All the Fuss About AI

- Knowledge is power.

- Sir Francis Bacon (note Thomas Jefferson often used the expression.) "Great minds think alike."             To which I think fits here. This is attributed to Carl Theodor Von Unlanski.  

"Everyone's talking about AI now..."

Dear Reader, that is all it is, talk. I see the computer producers claiming AI assistance. These computers are just more efficient versions of past offerings. They are quicker with more storage, but everything else is just PR. AI is in pre-season like in the NFL. It is getting better, but it will take time. Do you recall the propaganda around the famous chess match between grandmaster Gary Kasparov and IBM's Deep Blue? Gary won the first time, but the computer beat him the following year. Chips do "learn" from their past mistakes unlike many humans. The real question is who benefits and what and where AI will be implemented?

Founder...

Berners-Lee who invented the worldwide web says, "AI is an agent like a valet of the rich." We, at Evolution fear that AI will be like the atomic bomb in the next global war. However, the actual AI thing is really a work in progress. Every nation and firms are seeking its power. One big problem that they all missed is that in developing these data centers, AI requires a lot of energy and water. Too many locations were chosen far from populations. The firms were seeking easy permitting. Now, they discover not enough water or electrical power. Meta, to which we mentioned in a previous piece, purchased a defunk nuclear plant to get energy. I find giving a firm who cannot control their own platform the right to operate a nuclear plant, very troublous for our safety. What is not mentioned is that data centers need power, a lot of power. In any area where new data centers are developed, consumers will suffer higher energy bills. President Trump is wrong on alternative energy. We need all sources. This is not oil versus clean, but low priced energy for all. Meanwhile,

Recent Success

IBM developed the smalest transistor. Amazon is developing their data centers that have new and better chips like Tranium and Inferentia. These two chips use less water and are highly efficient. Google's Deep Mind , uses the web as an aid to its AI chip. Remember all the hoopla around China's Deep Seek? It is just BS like we stated in our opening paragraph. With that said, we must acknowledge the great contributions from early transistors and today's chips. This led to our cell phones, drones and a host of developments in our appliances, cars and life. However, the latest from business leaders and scientists suggest concerns to our economy as AI can replace humans in many functions like paralegals, surgery, transportation and moving of product with robotic carts. Robots have secured their place in auto manufacturing and in warehouses. AI, along with drones have been fabulous for agriculture. It has become a must for satellites and weather forecasting.

The billionaire, Sam Altman and AI's "godfather, Geoffrey Hinton both warned about the loss of jobs due to AI and they feel it will widen the wealth gap. The two advocate a basic universal income. Ray Dalio says, "AI is a great tool, but it presents dangers for workers." He also believes it will worsen the wealth gap. To us, at Evolution, this type of serious economic problems could lead to social unrest and we have enough kindling floating around as it is right now. With all of the above, the modern truth comes from the great American, Gordon Moore. He co-founded Fairchild Semiconductor and Intel. He stated...

Moore's Law

In 1965 he said, "That the number of transistors in an integrated circuit (IC) doubles about every two years." His observation held true, but when numbers go to infinity, no one can give an accurate answer. The problem is the capability to continue to design chips that make progress possible. This has led scientist to declare Moore's Law is dead. Evidence can be seen through the timeline of advancements in improvements in the field. The last step forward took over five years. In building these new data centers, the producers are finding that costs are high as well as energy and water needs. 

Top scientists say that future gains well come from software, algorithms and hardware architecture. There is also another concern, coding. What works for one program may not be the most efficient in another like 3D integration, photonic computing, carbon nanotube transistors and neuromorphic computing (We have no idea what that is?)...Peace

 

Odds and Ends: September 2025

 - The market retreated after President Trump's tariff day back in April. Nasdaq entered into bear territory and all the indexes sold off. That was then. Now, the S&P, Nasdaq and the Dow all hit new highs in September and this is suppose to be the market's toughest month. The odds and ends complete the story.

