar.
They had secretly positioned drone teams inside Iran for months.
When Israel struck Iranian nuclear sites, these hidden drones attacked first.
They knocked out Iran's air defenses and let Israeli jets take complete control of Iranian airspace in just a few hours.
But the battlefield isn&rsquo;t the only place where drones are getting attention.
Walmart announced earlier this month that it will bring drone delivery to five new cities.
Since 2021, they've dropped over 150,000 packages from the sky.
Now they want to do a lot more.
Customers in five cities will soon be able to get eggs, ice cream, and medicine dropped at their door in 30 minutes or less.
<h2 class="subhead nbp">How AI Can Solve the &ldquo;Pilot&rdquo; Problem</h2>
All these operations still need human pilots.
Ukraine's Spider's Web needed teams of people flying drones in shifts.
Israel's Iran mission required multiple human controllers working together.
Every Walmart delivery needs a person watching the flight.
This creates a big limit.
You can only fly as many drones as you have trained people.
Managing airspace for dozens of flights at once becomes impossible for humans.
For drones to realize their full potential, we&rsquo;re going to need to be able to coordinate the movements of tens of thousands of drones simultaneously.
That's where AI changes the game.
In April, a computer beat the world's best drone pilots at their own sport.
At a racing championship in Abu Dhabi, an AI drone from a Dutch university destroyed the competition.
The AI didn't just win. It beat three former world champions.
The computer-controlled drone completed the course with 22 gates in just 17 seconds.
It hit speeds of nearly 60 miles per hour on a winding track designed to challenge the best pilots in the world.
The winning team built computer brains that sent commands straight to the drone's motors.
Old autopilot systems are too slow for high-speed flying.
The AI had to see obstacles and make decisions faster than any human could.
It learned by practicing millions of times on a computer before flying for real.
The drone used just one camera to spot gates, avoid crashes, and stay in control at top speed.
Most importantly, it worked reliably with bad lighting, wind, and interference.
This proves AI is reaching the point where it can handle the hardest flying jobs.
If computers can beat humans at drone racing, they can easily manage delivery flights or military missions.
Instead of needing one person per drone, a single AI system could control hundreds or thousands of drones at once.
Picture Walmart launching 1,000 delivery drones every hour in a big city.
Each drone would avoid other aircraft, find its destination, and come back for the next job.
No human pilots needed.
Or think about military uses where AI coordinates massive drone swarms.
Each drone would share information with others instantly, adapting to new situations without human help.
The technology is getting better fast.
AI and drone technology coming together is creating opportunities that seemed impossible just a few years ago.
For investors wanting to profit from this trend, several public companies offer ways to invest in the drone revolution.
<h2 class="subhead nbp">The AI Drone Opportunity</h2>
Unusual Machines Inc (UMAC), Red Cat Holdings Inc (RCAT), and AeroVironment Inc (AVAV) are just 3 of the many companies that develop drones with AI capabilities for military and civilian purposes.
These companies sit where two powerful technology trends meet.
And while I&rsquo;m not officially recommending UMAC or RCAT today, AVAV is an opportunity that we&rsquo;ve previously recommended and are tracking in the Altucher&rsquo;s Investment Network portfolio.
The drone market keeps growing fast, and AI is removing the last big barrier to widespread use.
We're seeing the start of a change that will reshape industries from shipping to farming to national defense.
Just like the internet created whole new types of businesses, self-flying drone technology will unlock possibilities we haven't thought of yet.
The companies that master AI-powered drone systems today will control the skies tomorrow.
For early investors who spot this shift, the wealth creation potential could be life-changing.

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Igniting the Drone Revolution

