BALTIMORE – It has gotten worse…

Now, reader feedback in the Diary Mailbag (see below) is running 3-to-1 against us.

Which is puzzling.   

We’re not really against Mr. Trump. We don’t dislike him (we’ve never met). We wish him well. We have no reason to think he will be worse than Ms. Clinton.

Still, readers aren’t satisfied. They want devotion, not observation.

No Negativity

One reader:

Now, four days after his inauguration, you declare the president’s “policies” DOA. Your opinions are not based in fact. You have nothing but your own inflamed ego to back up your crazy predictions. I cannot stomach such ignorance anymore. Post this on your daily, Bill, and see how many of your subscribers agree with me. If you have any left, that is.

[Editor’s Note: You can have your say by emailing us at [email protected].]

Usually, you know what a president will do – because he follows a party line.

This one won’t. So, we have to ask: Who is this guy? What will he do? What will it mean?

Alas, never before has it been so important to draw the measure of a president. Because never before has politics played such an important role in markets and economies.

But okay… Our nerve cracks. Our backbone bends. We whimper in contrition. Today, we put on a red cap and look at the world through the eyes of its wearer. 

We see that Donald J. Trump is a winner. He is our hero, our champion. He fights for us. If he wins, we win. If he makes America great, he makes us great, too.

Positive Spin

Let’s begin with facts. What do we know so far?

Well, we know the president is a guy who gets things done. At least some things. He has a talent for getting himself on TV, putting his name on hotels, and getting himself elected president.

These things could be described as “vanity.” But we have the red cap on, so we will say simply that he is successful at self-promotion.

But now that Trump is president, some miracle has happened. The person who was so good at promoting himself and his brand will now be promoting us. Now he’s looking out for “the people.”

“You will never be ignored again,” he said at his inauguration last week.

Dear readers, you don’t know how happy and relieved that makes us feel.

Of course, being ignored was what we were hoping for. But we’ll put a positive spin on it, just for today – as in, POTUS has our backs.  

How do we know?

He said so. Fact. 

Personal Sacrifice

What else do we know?

Well, we know who he wants to put in key positions. Some of them seem pretty good.

For example, billionaire and “schools-of-choice” advocate Betsy DeVos in Education could be an improvement. But let’s just stick to economics.

For the key financial posts, the president chose Goldman Sachs people. Steve Mnuchin, his choice for Treasury secretary, is as Goldman as you can get; his father made his career there before him.

Is that a bad thing?

Of course not!

This is a guy who understands how yield and price move inversely in the bond market… how to turn a subprime mortgage crisis into opportunity… and how to talk to the big banks.

And since Mnuchin is now on the public payroll – at great personal sacrifice (he gave up millions in compensation as a movie financier to work for the federal government on a salary of just $237,000 a year; how will he make ends meet?) – he’s on our side.

He will work tirelessly to dismantle the fake-money system that made him and his cronies so rich.

Neither he nor “The Donald” have mentioned this in public. They are probably counting on a surprise to get the drop on the big banks… but now we can expect them to re-establish an honest money system… stop meddling with interest rates… stop supporting stock and bond prices… and let the chips fall where they may.

Of course, Trump, Mnuchin, Ross, and their cronies will be poorer as a result. Cut the U.S. stock and bond markets in half and you erase about $33 trillion in “fictitious” wealth.

But that’s what public servants are supposed to do: put the public’s interests ahead of their own.  Thank God we finally have a team that will do it.

Boom Time

What are we forgetting?

Oh, yes… the 4% GDP growth… the tax cuts… and the big infrastructure-spending boom.

Let’s see… How does that work again?

You cut taxes… but hold on. Mnuchin says he’s just eliminating deductions while reducing rates so that the rich won’t really save any money.   

He’s still promising a tax cut for the middle class, and for business, of course… and will use “dynamic scoring” to prove that the federal debt won’t rise.

Then, that extra money in the hands of the people will cause a boom. George Bush “the Elder” called it “voodoo economics.”  But heck, he didn’t have a red cap on.

It’s pretty simple, really. Fiscal stimulus. Tax cuts. Growth. It’s funny previous administrations didn’t think of that… Guess they didn’t want 4% growth.

Anything else?

Well, Mr. Trump just tore up the Trans-Pacific Partnership (TPP) trade deal.

Bad?

Not necessarily. If we were running things, we’d tear up all trade deals. Instead, we’d say simply: It’s none of the government’s business who sells what to whom.

Then people could get on with their lives, buying the best products at the best prices regardless of where they were made or by whom.

So, whoopee! Another good move by Mr. Trump’s team.

Putting America First

But what’s this? Did the president threaten to impose a “border tax” on imports?

Won’t that lead to higher prices – aka inflation?

And won’t it give the feds more power to decide which crony is taxed and which is not, which company may be important and which may not?

And won’t this lead to a slowdown in world trade, a reduction in economic growth, an increase in bureaucracy, and a poorer world?

Maybe.

But Mr. Trump is a winner; he must have something up his sleeve he’s not telling us about.

Restricting trade has never worked in the entire history of the world. But this time, it’s different.

Trump is going to triumph where even former Argentine leaders Cristina Kirchner and Juan Perón failed. You gotta love the guy.

Probably most important, Donald Trump has vowed to put an end to the altruism of the Clinton, Bush, and Obama administrations. Now it’s “America first.”

