BALTIMORE – This week, Team Trump made its triumphant march into Washington.
Yesterday, the president-elect paid his respects at the Tomb of the Unknown Soldier, admired his new hotel in Washington, and quipped that his cabinet had the highest IQs of any on record.
But the sweetest moment… the delicious, savory victory… will come today, when, to the great relief and applause of millions of adoring fans, “The Donald” becomes the 45th president of the United States of America.
When we were in the third grade, our teacher told us that “anyone can grow up to become president.” We looked around the room and had our doubts.
Now we have proof.
Trump’s long march began at least 20 years ago when he first toyed publicly with the idea of running for president.
Over the years, unbeknownst to anyone, perhaps even to himself, he made his connections, mapped out his campaign, and assembled his troops.
At first, when he appeared as a contender, commentators ridiculed him. He had “no experience,” they said. He was “temperamentally unsuited” to high office. He was this. He was that. But what he wasn’t was discouraged.
As unlikely as it seemed, the upstart politician from Queens crossed the Hudson and brought novel new technology and shocking new tactics to the presidential contest – including disarming tweets and surprise attacks.
Instead of sticking to conventional movements and rigid positions, Trump rounded on his enemies and outflanked them time and again.
Trump seemed to outrage all the major constituent parts of the electorate at once, but he was hard to stop. He knocked out “Little Marco” Rubio. He decked John Kasich. And then he hammered, one after another, Carly Fiorina, Rand Paul, Mike Huckabee, Ted Cruz, Jim Gilmore, George Pataki, Rick Perry, Bobby Jindal, Lindsey Graham, Chris Christie, and Ben Carson.
Finally, this new Pompey of reality TV, this Bonaparte of the hospitality industry, faced two of America’s greatest imperial families.
The Bushes and the Clintons are staunch defenders of the Deep State, wise to the ways of the media and politics, and they had the support of the rich and powerful patrician classes of Wall Street, Northern Virginia, Georgetown, Montgomery County, Maryland, and Silicon Valley.
But despite all their experience and money, Trump swept them from the field.
And then the road to Rome was wide open, with the remaining defenders either preparing a bitter rearguard resistance movement… or joining the invading legions. Within minutes of the election victory, for example, the Wall Street-military-crony establishment was on board with Trump.
Goldman Sachs’ revenues in the fourth quarter of 2016 rose 78% over the same period a year earlier. Many Goldman captains found their skills in demand with the Trump forces and are now in the vanguard of the army investing the capital.
So, let the triumph begin!
P.S. Caesar’s triumph included the slaughter of 400 lions and dozens of gladiators, a naval battle in a flooded public arena, and even a pitched battle between two groups of prisoners of war – 2,000 men per side with 200 horses and 20 elephants fighting to the death.
In the hubbub, a riot broke out. It was brought under control, say the chronicles, when Caesar had two of the rioters sacrificed on the Field of Mars.
Hard to beat that.
By E.B. Tucker, Editor, The Casey Report
Donald Trump’s election signals a critical change for the U.S. economy and its markets.
You see, for 15 years, the Federal Reserve’s radical money experiment fixed interest rates at lower and lower levels until they hit 0%… where they stayed.
The price of money is not zero. Keeping it there distorts prices, manipulates investments, and alters the natural course of our economy.
Companies used the cheapest borrowing rates in human history to buy back their own stock, overpay for acquisitions, and reward mediocre management teams. Easy money, plentiful credit, and instant gratification have hollowed out the U.S. economy. It made otherwise losing investments acceptable. It made spending today more rewarding than investing for tomorrow.
But all of this is about to change.
As I’ll show you today, the next four years are presenting us with brand-new investment opportunities.
America is a hollowed-out shell of what it was last century.
Take the homeownership rate, for example. This rate measures the percentage of occupied homes that are owned by the person who lives in them. This year, it dipped to its lowest level in 45 years.
The Fed made last decade’s housing boom possible. Easy access to abundant credit meant anyone and everyone could buy a home. In the real world, some people shouldn’t buy a home. Some people are transient or irresponsible.
But in the Fed’s radical money experiment, banks rush to lend money. When they run out of good borrowers, they lower the standards. In the end, the boom goes bust. What’s left is a generation of renters.
Keep in mind that the homeownership rate touched new lows while creditworthy borrowers had access to the lowest mortgage rates in human history.
