Here Comes the AI Cartel

  1. The hidden agenda of AI fearmongers
  2. Boffo job numbers: Well, it’s complicated
  3. Financial news plays catch-up on de-dollarization
  4. The dairy lobby’s (illegal?) milk propaganda
  5. About our new name and new format

1 Doom-Mongers With an Agenda

Wait, AI is going to be even worse than our worst Skynet nightmares from the Terminator movies?

Maybe you saw the news earlier this week: An outfit called the Center for AI Safety issued a 22-word statement, as dire as it is terse…

“Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks, such as pandemics and nuclear war.”

(Interesting that they left “climate change” out of there. That had to be a conscious decision, but why?)

The statement has about 350 signatories including Microsoft chief technology officer Kevin Scott, Google AI executives Lila Ibrahim and Marian Rogers Croak… and CEO Sam Altman of OpenAI, the firm behind ChatGPT.

Sam Altman? Immediately I’m suspicious.

As we chronicled last month, Altman went to Washington begging Congress to set up a scheme for government regulation and even licensing of AI, the better to keep a lid on “misinformation.”

It’s an old, old story — a businessman in the forefront of an emerging industry, professing concern for the good of humanity and asking the government to take action. Of course, such “action” would have the effect of cementing said businessman’s leader-of-the-pack position and throttling any upstart competitors.

Another leading signatory on the statement is Yoshua Bengio, founder of the Montreal Institute for Learning Algorithms. He cites an issue related to “misinformation…”

“One of the easy but important things we need to do is to make it very difficult, illegal, and punish very strongly, to impersonate humans. So when a user is interacting with an AI, it has to be very clear that it’s an AI. In fact, we should even know where it comes from, which company made it.”

Do we really need an entire new scheme of regulations and licensing to govern that? I mean, we already have fraud statutes on the books right? Doesn’t seem as if it should be that hard.

But again, it’s not your well-being this bunch has in mind. It’s how they can entrench themselves as a sort of AI cartel. It’s coming.

And don’t take it from me. Take it from one of the most savvy tech investors out there.

The rapid advancement of AI “is going to create some winners and losers… more losers than winners,” says Rajiv Jain, founder of GQG Partners.

“The most obvious winners at this point, besides Nvidia, will be the larger tech names, whether it’s Alphabet or Meta or these kinds of names,” Jain tells the Financial Times.

In other words, the behemoth incumbents. It’s not just that they have clout in Washington. They also have ample cash with which to take over promising small fry in the AI space.

Alphabet/Google knows this phenomenon very well: It built a dominant position in web advertising when it acquired DoubleClick in 2008. Meta/Facebook cemented its social-media dominance in 2012 when it acquired Instagram — just before Instagram planned to go public.

Microsoft, of course, sank $10 billion this year into OpenAI.

(Do you see where we’re going with this already? Look, this is one of those trends you can’t do anything to stop. So you might as well try to make some money from it.)

“I’m predicting a massive wave of AI buyouts in the next few months,” says Paradigm’s own Silicon Valley insider James Altucher — “many of which could be just as big or even bigger than Microsoft’s move.”

And in this case, he’s talking about companies that are publicly traded — unlike OpenAI.

In fact, right now — with the help of a proprietary trading tool — James has zeroed in on one AI company that looks like perfect “buyout bait” for one of the big boys.

Based on similar buyouts in the past, we’re looking at profit potential of 1,167% in 11 days… 1,779% in 13 days… or even 2,900% in just three days.

James’ evidence is compelling… and he invites you to see it for yourself at this link.

2 The Jobs, the Fed, the Rally

OK, it looks as if the next phase of a stock market rally is underway.

The May jobs numbers came out first thing this morning… and Mr. Market liked what he saw.

The S&P 500 has burst through the 4,200 level that proved to be a powerful ceiling for weeks; recall that both Paradigm trading authority Alan Knuckman and Rude Awakening editor Sean Ring agreed that over 4,200, it was up, up and away. (And they don’t agree on much.) At last check, the index is up 56 points or 1.3% to 4,277.

The Nasdaq, meanwhile, is up 1% to 13,236 — the highest in over a year. And the Dow is up strongest on the day, 1.8% or 600 points, to 33,667.

What’s good for stocks is not good for gold; the Midas Metal is down $15 to $1,962; silver has slid to $23.68.

Crude has popped $1.36 to $71.46. Expect a big gap up or gap down when trading reopens for the week on Sunday night… because earlier that day OPEC+ oil ministers will set their latest production targets. For whatever it’s worth, Goldman Sachs projects a 35% probability they’ll announce another round of cuts.

So about the job numbers: It’s a little complicated.

On the one hand, the wonks at the Bureau of Labor Statistics conjured 339,000 new jobs for the month — way more than “expert consensus” among Wall Street economists. In addition, the April and March numbers were revised upward.

On the other hand, the official unemployment rate jumped — and not a little — from 3.4% to 3.7%. That’s because a not-insubstantial number of people decided to start looking for work again last month. (Maybe they’re eyeing the end of student-loan forbearance in September?) Thus the statisticians count them as having returned to the labor force.

No, it makes no sense. But that’s the gummint for you.

Clearly Mr. Market is putting more weight on the unemployment rate: The labor market is softening! The Fed won’t raise rates again! Certainly that’s the betting in the futures market — which sees a 70% probability the Fed will stand pat at its next meeting in 12 days.

3 “Go-Time” for De-Dollarization

Wow, those Bloomberg News folks — they don’t miss a thing, do they?


That’s a story Bloomberg posted today. Better late than never?