Why our past presidents put other nations ahead of the U.S. has never been explained. But if we’re wearing the red hat, we can’t ask too many questions.

Regards,

Signature

Bill

 

Market Insight


BY CHRIS LOWE, EDITOR AT LARGE


The Trump rally is running out of steam…

The Russell 1000 Index tracks the biggest 1,000 stocks in the U.S. by market valuation.

If you break up these 1,000 stocks into 10 groups of 100 stocks each… and look at their performance from Election Day through the end of 2016 versus their performance so far in 2017… the pattern is clear.

The group that performed best from Election Day to the end of the year – the Trump rally darlings – have performed the worst in 2017.

And the group that performed the worst from Election Day through the end of 2016 – the Trump rally rejects – are up the most in 2017.

Chris Lowe

Editor’s Note: Stocks will not be the only thing affected by the new president. Trump’s first 100 days in office could change everything. To find out how the whole thing could unfold – and how you can stay out of the crossfire – click here to watch this urgent video.


Featured Reads

The 50 Infrastructure Projects Trump Has on His List
President Donald Trump’s administration has compiled a list of 50 infrastructure projects totaling $137.5 billion in investment. Half the projects will have private funding…

What the Ancient Greeks Can Teach You About Investing
Great civilizations like the one the ancient Greeks built rise and fall. So do markets. If you really want to be a successful investor, you need to follow the six stages of the business cycle.

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.


Mailbag

Bill has his detractors. But he has his supporters, too. Here are some of your responses to yesterday’s Diary, “Trump’s Momma Didn’t Raise No Fool.”

I have been reading your posts for months now and I finally have to unsubscribe. I lived through Carter, Reagan, and now Obama – the worst of the worst. You said nothing while Obama ignored the rule of law and dragged our economy into the mud.

Oh, that’s right. It’s Bush’s fault.

– David P.

So, who did you want as president? Clinton, Bush, etc.? You could point out the same things without trashing Trump. Give the man some room and stop acting like the media. Any changes for the better will be appreciated.

– Clarence C.

You just love to dampen our love of a good fight. The champion (the Deep State) has held the title for years. The challenger (Donald Trump), who has captured our hearts, is a wild-swinging amateur with nothing more than a big punch. The odds are at least 500-to-1 in the champion’s favor.

Even so, didn’t Sonny Banks knock down Muhammad Ali before he was annihilated?

– Ken D.

The day of the election, I saw an interview with an alt-right leader. I did not take much note as it began. But as it progressed, it hit me like a bomb. This young man was describing in detail the underlying plan for the new world order.

The “make nice” with Russia is one leg of a three-legged Nazi-like right. U.S., Russia, and the future newly elected alt-right governments of Europe would make a second try to be the real controlling influence of the world.

The alt-right leader talked a lot about Bannon, Donald’s chief strategist. His primary role will be to advance Europe’s right-wing leaders. How’s that for a twist?

– Charles F.

I am quite confident that Bill would be delighted to see Trump win out over the Deep State, just like I would be delighted to win the lottery. But when he really considers the options and possibilities, it doesn’t seem likely (although perhaps slightly more so than me winning the Powerball).

I once had a coworker who, like Bill, often made negative predictions. When we accused him of being a pessimist, he would reply, “I’m not a pessimist. I’m a historian.” I would likewise say that Bill is a historian, with a broad knowledge of human nature and human history. And this knowledge informs and supports his opinions.

I find his opinions well thought out and worth considering. In no way do I feel threatened when his opinions and mine don’t coincide. If everyone agreed with me, the world would be a terribly boring place.

– Gordon F.

I don’t know who Bill’s readers are that are for Trump. But it makes me wonder about the group I’ve joined! To be pro-America/pro-freedom should not mean having to align oneself with such a despicable person.

If this is a leader of a democratic society, perhaps this is why the beautiful, wonderful, idealistic story is about to end.

– Melanie V.

If I would like only to hear what I already know or agree with, I could stand in front of the mirror all day long and mumble.

A rational grown-up person – which it seems there are so little of – should be able to listen, (enjoy?), and be interested in things he doesn’t know or necessarily agree with.

– Chanan S.

It seems to me that readers are being critical of your assessments because they somehow believe that the problem is not systemic.

Perhaps they suffer from the classic delusion of “If my guy was in office, all would be well…” But neither the problem, nor the solution, rests in the man. It is the transfer of profits from production that powers the machine. Cut it off, things change. Leave it in place, things stay the same, trending increasingly toward centralized control, with power aggregating into the hands of the few.

– Shane C.

I deeply appreciate your backbone to call a spade a spade. It is baffling that Republicans feel that they need to defend the emperor’s new (amoral) clothes.

President Trump deserves the respect of the office, but the man himself is a cad with an obsessive compulsion to pronounce alternative facts mostly connected to his own reality of self-aggrandizement.

Even if we disagree on policies, the discussion is useless if one party insists on “alternative facts” – i.e., falsehoods. Your ability to hold disparate opinions on the president is admirable.

– Christine C.


In Case You Missed It…

Bill’s longtime friend and colleague Doug Casey just released a forecast for President Trump’s first 100 days in office.

What happens next could change everything in sudden, unexpected ways… and could be the fortune-building opportunity of a lifetime. But hurry – this offer ends at midnight. Click here to watch it now.