We&rsquo;ve been writing for years about actual crises that can affect you and your families. We write from the perspective of crises that can cause physical harm such as storms and other natural disasters. These include hurricanes, wildfires, earthquakes, tornadoes and more.&nbsp;
We also write about crises that can damage your portfolio and your net worth. These include bank runs, market panics and social unrest. Some crises can affect both your health and financial well-being. The 2020 pandemic is a good example. Millions died from health effects while stock markets crashed 30% in one month during March 2020. By the way, we predicted the 2020 pandemic and the market crash over a year in advance in my 2019 book <a href="https://www.amazon.com/Aftermath-Secrets-Wealth-Preservation-Coming/dp/0735216959/ref=sr_1_1">Aftermath</a>.
In this month&rsquo;s edition of Crisis Survival Insider, we&rsquo;re going to do something different. We&rsquo;re going to write about crises that are not crises at all. It&rsquo;s difficult to gather the financial, medical and technical resources you need to withstand actual crises. But it&rsquo;s the case that increasingly, individuals are devoting time and effort to matters that aren&rsquo;t even real crises. Instead of being concerned about events that are real, wouldn&rsquo;t it be a relief to stop being concerned about things that are not real?&nbsp;
It's unfortunate that political activists, phony scientists and fearmongers have ginned up a long list of alleged crises that don&rsquo;t exist. They do this because they want to attract political followers, make money off donations or get you to invest in &ldquo;solutions&rdquo; that are not needed at all because the threat does not even exist. Their supposed threats are invented simply to change your behavior or to get your money.&nbsp;
This phony threat industry does more than just skim your money or get you to follow their recommendations to advance their political agendas. The promoters of fake threats cause anxiety in the general population. They cause people to worry about things that are not even happening except in the imaginations of the threat promoters and their media stooges.&nbsp;
Let&rsquo;s look at three so-called threats that are not real at all. Once we internalize this information, we can all rest a little easier.&nbsp;
Fake Threat #1 - Climate Change. You all know the rap. The world is burning up. Wildfires and extreme weather are out of control. Oceans are rising and will soon cause the elimination of island nations and flood the New York City subways. Crops will not grow. Oh, and don&rsquo;t forget about polar bears. They&rsquo;ll soon be extinct. You&rsquo;ve heard this from Al Gore and Greta Thunberg and even the United Nations. Countries need to stop burning oil and natural gas, rely solely on windmills and solar modules and everyone should buy an electric vehicle (EV). If you follow that advice, all will be well.&nbsp;
That&rsquo;s the propaganda. Here are the facts. Climate change is real as evidenced by the Roman Warm Period (around 200 BC), the Medieval Warm Period (around 1000 AD) and the Little Ice Age (1350-1850 with a peak around 1665). But those changes evolved slowly. Notice how all of them pre-date the Industrial Revolution, carbon emissions and the automobile?&nbsp;
In fact, there is no evidence that CO2 has anything to do with climate change. The causes of climate change (if it&rsquo;s even happening today) are solar cycles, volcanoes, ocean currents, subduction and other large scale natural phenomena that humans cannot control at all. That said, the evidence for global warming today is scant.&nbsp;
Extreme weather is not getting worse. Tornados peaked in the 1940s. Hurricanes peaked in the 1950s and 1960s. Drought was prevalent in the U.S. in the late 1920s. The most accurate data shows the ocean may be rising at about 7 inches per 100 years. That&rsquo;s barely enough to get your feet wet by 2125. (After the last Ice Age about 12,000 years ago, oceans rose 400 feet. Humans survived just fine). In short, none of the extremes predicted by the climate cult are true.&nbsp;
Here&rsquo;s the good news: There is no climate crisis. Polar bears are thriving. You can enjoy your sports sedan and your backyard barbecue with a clear conscience.&nbsp;
Fake Threat #2 &ndash; The End of the Dollar. You hear and see this claim on every website and every financial broadcast you tune into. According to the hysterical so-called analysts, China is dumping U.S. Treasury bonds, the BRICS will be launching a new currency to replace the dollar, and the dollar&rsquo;s days as the leading reserve currency are numbered.&nbsp;
None of these claims is true. The identify of the leading reserve currency does change from time to time but the process can take 30 to 50 years, and you can see it coming a mile away. In 1914, sterling was the leading reserve currency. It lost that role permanently in 1944 after the Bretton Woods conference. Still that process took thirty years. And there were many signposts along the way, including two world wars and major devaluations in 1931 and again in 1936. Sterling was replaced by the dollar, but it took decades to play out and asset allocators have ample time to make the switch.&nbsp;
Do we see any signs of that happening to the dollar today? Actually, no. The dollar maintains a share of about 60% as the currency of major reserve assets, mostly U.S. Treasury securities. The dollar is the currency of choice in about 80% of global payments and almost 100% of payments for oil. The BRICS do not have an alternative currency; they are working on an alternate payments system, but that&rsquo;s not a currency.&nbsp;
It is true that the Chinese have been selling U.S. Treasury securities but that&rsquo;s not a sign of dumping dollars. Quite the opposite. The Chinese are desperate to get dollars to prop up their currency and their banks. Selling Treasuries is the easiest and fastest way for them to get dollars in a world that is actually suffering a dollar shortage.
If you want to know how the dollar is doing, don&rsquo;t look at euros, yen or other currencies. Look at gold. The price of gold is going up sharply, which means dollars are worth less when measured by weight of gold. That&rsquo;s a reason to have gold in your portfolio (I recommend 10%), but it&rsquo;s not a reason to worry about dollars. They&rsquo;re still the only game in town when it comes to banking, savings, payments and global reserves.&nbsp;
Fake Threat #3 &ndash; A Chinese Invasion of Taiwan. There&rsquo;s no doubt that Communist China considers Taiwan to be part of China. There&rsquo;s also no doubt that China will pursue reunification with Taiwan as long as it takes. But that&rsquo;s not the same as invading Taiwan and pushing the world to the brink of World War III.&nbsp;
The Chinese military has grown, and their weapons technology has improved. But they are still no match for the U.S. in the event of an invasion. And the U.S. would not be alone. We could count on help from Japan, Australia and possibly India to resist the Chinese.&nbsp;
Among other countermeasures, the U.S. would interdict all oil flows into China by blockading chokepoints such as the Straits of Malacca. The Chinese economy (and military) would grind to a halt within weeks. And the Chinese know it. The U.S. could also use air power and precision guided missiles to sink the Chinese invasion fleet and to sink their entire navy within days.&nbsp;
The more likely reunification scenario is that pro-mainland political parties in Taiwan will win elections and seek reunification on a negotiated basis. That&rsquo;s not good for U.S. national security, but it&rsquo;s not an invasion and it&rsquo;s far from World War III. An even more likely scenario is that China collapses internally due to failures of the Chinese Communist Party leadership. That would be a huge win for the U.S. It would cause problems of its own but, again, it&rsquo;s not an invasion scenario.&nbsp;
So, the planet is not burning up, the dollar is not collapsing, and China is not invading Taiwan.&nbsp;
Feel better? Hopefully you do. There are enough real dangers in the world. We should not spend time and effort worrying about the fake ones.

Jim Rickards' flagship Strategic Intelligence publication has been keeping readers ahead of the curve with their financial decisions for years. Now, Jim has created a way to elevate your investment education to take advantage of unique companies in the marketplace.&nbsp;
The goal of Jim Rickards&rsquo; Strategic Intelligence PRO&nbsp;is simple &mdash; to help further your education and provide an alternative investment strategy to profit during these uncertain times.
With Strategic Intelligence PRO, you have access to a strategy employed to fast track your gains and profiting off companies whose stock is going down, not up.
Readers have realized gains like 131% in just two weeks when an Industrial ETF&nbsp; plummeted&hellip; 93% in less than six weeks when tech stocks fell out of favor&hellip; and 101% in three weeks when a manufacturing fund took a nosedive.&nbsp;
Jim also collaborates with senior investment analyst Dan Amoss in providing opportunities in the gold sector that most investors don&rsquo;t see coming.&nbsp;
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3 Phony Threats Not Worth Your Worry Time

