- Speed of Trump: The 5 can’t keep up
- The industry with more growth potential than ’90s dot-coms…
- … and reassurances the Trump administration will stay out of the way
- Smoking gun: India’s war on cash, made in America
- Markets steady… the cashless society as a theft deterrent… off-road autonomous trucks with years of service… and more!
Much as it pains us to do so, we begin this episode of The 5 with a disclaimer: While we try to be as timely and up-the-minute as possible with the flow of the day’s events… the president-elect might blurt out one or more market-moving things during his press conference today… and the limitations of our e-letter format might not allow us to keep up.
We won’t rehash the tawdry — and utterly unsubstantiated — claims about Trump’s visit(s) to Moscow. We’ll simply pass along the words of the Russia scholar Stephen F. Cohen from last night’s John Batchelor radio show.
He offered a stark and binary proposition: “Either the elected president of the United States is controlled by the Kremlin, or highly vulnerable to blackmail by the Kremlin — in which case he probably should not be sworn in — or powerful forces in this country are trying to destroy Donald Trump before he gets to the White House.”
We also understand there’s a third possibility — that it’s all a huge prank someone started on the notorious 4chan website. That would be the best possibility of all, seeing as it would terminally discredit both the Intelligence Community and establishment media in one fell swoop. Heh.
With that, we move on…
As we suspected, Trump’s choice for attorney general seems unlikely to destroy a $6.7 billion business with a growth trajectory bigger than that of the tech industry in the late 1990s.
After several years of skepticism about “pot stocks,” we came around to the possibilities of marijuana investing during 2016. Then in November, the president-elect picked Sen. Jeff Sessions (R-Alabama) to be his attorney general. Sessions is an unreconstructed drug warrior. As recently as last summer, he waxed nostalgic about the days of Nancy Reagan and “Just say no.”
The fear was that because pot remains illegal on the federal level, Sessions would unleash militarized federal law enforcement on the states that have nullified federal law.
We suggested those fears were overblown. Sessions has limited time and energy. He has to pick his battles with the “blue states.” He’s much more likely to go to the mat over immigration than over marijuana. Immigration, after all, was one of Trump’s signature issues.
Sessions himself said as much during his confirmation hearing yesterday.
“I won’t commit to never enforcing federal law,” he said. “But absolutely it’s a problem of resources for the federal government.”
Later in the hearing, he said, “The U.S. Congress has made the possession of marijuana in every state, and distribution of it, an illegal act. So if that’s something that’s not desired any longer, Congress should pass a law to change the rule.”
Heck, President Obama said much the same thing when he justified his administration’s refusal to take pot off the government’s “Schedule I” blacklist.
Bottom line: Sessions “was given the opportunity to take an extreme prohibitionist approach and he passed on it,” says Robert Capecchi of the Marijuana Policy Project.
“There are two sides of Sessions,” adds our resident trend forecaster Gerald Celente.
“When you look at Jeff Sessions’ track record, he’s one of the few people in Congress opposed to these stiff sentences imposed upon people for dealing drugs.”
Too, Gerald says Trump’s approach to governance will be similar to his approach to business. Cabinet members won’t be Cabinet members as much as senior vice presidents.
“Sessions is going to be carrying out the orders of the president. I mean, Trump’s a guy from New York. You think his kids ever got high or Trump’s ever been around people smoking a joint? This isn’t foreign to him. Let’s grow up about this. So Trump is looking at this again.
“Let’s go back to the facts. Remember when gambling was illegal? As soon as they legalized it down in Atlantic City, in Jersey, what do you have? Trump casinos. He’s in the business. Trump’s a businessman, and so we believe the marijuana business is going to flourish and grow under a presidency where the business of America is now back to business.”
We haven’t forgotten the part about pot having more growth potential than tech during the dot-com boom.
Arcview Market Research — which tracks the weed industry as closely as anyone — is out with new figures saying legal sales of marijuana in North America totaled $6.7 billion in 2016. That’s a 30% increase over the year before.
Little wonder, when sales in Colorado, Washington and Oregon — where recreational pot is legal — jumped 62% between September 2015 and 2016. And soon California, home to one in eight Americans, is coming on board. Arcview projects 25% annual growth through 2021, making for $20.2 billion business.
“To put this in perspective,” writes Debra Borchardt at Forbes, “this industry growth is larger and faster than even the dot-com era. During that time, GDP grew at a blistering pace of 22%. Thirty percent is an astounding number, especially when you consider that the industry is in early stages.”
“It’s as big as the end of Prohibition,” Gerald Celente adds.
“Think of when Prohibition ended in the United States. 1933. What’s going on in 1933? The Great Depression. They needed money, so they decriminalized alcohol, and they took control of it, so you could, when we buy the booze, they get their share of the taxes.
“It’s absolutely no different from now with the legalization of marijuana. It’s the beginning of the end of Prohibition. So imagine if you knew the stocks to buy the companies to invest in in 1933 at the end of Prohibition and that’s where we’re at.”
But beware: “As the industry grows, there are going to be a lot of false promises about where the money is in the marijuana industry. I have the inside scoop on the industry and just how big… how far reaching… how life changing it will be.”
Tomorrow night at 7:00 p.m. EST, Gerald hosts a live online briefing called 2017 Road Map to Riches: My Top 5 Market Trends for the Year Ahead. Legal marijuana is one of those trends… but he’s onto an angle we guarantee you haven’t heard about before. It involves the chance to double your money inside of a year — long before the industry triples in size by 2021.
This event is free to watch; just sign up in advance at this link and you’re guaranteed access.
