Authored by Nomi Prins via Prinsights substack,

“Nothing exists except atoms and space, everything else is opinion.” 

– Democritus, Ancient Greek Philosopher

Certain geopolitical events unleash unstoppable global re-alignments and national policy shifts.

Russia’s invasion of Ukraine in February 2022 was one of them. 

The escalation of the Russia-Ukraine War made it clear to the U.S. that energy independence is critical for national and economic security.  Nowhere is that more apparent than with nuclear energy. Russia supplies 35% of U.S. nuclear fuel. Kazakhstan supplies 25%.

Since 2022, legislators on both sides of the aisle, along with the White House and the Departments of Energy and Defense have accelerated discussions over nuclear energy and uranium supply chain policies.

Now, nuclear energy is familiar to the U.S. In fact, nearly 20% of U.S. electricity comes from nuclear power.  Nuclear power also provides about 10% of the world’s electricity and 18% of electricity in OECD countries.

The truth is that no country, large or small, is looking for less energy. Electricity demand is increasing about twice as fast as overall energy use, and it will likely rise by 50% by 2040. Nuclear power capacity is forecast to grow in tandem.

Source: Carbon Credits

That’s why nuclear energy is an increasingly essential part of national defense and energy policy. Those who understand this resource will also be able to unleash its potential.

Let me explain…

Nuclear Energy Is (Back) in Vogue

Nuclear energy is the “Switzerland” of energy sources. It is increasingly popular with both sides of the political spectrum for several reasons.

First, nuclear energy is the most reliable baseload power source. That’s because it has the highest capacity factor, which measures how often a power plant runs at its maximum power.

Nuclear power can step in when other sustainable energy sources like wind and solar power can’t meet power needs.

Second, nuclear energy is nearly carbon-free, making it ideal to meet clean energy goals.

By increasing its nuclear energy use while also limiting its vulnerability to supply chains, the U.S. can lower its exposure to geopolitical tensions, price manipulations and foreign energy dependence.

The only way to achieve that is to secure domestic and reliable allied uranium supply sources and production. This would also require the development of more efficient technologies to refine uranium and convert it into nuclear energy.

Transformational U.S. Nuclear Energy Bills

After taking nearly two years to develop, several crucial bipartisan bills supporting nuclear energy, domestic and allied uranium supply, and technologies became law starting in late 2023.

The three you should know about are:

1. The Nuclear Fuel Security Act  

This bill was signed into law as part of the National Defense Authorization Act (NDAA) on December 22, 2023. It establishes a strategic uranium reserve to ensure domestic uranium supply for national defense.

The Act creates new programs and expands existing ones to increase domestic supplies of certain types of low-enriched uranium (LEU) for nuclear energy, including high-assay low-enriched uranium (HALEU) used by advanced reactors.

2. The Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act

This Act passed the House on May 8, attached to S. 870, the “Fire Grants and Safety Act,” by a vote of 393-13. The Senate passed it by a vote of 88-2 on June 18. With votes like those, it should be clear that nuclear is popular across the aisle (a rarity in the D.C. Beltway).

The legislation invests in advanced nuclear technologies for efficient energy production. That includes the continued development of small modular reactors (SMRs) and microreactors.

The overwhelming bipartisan support for advancing nuclear energy as a clean and reliable power source will only serve to enhance energy independence and national security.

It was just signed into law on July 9th.

3. The Prohibiting Russian Uranium Imports Act

After Russia invaded Ukraine, escalating its war that started with its invasion of Crimea in 2014, the U.S. banned imports of certain Russian energy products like oil and coal. But it didn’t ban uranium due to a lack of domestic and allied supply.

In December 2023, the House passed H.R. 1042, the Prohibiting Russian Uranium Imports Act, by voice vote. Two months before that, I met with the senior staff of Rep. Cathy McMorris Rodgers (R-WA), who chairs the Energy and Commerce committee. She championed the bill. We discussed its importance for overall energy and national security.

Following productive meetings on Capitol Hill

The Senate passed its version by unanimous consent on April 30.

On May 13, the bill was signed into law.

The bill bans low-enriched uranium (LEU) produced in the Russian Federation or by a Russian entity, fuel used in domestic nuclear reactors.

It also allocates $2.72 billion to domestic and allied uranium companies to further advance domestic enrichment capabilities.

Uranium is More Powerful Than Gold

Those policy developments are boosting uranium prices and domestic uranium producer shares.

Uranium prices rose 3-fold since early 2020.

They more than doubled from July 2023 through January 2024 to $107 per pound before settling to current levels near $80-85 per pound, which are still up 60% since then.

That’s compared to gold at 19% and silver at 28% over that period.

Given the growing global need for uranium, I see uranium prices doubling over the next two years and surpassing the 2007 levels shown in the chart below.

Source: Trading Economics

Countries are now recognizing nuclear power’s energy potential, economic implications and clear national security benefits. Government investments and initiatives for uranium and nuclear energy companies include financial subsidies, tax incentives, grants and loan guarantees.

More than 20 countries at COP28, including the U.S., signed a declaration to triple nuclear power capacity by 2050. That would add 740 gigawatts (GW) of nuclear capacity to the existing stock of 370 GW. For reference, one gigawatt is equal to one billion watts. To put that into perspective, one gigawatt is enough to power an entire medium-sized city. 

The World Nuclear Association reports that 68 GW of nuclear capacity is under construction. Another 109 GW is in the planning stages, and another 353 GW is proposed beyond that. 

Plus, 29 GW of new capacity is expected to be in operation by 2026. China and India represent more than half of that. They will need more uranium to accomplish this.

Source: Carbon Credits

That means that the U.S. is in a race for uranium supply to fuel its own nuclear capacity growth, and the world is taking notice.

Several domestic miners have restarted operations across five states to meet growing demand and favorable policy. Those include IsoEnergy, Uranium Energy Corporation and Energy Fuels Inc.

Domestic U.S. and allied uranium producers, especially those with operating mines, will benefit in the coming months and years. So will nuclear energy technology companies.

You’ll be hearing much more from us on this mega-trend soon.