In 2008, I published a book called &ldquo;The Forever Portfolio.&rdquo;
It was horrible.
Not because the content was bad, but because nobody was interested in buying it.
When my publisher saw the numbers, he wanted to throw me out of the window.
If he had read the book and waited a few years, he might have felt differently&hellip;
As the name suggests, the book describes a group of stocks you can buy and hold forever.
The book predicted the success of companies like Eli Lilly (which has since returned 24x), Mastercard (which has since returned 39x), and Taser (which has since returned 197x).
It might sound unbelievable, but Chapter 3 actually predicted a global pandemic&hellip; 12 years before Covid-19.
But I&rsquo;m not here to talk about the past.
Because there is an opportunity too big to ignore.
And it might be only weeks away.
<h2 class="subhead nbp">The Cyber-Stock Scenario</h2>
Which brings me to Chapter 2 of the Forever Portfolio&hellip; cybersecurity.
Sounds boring and complicated. Believe me, I know.
But bear with me, because it&rsquo;ll be worth the effort.
As I said in the book, it's only a matter of time before we see a large internet attack.
When that time comes, cybersecurity companies are going to skyrocket by 2x, 5x, even 10x&hellip;
Which brings me to today&rsquo;s big news.
Overnight, Israel launched an attack on Iranian military officials and nuclear facilities.
In response, Iran launched a drone attack on Israel which was largely unsuccessful.
While things have quieted momentarily, it seems this attack is just the first of many.
This morning, President Trump announced on Truth Social that: &ldquo;Iran must make a deal, before there is nothing left.&rdquo;
This raises the possibility of an escalation to a full out war with the potential for cyberattacks.
In recent years, cybersecurity has been a critical tool in Israel&rsquo;s defense strategy.
In 2010, Israel is believed to have used a virus to target and remotely destroy Iran&rsquo;s nuclear arsenal.
Israel is also believed to have used a virus to cause a small explosion at the Natanz nuclear facility in Iran in 2021.
Then, of course, there was the operation in 2024 when Israel remotely detonated bombs inside Hezbollah&rsquo;s pagers ahead of a ground invasion into Lebanon.
If history is any indicator, the next round of fighting with Iran could potentially include some element of cyber-warfare.
Which is good for cyber-security stocks.
Cybersecurity is a bit like going to the dentist&hellip; it's the kind of thing that no one wants to think about or spend money on, but if you ignore it, the problem gets bigger over time.
Highly visible cyber attacks are the best possible advertising that cybersecurity companies can ask for
Cybersecurity sales have historically ramped up following big cyber incidents like the ransomware attack on the Colonial Pipeline in 2021 or Caesar&rsquo;s casinos in 2023.
Attacks on governments have a similar effect.
Earlier this month, we saw drone stocks skyrocket following Ukraine&rsquo;s attack on Russian military bases, followed by Russia&rsquo;s own drone attacks in response.
I would not be surprised if we see a similar trend play out in the coming days or weeks should the conflict between Israel and Iran continue to escalate.
<h2 class="subhead nbp">Palo Alto Networks - A Rocketship Cybersecurity Opportunity</h2>
One of our favorite picks in the Cybersecurity space is Palo Alto Networks (PANW).
As we first described in our monthly issue in October of 2023, the company is a one-stop shop for cybersecurity products, software, and services.
The company is a leader in providing security solutions with multiple layers of security necessary for properly protecting systems that incorporate cloud software.
Palo Alto Networks sells its technology as a subscription service, which provides a reliable - and sticky - source of ongoing revenue.
Although the company was founded two decades ago - long before cloud technology became as essential as it is today - they&rsquo;ve managed to continue to innovate and stay relevant&hellip; despite major shifts in technology.
<h2 class="subhead nbp">The Bottom Line</h2>
Palo Alto&rsquo;s ability to innovate is most clear in their development of AI-powered products offered by their Next Generation Security (NGS) division.
One of the tools within NGS is the company&rsquo;s Cortex platform.
Cortex connects the different systems within an organization's infrastructure and uses AI to analyze vast amounts of data and detect unusual activity patterns.
As of the most recent quarter, NGS generated more than $5 billion in annual recurring revenue&hellip;. Roughly 34% higher than one year earlier.
The company plans to grow this number three-fold, to $15 billion by 2030.
In their latest quarter, Palo Alto Networks had decent results, beating expectations for both revenue and earnings.
Their revenue for the third quarter came in at $2.29 billion, which is up over 15% from last year.
Looking ahead, the company also expects strong results for the fourth quarter and the full year, projecting full-year 2025 revenues to be between $9.17 billion and $9.19 billion&hellip; or about 14.5% growth from 2024.
While some investors might have thought the quarter was nothing special, leading to a slight dip in stock price after the earnings report, the growth in NGS shows that the company is still on track to achieve its long-term goals.
No matter how challenging the economy gets, the AI revolution makes cybersecurity more critical than ever.
Based on the progress made in the third quarter and growing demand for cybersecurity, I&rsquo;m as bullish as ever on the stock.
<h2 class="subhead nbp">Why Palo Alto Networks Could Be the Big Winner</h2>
Tensions between Israel and Iran are rising by the day. Full blown war could break out at any moment. And when it does, cyber attacks will follow.
History shows us what happens next. Every time there's a major cyber incident, security companies soar.
We saw it with the pipeline attack. We saw it with the casino hack. We saw it just weeks ago with drone stocks.
The pattern is clear as day.
Palo Alto Networks sits right in the sweet spot. They're the leader in cybersecurity with $8 billion in recurring revenue.
Their AI-powered tools are exactly what companies need to protect themselves. And they're growing fast - 34% growth in their most important division.
But here's the thing most investors are missing&hellip;
You don't have to wait until 2030 to see massive gains.
The next cyber attack could happen tomorrow. Next week. Next month.
Smart investors know that the best time to buy is before the crowd realizes what's happening.
Because when the next major cyber attack hits - and it will hit - cybersecurity stocks like Palo Alto Networks won't just benefit.
They'll soar.
We may be on the edge of something big.
And if you&rsquo;ve read this far, you&rsquo;re already ahead of the curve.

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With the simple mantra of &ldquo;Choose Yourself,&rdquo; James has built a massive following &mdash; helping people find new and unusual opportunities to generate inward success.
Now he wants you to achieve the next step: True financial freedom and independence.
He&rsquo;s tapping into the skills he developed as a hedge fund manager and venture capitalist to reveal every secret he&rsquo;s ever learned about building wealth.
And he&rsquo;s not alone.&nbsp;
James is connected to the biggest players in Silicon Valley and Wall Street. So he&rsquo;s hand-picked a team of investment experts and trading superstars to create Altucher&rsquo;s Investment Network &mdash; connecting you directly to their wealth of knowledge.
You&rsquo;ll learn tips for navigating Wall Street&hellip; personal finance strategies.. and tricks to boost retirement income. The team will also tell you specific ways to get ahead of hot investment trends like AI, cryptocurrencies, biotech, cybersecurity and driverless cars.
With Altucher&rsquo;s Investment Network, you&rsquo;ll have the tools to start building a personal financial fortress to live a life of abundance and true financial well-being.

