Trump Raid: Point of No Return

• The FBI raid on Trump’s estate
• The Latin Americanization of America (ex. Argentina)
• Byron King on the destabilization of the U.S. dollar
• A reader applauds Dave for “reading across the spectrum”… Another questions his musical tastes… And more!

The last thing I wanted to write about this week was the FBI raid on Donald Trump’s estate.

Your editor is among the tens of millions of Americans who don’t define their existence relative to Donald Trump, either for or against.

But there’s a larger group of Americans who do, either for or against — folks who, lacking any sense of meaning via their families, their homes, their communities, have found meaning by manufacturing a Manichean good-versus-evil struggle in which they feel destiny is calling them to play a role.

As a result, there’s a god-awful amount of noise connected with this event… along with economic and financial consequences that follow from this event.

They will affect you no matter what you think about Trump, good, bad or indifferent.

So… down the rabbit hole we go…

First things first: For all the “civil war” chatter you’ve probably seen online this week, it’s probably too early for that.

Mike Shelby isn’t buying it — not yet, anyway. Shelby is a former Army intelligence guy who now runs Forward Observer — an outfit catering to folks in the patriot/prepper crowd seeking to hone their “SHTF intelligence” skills.

Much hinges, he says, on whatever the feds say once they get around to issuing an official statement.

“A ‘slam dunk’ justification might assuage fears that the FBI was further weaponized against a political opponent,” Shelby writes. “Trump supporters will continue to grumble, but a credible justification — or one seen as credible by Middle America — will likely reduce most tensions.

“Alternatively, any appearance that the raid was politically motivated (i.e., for something related to political but not criminal matters) will further tarnish the FBI and Justice Department, and create substantial social backlash.”

If the feds file charges and seek prison time, “I do believe this will be a trigger for political violence, which will justify further crackdowns against the dissident right. I think this could, unfortunately, lead to a spiral of worsening violence.”

That would be the case especially if the charge turns out to be that Trump failed to return borrowed documents to the National Archives on schedule.

“If that’s true,” writes Matt Taibbi for his TK News venture, “and it’s not tied to Jan. 6 or some other far more serious offense, then the Justice Department just committed institutional suicide and moved the country many steps closer to once far-out eventualities like national revolt or martial law.”

If that sounds like the stuff of so-called third-world countries — or as Trump once said inelegantly, “s***hole countries” — you’re right. And Taibbi would know, given his many years of globe-trotting reportage for Rolling Stone.

“It was already straight out of the Papa Doc/Mobutu playbook when Joe Biden was quoted in The New York Times saying he wanted his attorney general Merrick Garland to hurry up and prosecute Trump, but using federal cops to disqualify the current poll leader of your opposition on a records technicality is pure fingernail-factory politics…

“Unless [Monday’s] events are tied, quickly, to an attempt by [Trump] to prevent Biden’s 2020 certification, or an effort to game the electoral system ahead of 2024 or some other devastatingly serious crime, this is absolutely going to play as the crudest harassment,” Taibbi continues.

“I worry particularly about the reported presence of counterintelligence agents at the raid, raising the specter — which numerous sources told me is theoretically possible — of parts of this investigation remaining secret.

“Moreover, [the Biden administration will] have guaranteed that the next Republican who wins the White House, if such a thing is allowed again, will tug at every rein of power to prevent ever having to leave and risk this kind of prosecution.

“Ask anyone who grew up in autocratic societies how that dynamic works. There has to be more than what we’re hearing, or else [Monday] will go down as an infamous crossroads, a day we passed a point of no return.”

What lies beyond that point of no return? “In the last quarter century, nine Latin American presidents have either been impeached and removed from office or resigned to avoid that outcome,” writes author Michael Lind at the Persuasion website.

“In the same period, three of the four impeachments in U.S. history have occurred (Bill Clinton, and Trump twice).

“Americans who have watched too many PBS documentaries about the rise of the Third Reich no doubt will continue to fear demagogues in the European mold.

“A more plausible worry is the Latin Americanization of U.S. politics, with the left-right distinction replaced by a dichotomy of insider oligarchy and outsider populism, and with impeachment weaponized by the party that controls Congress to expel presidents of the other party from the White House, for good reasons or bad.”

And when it comes to Latin America, what better example than Argentina?

“By 1910… Argentina was one of the foremost countries in the world. It was one of the most important grain and meat exporters,” writes Vito Tanzi in his book Argentina: An Economic Chronicle. “In 1913, its per capita income was higher than that of France, twice that of Italy and almost five times that of Japan.”

How hard the mighty have fallen: Argentina “has seen the largest relative standard of living decline in the world since 1900,” wrote JPMorgan Chase analyst Michael Cembalest in 2019. It swings wildly between left-wing dictatorship and right-wing dictatorship — punctuated by periodic currency crises.

Another crisis looms right now: The official inflation rate runs 64%, probably on its way to 90% before year-end.

Will it be as bad as December 2001? In that month, the Argentine government imposed what came to be known as the corralito — effectively freezing bank accounts and devaluing the peso 75%.

Riots and looting followed within three weeks. “Argentina is a food-producing country,” recalled Fernando Aguirre in his book Surviving the Economic Collapse, “but children were starving to death every day because their parents couldn’t afford the price of food…

“The rest of humanity still lived by the B.C. and A.D. years,” Aguirre wrote. “Argentines measure history… before and after ‘the crisis.’”

➢ More harrowing third-world tales: In Lebanon today, a guy walked into a bank and took the staff hostage — threatening to set himself on fire unless he was allowed to withdraw $200,000 of his own savings. He later surrendered after accepting an offer to receive a portion of the total. Lebanon has been in nonstop economic meltdown for nearly three years now.