Low interest rates make money more accessible. Lower interest means lower payments on borrowed money. For most people, it means being able to borrow more.
Borrowing more money can stave off hard times. Lower and lower interest rates make that possible. Over the last 15 years, rates sank lower and lower until they hit 0%.
Zero percent is not a natural interest rate. Most people don’t want to lend their hard-earned money for 0%. Companies definitely want to borrow it. Corporate debt levels barely even felt the last financial crisis.
If interest rates rise even the slightest bit, many companies will struggle to pay back bloated piles of debt.
Companies used to borrow money to grow. Building a factory, hiring workers, or developing a new product were all good reasons to borrow.
That’s not the case anymore. Over the last 15 years of record-low interest rates, companies found new ways to make money. They started using borrowed money to buy back their own stock.
When a person borrows to buy stock, it’s called “buying on margin.” Everyone knows it’s risky. Brokers warn against it. If the price of the stock falls too quickly, you’ll have to sell everything to cover the loss on the borrowed stock.
Things aren’t much different for companies. When times are good, they use profits to buy the stock back. When times get tough, they have to sell stock to raise badly needed money. That usually happens at just the wrong time.
Like him or not, Donald Trump is one of the best dealmakers in history. He’s written books on the subject. He built a massive empire using the art of the deal.
He realizes a hollowed-out America, buried in debt, can’t support its own weight forever. He’s said it publicly.
Trump also knows American tax rates are far too high to incentivize growth. Lower taxes encourage people to invest. Higher taxes encourage them to hide money.
We’re not fans of any tax. In fact, our stance on taxes is that they’re immoral. We also don’t get hung up in ideological battles. We want to make money.
Donald Trump said he’d convince these companies, and many others, to bring their cash hoards home. You can bet there will be strings attached. Companies will likely have to put that money to work building, creating, and investing in their futures here at home… where the money came from in the first place.
If that happens, certain infrastructure companies stand to see major increases in revenue.
– E.B. Tucker
Editor’s Note: For more than a decade, companies had little incentive to invest in their core businesses. They borrowed cheap money and used it to pay dividends and buy back their own stock. But as E.B. said, those days are over. And there’s a lot of catching up to do.
To profit from this huge trend, E.B. and his team just published a brand-new report, “The Trump Years: Four Infrastructure Stocks for 2017 and Beyond.” Months of pre-election research went into this report to determine the top companies that are best positioned to cash in on Trump’s massive spending.
You can learn how to access this report – and two other critical ones that could set you up to make a fortune during the Trump years – by watching this FREE video presentation.
Get Ready for Rate Hikes
Saying the Fed is close to meeting its dual goals of full employment and price stability, Janet Yellen commented on the number and timing of interest rate hikes.
How Deutsche Bank Made a $462 Million Loss Disappear
In the wake of Lehman’s collapse, Deutsche Bank was set to book a massive $462 million loss… Here’s the story of how some financial sleight of hand made it vanish.
What Trump Means for Your Personal Finances
Gold guru Doug Casey explains what President Donald Trump could mean for your personal finances, specifically bonds, real estate, stocks, and commodities like gold.
Only two responses to yesterday’s Diary essay – “The Morning After ‘Morning in America’”…
Maybe Trump can’t do anything, but most of that problem stems from your buddy Greenspan and his fellow feds that have stolen the country blind through counterfeiting and other inflationary shenanigans. Maybe Trump will be dexterous enough to turn out the lights and shut it down. At least the parasites would either become producers of desired products and services or take a dirt nap. The producers would be able to keep their wealth.
– Bobby H.
Bill Bonner is a rare commodity; people like him are born in centuries. I [hope] Trump hires him. Or more people in power listen to Bill. Hopefully, make America and this world a better place, for us, our children, and grandchildren. Warmest and most sincere best wishes for Bill, his family, and all his colleagues.
– Habib Q.
Were you and your fellow Diary readers too busy making inauguration plans to write in yesterday? Do you plan on watching it today?
Write to us at [email protected] and tell us your Inauguration Day plans.
Trump takes office today. His presidency could be a boom or a bust. That’s exactly why Bill’s longtime friend and colleague Doug Casey put together a must-watch video. It shows what you need to do to position your finances for either scenario. But you must act now. Click here to watch this tell-all presentation.