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Iran War Alert: Buy Cyber

What&rsquo;s going on in crypto-currency land and how does it impact legitimate investors in stocks, bonds and commodities?
We&rsquo;re assuming by now most readers are at least somewhat acquainted with Bitcoin (BTC) and the other leading cryptocurrencies including Ether (ETH), Ripple (XRP) and Tether (USDT). The combined market capitalization of those four coins is $2.6 trillion, with over $2.0 trillion of that represented by Bitcoin alone.
In fact, $2.6 trillion is a relatively small market cap in the world of investible assets. The market cap of U.S. stocks is over $60 trillion. The market cap of the U.S. Treasury securities market is over $36 trillion (not including government-guaranteed debt such as mortgage-backed securities and student loans). The daily trading volume in foreign exchange markets is $7.5 trillion with a far higher market cap if you combine the values of all global currencies.
<h2 class="subhead">The Bitcoin Casino</h2>
Still, a $2.6 trillion market cap for the major cryptos is a material amount. When Bitcoin goes from $1.00 per coin to over $100,000 per coin in a matter of years, it&rsquo;s impossible to ignore. My view of Bitcoin hasn&rsquo;t changed, which is to say that it has no powerful use case. It is helpful for criminals seeking to avoid money-laundering rules. It&rsquo;s helpful for individuals in chaotic societies facing war or social breakdown who are trying to move money out of the jurisdiction.
Other than that, it&rsquo;s just a casino chip that you buy with good money. You can make or lose money in casino gambling but it&rsquo;s still gambling. If you want to spend or invest outside the casino, you have to visit the cashier, convert to dollars and then leave the casino. In the crypto world, the cashier is a bank. The crypto world is a closed system with little connection to the much larger world of securities markets and banking except through the banking system itself.
I realize Bitcoin maximalists disagree. It&rsquo;s interesting to watch the Bitcoin crowd act like the new establishment while dismissing new cryptos as &ldquo;just gambling.&rdquo; Perhaps they should look in a mirror when they say that.
<h2 class="subhead">Meme Coins vs. Stablecoins</h2>
That said, our focus is on two aspects of the crypto market that are dominating the news today. The first is the meme coin. The second is the stablecoin. The impact of these tokens on coin investors is of little interest. The impact on broader financial markets should be of far greater interest to investors.
A meme coin is a crypto coin with little to offer except an association with a celebrity, politician or a popular cultural icon. If not frauds, most of them are failures. A typical meme coin starts out with a low valuation, skyrockets to some inflated value pumped up by fans of the meme sponsor and then crashes back to earth. The meme coin sponsor makes money by keeping the dollars paid for the new issue and on transaction fees on the blockchain ledger entries between buyers and sellers in the secondary market.
Early investors can make money by dumping the coin on latecomers just in time for the crash. It&rsquo;s the crypto version of what Wall Street calls a pump-and-dump scheme also known in the UK as a ramp. Meme coins are new but pump-and-dump is not.
Enormous attention has been drawn to the Trump family efforts in meme coins. The $Melania coin opened at $13.00 per coin and now sells for about $0.32. The more recent $Trump coin rallied from $1.00 to $70.00. Since this market is almost completely unregulated, it&rsquo;s important to consider that these gains may have been realized on small volume with a boost from wash trades where two parties sell the same coins back and forth at progressively higher valuations to attract the suckers. We&rsquo;ll see where it goes from here.
Meme coins are a sideshow in the world of crypto. They may or may not prove profitable for buyers, but they will not change the world or disturb financial markets. Of far more importance are stablecoins.
A stablecoin sponsor issues a stablecoin in exchange for U.S. dollars. The ratio is usually 1:1 but it could be a different ratio. The main point is that the ratio is fixed, like a fixed exchange rate. The idea is that if you want to redeem the stablecoin for dollars, you will get back exactly the amount you put in. No gain or loss. It's a crypto token but the value does not fluctuate.
This begs the question, why would you buy a token that will always be worth what you paid for it with no gain or loss? Some holders like the fact that the coin is digital and cannot easily be traced or seized by government authorities. That&rsquo;s an attraction but it&rsquo;s false comfort. I&rsquo;ve worked with U.S. Special Operations Command to track and trace Bitcoin used by ISIS and Al Qaeda. It&rsquo;s a challenge but not that difficult in the end. The U.S. leaves most cryptos (including stablecoins) alone because there&rsquo;s no compelling reason to go after them. But if the government wants to seize or shut down your crypto accounts, they know how.
The bigger reason for buying stablecoins is that they are a transaction currency in the crypto world. Once you have Tether, you can use it to buy Bitcoin or any other crypto. In fact, most Bitcoin purchases are made with Tether. The Tether stablecoin ecosystem acts as a kind of crypto bank account while you&rsquo;re waiting to buy or sell other cryptos. It&rsquo;s a par value parking place in crypto world.
What does the sponsor do with the dollars received for issuing the token? Since the sponsor promises that the token value will not fluctuate, they have to invest in something highly liquid that will not fluctuate either. The obvious choices are short-term Treasury bills and high-quality bank deposits. Highly rated commercial paper (unsecured IOUs with a maturity of less than 365-days) is another possibility but that market is not highly liquid. These instruments are referred to as "cash or cash equivalents" on a corporate balance sheet.
The point is that when you give dollars for the stablecoin, the token sponsor turns around and invests in dollar instruments, primarily short-term Treasury bills. Some crypto cultists claim stablecoins will eventually displace the dollar. That&rsquo;s nonsense. Far from undermining the dollar, the stablecoin sponsor is actually supporting the dollar by buying Treasury debt. This is the kind of real-world dynamic that the hysterical screamers about a "dollar reset" or "dollar collapse" simply do not understand.
If the sponsor takes dollars in and then reinvests them in dollar assets, how does the sponsor make money? The answer is the spread. The sponsor pays zero interest on the stablecoin but earns approximately 3% interest on the Treasury bills and bank deposits. Operating costs are quite low because the entire operation is digital. You just need some servers, tech support and a digital ledger. That's about it.
So, this is an extremely profitable business for the sponsor. Howard Lutnick, the U.S. Secretary of Commerce, is a 5% investor in the sponsor of Tether through his company Cantor Fitzgerald. It's practically free money for the stablecoin sponsor.
<h2 class="subhead">What Could Go Wrong?</h2>
Two things. The first is fraud. The stablecoin sponsor could just steal the money. There's no transparency, regulation or auditing in this market. It's all set up for a Bernie Madoff type Ponzi or worse. That's probably just a matter of time.
A stablecoin fraud will not automatically cause a dollar panic. It would cause a crypto panic, although there could be spillovers into the banking system in the manner of Silicon Valley Bank.
The second disaster-in-waiting is that the stablecoin operation is legitimate but the commercial paper or bank deposit market seizes up. This happened in October 2008 and the Fed had to guarantee the entire commercial paper market (remember General Electric?). It also happened in 2023 with Silicon Valley Bank when the Fed and FDIC had to guarantee every bank deposit in the country regardless of deposit insurance limits.
If the panic to sell liquid assets get bad enough, even the Treasury bill market could face distress. In this scenario, the stablecoin sponsor could not get the cash to meet the redemption requests and the stablecoin would "break the buck" (meaning it could not satisfy the fixed exchange ratio). This may not be a fraud but it is a good old-fashioned bank run in the crypto market, which would spillover into the banks and Treasury markets.
We've lived through these panics before (1873, 1898, 1907, 1929, 1998, 2008). That's why we have regulation. Stablecoins are popular because they're unregulated, but they're just as vulnerable to run-on-the-bank style panics. I view the entire stablecoin market as an accident waiting to happen. Greed triumphs over the lessons of history. None of this means the end of the dollar. It may mean the end of cryptos and the end of some banks. It will be at least a Madoff-type disaster for investors.

Stablecoins: What Could Go Wrong?

