Those who focus primarily on the financial/economic elements of Trump’s policies are understandably concerned. His policies conform to no known economic theory. They are not Marxist, Keynesian, Classical, Neoclassical, Chicago School, Austrian, or anything else—though they incorporate important elements of several of these schools of thought.
One important element seems ironically to come from the theory of Trump’s political enemies—namely Modern Monetary Theory, which advises printing and spending dollars ad infinitum to solve any and all monetary problems. When coupled with Trump’s strong enforcement of federal laws, by force if need be, many people see troubling signs of federal overreach and monetary bubble exacerbation.
Others note the rich abundance of evidence that Trump is attempting to re-empower America’s middle class—financially, productively, culturally, and legally. These attempts are at odds with typical federal overreach. In the end, it all depends on Trump. Will he become an authoritarian figure? And if he does, will he be like Stalin, Mao, and Pol Pot, who left destitute nations in their wake, or will he be like Augusto Pinochet, who was far from perfect, but left the most stable, productive, and safe country in Latin America when he voluntarily ceded power?
However you want to describe Trump’s policies, they could still come up short. As Patton was wont to say, even after the success of D-Day, “we could still lose this war.” Today’s axis powers (the debt, Trump’s political enemies, trade imbalances, immigration, polarizing wars, etc.) are formidable, and only a person with significant skill and wherewithal would rationally take them all on.
In light of these powerful forces in play on both sides, and the uncertainty of outcome, the analysts below advise keeping your powder dry—which in financial terms means anchoring your portfolio with precious metals and keeping some cash on hand.
Key Takeaways:
- Rare earth minerals even rarer without China
- Trump bolsters the Fed put
- When waiting beats doing
- Strong gold gets stronger
The McAlvany Weekly Commentary: Don’t Miss the Silver Streak
David and Kevin delve into the silver market’s impressive breakout, with prices surging past $34, $36, $38, and eyeing $40—a level not seen in years. They highlight the historic inversion of foreign ownership in U.S. equities surpassing U.S. bonds, a first that signals shifting global investment dynamics. As the Fed contemplates rate cuts, David notes that potential yield curve control could unshackle gold prices, removing any conceivable ceiling. Kevin draws attention to the critical minerals bottleneck, with 20 of the top 25 high-impact resources dominated by China, underscoring vulnerabilities in U.S. supply chains. The duo explores Powell’s Jackson Hole comments, debating whether his tone was dovish or hawkish, with implications for inflation, employment, and market volatility. They wrap up with insights into Nvidia’s outsized market influence, the risks of over-allocation in AI and tech, and a lighter nod to energy brownouts as they relate to data center demand. With silver now on the U.S. critical minerals list and likely high demand ahead for precious metals, David and Kevin emphasize the importance of preparation in navigating an unpredictable market landscape.
Credit Bubble Bulletin: MAGA Fed Put
Doug delivers a sobering yet incisive analysis of the week’s escalating financial and political turbulence, spotlighting France’s brewing crisis as a microcosm of broader systemic fragility. With French bond yields approaching crisis-era highs and equities plunging—Société Générale down 8.9%—Doug highlights the precarious interplay between political uncertainty, investor sentiment, and leveraged speculation in European debt markets. Italy and Greece are not far behind, as rising yields across Europe signal mounting deleveraging risks, even as the ECB’s rate cuts struggle to stabilize markets. Meanwhile, across the Atlantic, President Trump’s move to oust Federal Reserve Governor Lisa Cook has reignited concerns over the Fed’s independence, with Doug drawing parallels to Viktor Orbán’s authoritarian playbook. The so-called “MAGA Fed Put,” a blend of political strong-arming and inflationary policy, looms large as an existential threat to markets reliant on endless liquidity and speculative Bubbles. Against this backdrop, gold shines as a safe haven, surging to a record $3,447.95. Doug warns of the administration’s fixation on sustaining asset inflation at all costs, likening the system to a “house of cards” vulnerable to collapse. With central banks as enablers and political agendas eclipsing economic soundness, Doug’s message is clear: the path ahead is perilous, and the stakes couldn’t be higher.
Hard Asset Insights: Be Right and Sit Tight
Morgan begins this week’s discussion with emphasis on his titular reminder to be right and sit tight, highlighting the importance of patience and discipline in navigating volatile markets. The late-week stock market turbulence, marked by breakdowns in major indexes and high-profile MAG-7 leaders, signals a potential regime shift towards a bearish phase for equities. Meanwhile, precious metals stole the spotlight with bullish breakouts, suggesting an acceleration in their ongoing bull market. Morgan attributes this momentum to several systemic challenges: rising U.S. debt, inflation pressures, a politically constrained Federal Reserve, and the fracturing of the post-1971 dollar-based system. He also notes the recent political storm over Fed independence, which could introduce a governance risk premium, further supporting gold. Drawing on Jesse Livermore’s wisdom, Morgan underscores the psychological hurdles investors face, emphasizing the need to resist fear and hope in favor of strategic perseverance. Weekly highlights include gold’s 2.21% gain, silver’s 2.06% rise, and a 5.30% surge in the HUI gold miners index, while energy and infrastructure sectors showed mixed results. As Morgan puts it, now is the time to maintain focus, embrace the bull market in precious metals, and let the thesis play out.
Golden Rule Radio: Gold Hits $3,400 as Fed Signals Rate Cuts
This week on Golden Rule Radio, the team dives into the remarkable rise of gold, which hit $3,400 following the Fed’s Jackson Hole meeting. Miles begins by unpacking the Fed’s rate cut signals, highlighting the tension between inflation concerns—projected to exceed 3.3% by year’s end—and a labor market showing surprising cracks, with major payroll revisions erasing nearly half a million jobs in May and June. The hosts discuss how these dynamics, reminiscent of the 1970s, could lead to monetary missteps and further inflationary pressures. Meanwhile, Tori notes the proposed U.S. Sovereign Wealth Fund, a radical fiscal strategy tapping into federal land and mineral rights, raising both opportunities and concerns about governance, wealth concentration, and environmental risks. The conversation pivots to precious metals, where gold’s bull market is entering an acceleration phase, and silver, up 1.75% to $38.55, is following suit. Platinum holds steady, while palladium faces bearish trends. Mining stocks also shine, with junior miners seeing notable gains. Concluding, the team emphasizes gold’s enduring role as a hedge against monetary debasement, urging investors to prioritize tangible assets as the global economic order shifts. With volatility mounting, the message is clear: stay informed, stay hedged, and let gold do what it does best.