One way to take advantage of uranium and nuclear energy trends is to consider investing in the Global X Uranium ETF, URA.  Many of the ETF’s top holdings are U.S.-based, or U.S allied uranium or nuclear technology companies.

*  *  *

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Update (1927ET):

Moments ago, ABC News reported that Senate Majority Leader Chuck Schumer, D-N.Y., advised President Biden to end his reelection for the greater good of the country and the Democratic Party. 

Only eight days ago, Schumer had a different opinion on Biden: “I’m with Joe.” 

Chuck Schumer repeats the same thing each of the three times he’s asked about the scandal around Biden’s cognitive decline: “I’m with Joe” pic.twitter.com/e6wjtHyTru

— RNC Research (@RNCResearch) July 9, 2024

Earlier, according to Fox News, citing multiple sources, Schumer pushed for the Democratic National Convention’s delay as questions soared about the president’s 2024 candidacy. 

According to Axios, the delay “signals that the congressional leaders sympathize with rank-and-file Democrats who want more time to address concerns about Biden’s ability to defeat former President Trump.” 

Vice President Kamala Harris’s nomination odds for the party now stand at 50, while Biden’s is at 38.  

Democratic lawmaker have been urging Biden to drop out since his disastrous debate with former President Trump last month. 

*   *   * 

Just hours after President Biden mentioned in an interview that he would consider dropping out of the presidential race if diagnosed with a “medical condition,” the elderly president tested positive for Covid-19 this afternoon. 

UnidosUS president Janet Murguía informed the audience at the organization’s national conference in Vegas about Biden’s diagnosis.

Biden allegedly can’t give his speech in Nevada because he “tested positive for COVID.”

He was greeting restaurant patrons just an hour ago. pic.twitter.com/hFU4t4t9yG

— RNC Research (@RNCResearch) July 17, 2024

White House press secretary Karine Jean-Pierre said President Biden was delivering speeches in Las Vegas when he “experienced mild symptoms.” 

KJP said the president “will be returning to Delaware, where he will self-isolate and will continue to carry out all of his duties fully during that time.”

She noted, “The White House will provide regular updates on the President’s status as he continues to carry out the full duties of the office while in isolation.”

Biden’s doctor reported that the president developed a runny nose and a “non-productive cough” on Wednesday afternoon.

“He felt okay for his first event of the day, but given that he was not feeling better, point of care testing for COVID-19 was conducted, and the results were positive for the COVID-19 virus,” the doctor wrote in a statement shared by the White House. 

The doctor said, “The President has received his first dose of Paxlovid,” adding that Biden’s symptoms “remain mild.” 

Biden boarded Air Force One in Vegas this evening, the White House pool reported.

Where is the president’s mask?? 

Biden boarding a plane to head to the beach house in Delaware cancelling his Las Vegas visit to ‘self-isolate’ himself after testing positive for Covid.#BREAKING #Trump #TrumpAssasinationAttempt #BidenHarris2024 pic.twitter.com/YkhZO77slD

— Target Reporter (@Target_Reporter) July 17, 2024

Sigh. 

This was Joe Biden yesterday which includes touching and sniffing various people.

Joe Biden has tested positive for ‘Covid’.

Joe Biden is a ‘Super Spreader’. pic.twitter.com/AfTqbMpzh8

— Liz Churchill (@liz_churchill10) July 17, 2024

Earlier today, the president said in a pre-taped interview with BET News: 

“If I had some medical condition that emerged, if somebody, if doctors came to me and said, you got this problem and that problem.” 

PredictIt data shows Biden’s election odds are cratering once again. 

X users are asking…  

President Biden has covid.

Is this the first stage of stepping down?

— Graeme Pearce (@GraemePearce3) July 17, 2024

Biden this morning: I would consider stepping down if a doctor told me i had a medical condition requiring me to do so.

Biden this afternoon: I have COVID.

— Aeson Keel (@AesonKeel) July 17, 2024

Ha. 

When you hear Biden tested positive for COVID pic.twitter.com/8k3xOLLLlm

— The Right To Bear Memes (@grandoldmemes) July 17, 2024

*Developing…

Thousands of Marylanders are discovering firsthand the dark side of ‘The Next AI Trade,’ in which power grids must be upgraded and expanded to handle increased load demand from AI data centers and other electrification trends. This expansion involves eminent domain and the destruction of farmland and forests.

Strict climate change rules from progressive lawmakers in Annapolis are some of the main drivers in the chaos unfolding across three counties in the blue state, as these rules discourage the development of new fossil fuel power plants, forcing power companies to expand transmission systems to import electricity from surrounding states versus building clean NatGas power generators with carbon capture systems near areas where AI data centers are being constructed. 

Pro-subs are all too familiar with our ‘powering up America’ theme dubbed the “The Next AI Trade.” However, the situation playing out in Maryland has revealed a dark side to this theme, which we were the first to report last week in a note titled “Dark Side Of ‘The Next AI Trade’: Seizing Private Property For Transmission Lines.” 

The evolving situation in Maryland involves a group called “Stop MPRP.” MPRP stands for “Maryland Piedmont Reliability Project,” which is a project that plans to upgrade the region’s 500,000-volt transmission system that runs across three counties: Frederick, Baltimore, and Carroll. The upgrades will ensure enough power is imported from surrounding states to supply new AI data centers coming online in southern Frederick County. 

Stop MPRP has over 8,000 furious Marylanders who are quickly organizing to oppose the MPRP project because they say it’s a massive “land grab that will not benefit our community while devastating businesses, farms, and property values.” 

In recent weeks, hundreds of Marylanders, if not more, in all three counties have met with local government and power company officials to discuss the project – as many are concerned about plunging land values, destruction of farms and forests, and high risk of eminent domain. 

I’m here at another PSEG event about the proposed 70-mile transmission line. The session officially starts at 2, but the lines are already long, and residents are in the building talking w/ reps. Many are concerned about what this project means for their properties & losing money pic.twitter.com/XZMxKhoqvr

— Jessica Babb (@jess_babb) July 11, 2024

Local news WMAR interviewed second-generation farmer Brandon Troy, who said the high-voltage power lines will run directly through his farm. 