Updates

I want to do something a little different today&hellip;
Instead of going over what&rsquo;s been happening in the market, I want to talk about the system behind our strategy.
We&rsquo;ve been getting a good amount of questions in our inbox about what happens if a buyout or other big piece of news doesn&rsquo;t happen for our plays, and I want to make sure we&rsquo;re all on the same page.
In order to be the most successful trader you can be, you have to utilize trading strategies with as many technical advantages as possible.
This is what I call &ldquo;stacking advantages&rdquo; in your favor.
Our strategy here at Altucher&rsquo;s True Alpha is first and foremost centered around impending buyout deals and big announcements.&nbsp;
So we&rsquo;re buying options on companies that our indicator has identified as having an increased chance of getting bought out or having some other impending news on the way that would cause the stock to shoot higher.
Yes, it could be a buyout deal, but it could also be another important event.
All we know for sure is that someone is loading up on options contracts, betting on a big runup.
BUT we always have a &ldquo;plan B&rdquo; so to speak&hellip;
All the companies in our portfolio are great companies that don&rsquo;t need a big announcement in order to succeed.
These are good tech companies in growing industries that already have what it takes to be successful in the first place.
Their state-of-the-art technologies and great business models make them all great companies to invest in with &mdash; or without &mdash; a big event.
Like Astera Labs, Inc. (ALAB)&rsquo;s connectivity solutions for AI and cloud infrastructure&hellip; Palantir Technologies Inc. (PLTR)&rsquo;s one-of-a-kind data mining platform&hellip; and Quantum Computing (QUBT)&rsquo;s quantum computers, to name a few.
If a buyout deal or other important announcement does take place, our options contracts will skyrocket along with the company&rsquo;s stock price, but we don't need that to happen to make a profit.
These are all young companies that still have yet to see their most significant moves&hellip; which we know they will. Any positive news could easily catapult these companies higher, taking our contracts along for the ride.&nbsp;
We&rsquo;ve seen this happen a few times recently &mdash; and we&rsquo;ve walked away with triple-digit gains without a buyout announcement&hellip;
Like the 121% gain on half of our PLTR June $70 calls... the 101% gain on the first half of our Seagate Technology Holdings plc (STX) June $85 calls&hellip; and then the 287% gain on the second half of those STX contracts.
We&rsquo;ve truly stacked the advantages in your favor with this diversified strategy.
We use our Blue Spike indicator to find great companies&hellip; we look at the economy to determine general market sentiment&hellip; and we choose options contracts that give us the best potential to profit.
The more advantages you have stacked in your favor, the higher your average profits will be over time.
We&rsquo;re glad we get to share this one-of-a-kind system with you and can't wait to see what opportunities we will uncover next.
That&rsquo;s all for today. Have a wonderful weekend.

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Artificial intelligence (AI) is sweeping the world, disrupting everything from medicine to the legal industry&hellip; And of course, financial institutions are adopting it, too.
Hedge funds are using it to beat the markets&hellip; manage risk&hellip; and find new opportunities. Now you can, too.
Altucher&rsquo;s True Alpha uses a powerful AI algorithm to identify &ldquo;insider moves&rdquo; in the stock market &mdash; giving YOU a chance to cash in before anyone else.
This is your chance to turn the tables and start using AI to grow your own wealth, thanks to James&rsquo; patented Blue Spike indicator. It helps to identify &ldquo;behind-the-scenes&rdquo; market moves everyday investors simply don&rsquo;t know about.
In other words, the Blue Spike indicator knows when Wall Street&rsquo;s deepest pockets are positioning themselves for something big&hellip; and can signal you before the news goes mainstream.
Together, James and the ALPHA-3 system level the playing field. It&rsquo;s your opportunity to profit from the kind of market moves previously reserved for Wall Street fat cats.
The next big announcement could come at any time. So don&rsquo;t miss your shot at getting in ahead of tomorrow&rsquo;s headlines.

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Weekly Update: A Stacked Strategy

Thirty-five years ago,Dell engineers put a giant 25-foot gorilla on their headquarters' roof.
The prank didn't get them fired. It got them promoted.
When Michael Dell shared this story on X earlier this month, Elon (who now posts on X under the handle &ldquo;Kekius Maximus&rdquo;) responded with a laughing emoji.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6myx0Yt9F2ljjIhvbq2ABz/115a5aab253942dd617fcfba311007c4/ALN-Alert-05-21-25_2_.png" alt="pub" width="540px" />
He's laughing all the way to the bank.
That same bold, rule-breaking spirit is now powering Musk's AI revolution &ndash; from Memphis to the Middle East, where Dell Technologies (DELL) has been quietly building its empire for over two decades.
<h3>Dell Saw It Coming</h3>
"Saudi's abundant and inexpensive energy makes it a good hub to host power-intensive AI training data centers," Michael Dell declared last year at Dell Technologies World.
His foresight was remarkable: "Just as artificial intelligence goes where there is data, it will go where there is energy."
That prediction is now reality.
Saudi Arabia currently operates 24 data centers with 123 MW capacity, with another 37 facilities in the pipeline. But that's just the beginning.
Dell has been actively developing Saudi talent for this AI future. "A lot of new skills will be needed to drive AI growth," Dell noted last year, adding that his company is helping build that expertise.
<h3>The Saudi-Musk AI Alliance</h3>
When Musk joined President Trump in Saudi Arabia last week, he supercharged an already-brewing AI revolution.
The kingdom is building a $40 billion AI-focused fund &ndash; potentially the world's largest &ndash; with AI projected to contribute $135 billion to Saudi's economy by 2030.
The first major initiative? Humain, a new Saudi AI company building 500 megawatts of AI Factories &ndash; Dell's exact terminology for its AI infrastructure solutions.
The initial order: 18,000 Nvidia Blackwell chips, with "several hundred thousand" more coming over five years.
<h3>Dell's Home Field Advantage</h3>
While competitors scramble to establish Middle Eastern connections, Dell already has boots on the ground.
Their new merge and logistics fulfillment center in Riyadh becomes operational this year. It's handling all product lines and slashing customer lead times.
Partnerships with regional players like AlJammaz Technologies and TeleNoc give Dell an infrastructure network that spans Saudi Arabia, UAE, Qatar, Bahrain, and Jordan.
This isn't a company trying to break into the Middle East. This is a company that helped build it.
<h3>Armed for Desert Deployment</h3>
The Saudi desert presents unique challenges for AI infrastructure. Traditional air cooling fails when temperatures regularly exceed 120&deg;F.
Dell's newest weapons were just unveiled at this year&rsquo;s Dell Technologies World: PowerEdge XE9780L and XE9785L servers with direct-to-chip liquid cooling.
Each rack supports up to 256 NVIDIA Blackwell Ultra GPUs &ndash; precisely what's needed for the massive AI deployments planned across the region.
Michael Dell understood the energy equation before most: AI data centers require enormous power. Saudi Arabia has that power in abundance, at costs competitors can't match.
<h3>The Musk Connection</h3>
This regional opportunity builds on Dell's established partnership with Musk's xAI.
In February, Dell secured a $5 billion agreement to supply AI servers with Nvidia's cutting-edge GB200 GPUs to Musk's xAI.&nbsp;
With Musk's influence now extending into Saudi Arabia's AI ambitions, Dell stands at the perfect intersection:
<ul>
<li>Trusted by Musk to build his AI infrastructure</li>
<li>Deeply established in Saudi Arabia</li>
<li>Already aligned with Saudi Vision 2030 initiatives</li>
</ul>
<h3>The Bottom Line</h3>
The relationship between Musk, Dell, and Saudi Arabia creates a perfect triangle of opportunity:
<ul>
<li>Musk provides the AI vision and global influence</li>
<li>Saudi Arabia provides the capital and energy resources</li>
<li>Dell provides the infrastructure expertise and regional presence</li>
</ul>
This alignment of interests positions Dell to capture a significant portion of the region's $22.84 billion AI infrastructure spending by 2030.
From a college dorm startup to building the backbone of global AI, Dell's 25-foot gorilla has evolved into a worldwide technological force.
The company that was bold enough to put a gorilla on a roof is now constructing the infrastructure that will power humanity's AI future across the energy-rich Middle East.
And Musk's laughing emoji might just be the most profitable investment signal of 2025.