The story is becoming impossible for the mainstream to ignore. This week, foreign ministers from the BRICS countries are meeting in Cape Town, South Africa — setting the stage for a summit among the BRICS heads of state in August.

As the U.K. Independent reports, “BRICS — which for now consists of Brazil, Russia, India, China and South Africa — is considering expansion and even the possibility of a new, common currency as an alternative to the US dollar for international trade in order to avoid the impact of sanctions over the war in Ukraine.”

➢ Note the words “for now”: Next in line to join the BRICS are Saudi Arabia and Iran — until recently, archrivals staring each other down across the Persian Gulf. And of course, it’s the “petrodollar” arrangement between the United States and Saudi Arabia that’s kept the dollar king of the hill for nearly 50 years now.

None of this should be news to you. Your editor has been pounding the table regularly about “de-dollarization” for nine years now… and Paradigm’s macro authority Jim Rickards has been anticipating Chinese and Russian moves to escape the dollar’s influence ever since he took part in a “financial war game” with the Pentagon in 2009.

Now, remember what I’ve said this year about how de-dollarization is “a process and not an event”? Something that happens gradually and not in one fell swoop?

Yeah, I’m reassessing that as I pore over the new issue of Rickards’ Strategic Intelligence. Jim begins thus: “On Aug. 22, 2023, the most significant development in international finance since 1971 will be unveiled.”

Aug. 22 is when the BRICS presidents and prime ministers will convene in Durban, South Africa. The year 1971, as you likely know, is when President Richard Nixon severed the dollar’s last tie to gold.

So yeah, that’s a big deal.

I won’t steal any more of Jim’s thunder here — not least because records show more than half of our 5 Bullets readers already have a Strategic Intelligence subscription.

If you’re in the majority, I urge you to dive into the June issue right away. If you’re in the minority, you can remedy that at this link. Every month you get 20 packed pages featuring Jim, Dan Amoss, Byron King and Zach Scheidt. It’s the best value in the whole damn newsletter industry.

4 What’s in a Name, Milk Edition (Continued…)

So here’s a crazy twist in the ongoing saga over whether “almond milk” or “soy milk” should really be called milk.

As we’ve related in the past, the dairy industry has pursued years’ worth of lawsuits and lobbying to put an end to such practices, on the theory that only animal-based products should be called “milk.”

In a rare instance of regulators exercising common sense and respecting the intelligence of the consumer, last February the FDA rejected an industry proposal to ban the use of “almond milk” and similar verbiage on packaging.

So this spring the dairy industry resorted to good old-fashioned persuasion to encourage people to eschew almond milk, soy milk, etc. The Milk Processor Education Program — MilkPEP for short, administered by the Department of Agriculture — recruited actress and comedian Aubrey Plaza for a parody campaign pushing “Wood Milk.”

“Throughout the ad,” reports the Vox website, “Plaza hugs trees and dumps wood shavings on her head while espousing the supposed benefits of this ‘artisanal,’ ‘old-fashioned,’ ‘eco-friendly,’ and ‘free-range’ nectar of the forest. Wood Milk, like other non-cow milks, comes in various flavors: oak, cherry, maple and mahogany.”

wood milk

And then at the end, she says “Is Wood Milk real? Absolutely not. Only real milk is real.”

So get this: The spot might be illegal. At least that’s the claim in a complaint filed with the USDA last week by the do-gooders at Physicians Committee for Responsible Medicine — an outfit that encourages “plant-based eating.”

Per the Vox story, “MilkPEP is barred by federal statute from engaging in activities ‘… disparaging to another agricultural commodity,’ and by federal regulation from employing ‘unfair or deceptive acts or practices with respect to the quality, value or use of any competing product,’ PCRM’s complaint points out.”

Good grief. There’s literally no one to cheer for in this story. The regulators, the industry, the do-gooders — a pox on ’em all.

(No, I won’t say, “Put ‘em all in a wood chipper.” But the play on words crossed my mind!)

5 No Drama

As the week winds down, let’s hear about our new name and format from a reader who’s not been around from the beginning in 2007…

“Three–four-year faithful reader from Texas and I just want to give props to the satire-laden — or maybe humor-laden is a better phrase — absurdities that y’all weave into the vital information not readily available from other ‘financial’ reports. The ‘GOP Emmy’… ROFLMAO… LITERALLY for two–three minutes… then again several times when trying to finish yet couldn’t resist scrolling up for another peek or two. Yes I know The Babylon Bee had the content originally, but being a former ‘subscriber’ to BB I discovered I don’t have the time to pore through ALL that stuff to get to the pearls like this.

“You and Emily give the information we want, with support from some outsiders, and filter the irrelevant. TIME is the most precious commodity for us ‘old-timers’ and 5, whatever you choose to call it, delivers valuable time-saving information and insights and allows us to laugh at very serious events that could be ‘depressing.’

“But 5 Bullets provides the humor rather than DRAMA, thereby creating a mentality more like to ACT to profit/resist/protect/change in the said circumstances. GREAT JOB and thank you. As with ANY business, CONTENT is KING… the name on the sign is not nearly as important.”

Dave responds: Thank you. We’re not always going to succeed at keeping the tone as light as, say, yesterday. No gut-busters today, really.

But I never want to force it. Best, I figure, to let the funny stuff surface synchronistically and go from there.

That said, I’ve got something I’ve squirreled away all week and haven’t had occasion to use yet. Might as well trot it out here, because in its way it really is more relevant to your life than most economic statistics…


Have a good weekend,

Dave Gonigam

Dave Gonigam
Managing editor, Paradigm Pressroom’s 5 Bullets

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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