BALTIMORE – Yesterday, Treasury prices rose and yields had their biggest one-day fall in over two weeks.
Investors are turning their backs on risky stocks, in other words, in favor of traditionally “safe-haven” bonds.
The Trump boomlet seems to be fading.
We left off yesterday after exploring one of two major directions for the next four years.
President Trump could really “go to war” with the Deep State. And lose.
If this were to happen, investors would almost certainly get caught in the crossfire.
But don’t worry. This is extremely unlikely. The only way to bring the Deep State to heel is to cut off the EZ money funding that feeds it.
Mr. Trump has not even suggested it. It’s not going to happen, not voluntarily at least.
Today, we explore the more likely possibility: The Lion of Queens will lie down with the swamp foxes of the Potomac… and together they will feast on the poor little lambs who elected him.
Reader feedback in the Diary Mailbag (see below) is running against us at a rate of about 2-to-1.
Most dear readers want us to give “The Donald” a break. Many think we are criticizing him. One even went so far as to suggest we were a “Hillary-loving closet liberal.”
Alas, our lonely mission is to look… to laugh… to try to understand. Nothing more.
Novelists often invent characters. They put them in a situation. Then they ask: What would this character do?
“Character is fate,” said the ancients.
So today we ask: WWDD? What would Donald do?
Little by little, we come to understand Mr. Trump better. He is a scoundrel and a cad, a tough hustler from beyond the East River, shrewd and egomaniacal. But we say that as much in admiration as disgust.
And little by little, we have a clearer idea of what he may do. He is what he is. He will do what he will do.
We are not criticizing; he may be just what we need. Every empire has to come to an end. Trump might be the man for the job
Immediately after his election victory, Mr. Trump brought the most powerful swamp critters – the moneymen and the gunmen – to his Trump Tower HQ in Midtown Manhattan.
He loaded up his cabinet with Goldman and Pentagon alumni. Then he backed away from slashing the benefits promised by Obamacare, saying his new plan would provide coverage for all the sheep.
And now, Trump’s pick to lead the Department of Energy, former Texas governor Rick Perry, says that when he pledged to abolish the department while campaigning for the presidency in 2012, he didn’t know how important it really was.
As Perry put it at his confirmation hearing last week:
In fact, after being briefed on so many of the vital functions of the Department of Energy, I regret recommending its elimination.
Trump’s momma didn’t raise no fool.
Protected by big money, big guns, big oil, and big medicine, he will be free to spar with the less-important Deep Staters – academics, the media, the bureaucracy, businesses, foreigners, and the small fry.
Neither Republican nor Democrat, neither Liberal nor Conservative, this is the essence of Trumpismo – keeping the cronies off balance while remaining the hero of the little guys.
Delighting the guys in the red hats, Team Trump will take on a few token “enemies of the people” and keep the cash flowing to the most powerful insiders.
What will be the result? A boom on Wall Street? GDP growth of 4%? A catastrophic depression?
Who knows? Lucky presidents are better than smart ones. And Mr. Trump is famously lucky. He could even be both.
But tomorrow, we will look at why Trumpismo cannot really make America great again… and we introduce a radically new, simpler, and better way to understand the political economy.
BY Nick Giambruno, Editor, Crisis Investing
“It’s a big club and you ain’t in it!”
I often think of these words, spoken by the great comedian George Carlin, when I read about the World Economic Forum meeting in Davos, Switzerland.
Every year, global elites descend on Davos to discuss the big issues of the day in a Bilderberg-like conclave. This year, George Soros was there. So was Bill Gates.
The most important world leaders go. As do CEOs of the world’s largest companies, mainstream media bigwigs, and prominent academics. Central bankers attend, too.
In short, it’s a bunch of out-of-touch, self-anointed elites meeting to hand down from above their uniformly bad “solutions” to the world’s problems. Then they pat each other on the back for all the good they’re doing.
No matter the problem, their prescription is always more welfare, more warfare, more money printing, more taxes, and, of course, more centralization of power into global institutions.