ALN-Alert-05-21-25(1)

Elon’s “King Kong” Unleashed On The Middle East

There are things you expect to see in the desert. Sandstorms. Camels. Maybe a mirage or two.
A dancing robot doing the YMCA for Trump? Not one of them.
But that&rsquo;s exactly what happened in Riyadh.
Elon Musk took the stage at a Saudi-U.S. investment forum, showed off his Optimus bots&hellip;
And made one of them perform for a crowd that included Trump and the Crown Prince.
It&rsquo;s clear.
At some point in the past few months, there&rsquo;s been a shift.
The smart money stopped caring whether the AI could write poetry, and they started asking if it could drive a car through fog, recognize a kid on a bike, or dodge a missile in a simulated war zone.
Put a different way:
Those &ldquo;in the know&rdquo; stopped focusing on the world of bits&mdash;because they know now the world of atoms is up for grabs.
This is the new frontier: Physical AI.
And the guy most prepared for it in the US?
Musk.
<h2 class="subhead nbp">From Bits to Atoms</h2>
For the past two years, AI's been all about language&mdash;chatbots, text prompts, image generators, autocomplete for human thought.
But now? The stakes are getting real.
Nvidia&rsquo;s CEO, Jensen Huang, said it before anyone: &ldquo;The next wave is Physical AI.&rdquo;
Translation: AI that doesn&rsquo;t just think. It moves. It acts. It sees, plans, and touches the real world.
And if you're building for that world, you don't just need better models. You need maps. You need sensors. You need simulation. You need scale.
Imagine an AI that can plan a supply chain, reroute trucks in a snowstorm, identify a wildfire before humans smell smoke, and guide a robot through a construction site at night.
In many ways, as we saw last week, this is already happening. And the next iteration&hellip; where the literal rubber meets the road&hellip;
Is robots.
But it&rsquo;s not just about robots. It&rsquo;s about embedding intelligence in everything that touches the real world.
And Musk is already thinking ahead.
Tesla&rsquo;s fleet? Not cars. Sensor arrays.
Starlink? Not internet. The supra-orbital nervous system.
And Dojo? That&rsquo;s not just a chip. It&rsquo;s a furnace. A factory. A crucible for synthetic training data that makes the rest obsolete.
This is the next trillion-dollar layer. And it's not theoretical.
<h2 class="subhead nbp">Musk&rsquo;s Physical AI Empire</h2>
Let&rsquo;s talk Cosmos.
Nvidia just rolled out a platform that can generate entire digital twins of cities, street corners, weather patterns, and traffic systems&mdash;then use those as training simulations for robots and self-driving cars.
Think Grand Theft Auto for machines. Except it&rsquo;s photoreal. Rule-bound. Physics-based. And fully integrated with real-world sensor data.
You don&rsquo;t need a billion-dollar mapping fleet anymore.
Just render the street. Add a deer. Add rain. Add fog. Split the digital twin into a million (or a billion, or a trillion) different digital twins. Train the robot on those twins. Done.
It&rsquo;s synthetic reality, as infrastructure.
This is Nvidia&rsquo;s trillion-dollar bet.
But guess who already owns the real-world version? Musk. 
Consider:
<ul>
<li>Tesla collects real-world sensor data every second of every day.</li>
<li>Starlink maps the atmosphere, the terrain, the timing, and the noise.</li>
<li>X captures the sentiment of the human hive mind.</li>
<li>xAI is now folding that all together into its own agentic model stack.</li>
<li>Dojo doesn&rsquo;t need open internet scrape junk. It&rsquo;s training on reality.</li>
<li>The Boring Company gives him 3D control under the earth.</li>
<li>And Optimus gives him the hands to act on all of it.</li>
</ul>
Nvidia&rsquo;s building the tools. Elon&rsquo;s building the world.
And that matters for anyone betting on the Paradigm Mastermind Group portfolio.
<h2 class="subhead nbp">Why It Matters</h2>
Most investors are still focused on digital winners: Which app will dominate AI? Which model will replace OpenAI?
Wrong question.
The next winners are whoever provides the infrastructure and tech for the training environments, real-world data feeds, synthetic simulators, sensor networks, and physical AI stacks.
It&rsquo;ll also be who actually uses all of this stuff to solve real-world problems.
In other words:
<ul>
<li>The systems that simulate reality.</li>
<li>The infrastructure that ties bits to atoms.</li>
<li>The companies that leverage it to move the world.</li>
</ul>
This isn&rsquo;t a trend.
It&rsquo;s a transition&mdash;from the screen to the street.
In the &lsquo;90s, the internet digitized the world. In the 2010s, mobile made it move. Now, in the 2020s, AI is giving the digital world a body.
It&rsquo;s learning to see, hear, and act.
Musk sees it. Jensen sees it. The market hasn&rsquo;t priced it in yet.
But when it hits, the biggest wealth shift of the decade won&rsquo;t play out in pixels.
It&rsquo;ll be forged in concrete, steel, iron, and wood&mdash;in the real world, where atoms still matter.
As usual, we&rsquo;re on the lookout for the biggest opportunities in AI.

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The artificial intelligence boom is entering a new &mdash; and much more profitable &mdash; stage.
So a team of the world&rsquo;s top tech and investment analysts have joined forces to create Paradigm Mastermind Group.
Together they&rsquo;ll help you get in on the ground floor of up-and-coming AI pioneers&hellip; setting you up for a chance at life-changing gains!
Your guides include James Altucher, former venture capitalist and tech entrepreneur who has deep connections to the origin of A.I. technology. In fact, he worked on a precursor to IBM&rsquo;s Deep Blue.
Then there&rsquo;s Jim Rickards, former advisor to the CIA and Pentagon. The U.S. intelligence community has contracted him to use AI to help predict everything from financial crises to terrorist threats.
We also have Ray Blanco, a man who has crossed paths &mdash; and attended private closed-door meetings &mdash; with people like Elon Musk, biotech legend Phillip Frost and even Nvidia CEO Jensen Huang.
Plus many more!
Together, they know how disruptive the next wave of AI will be.
The team also knows that dozens of tiny innovators are set to dominate it &mdash; creating fortunes for anyone who invests before these names go mainstream.
So our brain trust will bring you the absolute best of the best.
Also, expect &ldquo;special guest&rdquo; experts to chime in with their AI investment ideas.
In short, this first-of-its-kind group gives you access to AI insights from the absolute top minds in the business.
 Don&rsquo;t wait until the second wave of AI innovation takes hold. Put the Paradigm Mastermind group to work for you &mdash; and get ahead of everyone else on Wall Street.