“What they basically want to do is come from over the hill there and come straight across everything, come across the crop land, across the wetlands and up in here to our pastures to basically cross us,” Troy told WMAR, adding, “You couldn’t pick a wider swath through our farm.” He warned his property value would tank if these power lines were built. 

In a recent note titled “Maryland ‘Can’t Import Itself Out Of Energy Crisis’ Amid Urgent Need To Boost In-State Power Generation,” we discussed Maryland’s struggling energy utility system. Due to strict green policies, the state attempts to resolve its power crisis by importing energy from neighboring states rather than developing in-state power generation capabilities.

The dark side of the Next AI Trade will involve land grabs, and Marylanders are some of the first to figure out this unfortunate reality. However, we suspect if Annapolis had common sense, there wouldn’t be a need for new massive transmission lines because NatGas power generators could be built down the street from the data centers. 

“Current views along the proposed route,” one landowner said. 

Another person said, “Here is what they intend to ruin for me…” 

“Just a couple of views that we will lose if this happens,” another landowner said. 

Great job, Democrats. Your green policies are backfiring, causing anxiety among landowners.

Rare earth mineral companies in China have been stung by declining prices at the same time the government “tightens its grip” on the industry, according to Nikkei Asia.

Companies like Rising Nonferrous Metals, a rare-earth miner listed in Shanghai, are losing money this year, a stark contrast to last year’s profitability. 

The company is blaming “drastic slide in sales prices of its major rare-earth products,” according to the report. They sell dysprosium, terbium and didymium, a mix of neodymium and praseodymium.

This company belongs to central government-owned platform China Rare Earth Group, which was established in December 2021 when three state owned miners merged. It was then designated a “central company”, designating it as controlled by the State Council.

Nikkei reports that another arm of the central company, China Rare Earth Resources and Technology, is also expecting a net loss for 1H 2024. Fuijan province controlled Xiamen Tungsten also said revenue had dropped 22% on the year. 

China holds the world’s largest reserves of 17 rare-earth elements, vital for tech products like smartphones, electric vehicles, wind turbines, and missile defense systems. 

Amid rising U.S. tensions, China is increasingly leveraging these resources. Last month, the central government mandated state control over rare-earth resources to ensure national resource security and industrial security.

This new directive aligns with President Xi Jinping’s focus on a “holistic approach to national security.”

Despite increased sales, suppliers are struggling. Shenghe Resources Holding, supported by the Finance Ministry, forecasts a significant interim net loss, citing a “substantial decline” in rare-earth prices. Shenghe is expanding through acquisitions, notably purchasing Strandline Resources UK for 43 million Australian dollars to gain control over Tanzanian mineral projects.

China Northern Rare Earth (Group) High-Tech, the top rare-earth miner by volume, barely turned a profit in the first half of the year, with a sharp profit decline of 95% to 97%. The company’s board attributes this to falling prices due to higher production, increased imports, and more recycling, while demand growth has lagged.

Authored by Luis Cornelio via Headline USA,

In a resurfaced video, Ukrainian President Volodymyr Zelenskyy voiced cynical remarks against JD Vance, President Donald Trump’s running mate and staunch America First supporter.

Zelenskyy, a former comedian who rose to power in 2019, said that Vance, a Marine veteran, seemed clueless about the ongoing war between Ukraine and Russia.

“I’m not sure he understands what’s going on here and we don’t any rhetoric from people who are not deeply in the war,” Zelenskyy said in a CNN interview.

“To understand, he needs to come to the frontline to see what’s going on, to speak with the people … to understand,” the Ukrainian president said of Vance.

The interview, taped and aired in February, occurred as Vance led an effort to block tax dollars from being funneled in aid to the corruption and scandal-plagued country. On Tuesday, internet personality Dom Lucre re-shared the video, garnering over 3.2 million videos.

🔥🚨BREAKING: Ukrainian President Volodymyr Zelenskyy went to CNN to criticize Donald Trump’s Vice President pick, J.D. Vance suggesting that Vance ‘doesn’t understand what war means.’

Reporter:

“Vance said that even if you got the $60 billion in aid, it is not going to… pic.twitter.com/cV49v5axFO

— Dom Lucre | Breaker of Narratives (@dom_lucre) July 16, 2024

Following Vance’s elevation to the Trump 2024 ticket, Ukrainian officials are panicked that their multi-billion-dollar stream in aid could come to an end.

In a Monday press conference in Kyiv, Zelenskyy said he is ready to work with Trump if elected in November.

“If Mr. Donald Trump becomes president, then we will work with him. I am not afraid of it,” he said.

He also labeled America First Republicans who oppose aiding the war as “more right-wing and radical.”

Conversely, Zelenskyy’s allies are less optimistic.

“This is a disaster for Ukraine,” a senior European Union official told Politico in response to Trump’s announcement of Vance as his running mate.

Ukrainian lawmaker Maria Mezentseva suggested Vance is invited to Ukraine. “I think we should bring him,” she told Semafor. “That’s how we usually succeed to change someone’s mind.”

Hours before Donald Trump was shot by a would-be assassin on Saturday, President Joe Biden became absolutely unhinged during a Zoom call with Democrats to discuss whether he should abandon his bid for reelection.

According to Puck News,

Right before the Trump rally in Butler, Pennsylvania, a group of moderate Hill Democrats held a “tense” Zoom call with the White House to express their concern about Biden’s ability to win—and their ability to win, should he tank and take them down with him. “The call was even worse than the debate,” one of the participants told me. “He was rambling; he’d start an answer then lose his train of thought, then would just say ‘whatever.’ He really couldn’t complete an answer. I lost a ton of respect for him.”

What’s more, Biden had a ‘particularly troubling exchange’ with Rep. Jason Crow (D-CO) – a former Army Ranger who served three tours of duty in Iraq and Afghanistan – in which Biden said “Tell me something you’ve never done with your Bronze Star like my son,” referring to Beau Biden – an Army lawyer who served in the National Guard and was deployed to Iraq, who as the Attorney General of Delaware gave a DuPont heir a plea bargain that spared him prison time for raping his young daughter.

