It’s Morning In Trumpmerica

  • Inauguration Day: The 5‘s cheeky suggestion for a Trump infrastructure project
  • Rickards on what to expect from Trump’s first 100 days: “Action”
  • Gold up 4.6% year to date: Why that’s just the beginning
  • Inauguration protesters remind us of a profitable sector during 2017
  • Imaginary numbers from China… Where’s the trust?… Trump’s (alleged) plans to slash the federal payroll 20%… and more!

Hmmm… Perhaps the inauguration spectacle today isn’t as elaborate as the new president wants.

It all began on Wednesday when Donald Trump mused to The Washington Post about how America would be great again if there were more military parades.

“Being a great president has to do with a lot of things, but one of them is being a great cheerleader for the country,” he said. “And we’re going to show the people as we build up our military, we’re going to display our military. That military may come marching down Pennsylvania Avenue. That military may be flying over New York City and Washington, D.C., for parades.”

The liberal twittersphere instantly went simian-excrement — for example, New York Times columnist Charles M. Blow…

No, of course, this isn’t North Korea. Our military worship is much more subtle and insidious — to the point that liberals on Twitter ooh and aah with everyone else when F-16s fly over NFL stadiums!

The story snowballed yesterday. If The Huffington Post is to be believed — a dubious proposition, but play along with us for a moment — Trump’s transition team wanted to include tanks and missile launchers in today’s inauguration parade. But supposedly the military shot down the idea, not only because of the North Korea vibe but because the tanks would pulverize the Pennsylvania Avenue pavement.

Now there’s a project for Trump’s trillion-dollar public works stimulus — concrete and steel reinforcement for America’s major urban thoroughfares to accommodate tanks for parades.

Or for enforcement of martial law, come to think of it. Dual purpose!

Expect a dizzying pace from the Trump administration, says Jim Rickards — who’s spent much of this week in Washington.

“While there’s no particular significance to the mythical ‘first 100 days’ of any administration,” he tells us, “it does seem Trump will try to do more in a shorter period of time than any president since FDR in 1933.

“The most seasoned observer I know in Washington summed up what’s about to happen in one word: ‘Action.’ Policies may or may not be the correct ones, but they will come thick and fast.”

Heh. Yesterday during his confirmation hearings… Trump’s pick for Treasury secretary, Steve Mnuchin, followed the tradition of Treasury secretaries going back the last two decades and gave lip service to a “strong dollar” — even though Trump said a few days ago the dollar is “too strong.”

It’s going to be an entertaining four years…

As we approach the hour of the inauguration, gold is holding the line on $1,200. That’s a 4.6% gain so far in 2017… while yesterday, the Dow slipped into the red year to date.

“The first quarter of 2016 was the best quarter for gold in over 20 years,” Jim says, “and 2017 may challenge 2016 for that title, given the political and economic uncertainty swirling around the global economy.”

Throughout gold’s pullback late last year, Jim urged readers to keep the faith: “The Trump trade,” he wrote in mid-December, “is based on a ‘rosy scenario’ of lower taxes, less regulation, higher spending, fiscal stimulus and much higher nominal growth that will allow for higher nominal interest rates without raising real rates substantially. Yet every one of those assumptions may be wrong.

“The Congress is already starting to push back against tax cuts that are not revenue neutral. Republicans have expressed reservations about spending increases that add to the already staggering national debt… In short, the stock market may be heading for a fall, and the unloved gold trade could come roaring back.”

Five weeks since Jim wrote that, “The gold rally is just getting started,” he says by way of update.

Those trends he identified in December “are still playing out and will have an even greater impact in the months ahead as the Congress and Fed push back on the Trump stimulus plans. Weaker-than-expected growth means the Fed will have to shift to a dovish posture after their March rate hike. That prospective dovish posture is a huge tail wind for gold.

“Of course, what goes for gold goes even more emphatically for gold mining stocks, which should be understood as leveraged bets on the underlying gold.”

[Ed. note: Gold figures into Jim’s “Third Prophecy” — the one he made after he called the Brexit victory and the Trump victory correctly.

While TV talking heads are obsessing over which celebrities will and won’t show up for the inaugural ball tonight, your time would be much better spent checking out this short video message from Jim. It’s right here at this link. Please note: We’re taking the video offline Sunday night at midnight, so it pays to watch now.]

As the morning wears on, the Dow is back in the green for the year — back above 19,800 as we write.

Treasury yields continue to drift up, the 10-year approaching 2.5% again. Gold continues to hug the $1,200 level.

Big earnings numbers include IBM, which beat expectations… but its year-over-year revenues have fallen for 19 straight quarters. General Electric also delivered an earnings beat, but missed on revenues.

The big economic number of the day is from China, where the government says GDP grew 6.7% last year — the slowest pace since 1990.

Whatever. A few days ago, leaders in China’s Liaoning province admitted they’ve been jiggering their GDP figure for years. And as we learned long ago courtesy of Chelsea Manning and WikiLeaks, Chinese Premier Li Keqiang thinks most of China’s economic numbers are bogus anyway.