As we write, the president-elect said a thing or two about drug pricing… Big Pharma stocks took a hit… and the Dow has shed most of its gains for the day. At last check, the Big Board was up 10 points, at 19,866. The S&P 500 and the Nasdaq are in the red.
Gold has retreated a couple of bucks, to $1,184. Crude has recovered the $52 level; West Texas Intermediate jumped nearly 2.5% after the latest inventory numbers from the Energy Department.
Now to an urgent revelation in the war on cash: India’s dramatic crackdown late last year appears to have been “made in America.”
As you might recall, two months ago, India’s government banned the largest and most widely used banknotes, the 500- and 1,000-rupee notes, roughly equal to $10s and $20s in the United States. Indians were required to bring their cash to a bank, where it could be deposited in a digital account or converted to other denominations.
“Of course, the real purpose was to flush out the cash and slap tax liens on anyone who did not have a satisfactory reason for having cash in the first place,” Jim Rickards reminds us. “The entire Indian economy was thrown into chaos. Banks were closed, ATMs had to be reprogrammed, businesses shut down and money riots broke out in some places.”
“Amidst all the commotion and outrage this caused, nobody seems to have taken note of the decisive role that Washington played in this,” writes the German journalist Norbert Haring, a veteran of that nation’s respected business daily Handelsblatt.
The outfit most responsible is the U.S. Agency for International Development — an agency that traces its lineage to the post-World War II Marshall Plan and today has a presence in in Europe, Asia, Africa and Latin America.
In a little-noticed press statement back on Oct. 14, USAID touted an initiative with the Indian government called “Catalyst: Inclusive Cashless Payment Partnership.”
“Reading the statements with hindsight,” writes Haring, “it becomes obvious that Catalyst and the partnership of USAID and the Indian Ministry of Finance, from which Catalyst originated, are little more than fronts which were used to be able to prepare the assault on all Indians using cash without arousing undue suspicion.”
The venture even has a website with the spooky URL cashlesscatalyst.org…
Also in on the venture: the Gates Foundation, MasterCard, Visa and the World Economic Forum (aka, the Davos crowd). Or as one wag on Twitter said, “the usual suspects.”
We’ve said a fair amount about India’s cash ban since it went down; had we known all of this, we’d have said much more. To be continued…
“I just saw another tack that will be taken to convince business owners to join the war on cash,” a reader writes.
“A recent local news story in Seattle featured a barber who had just decided to stop taking cash for her services. Reason was that she feared for her safety (and her family’s) due to recent burglaries in the area.”
The 5: Yeah, we can see that. Easily. Longtime readers might recall our chronicle of the Dehko family, who own a grocery store in the suburbs of Detroit.
As you might know, federal law requires banks to report all cash transactions over $10,000. It is illegal to “structure” cash deposits to get around this requirement.
Unfortunately, the Dehkos were regularly making cash deposits of just under $10,000… for the basic reason that many small-business insurance policies don’t cover cash losses from a robbery or fire for more than $10,000.
In early 2013, the IRS seized the account — more than $35,000 — even though the same agency audited their accounts in 2010 and 2012 and found nothing wrong.
Yes, the feds eventually dropped the case. But between the threat of robbery, the limits of insurance and the ever-prying eyes of the IRS… we can easily see small-business owners give up in exhaustion and resign themselves to surrendering their obligatory 2% vig to Visa/MasterCard on every transaction, not just the ones where customers want the convenience of plastic…
“Way to be timely,” a reader writes on the subject of self-driving trucks. “Australian miners have employed autonomous haul trucks for several years.
“Autonomous trucks make a lot of sense because they are proven to be safer and greatly reduce maintenance costs and operating costs by getting rid of those pesky expensive human drivers! This is where I expect to see the quickest and greatest uptake in autonomous vehicles for the reasons that Gerald Celente has articulated.
“The push into autonomous cars puzzles me from a manufacturer’s standpoint. It’s messy and fraught with legal liability risks, as you’ve pointed out. Plus, it will drastically reduce the number of vehicles on the road as it changes our car use habits through ride sharing possibilities and increased taxi efficiencies, as you’ve also pointed out. It has the potential to wipe out thousands of jobs and profits in the cab and car manufacturing industries.
“I don’t think the players have thought about how to monetize this in the long run… and don’t tell me Uber has, because last time I checked, it has lost well north of a billion dollars… I love the service, but it’s a terrible business model!”
The 5: Fortunes are both made and lost every time a disruptive technology comes along. The key is to identify the potential winners — as Gerald believes he has in the autonomous-vehicle space. His online briefing tomorrow night promises to be fascinating.
Best regards,
Dave Gonigam
The 5 Min. Forecast
P.S. Just a quick recap of all five trends Gerald Celente believes will present the biggest profit opportunities of 2017…
➤ The booming trend that could “steal” all the cash in your wallet — and make you rich at the same time. Your bank loves this idea but won’t tell you about it
➤ The new, “off limits” market the bureaucratic slimeballs in Washington want to control — but that’s already minting millionaires out of regular folks nationwide
➤ An approaching financial crisis the likes of which you haven’t seen since the housing bubble burst in ’07 — and the easy, perfect way to make a mint from it
➤ The health catastrophe in your own backyard that political hacks keep sweeping under the rug — and the one thing you can do today to profit from their stupidity
➤ The biggest, least talked-about trend that could soon leave millions jobless — and make you a huge pile of cash in the months ahead.
Gerald will dig into all of them tomorrow night at 7:00 p.m. EST. It won’t cost you a thing to watch, but we do ask that you do us the favor of signing up in advance so we know how many people to expect and our servers don’t crash. Here’s the signup link.