Well, Crow didn’t die doing one of those tours like Beau did.

— Mostly Peaceful Cat (@MaxPaxCat) July 17, 2024

Even CNN is reporting it…

CNN; Biden gets nasty w/ Bronze Star Democrat @JasonCrowCO on “absolute disaster” Zoom Call, tells him to “cut that crap out” after Crow voiced concern about Biden’s diminished abilities. pic.twitter.com/1X0w1MUYYH

— Tom Elliott (@tomselliott) July 17, 2024

As Puck‘s Julia Ioffe writes of a portion of the Zoom call she was able to view, Biden starts shouting at Crow, saying “First of all, I think you’re dead wrong on national security,” at times garbling his words as he became emotional. “You saw what happened recently in terms of the meeting we had with NATO. I put NATO together. Name me a foreign leader who thinks I’m not the most effective leader in the world on foreign policy. Tell me! Tell me who the hell that is! Tell me who put NATO back together! Tell me who enlarged NATO, tell me who did the Pacific basin! Tell me who did something that you’ve never done with your Bronze Star like my son—and I’m proud of your leadership, but guess what, what’s happening, we’ve got Korea and Japan working together, I put Aukus together, anyway! … Things are in chaos, and I’m bringing some order to it. And again, find me a world leader who’s an ally of ours who doesn’t think I’m the most respected person they’ve ever—”

“It;’s not breaking through, Mr. President,” Crow replied, “to our voters.”

“You oughta talk about it!” Biden fired back – rattling off several accomplishments. “On national security, nobody has been a better president than I’ve been. Name me one. Name me one! So I don’t want to hear that crap!”

“How is this tenable?” One campaign source told Ioffe, adding “We’re in a perfect shitstorm until he steps down or everyone gets back on board.”

Of note, nearly 2/3 of Democrats want Biden to step down, according to an AP-Norc poll released on Wednesday.

By Peter Earle of the American Institute for Economic Research

As high inflation enters its third year and disinflation slowed, the impact of broad price increases are seeping into increasingly far flung areas. They are seen and felt not only in the prices of capital, producer, and consumer goods, and in the prices of securities and commodities, but also in goods and services procured through the government. 

In some, adjustments have been made. The most recent Cost-of-Living Adjustment (COLA) for Social Security benefits was a 3.2-percent increase. That adjustment affects more than 66 million Social Security beneficiaries and around 7.5 million recipients of Supplemental Security Income (SSI), whose increased payments began on December 29, 2023​. Medicare Part D, and particularly the catastrophic coverage phase, also saw a modification through 2022’s so-called Inflation Reduction Act (IRA). Those changes eliminate the 5 percent coinsurance requirement for enrollees in the catastrophic phase starting in 2024, effectively capping out-of-pocket expenses. In 2025 additional changes will kick in, including a $2,000 annual cap on out-of-pocket drug spending and the elimination of the coverage gap phase. The changes are intended to provide more consistent cost-sharing throughout the year, reducing the financial strain on beneficiaries and in particular those with significant prescription drug needs.

On the other hand, Medicare payments to physicians do not, and have not, been adjusted for inflation. Over the last decade, in fact, the American Medical Association estimates that rates have been cut by ten percent. The reimbursement rates for Medicare are set by the Centers for Medicare & Medicaid Services (CMS) and are updated annually through various fee schedules, primarily the Medicare Physician Fee Schedule (MPFS). In recent years, updates have been minimal and have not kept pace with the rising costs of providing medical care, which has in turn led to financial pressure on healthcare providers. While Medicare Part D changes reduce out-of-pocket drug costs for patients, they do not affect the reimbursement rates doctors receive for their services. Since 2001, physician payments have fallen 30 percent behind the rate of inflation. The difference highlights a broader issue in healthcare policy, where measures to ease financial burdens on patients are not always extended to healthcare providers.

There are several reasons why Medicare payments to physicians are not automatically adjusted for inflation. Budget constraints play a significant role; Medicare costs comprise a substantial portion of the federal budget, and automatic inflation adjustments could significantly increase their budgets. Congress and policymakers often prioritize controlling healthcare spending to manage the overall federal budget and reduce deficits. That physicians represent a far smaller voting bloc than the 19.4 percent (65.7 million) of Americans who are Medicare recipients is undoubtedly a major contributing factor.

The Omnibus Budget Reconciliation Act (OBRA) of 1989 required that Medicare spending not increase overall fiscal spending. That is to say, adjustments to payments, methods, or policy changes are required to be accompanied by finding savings or outright reductions within the program, ensuring its neutrality. For this reason, nominal reimbursement rates have fallen virtually every year. A history of attempts to wrangle government expenditures while contending with rapidly changing technology, demographic shifts, and in the case of healthcare rising longevity is beyond the scope of this article, but offered here. It brings to mind Ludwig von Mises’ many critiques of interventionism, but particularly those which arise of its cumulative effects: each tinkering and tweak leads to unintended consequences, which over time leads to new unintended consequences, further interventions, and on it goes.

In 2023, the CMS approved a 3.37 percent reduction in Medicare physician payments for 2024, which took effect on January 1. This was later reversed in part, as described in this blog post from March 7, 2024.

Last Sunday, Congress released the text of a minibus package, which will likely be signed into law by tomorrow. While the bill’s primary purpose is to keep the government open, it also includes healthcare extenders through the end of the calendar year, as well as several notable healthcare policies … The minibus includes a 1.68 percent reduction to the 3.37 percent cut to the Medicare Physician Fee Schedule (MPFS) conversion factor (CF) that physicians and other clinicians are currently facing. The 3.37 percent CF cut went into effect on January 1, 2024, and this provision would effectively reduce that cut to 1.69 percent for the rest of the calendar year (3.37 percent – 1.68 percent). It will be in effect as of March 9, 2024, and will not impact payments for services delivered between January 1 and March 8, 2024. In other words, the fix is NOT retroactive, but will apply prospectively.