- JFL

What We Know

Any economy will slow just like your home budget when you add debt that needs to be paid off. Our leaders get around this obstacle by abusing the reserve status of the dollar. The under-estimated $37 trillion in debt needs to be paid off. Doubt is growing. One big indicator is every year we enter into a debt ceiling crisis. Consider what Sebastian says? If we somehow paid off one trillion every year for 37 straight years, we would still not pay off our national debt. What are the odds of that, you ask? Not very good. We cannot even recall one decade without some type of crisis. When we hear that banks are misbehaving again with the top four accumulating $180 T in derivatives, nails are being assembled for a coffin for the dollar. The market always has tops before the bottom falls out. We see a worldwide currency reset coming.

Market Indexes

As stated in the opening, the Dow hit a record, however we notice no conviction, no volume. The S&P also broke a new record and it did this on good volume. One strong indicator was that both Nasdaq and the Russel (small caps- IWM) made a new record high on strong volume. This points to the market continuing to its uptrend. When there is doubt about the market, the large caps get all the attention. When the market is rallying, the small caps take the lead. When you combine these two aspects, the market is telling us at Evolution that our call is wrong. With that said, we turn the the last piece of Dow Theory, the Transports. Not only did they not participate in the rally, but continue to decline with strong volume. We stand with our call as this year has seen market whiplash. We expect more.

Consumer Economy

It has been stated many times that since we do not make anything anymore in America that we are a consumer economy. The world knows since they dump all their crap on us. If that is so, why do we we find ourselves addressing our retail catastrophe? In addition, if our economy is so strong, why does retail close stores? Does this effect other sectors? Apparently, it does as we list the losers. We also notice this is not all firms. Some are growing, but the math has the liabilities over the assets.

7-11: They are quietly closing stores - 400 was the last count. This is a lot of jobs.                                    Walburgers: They are closing 79 stores.                                                                                                      Petco: They closed 25 locations last year and adding 25 more this year.                                                    Kroger: The grocery chain is dropping 60 stores and laying off 1000 workers.

Bankruptcy: Del Monte after 140 years in business. Spirit Airlines, again and Target.

By the way...we mentioned that layoffs have even hit oil and now, we read, Novo Nordisk, a rich drug maker is laying off 9,000. I got a headache! They make Wegovy. The layoffs are spreading. Softbank is dropping 20% of help. Quess where? AI. The robot has a headache. 

Now, the other side. Trader Joe's is expanding into 7 more states and adding 41 stores. There are others, but the math is heavily on the negative side. 

Ongoing Tariffs...it changes from month to month. We feel the pain when we buy our morning elixir. We read that Bolsonaro has been convicted of a coup. He received 27 years. What will Trump do? What well be the consequences? How much will the price of coffee rise? Another headache.

This is how we read the tea leaves. Peace.

Got Gold?

- I can see clearly now the rain is gone                                                                                                            I can see all obstacles in my way                                                                                                                  Gone are the dark clouds that had me blind                                                                                                  It's gonna be a bright, bright sun shiny day

- Johnny Nash

Gold is Golden😍

Back in July the daily gold chart had a three black crows formation. This is a dark cloud. Very negative for price. At the time we were going to do a piece on the precious metal. We stated why we did not. We wanted to wait to view the weekly and monthly chart. Gold did retreat for a few sessions, but buyers appeared to buy the dip. Resistance and support formed around $3250. By the way, we do not like to toot our horn because if we are wrong on recommendations, we feel pain. However, all our Fibonacci calls on the metals have hit their target. Yea!

That was yesterday. Today, gold broke-out higher and it hit a new record. It's buddy, silver also broke-out and sits above $42 last Friday. The two precious metals had strong volume. This is very nice. We stated last January that two factors and indicators needed to be met. One is King Dollar. It had to fall. It did. The other was the GDX. We actually mentioned it in January 2024. We stated that it needed to pierce $35. It did, but failed to hold price. So, we repeated the two. 

The GDX sat at $35 in January and it rose to challenge the high of 2024. It not only beached it, it broke-out. It has been non-stop on an up channel line. It closed last Friday at $69.75. There's more. The two gold indexes, the XAU and HUI are like Elton John singing, "Harmony."

💪XAU and HUI

The two look alike in their channel line. The XAU was $140 in January and closed at $272 on Friday. The HUI was $277 in January and closed ar $559 on Friday. WOW!

There's More

Bank of America sees more investment in gold. They feel that gold will average over $4000 in the second half of 2026.