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The Next AI Rush Isn’t Digital

Mailbag

Operation Save America

This week&rsquo;s mailbag included questions on China as a superpower, threats to the global financial system, and the best way to invest in gold.
Here are a few questions:
Q: Is China still on par with the U.S. both economically and militarily? &ndash; Barbara M.
A: Chinese GDP is often touted as a measure of success, but it is way overstated. Investment is roughly 45% of Chinese GDP compared to about 25% in most developed economies. Over half of Chinese investment is wasted. I&rsquo;ve been to China many times and have seen the empty ghost cities and the monumental train stations that are mostly empty. If that wasted investment were written-off, Chinese GDP would drop from 5.0% to 3.6%. With honest accounting for bad debt in the government-controlled banks, Chinese GDP would drop to 2.0% or lower. China&rsquo;s government debt-to-GDP ratio of 250% makes it impossible for China to grow faster than its growing debt burden. This dynamic makes future growth even more difficult. As for military superiority, China is not even close to U.S. capability despite the last administration&rsquo;s cuts in spending on new weapons and combat readiness. China touts its lone aircraft carrier without mentioning that it was actually built by Russia. China is trying to build an aircraft carrier fleet, but that&rsquo;s an immensely complex task that can take twenty years to fully implement. China threatens U.S. aircraft carriers with an attack from a Chinese hypersonic missile. That&rsquo;s possible, but the U.S. response would be to sink the entire Chinese fleet &ndash; something similar to what Japan did to Russia in 1905, and the U.S. did to Iran in 1988. An invasion of Taiwan is not in the cards despite continual threats. So, the China threat is not what the mainstream narrative makes it out to be. It&rsquo;s still a significant part of the global economy and a country to reckon with, but economic and societal threats will not keep China on par with the United States.
Q: What is the biggest threat to the global financial system today? &ndash; Martin S.
A: What the Fed and the Treasury have done (mostly under Biden) is to create a global dollar shortage, which is now morphing into a global liquidity crisis. China is not dumping Treasuries because they&rsquo;re distancing themselves from the dollar. Quite the opposite. China is selling Treasuries because they&rsquo;re desperate for dollars and can&rsquo;t get them from Japanese banks who have their own problems. The liquidity crisis then goes back to European banks who can&rsquo;t fund in Eurodollars and U.S. hedge funds who can&rsquo;t find collateral to support their derivatives basis trades. India is not immune either. The best description of a financial crisis I&rsquo;ve ever heard is that &ldquo;Everybody wants his money back.&rdquo; We&rsquo;re dangerously close to that situation right now. If it gets worse, trade, tariffs and stock markets will be a sideshow. Watch Treasury yields and foreign exchange markets if you really want to know what&rsquo;s going on.
Q: In your view, what are the best ways to invest in gold? &ndash; Larry P.
A: My long-time readers know I recommend allocating 10% of investable assets into physical gold. There are other options available as well, including buying paper gold like exchange-traded funds as well as shares of mining companies. There is also a way to collect gold profits without ever investing in the metal itself or investing in any companies that deal with the exploration or production of gold. Gold royalty and streaming companies have one of the best business models in the entire precious metals sector. Here is how the &ldquo;royalty&rdquo; business operates. In exchange for an upfront payment, a royalty owner will receive a predetermined percentage of the gross revenue from a mine&rsquo;s future gold production over that mine&rsquo;s entire future life. When costs for mining fluctuate, or if they aren&rsquo;t producing enough to meet expectations, it really doesn&rsquo;t matter. Royalty companies still get a cut off the top. These backdoor plays are a way to trade gold with fantastic upside leverage, combined with much less downside risk. And because we see gold ready to shoot higher, these companies don&rsquo;t even need that cushion &mdash; allowing them to bring in even higher profits that will spark a huge pop in gold royalty shares. We have made gains on some gold royalty stocks in the Strategic Intelligence portfolio and will be recommending more in future issues so keep an eye out for them.

awn hero img 05-09-25 USA and China armwrestling, us and china flags, vector concept

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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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Crisis Trader with Jim Rickards uses proprietary algorithms to peer into corporate balance sheets &mdash; uncovering the ugly secrets of popular companies.
You don&rsquo;t want these names in your portfolio. But you can set yourself up for massive profits when the truth inevitably comes to light.
Jim Rickards and Dan Amoss can show you how. They correctly predicted every move the Federal Reserve made to fight inflation. And now they believe we&rsquo;re on the verge of a historic economic downturn.
Most investors are completely unprepared for the wave of bank failures and corporate bankruptcies that will rock Wall Street.
Luckily, you don&rsquo;t have to be caught unaware.&nbsp;
Jim and Dan will guide you through the worst of what&rsquo;s to come &mdash; revealing opportunities to score big wins from the market&rsquo;s worst stocks.