Changes to Medicare reimbursement rates are determined through legislative processes. The reimbursement rates are influenced by various political and economic factors, and automatic adjustments for inflation have not been a priority. Historically, the Sustainable Growth Rate (SGR) formula was used to control spending by tying updates to physicians’ fees to the rate of US economic growth. This, however, has at times led to scheduled cuts in physician payments, which Congress has almost as frequently postponed through temporary “doc fix” measures. The SGR was replaced by the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, but automatic inflation adjustments were not included in the new system. 

Current policy trends favor value-based payment models over traditional fee-for-service models, with the former aiming to reward quality and efficiency over a sheer volume of services. The emphasis on value-based care has also shifted focus away from across-the-board fee adjustments. Any implementation of automatic inflation adjustments would require consensus among lawmakers, which is likely to be especially contentious today in the face of record debt and deficits, in addition to divergent spending priorities and a widening gulf on views of the proper role of government where healthcare is concerned.

While physicians and other health professionals are at times written off with the same dismissal that “the rich” are broadly, the accelerating insufficiency of Medicare to keep pace with inflation directly and critically impacts medical care in the United States. Financial pressures resulting from stagnant or falling real Medicare reimbursement rates have effects on physicians, patients, and the entire healthcare system.

Declining reimbursement rates, on top of losses in purchasing power, result in reduced access to care, as some physicians have limited the number of Medicare patients they accept or have stopped accepting new Medicare patients altogether. Regardless of the basis upon which medical practices reduce the percentage of Medicare patients among their patient base, the ultimate result is less care for those most likely to be in the Medicare system: senior citizens and individuals with disabilities. Physicians in smaller practices, or practicing in higher cost-of-living areas (big cities in particular) are likely to compensate for the growing gap between expenditures and reimbursements by capping staff compensation, reducing headcount, delaying or forgoing new equipment/technological investment, and minimizing (or eliminating) office space. In some cases, doctors have wrestled with reimbursement rates lagging behind inflationary pressures by increasing their patient volume, opting instead for shorter appointments, longer hours, increased stress, and burnout.

Medicare is an entitlement program, in many ways exemplifying government intrusion into what historically has been a more market-oriented sector. Established in 1965, Medicare is now deeply integrated into the fabric of the medical profession, the insurance industry, the broader healthcare sector, and the lives of U.S. citizens. While the rationale for gradually reducing Medicare funding may seem logical — it seems less so when considered alongside expanded military spending and gifts to foreign governments — the considerable inflation since 2021 poses new risks.

If the widening maw between the expenses of medical practice and Medicare compensation persists or worsens, more physicians are likely to transition to concierge or direct primary care models in which patients pay a retainer for more personalized care. Such a transition would reduce the number of physicians available to the general Medicare population on top of the cost-cutting measures which have already taken place, further denigrating the quality of care provided: fewer available appointments and shorter visits in particular. And if the cost crunch continues, smaller practices are likely to merge with larger healthcare systems or be acquired by hospital networks to achieve economies of scale. A falling number of independent practices reduces competition, lowering the efficiency, accessibility, and quality of healthcare. Over time, those effects will impact not just Medicare beneficiaries, but all consumers of US healthcare services, which are increasingly inundated with an aging Baby Boomer generation.

Inflation was not caused by Vladimir Putin, gas station owners, corporate profits, or ocean shipping firms. Neither was it “9 percent” when the Biden administration took office, “zero percent” in July 2022, or higher everywhere else in the world two Octobers back. The cause of inflation is found in massively expansionary monetary policy operations during the pandemic — a period of time during which incredible demands were made of healthcare professionals at all levels — and aggravated by massive fiscal spending. While in the case of Medicare reimbursement there seems for once to be a reluctance to add to Federal spending, the broader implications of lagging recompense on the healthcare system and the well-being of those who depend on Medicare should be more closely examined.

Given the US healthcare system’s substantial distance from market forces, chances are slim for reform in the near-term. It is nevertheless critical that even in their bloated, interventionist form, government-dominated systems implement incentives that correlate compensation and performance with the provision of quality, adequate healthcare. And at the very least, they should not intensify the financial duress by failing to account for spiraling prices. This can and should be done while simultaneously addressing Washington DC’s large and growing fiscal and monetary mismanagement, which began long before the first utterance of COVID-19.”

Nantucket residents are watching their pristine beaches transform into “waste dumps” filled with floating debris and sharp fiberglass shards. This prompted officials to close beaches this week after a massive offshore wind turbine experienced a catastrophic failure.

Nantucket beaches turning into a waste dump from broke fiber glass wind turbine blades. Feds shut down the entire Vineyard Wind project.

Beaches are closed.

Huge problems if the other 1400 turbines are built like junk. pic.twitter.com/WYWmRubDqv

— Ryan Maue (@RyanMaue) July 16, 2024

Local paper Nantucket Current reports debris from a broken Vineyard Wind turbine blade washed ashore across southern Nantucket beaches, stretching from Madaket out to Nobadeer, on Tuesday. 

“The water is closed to swimming on all south shore beaches, due to large floating debris and sharp fiberglass shards,” Nantucket Harbormaster Sheila Lucey said, adding, “You can walk on the beaches, however we strongly recommend you wear footwear due to sharp, fiberglass shards and debris on the beaches.”

Late Tuesday, the Bureau of Safety and Environmental Enforcement said Vineyard Wind’s offshore “operations are shut down until further notice.” 

Vineyard Wind disclosed Monday that one of its massive turbines was damaged in an “offshore incident” on Saturday night. The nature of the incident was not disclosed. 

“The blade experienced a breakage approximately 20 meters out from the root,” Vineyard Wind spokesman Craig Gilvarg said, adding, “The turbine was in its commissioning phase and was still undergoing testing. Nearly the entirety of the blade remains affixed to the turbine and has not fallen into the water.”

Nantucket Current posted a series of images that show local area beaches were scattered with debris. 

The good news is that the local paper reported the debris as “non-toxic fiberglass” and “not hazardous to people or the environment.” However, the debris littering the beaches is an eyesore and a reminder of the flaws in unreliable green energy technologies.