"Everybody's Talking About Rate Cuts Now..."

We expect a quarter point rate cut later today. We feel there will be a pullback in the metals after the cut. We also told you that we expect a market pullback too. If this happens, it would be your opportunity to buy gold or load up the truck. The three mining stocks that we like all are trending higher. Newmont (NEM) could retreat to $67, but after that, we see $91. Barrick (B) could fall to $24, but after that, we see $34. Alamos (AGI) could slip to $28, but after that, we see $37. Yay! 

Other Factors

There are many, but we will conscentrate like a blond reading the orange juice container. Peter Krauth reminds us that the poor man's gold is facing a double squeeze. Silver has been in a supply shortage for years. The demand is being met with recycled silver. This is limited. The other demand on silver comes from its industrial use. Solar needs silver. Peter says the push for AI data centers is extremely high. The problem is these centers are being built in dry, open areas. The electric grids in these areas cannot cover domestic needs and this new business need. The firms are building their own solar farms to get power. Another reason for this choice is zoning permits are easier to get with solar. The demand for silver could push the poor man to millionaire status at over $100 per ounce. Double Yea!! Peace.

Market Signs

- A high tide lifts all boats, and a low tide ditches everything. 

- Market Proverb

Change of Plans

We were going to revisit the precious metals this week as we felt the monthly chart would reveal a clearer picture going forward. The three black crows at the end of July got us nervous. Gold did drop below $3300, but the stronger fundamentals along with the calendar cycle overcame the short correction. The monthly chart ended positive. The drop was a head fake. No follow through and mostly, no volume. The slightly positive channel line had a breakout and gold set a new record high. YAY!

With that said, our other call on the market is bearing fruit in the harvest season. We told you that even though the bulls have kept market breath positive, the indicators that we watch gave us the warnng. 

Another Wall St. saying, "The market elevator rises with stops along the way up, but when it goes down, it is an express." You can easily see this if you chart with volume. Even though the market hit new highs in the S&P, Dow and NASDAQ, the volume kept dropping. It is like a retail store. You are selling product, but you have less and less customers. You know this is not a good sign. Then on down days, the volume is very strong. Can you see what we see?

 Last Friday

The Dow closed with a dark cloud candelstick on the daily chart. A short term bearish sign. We looked at the weekly. It was worse. A bearish engulfing candelstick. This is very negative. 

The S&P is totaly bearish in the daily and weekly chart. It had a bearish engulfing on both charts. Keep in mind that according to Dow Theory for a true rally all three indexes must be in harmony. The transports have never rallied or set a new high. 

Conclusion

The calendar is in its worst month for the market. The first day and week were down days on big volume. We see continuing inflation in food. Oil has been in a consolidation, but a better picture comes from Conoco-Phillips. They announced the layoff of workers between 20% and 25%. Not good. It people get on the elevator going down, it moves quickly. Like the wisdom of the opening thought, everything will fall, even gold. One reason is investors will sell their profits in the precious metals to cover their margin calls. It could be a gift to load up or enter into quality miners like Barrick, Newmont and Alamos gold...Peace.

Sea of Darkness

- My whole heart keeps tellin' me - there ain't no kid at thirty-three - Play around, you lose your wife        You play too long, you lose your life. I got my pills to ease the pain - Can't find a thing to ease the rain.

   Some got to win, some got to lose - Good time Charlie's got the blue.

- Danny O'Keefe

Evil Wax: Lava Over the Mind

It might have germinated with a study at MIT in 1972. It predicted that society will collapse by 2040. The causes will be driven by excess pushing for economic growth, social unrest and the politics of failing governments. We read and see signs everywhere. Then, we read a new report by the World Economic Forum that predicts in 2030 that individuals will own nothing. You have tokens for wealth. 

We do not place too much recognition into any One World platform, but there is no pill to ease the pain of how young people act and act out. The kid that shot innocent kids and people attending mass, screams that our educational system needs an overhaul. It needs strong mental help programs. I do not need to hear a half-truth why this boy did it. I can figure it out. As a child, he did not get along with boys his age. When he hung around the girls, they thought he was weird. He went from Robert to Robin and he still was unhappy. He needed help when he was young. Our system does not provide it, but we offer weapons for protection. Television floods our eyes with violent shows. Our ears are waxed as well as our minds.