We see protesters in Washington have smashed the plate-glass window of a Bank of America building… which reminds us how a hated sector can be a source of profits if you don’t mind holding your nose.

Of course, you don’t have to be a black-clad anarchist to hate the big banks. “Many investors despise the big U.S. banks because of the catastrophic losses during the 2007/2008 financial crisis,” our income specialist Zach Scheidt reminds us. “As you know, these banks got in over their heads with too much exposure to mortgages and other risky assets. When the dust cleared, taxpayers were left spending billions to bail these giant businesses out.”

Zach gets it. But all the same, “just because the banking industry made some huge mistakes a decade ago doesn’t mean that we should turn our noses up at potential income opportunities from these stocks today.”

Zach says bank stocks should trade higher during the Trump administration for several reasons: Interest rates are on the rise — which allows banks to charge more for loans even as they’ll continue to pay a pittance on deposits. “As interest rates move higher, bank profitability should increase.”

Meanwhile, Team Trump is talking deregulation. “The repeal of these regulations should allow banks to generate more profits from their assets. And banks should also be able to distribute more cash to investors in the form of dividends. Higher profits and dividends will be good for investors and should lead bank stocks higher.”

Last year, Zach showed his premium subscribers how to collect an instant $306 payment off a big bank. This week? $220 off the aforementioned Bank of America. If banks are a bridge too far for you, the technique works in many other sectors… and Zach has instant-income ideas every week. See the technique in action when you follow this link.

“I too was mildly surprised by the reader silence after your tribute to Chelsea Manning,” writes one of our regulars, “and I think it is related to Brexit, the Trump election, low media ratings and the surge in worldwide populism in general.

“The above list is tied to a commodity that no one is discussing — a commodity that has become far more rare and precious than gold to a civil and thriving society.

“Without it, everything breaks down and goes to hell. Slowly at first and then rapidly and cataclysmically.


“Our government and institutions, world leaders, the media, politicians, the Fed are all bleeding out this precious commodity at an alarming and dangerous rate.

“We don’t trust their call to outrage over Manning when Hillary gets off for illegal servers and hacked emails.

“We don’t trust what is reported on the media because we have seen the way they were involved with the Democrats in interfering with our sacred elections far more than the Russians ever have been.

“The Europeans are losing trust that the bureaucrats in Belgium are even sane as they tell people how curved their bananas must be and how flexible their cucumbers can be, let alone how many Syrian immigrants they must allow into their neighborhoods.

“Trust in fiat currencies, which requires a trust in the governments that issue them, is rapidly declining. Growing numbers of people all over the world are trying to get their strips of paper money converted to anything with real value.

“The rise of cryptocurrencies is only possible in the presence of severe distrust of governments and their money.

“I think societies will one day look back and say, ‘How corrupt were their leaders that they would rather own digits in the ethosphere than government-issued money?’

“I honestly don’t know if Chelsea damaged our national security with the release of 770,000 documents. I haven’t read them all. I doubt McCain has, or any of the media who are reporting on it.

“If she did put others’ lives at risk, then she should be hanging from a rope, but only if that applies to our leaders who are guilty of treason as well.

“That’s the problem. Once you lose trust, you can’t summon it back when you need it most.

“Who will believe our leaders and the media when we really do face a national threat?”

“Yesterday’s end statement of The 5 that said that this was likely not an end but a beginning concerning Trump is sure to shake up the liberal elite right down to their toes, and they have no clue how to properly handle it. So far, all they have done is act more than a little crazy.

“I read an article yesterday that Trump is pushing his staff to pursue cutting federal government staffing and overhead costs. The figure talked about was 10% spending cuts, which would amount to over a hundred billion dollars a year and a cut in the federal workforce of 20%. If Trump even attempts this and is even partially successful, this, in my opinion, is going to change the entire direction of the country

“And I have one final thought: Suppose that this is so successful that professional politicians become as obsolete as the VCR is today and voters start electing real, down-to-earth people to lead them. Now that’s something that every liberal Democrat will have nightmares about.”

The 5: While we wouldn’t call that story “fake news”… we presume someone on Team Trump fed it to the Washington Examiner knowing conservatives would forward it and retweet it and write The 5 about it for the next 12 hours.

Every time we see something like that, we think about Lucy pulling the football away from Charlie Brown. The dead giveaway in this story was the part about privatizing the Corporation for Public Broadcasting and abolishing the National Endowment for the Arts.

C’mon, Republicans have been talking about these steps going back to the Reagan years; they’ve never followed through, and they never will. If they did, what would they do to rile up “the base” in their fundraising letters?

Have a good weekend,

Dave Gonigam
The 5 Min. Forecast

P.S. Jim Rickards isn’t resting on his laurels. He’s already moved on from his out-of-the-box prediction of a Trump victory.

His next big call is something not even remotely on the mainstream’s radar. See his Third Prophecynow — before it disappears from the web Sunday night at midnight.

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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