Authored by Peter Reagan via Birch Gold Group,

This week, Your News to Know rounds up the latest top stories involving precious metals and the overall economy. Stories include: Gold hits $2,424 on speculations of a rate cut, shifting our understanding of the gold market, and Africa’s turn to gold is sending us signals.

But first, I feel moved to say something about the assassination attempt on Donald Trump. This is part of a pattern – there have been 14 fatal politically-motivated attacks over the last three and a half years alone. This is a powder-keg situation.

I hope this is another “stress test” that will ultimately prove the resilience of our nation, our institutions and our laws. I fear it’s an indication of just how severe the polarization in American society has grown. I worry we’re on the brink of the “Great Conflict” Ray Dalio described. As always, let’s hope (and pray) for the best while preparing for the worst.

And with that off my chest, back to your regularly scheduled Your News to Know.

Gold returns to $2,424, despite Powell’s non-committal stance on rate cuts

In a week, gold gained more than $70 and came just short of reaching its all-time high of $2,450, set in May. The official reason is the latest inflation reading, which showed the first signs of easing since 2020.

[ZH: Gold hit a new record high shortly after this note was penned…]

You might expect some kind of big story propelling this kind of price action, but in reality, it’s the same inching upwards that we’ve seen for the last few years. Especially since the start of 2024.

In his latest speech, Federal Reserve Chair Jerome Powell again gave mixed signals that were interpreted as dovish, but can go either way. As we have pointed out over and over, gold appears exceptionally sensitive to the upside, with the smallest tailwind seemingly sending it towards a new ATH on any given week.

Robert Minter, abrdn’s Director of Strategy, told Kitco that inflation is only one half of this run, the other being deep-rooted economic weakness:

There is a strong case for a September rate cut. If you look at how high consumer debt is, it’s not going to take much labor market stress to cause real problems in the economy. I don’t think we are going to see a recession, but that all depends on the Fed. They are a little late, but not fatally late, to do something.

For all the supposedly positive bits of economic data we’ve seen, it does feel increasingly nuts to be an economic optimist. We have supposedly avoided a Volcker-era recession, but have we really? Or is the media downplaying how bad things are on the ground? And for that matter, are we living on borrowed time? Could the brutal recession begin after the Fed begins lowering interest rates?

That’s generally what happens, as Ryan McMaken warns us – the reason a “soft landing” is so elusive is because it’s impossible:

But there are two problems with this [soft landing] narrative: The first is that the Fed has never actually managed to pull this off—at least not at any time in the last 45 years. In actual experience, this is what happens: the Fed denies there is a recession approaching well until after the recession has begun. Then, the Fed cuts interest rates after unemployment has already begun to march upward.

The markets definitely believe that there is a strong case for a rate cut, with the CME FedWatch Tool reflecting a greater-than-90% probability. Carsten Fritsch, Commodity Analyst at Commerzbank, says that the markets have already priced a September rate cut and even one more before the end of the year.

Because of this, Fritsch says gold has all that’s needed to test, recapture, and possibly surpass its all-time high this week. And all of this is still in the near-term.

As we move towards the end of the year, gold will leave its weakest quarter and move into an election cycle that’s looking chaotic even by the standards of the last twenty years.

Gold’s driving forces are changing, and investors should stay ahead

In case you missed it, I just described how easing inflation gave gold a boost towards its all-time high. Doesn’t quite sound like the kind of thing we’re used to, does it?

In his latest report, Incrementum AG’s Ronald Stoeferle noted that gold investors should be mindful of the changing tides driving the gold market. (That’s not to say that the old ones are going away. Inflation and money debasement will still guarantee appeal, and any kind of safe-haven investment discussion simply has to include gold.)

Stoeferle lists the five trends that he now believes are key drivers of the price of gold in the years, and perhaps decades, ahead. Here’s a brief run-down of each:

#1: The decoupling of traditional correlations. This has basically been as in favor of gold as possible so far. If the U.S. dollar goes down, gold will go up, like always. But gold has shown that it can go up alongside the U.S. dollar, something we’d be hard-pressed to find previously.

The same goes for any kind of asset class that once had an inverse correlation with gold. We’re now clearly seeing that gold’s price can rise at the same time as many other asset classes.

Interestingly, Stoeferle seems most captivated by the abandoning of the correlation between strong gold prices and Western demand. This has allowed other forces to take control of the market, while leaving the West exceptionally exposed to counterparty risk.

#2: The East is taking over. In line with the above, we’re seeing the East take over the gold market, which is not something we’re used to when the price is set in London. In 2023, we saw 2,092 tons of gold jewelry demand, almost double the central bank demand we talked so much about. The majority of gold jewelry sold to Asia and the Middle East.

Indian consumers buying gold despite high premiums. The Chinese doing the same. The Indian government is sneakily increasing its reserves massively, not least through its sovereign gold bond scheme. We see the same in China, where citizens are now looking to gold to stabilize their finances now that the flimsy real estate market is in free-fall. (Then there’s that huge unofficial central bank gold reserve of theirs…)

The London price fix could be turning into a Shanghai price fix under our noses, especially given the comparative lack of demand in the West. We’re dozing while Asia scrounges up the world’s gold bullion – and that doesn’t seem like a sign of long-term economic wisdom, does it?

#3: Central bank gold demand. While this one doesn’t need too much expanding upon, it’s worth mentioning that we might be on track for a third consecutive year of record central bank gold demand exceeding 1,000 tons annually.

Central bankers went from “By the way, we’re net buyers now” to “The official sector is now driving gold prices.” This happened over the course of a decade, during which most officials couldn’t find a single nice thing to say about gold. (We certainly heard little about it from officials in the West.)

Now that they’re loaded up, are we going to hear more Poland-style remarks from central bankers or even hints to a gold standard? We’ll have to see, but Stoeferle fully expects the buying to continue and possibly increase from its already lofty figures.

#4: Debt. This could easily be the most important factor on the list because debt is directly correlated with both inflation and therefore the prominence of a sovereign currency. Stoeferle says we are entering a new era of debt which casts a large and looming shadow (though he focuses more on Europe and Asia than our own $34 trillion pile).