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The China Con

The real tariff story isn't what you're reading in the headlines.
It's not about short-term market volatility or quarterly earnings impacts.
The true story &ndash; and the massive investment opportunity &ndash; is about the fundamental restructuring of American manufacturing that's now underway.
Earlier this month, I wrote about how Trump's tariffs are accelerating AI adoption in American industry. Today, I want to show you the companies that are emerging as the backbone of this transformation.
Real action is happening in the companies building the infrastructure and tools that make reshoring possible.
These are the companies that will determine whether American manufacturing can truly rise again &ndash; and they're presenting investment opportunities that most investors are completely overlooking.
<h3>Nvidia: The $500 Billion Manufacturing Commitment</h3>
The clearest sign that something big is afoot came a couple of weeks ago when NVIDIA Corporation (NVDA) announced plans to produce up to $500 billion worth of AI infrastructure in the United States over the next four years.
This represents a huge shift in how the world's most valuable chipmaker approaches manufacturing.
For decades, even the most American of technology companies have designed their products domestically but manufactured them abroad.&nbsp;
Nvidia CEO Jensen Huang made the company's intentions clear when he announced that: "adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency."
But Nvidia can't do this alone. Reshoring manufacturing at this scale requires an entire ecosystem of support companies with specialized expertise.&nbsp;
The company has already begun production of its Blackwell AI chips at Taiwan Semiconductor Manufacturing Co. Ltd (TSM)&rsquo;s plant in Phoenix, Arizona, and is building new supercomputer manufacturing facilities in Texas through partnerships with Foxconn and Wistron.
<h3>Rockwell Automation: Nvidia's Strategic Partner in Factory Automation</h3>
If AI is the brain of America's manufacturing renaissance, factory automation is the nervous system that makes it possible. And Rockwell Automation (ROK) is positioned to benefit.
Nvidia and Rockwell are connected in a powerful reshoring alliance.
In March, Rockwell announced a significant collaboration with Nvidia to accelerate a next-generation industrial architecture. The partnership aims to create the factory of the future by making it easier for automation customers to digitize industrial processes.
This partnership has two key components that directly support Nvidia's US manufacturing ambitions:
First, Rockwell is integrating Nvidia's Omniverse Cloud technology with its Emulate3D software, creating sophisticated digital twins of production systems. These digital twins allow manufacturers to design, simulate, and optimize factory layouts before breaking ground &ndash; dramatically accelerating the deployment of new US-based facilities.
Second, Rockwell is incorporating Nvidia's Isaac robotics platform into its autonomous mobile robots, which will be essential for maximizing efficiency in these new factories. In a labor market where skilled workers are scarce, these AI-enhanced robots will be the backbone of reshored manufacturing.
With approximately 20% market share in US factory automation, Rockwell provides the critical systems that allow manufacturers to implement smart manufacturing at scale &ndash; the sensors, controls, and software that turn traditional factories into modern, AI-enabled production facilities.
As Nvidia builds its $500 billion worth of AI infrastructure in the US, Rockwell's automation technologies could be essential for making these facilities economically competitive against overseas alternatives.
What makes Rockwell a really great reshoring play is that it benefits regardless of which specific companies decide to reshore. Whether it's semiconductors, electric vehicles, or pharmaceuticals coming back to American soil, all require the automation expertise that Rockwell provides.
That makes Rockwell a direct play on the reshoring trend. The company's deep expertise in industrial automation positions it perfectly for this transformational moment.
<h3>UiPath: The Software Powering the Automated Factory</h3>
While Rockwell provides the physical automation infrastructure, UiPath (PATH) delivers the software intelligence that optimizes operations across the entire manufacturing process.
UiPath specializes in enterprise automation and AI software that allows companies to streamline complex workflows &ndash; exactly what's needed when building new manufacturing operations from scratch on American soil.
The company recently made a strategic acquisition of Peak AI, which focuses on optimization solutions specifically for the retail and manufacturing sectors. This positions UiPath to help companies navigate the complex logistics challenges that come with reshoring.
What's particularly interesting about UiPath is that it's developing specialized tools to help companies adapt quickly to changes in tariff environments &ndash; a capability that's suddenly become essential in today's volatile trade landscape.
By combining robotic process automation with advanced AI, UiPath helps manufacturers achieve the efficiency gains necessary to make American manufacturing economically viable despite higher labor costs.
<h3>The Connected Ecosystem: Nvidia, Rockwell, and UiPath</h3>
While the market remains fixated on whether Trump's tariffs will hurt quarterly earnings, smart investors are positioning themselves for the long-term structural changes these policies will drive.
What's particularly powerful about this investment thesis is how these companies form an integrated ecosystem:
Nvidia provides the AI chips and infrastructure that power next-generation manufacturing. Rockwell Automation delivers the physical automation systems and robots that make reshoring economically viable. UiPath supplies the software automation that optimizes operations and workflow.
This creates a virtuous cycle: Tariffs make offshore manufacturing less economically attractive, so companies invest in domestic manufacturing facilities.&nbsp;
These facilities implement Nvidia's AI, Rockwell's physical automation, and UiPath's software automation. This integrated approach enables cost-competitive manufacturing despite higher US labor costs. Success stories encourage more reshoring, restarting the cycle.
This ecosystem approach creates a multi-year growth runway for all three companies.
And unlike the highly speculative valuations we're seeing in many generative AI companies, these automation leaders are trading at reasonable multiples despite their strategic positioning in the reshoring revolution.

America’s AI-Powered Nervous System

This week, many of you had more questions on a U.S. sovereign wealth fund as well as the best way to play the market during recent volatility.
Here are a few questions:
Q: How should investors take advantage of a U.S. sovereign wealth fund? &ndash; Steven S.
A: Trump&rsquo;s decision to launch an U.S. sovereign wealth fund raises a number of interesting questions. Most countries that have a sovereign wealth fund use trade surpluses as their funding mechanism. But since the U.S. doesn&rsquo;t have a trade surplus, a SWF could also be funded with new sources of U.S. revenue. For instance, tariffs could raise $10 billion or more in annual revenue based on current trade patterns. That revenue would make a good foundation for an SWF. But the most efficient way of funding would be to contribute assets to the SWF that the U.S. already owns. These assets could include gold reserves, federal lands with oil and gas potential and intellectual property that could be leased to third parties. Trump&rsquo;s plan to open up federal lands for mining exploration and drilling for oil and gas are particularly good for investors in two ways. It would be a source of income for the government to fund a sovereign wealth fund that would promote fiscal sustainability and lessen the burden of taxes on American families. But it could also be a boon for investors to become shareholders in the companies that will actually help the government monetize all those trillions in mineral wealth that have been locked within federal lands. For investors, it&rsquo;s a new wealth creation opportunity to take advantage of. But as with all opportunities, getting ahead of the crowd is key to maximizing gains. We&rsquo;ll be showing investors the best way to capitalize on this new opportunity in our publications. Stay tuned.
Q: What should I hold in my portfolio during so much market volatility? &ndash; Christina B.
A: What we are seeing in the markets recently cannot be classified as a crash, but actually something worse. What is worse than a crash and quick recovery as markets are going up and down daily is a long, slow grind down. That does not mean a one-day crash of 10% or more. It could mean a slow grind down perhaps 20% or 30% over six months or even longer. A quick crash can recover quickly. With a slow grind, many investors tell themselves it will come back or "buy the dips" or hang in there. Then it will grind down some more until the retail investor finally capitulates with large losses. Economic data shows signs of recession. Unemployment in the U.S. has risen from 3.4% in April 2023 to 4.2% today. That&rsquo;s not a high level or a huge increase but the trend should be disturbing. Inflation is still sticky at 2.4% (annualized). Again, that&rsquo;s not an out-of-control level but the fact we aren&rsquo;t seeing more of a downtrend should also be disturbing. But there are also opportunities during markets like this. For your portfolio, allocations to cash and hard assets like gold are advisable to reduce volatility, increase liquidity and hedge against geopolitical risks. Having cash on hand to invest in companies that are positioned to take advantage of government policies is another smart tactic for savvy investors.
That&rsquo;s it for this week. Thanks for all your questions sent in.

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