Failure To Admit Being Wrong

It is everywhere, but it began when money bought government. JP Morgan got Congress and President Wilson to sign into law, the Federal Reserve. Since it started, our standard of living has constantly fell, our puchasing power in the dollar fell and our wealth gap grew. 

Social Capitalist is being pushed because our so-called free market capitalism won't step up to the plate in these uncertain times. President Trump is right to protect Intel. Chips are needed for everything in this society. This is not new. President Carter bailed-out Chrysler in 1979 to stabilize the economy and prevent the loss of jobs. Fortunately, the late great Lee Iacocca was there. Today, we got the greedy idiots like at Boeing. Lee turned the company around and he paid off the loan. My question? What happens if the firm cannot repay the loan? Socialist governments have wealth funds along with other options to invest, innovate and save jobs. President Trump is going this route. 

One way to help is tariffs and protectionism. In a world that uses government protection and assisance, they are not practicing free market principles. They are using socialism and our roots is capitalism. We have a failure to admit the global trading system is unfair. It is one reason why we lose - every year.   

We always say if an idea is good, it does not matter where or who it came from. The idea for Social Security actually came from an aristocrat, Chancellor Bismarck. We think it is an excellent concept. He gave us the term "social welfare." However, someone will push the envelope. We get socialism. The Communists have developed their own brand of socialism. With complete control over everything, they can target any occupation. You can see the effects with EVs. They have flooded the market to control it like with batteries, earth minerals and a host of other industries. Over the years, some members of Congress realized this danger and they acted to protect our agriculture. We band-aided the problem with subsidies. We have swayed away from our free market ways. We have failed to admit the truth and to act accordingly. Again, the root is the destruction of the dollar by printing and the failure of government to look out for its citizens and only help the rich.

What Now?

The "Genius Act" is law. It is laying the foundation for a reset in curency and its use. The stablecoin will be pushed. They are seeking away to repay the $37 trillion in debt. Again, they are looking out for the rich and not facing the truth. If you did not notice that at 3:00 last Friday, the treasury announced that foreign buyers of our debt declined by another $300 billion. Then, we read a report by Mark Zandi, an economist who generally favors the establishment. He says, "That one-third of states are in a recession, another third are threading water and onlt one-third are growing." He added, "55% of industry were cutting jobs, only health care were adding help." They are carching up to what we labeled. "Stealth Recession."

Bitcoin miners understand. They are leveraging their stock share price. They are borrowing on it to buy more. This is a dangerous speculation. If people shift their investments to gold for example, these miners will impolde. On the flip side, did anyone question the timing of the Genius Act to Trump's sons? The two brothers have invested in American Bitcoin and we read that they plan to be trading it in September? They did and now, they join the billionaire club. We will look further into this "fake money" in a future piece.

Another Dust Candidate

Spirit Airlines is back in bankruptcy court. The US debt limit is coming around. What bankruptcy court handles that? The only good note is that I'm still able to hear some blues through the wax buildup. ...Peace

Odds and Ends: August 2025

- History may not repeat, but it sure rhymes.

- Mark Twain / John Colombo

No truer words

The moment our last article was published on Google about the strange connection between market downturns and fraud, we read the following story. New York exposed crimes associated with food stamps (SNAP). One government employee working with five EBT terminals worked to steal over $66 million in the supplemental nutrition assistance program. These terminals connect to stores that accept the food stamps. The thieves altered application documents and used the EBT terimals to connect to unauthorized stores and other ways to grab over $66 million from poor people who need this help. From the info, we feel more crooks will be arrested. Good work! 

New Idea

This is wild and crazy stuff. A Swiss startup, Enerdrape is using panels with their formula that collects heat. They can use the heat for winter to warm a building or store the heat to keep the structure cooler in summer. They specialize in developing subway space or older, mutifamily dwellings. It works like a heat pump. It is expensive to install, but it can lower the hourly rate of electricity from 17-cents to 03-cents. 