It’s almost nostalgic to see Stoeferle mention Italy, reminiscing of a time when it looked to be threatening the entire European Union due to its indebtedness. These days, Italy’s 250% debt-to-GDP ratio barely registers next to France’s 330% (the second-most bankrupt nation in the world).

Now, France’s debt situation seems to have come out of nowhere. Its election had a familiar tone of a candidate whom nobody can name being elected. Little is known of this “far-left” candidate, except that he aims to battle “inequality” through currency debasement. How’s that going to work in the context of the Euro Zone? How did France’s finances get so bad in the first place? These are mysteries I won’t attempt to solve.

Most importantly, though, Stoeferle demystifies the slump of the Japanese yen in a warning to the U.S. Being the world’s most indebted nation with a debt-to-GDP ratio of 400%, the yen had no choice but to fall, and fall hard. What it’s done for gold in yen terms is already a matter for the history books.

Remember, the yen was once considered a safe haven currency! Why, exactly, are we expecting better things for the U.S. dollar?

#5: The new portfolio. Stoeferle presents us with a dramatic, but highly reasonable reimagining of the new diversified investment portfolio, where gold occupies up to 25%. We could easily expand some of Stoeferle’s percentages, such as commodities and even cryptocurrencies, and plenty of money managers have done that. The appetite for government debt is hitting historic lows.

And if we had to add anything to Stoeferle’s detailed analysis, it’s the seeming resurgence of difficulties in the mining sector. We’re hearing that miners aren’t making profits. A major mine in Yukon just closed with no reassurances it will reopen.

Right now is a very bad time to be experiencing any kind of supply disruptions in the gold market, unless you’re a gold bullion investor. In that case, you can just sit back and watch the scarce become even scarcer, and for price to respond.

Zimbabwe, Uganda and Nigeria would like gold to solve their money problems

Anyone who thinks Africa has been a sleeper in the BRICS affair hasn’t been paying enough attention. Russia and China have stolen most of the show so far, but there is plenty to see on the sidelines. Let’s take a look.

Technically, BRICS members only include three African nations so far: South Africa (they’re the S in BRICS after all), then Ethiopia and Egypt joining this year. But it shouldn’t be a surprise that other African countries are already eyeing the alliance. Zimbabwe has formally applied for membership. Both Uganda and Nigeria are seen as likely candidates. This is important because all three countries have had interesting gold-related developments recently.

In the case of Zimbabwe, we discussed its gold-backed currency developed after its disastrous hyperinflationary episode.

Nigeria‘s Senate recently shot down a bill that would have the nation buy gold as a major part of its central bank reserves. Remember, central banks own gold for most of the same reasons we do – to diversify and guard against economic calamity. Now, I’m far from an expert in Nigerian politics, but it looks like the bill failed because it had too much extra stuff attached to it. We shouldn’t be surprised to see a cleaner version debated and passed in the near future.

Uganda announced that it will significantly increase its gold bullion stockpile. They’ll buy from local mines, too. This is important for several reasons. For starters, Uganda’s central bank currently owns no gold, which would make it a new customer in the very crowded official-sector gold marketplace.

Now, buying from domestic mines is a cue taken straight from both Russia and China. Both of these BRICS heavyweights are known for their aversion to selling domestically-produced gold. In Russia it’s prohibitively taxed; in China it’s essentially outlawed.

In other words, some of the world’s biggest gold producers are choosing to buy local instead of selling their gold to other nations, allied or not. So where’s the gold to come from for the Western investor?

It’s similar to what Ghana is doing, recently legislating that domestic miners must sell 20% of their gold to the Bank of Ghana. Quite the development! See, adding to a nation’s gold reserves from domestic mining operations essentially eliminates the paper trail we use to figure out how much gold a central bank has. Most of the time, nations do want the world to know how much gold they own. After all, central bank gold is just about the only asset that other nations would be interested in accepting as payment. It’s a sign of national wealth!

Central banks are already competing with gold buyers in the world gold market. It makes sense, after all – there’s only so much gold to go around.

But major gold producers selling to themselves exclusively? That’s something to watch closely. Central banks have dropped the pretense of disinterest in gold. As the global gold marketplace becomes more competitive, we might see an even larger share of the gold supply vanishing into central bank vaults before it enters the market.

That would drive the price of gold even higher.

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Our economy is on a decades-long path to total collapse. And no election can completely stop what is coming! Which is why protecting your 401(k) or IRA is more critical than ever. With a physical gold IRA, you get an easy and tax-deferred way to safeguard your wealth with tangible assets. To learn more, click here to get your FREE info kit on Gold IRAs from Birch Gold Group.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Let us hope that whomever ascends to the leadership is a populist in the full sense of the word, channeling Emerson and his fellow critics of what we now call neoliberalism.

What does it mean to say a politician is a populist? Over 30 years ago, Christopher Lasch observed in his book The True and Only Heaven: Progress and Its Critics that populism had been applied to such a wide swath of individuals and causes that it had lost any specific meaning.

This definition is a start: A political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups.

Lasch, if not alone among American intellectuals, was certainly one of the few who was deeply concerned with the roots of American populism, and with its critique of the changes in the American social, cultural and economic realms that were promoted by the status quo at the expense of those social classes diminished by those changes. Those who resisted these changes were deemed populists.

Lasch meticulously traces the roots of American 19th century populism through the influential Enlightenment era thinkers of Europe, the Protestant tradition’s theological debates and American intellectual critics such as Ralph Waldo Emerson, of whom Lasch wrote: “his social views can easily be recognized, I think, as the views of a nineteenth-century populist. He has a populist distain for the fashionable life” which “fosters vanity, luxury and frivolous display.”

Emerson’s distain for the vanities of luxury was equaled by his distain for parasitic financiers, a position born of Emerson’s religious beliefs. As Lasch notes, “Emerson believes in the moral value of manual labor.” In other words, honest labor–what Emerson referred to as a calling–had a spiritual component. Here is Lasch: Emerson “would gladly sacrifice some of the ‘conveniences’ of civilization to the moral culture conferred by farming or a craft.”