Interestingly, Donald Trump has never been invited to Davos. But his many opponents surely have.
This year, former Vice President Joe Biden gave a provocative speech. He accused Russia of trying to “collapse the liberal international order.” It was basically a call to arms and only increased tensions.
Rising populism was another hot topic. The Davos crowd sees it as a huge threat.
One professional academic there claimed: “We have to pay for the social cohesion that we need to keep our societies advancing, and accept that this may be a higher tax burden on people.”
Christine Lagarde, head of the International Monetary Fund (IMF), struck a similar tone: “It probably means more redistribution than we have in place at the moment.”
Speaking of the IMF, the global elite has wanted a supranational global currency for a long time. In fact, it already has one on deck.
The IMF issues a type of international currency called the “Special Drawing Right,” or SDR. The SDR is simply a basket of other fiat currencies – the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound.
The SDR is not based on sound economics or the interests of the common man. It’s just another cockamamie invention of the economic witch doctors in academia and government.
The SDR is dangerous. It gives the government – in this case, a global government – more power.
The SDR is nothing new. The IMF has been slowly building it up since 1969. They’ve just been patiently waiting for the right moment to use it to displace the U.S. dollar as the world’s premier currency.
Another 1929- or 2008-style financial collapse would be the perfect excuse for the globalists to execute their SDR solution.
Trump has inherited a stock market bubble near its peak – fueled by the Fed’s easy-money policies. And he knows it. In recent months, he’s called the stock market a “big, fat, ugly bubble.”
There’s an excellent chance this bubble will burst on Trump’s watch. He might play along with the global elites’ SDR scheme, but I doubt it.
This is why Trump’s first 100 days in office could change everything… in sudden, unexpected ways.
The situation is so critical that New York Times best-selling author Doug Casey and I put together an urgent video explaining how it could unfold – and how you can stay out of the crossfire. Click here to watch it now.
– Nick Giambruno
How Fascism Comes to America
Fascism is totally the whim of the people in control… but they’ll prove to be ever more ruthless. And what happens now that Trump is president could change everything in sudden, unexpected ways…
Big Showdown Over Bond Market Bets
There’s a big showdown looming in the U.S. Treasury market. Traders are placing big, bearish bets on bonds. Meanwhile, big mutual fund managers are building bullish positions. Question is: Who’s right?
Trump Faces Hard Truths in Washington
On Twitter and in public, President Trump remains an uncompromising mix of bluster and bombast. Behind the scenes, he’s confronting the hard truths of governing…
It’s not quite a 2-to-1 ratio against Bill in today’s Mailbag. But he continued to rile readers with yesterday’s claim that Trump was no match for the Deep State.
Just because you can’t figure out how to fix the country doesn’t mean “The Donald” can’t do it.
– Robert B.
Apparently, I am not the only person tired of your negative outlook when it comes to President Trump. You lost my subscription renewal, not because we disagree on Trump, but because of your deep-rooted opinions. Again, we don’t have time to read your opinion. Stay on the facts.
– Michael P.
But not everyone thinks Bill should keep his opinions to himself…
I am in the wildlife safari business in Tanzania. I’m an oddball kind of libertarian fighting my corner in a Big Government type of place that has too much old-style communist detritus clogging up progress. But I love the freedom of wilderness.
I greatly enjoy your sentiments and writing. Your latest, “Trump: No Match for the Deep State,” if true, can only mean that we are at the threshold of an inevitable failure of democracy.
– Tim C.
Greetings from Dubai! Very savvy commentary and hinting on the possible end of Trump. As one who has often inserted my foot in my own mouth at the worst possible times in many a career, I can see how this will assuredly play out.
President Trump has gone into battle with the dragon. And like St. George, who was decapitated on April 23 in the year 303 for sticking to his beliefs without compromise, I fear Trump’s last words will be along the lines of Gaius Julius Caesar: “Et tu, Paul Ryan?”
– James P.
Trump’s presidency could be a boom or a bust. That’s exactly why Bill’s longtime friend and colleague Doug Casey and his team put together this 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.