Now consider the mighty U.S. dollar. Argentina couldn’t possibly happen here, no?

Then again, consider the raid on Mar-a-Lago. “Is this what you want to see from the country that administers the world’s reserve currency?” muses Paradigm Press’ natural resources expert Byron King.

“Because right now, U.S. currency is ubiquitous. It’s used in trade and commerce. Most of the world’s oil is traded in dollars, along with most of the world’s other energy fuels such as natural gas, coal and uranium. And most of the world’s agricultural products trade in dollars. Plus minerals and metals. And manufactured goods, ranging from shoes and socks to automobiles and advanced electronics. And services, of course.”

But if trust in U.S. stability starts to evaporate? “The world has long been a very forgiving place toward the manifest flaws of the U.S. and its system of governance,” Byron goes on. “But now we have something new, a different, very huge development…

“At the very least, all of this betrays the creation of a much higher-risk political-economic jurisdiction, with an accompanying new spin on the idea of trust in the U.S. government and its currency.”

No, not now. Just as it’s too early to say civil war is breaking out, it’s too early to say a global exodus from the dollar is underway. Heck, gold still can’t break above $1,800 an ounce this week.

But that only means you still have time to act before America reaches its 2001 Argentina corralito moment.

What will that look like? Well, Paradigm’s macro maven Jim Rickards has given it a lot of thought. And he believes it will probably entail the sudden imposition of a CBDC, a central bank digital currency. Or as Jim calls it, “Biden Bucks.”

Joe Biden laid the groundwork with an executive order issued on March 9 of this year. If you’re not yet familiar with it, or its implications, you can follow this link and get up to speed right away.

For the moment, however, there’s no evidence of shaken confidence in the markets.

The big news out of yesterday’s rally turned out to be that the Nasdaq has started a new bull market — if you use the yardstick of a 20% rise from the most recent low. As we write, the Nasdaq is flat on the day at 12,850.

A rather questionable yardstick that is: The Nasdaq staged seven such “bull markets” during 2000–2002… in the midst of a 78% plunge.

Anyway, the S&P 500 is up about a third of a percent — still above the important 4,200 level Paradigm trading strategist Alan Knuckman is watching. (A weekly close over that level would be more reassuring, no?) The Dow is up a little less than a half percent at 33,453.

Crude has shot up big-time to $94.51. Meanwhile, we see the national average gasoline price has fallen below $4 again. Seems that $5 was the mental barrier people just couldn’t get past, cratering demand in the same way that $4 was the breaking point in 2008.

But precious metals are moribund — gold a little below $1,800 as we just mentioned, and silver a little over $20.

The big economic number is the producer price index — which ticked down 0.5% month over month. The year-over-year increase is still steep at 9.8%, and there’s often a lag effect before wholesale inflation feeds through to the retail level.

“Thanks for letting us all in on how you obtain the background info for The 5, a reader writes in an email we must truncate to stay within our 5 Mins. today.

“I am one of those who has long appreciated your reliability, sanity, knowledge of historical background and willingness to read across the spectrum — which is the only way to get at the truth these days. There are many people out there who are terrific at what they do, but I don’t believe any of them pulls the news together the way you do.

“A few comments/suggestions:

“I admire Greenwald’s courage and forthrightness, but Taibbi really has been on a roll lately, and while he covers the same issues as Greenwald, he is broader. Did you see his article on Black militias marching with the Boogaloo Boys? He recently took his three-parter about ‘the lawyers who ate California’ out from behind the paywall, and I am certain that would interest you if you haven’t seen it already.

“On the Ukraine war, I check the Russians With Attitude Twitter, which earnestly attempts to follow the course of the war, and also translates statements that won’t be reported in our media. By Medvedev and Lavrov for instance, which you probably pick up from RT, but also by Orban or Ukrainians who in some way don’t fit the narrative.

“I check Luke Gromen’s Twitter, and also a couple whom I think of as in the space between him and Javier Blas: Tracy Chigirl and Doomberg.

“Well, it certainly is an interesting challenge to get the news these days, isn’t it? And you make an incredible contribution!”

The 5: Many thanks to you, and to the others who wrote in. It occurs to me I neglected to note the podcasts that I follow. Some other time…

“Let’s Dance,” reads the subject line of a reader email.

“Are we to imply by Dave’s last paragraph of Tuesday’s issue of The 5 that he doesn’t like David Bowie’s ’80s work?

“I know music is about personal taste but please do a poll of your office and ask them what they think about the album Let’s Dance, which was produced in 1983. I’m betting that the results are overwhelmingly favorable and Dave is… well, wrong.”

The 5: Sorry, but it’s just one among many examples of 1970s icons losing their way during the ’80s, often in pursuit of chart-topping success. Let’s Dance. “Owner of a Lonely Heart.” The self-titled Genesis album. And that was from just 1983 alone!

OK, Elvis Costello did turn out the excellent Punch the Clock, which I rank right up there with Armed Forces. The proverbial exception that proves the rule?

Best regards,

Dave Gonigam




Dave Gonigam
The 5 Min. Forecast

P.S. Here’s another blast from the past. It was 10 years ago this week when Mitt Romney put Paul Ryan on the ticket as his running mate… and The 5 generated a staggering quantity of hate mail for calling out Ryan as a phony.

It was a different time — when conservatives invested an enormous amount of hope in Ryan as a “fiscal conservative” despite all evidence to the contrary.

We saw through the flimflam from the get-go, and we can’t help patting ourselves on the back today. (Dig the chart showing the Obama and Ryan projections of the national debt in 2021 — which in reality turned out to be $28.4 trillion.)

By the time Ryan ascended to House speaker in 2015, everyone had come around to our view.

Just another example of how we try to stay ahead of the curve…

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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