In his essay Politics (1844), Emerson “argues that the prevailing social arrangements allow ‘the rich to encroach upon the poor.'” In Lasch’s summary, Emerson held that “Society needs self-respecting men and women,, not a perfect set of institutions.” He quotes Emerson: “Society can never prosper… until every man does that which he is created to do.”

Emerson also held that those seeking to get something for nothing–the essence of the parasitic financialization and speculation Emerson viewed as a mortal threat–would eventually face a reckoning akin to karma: “A ‘third silent party’, Emerson notes, attends ‘all our bargains’–nemesis or fate.”

In the broad sweep of industrialization and financialization that took hold in the 19th century and utterly transformed America, populists viewed wage labor–being paid a wage rather than earning a living from one’s own property and skills–was contrary to the American ideal and democracy, as only those with a stake in the system as owners could be entrusted to act in the interests of the nation as a whole, and only those with a path to ownership of their labor could reach their full potential and find their calling.

Let us turn now to the prevailing socio-economic arrangements in 21st century America, which are the result of 45 years of financialization and 30 years of rampant globalization, arrangement created not by forces beyond our influence but by policies promoted by political, social and economic interests on their own behalf.

These arrangements are quickly illuminated by a simple question: did they inflate your bubble or pop your bubble? In other words, did the bubble we each live in expand as a direct result of hyper-financialization and hyper-globalization, or was it popped by these forces?

That over 90 million Americans are expected to travel overseas this year offers a rough guide to the winners and losers in modern-day America: the 25% booking flights overseas who are reading articles asking if a $12,000 budget for a vacation in Europe is enough live in bubbles nicely inflated by financialization, speculation and globalization, while the bottom 60% are generally living paycheck to paycheck and cannot dream of having $12,000 available to spend on overseas travel.

In the America of today, a great many people have zero hope of buying a house in the city they grew up in and call home. Those who don’t inherit a house or fortune, or who didn’t choose their parents wisely have little hope of working their way through college with part-time jobs, as even state universities charge tens of thousands of dollars for tuition, fees and books, never mind living expenses.

I detailed these realities in “Why Are You So Negative?” Good Question. 4 Answers from Real Life (4/25/24)

Wage labor–what has been correctly identified as wage slavery–is now the norm, along with its sibling, debt serfdom. I have addressed the decline of self-employment (not gig-slavery, real self-employment) for years, and the rise of debt as the means to attempt social mobility and grab hold of a middle-class life.

A rigorous analysis of IRS data in 2015 revealed that only 1% of the US workforce of 145 million earns a middle-class income from self-employment: Only 4.48 million self-employed earn $50,000 or more, and 3 million of those are partnerships or corporations, i.e. professionals such as CPAs, attorneys, etc. That leaves leaves about 1.5 million people who aren’t in the professional class (those with advanced degrees and professional licenses and credentials) who earn a middle class living as sole proprietors. Here is the analysis:

Endangered Species: The Self-Employed Middle Class (May 2015)

As inflation in both essentials and assets have shredded the earnings and pathways to ownership of the bottom 60%, the lived reality of those who didn’t get rich from financialization, speculation and globalization is one of precarity, where any unexpected major expense such as a medical bill, car repair, insurance increase, etc. is enough to push financial anxiety into the red zone.

Precarious: One Misfortune Away from Insolvency (5/14/24)

The 45-year decline in labor’s share of the economy was not the result of fate, but of central state / bank policies promoted by those who benefited most from these policies. I covered these realities in The Bill for America’s $50 Trillion Gluttony of Inequality Is Overdue (9/21/20). This quote from Time Magazine encapsulates how policy created inequality on an unprecedented scale:

“There are some who blame the current plight of working Americans on structural changes in the underlying economy–on automation, and especially on globalization. According to this popular narrative, the lower wages of the past 40 years were the unfortunate but necessary price of keeping American businesses competitive in an increasingly cutthroat global market. But in fact, the $50 trillion transfer of wealth the RAND report documents has occurred entirely within the American economy, not between it and its trading partners. No, this upward redistribution of income, wealth, and power wasn’t inevitable; it was a choice–a direct result of the trickle-down policies we chose to implement since 1975.

We chose to cut taxes on billionaires and to deregulate the financial industry. We chose to allow CEOs to manipulate share prices through stock buybacks, and to lavishly reward themselves with the proceeds. We chose to permit giant corporations, through mergers and acquisitions, to accumulate the vast monopoly power necessary to dictate both prices charged and wages paid. We chose to erode the minimum wage and the overtime threshold and the bargaining power of labor. For four decades, we chose to elect political leaders who put the material interests of the rich and powerful above those of the American people.”

I regularly repost this chart because it’s a snapshot of what’s wrong with the status quo in America and what will eventually unleash nemesis on all those living in bubbles inflated by parasitic finance masquerading as “central bank policy,” “shareholder value” and “investing” in speculation.

Those who believe that there will be no blowback from becoming a nation where the bottom 50% own a near-zero 2.6% share of the nation’s immense private financial wealth are living in a bubble in desperate search of a needle.

Unsurprisingly, those who benefited the most from the ascendancy of parasitic finance and globalization approve most heartily of their own management of the nation’s institutions and policies. The bottom 99% have a decidedly less favorable view of the nation’s self-serving elites:

All of which brings us to the potential ascent of the Trump-Vance ticket to leadership. If populism means anything, it means restoring the value of work and especially manual labor of the real-world essential sort that ChatGPT, apps, bots and marketing cannot do, restoring the ladder of social mobility and gutting the forces that have laid waste to all those who didn’t have the opportunity to buy stocks and real estate before they skyrocketed to unattainable heights: hyper-financialization and hyper-globalization.

Nemesis is running out of patience. Let us hope that whomever ascends to the leadership is a populist in the full sense of the word, channeling Emerson and his fellow critics of what we now call neoliberalism. What counts now isn’t political labels; what counts now is promoting policies that reverse the 45-year hollowing out of the nation–morally, culturally and economically–that benefited the few at the expense of the many.

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