Not Everyone...

is onboard to green energy. President Trump is anti-wind because he does not like its look and solar. We do not know why he is against this excellent energy source, but he has directed the Department of Agriculture to stop giving farm owners permits to install wind or solar on their farms. Trump may be for oil, but we feel there is room on the energy pie for all sources. We need all the energy that we can get. Alternative sources of energy are not only cleaner, but its cost comes down with use and innovation. Germany is a cold climate nation and it still gets over 15% of its energy from solar. Consider it only received less than 2% in 2010. We need to use the sun. It helps in so many ways.

Old Ego

It didn't take long for the ego of Fed Chairman, Powell to adjust his thinking on interest rates. His Jackson Hole speech is basically asking to keep his job by going along with Trump's views. So much for the so-called independence of the Fed. By the way, it never is independent. Chairman are appointed because they share the views of the appointee - just like the Supreme Court. We hate it for what it is, a backup for the rich and banking. It destroys the value of money and our standard of living by excessive printing. We say, "End the Fed!" 

Connected

The talk on interest rates centers on inflation. We told you that it is not going away. We expect another wave to hit our shore. Well, Powell says he wants a 2% target on inflation and he has not met that goal. We predict that the target rate will be adjusted to 3%. With that said, we ask you to look at the price of McDonalds Big Mac. Not only do we worry about the price, but whether is the burger still real meat or that vegetarian, lab crap? Anyway, the price for the Big Mac Meal is a whopping (Fun pun with competition) $14.39. Yikes!  

Job Hunting

Risk management and assessment for the insurance industry will be a growing opportunity, especially with global hacking and climate dissaster that is connected to litigation. Something to consider?  

In a related aspect of employment, we offer a shoutout to newly ordained Maryknoll priest, Fr. Matthew Sim from Singapore. His unheralded work will be in Taiwan. We wish him well in the potentially dangerous assignment. He has special parents who flew halfway around the world to attend his ordination. We take comfort in realizng His wish is fulfilled, "To teach all nations."   Peace. 

Strange Pattern

- We become what we love and who we love shapes what we become.

- St. Clare of Assisi

Change in Plans

Sebastian planned to write about gold and precious metals this week, however with recent price action, he shifted gears. He saw three black crows in the daily chart. This is very negative, but gold and silver acted more like a consolidation pattern. The monthly chart will give a clearer picture. The calendar cycle says this is the best time for the precious metals until next February. It starts in India and spreads around the world. Patience is the word.

Meanwhile...

We noticed a stange, similar pattern that happens in the market. It usually appears just before the economy and market tanks. What is it, you ask? FRAUD. 

Someone will take this observation and write a book on it. Our energy is better served to expose and inform you to make our government more accountable and to promote the general welfare.

Do you recall...Columbia/HCA? Rick Scott was the CEO in 1997 when the Justice Department showed the company cheating Medicare. Almost all of Scott's governing board were convicted of fraud to steal from the government program. Scott claimed he did not know what they were doing and this guy is the CEO? Rick gets off. He becomes governor of Florida with all his pay package. He is now their state senator. Can you see why our government leaves one doubting? Anyway, the big fraud case timed with a down year for the market. By the way, in irony of ironies, Scott today is publically attacking Democrats for medicare fraud.

How about Bernie Madoff? He got caught with his ponzi scheme in 2008. The market crashed. There are many other cases like Enron, World Com, etc. Space limits the cases, but whenever there are serious fraud cases, the market crashes. 

Today

The Bulls are thriving. Records were set in the S&P and Nasdaq. The Dow also hit a new all-time high, but one aspect of a rally is how it appears in foreign currencies? It didn't. The transports are not even close. We told you this does not constitute a rally according to Dow Theory. In addition, the calendar is approaching September, the Dow's worst month. Then, we read about United Health Group (UNH). The Justice Department arrested 374 people associated with the company and another 96 licensed medical professionals for medicare fraud. The stock fell from over $600 to $240. It just bounced to $304. The news does not jive with its price. The estimated damaged caused by this firm is $14.6 billion. 

We see this as one big reason why the two social programs are in stress. Congress needs to investigate the corruption that is taking place and not cut back on this point. 

You can look to almost every nation on the map. Criminal investigations are taking place in S. Korea, Singapore, Brazil, Argentina, China and throughout Africa. Maybe this strange pattern is telling us something?   Peace.