The big picture fills the screen this week as the content creators summarized below continue to analyze Trump’s policies and their immediate and (possible) eventual consequences. David McAlvany’s interviewee, George Friedman, looks at the longer term and sees a healthy cyclical reinvention of America. Doug Noland looks at the short term and sees chaos and destruction. Morgan Lewis and the GRR hosts see the safest and best road through both short and long term. See the big picture while your friends see mainly the sound bites from the nightly news. Deep analysis available here.
Key Takeaways:
- What will the new America be?
- The train wreck is still in slow motion–for now
- Uncertainty makes planning difficult
- Gold rules the roost
The McAlvany Weekly Commentary: Why The United States Always Reinvents Itself
David interviews geopolitical analyst George Friedman this week. Author of The Storm Before the Calm, The Next 100 Years, Flashpoints, and more, George is a rare observer of world events capable of bringing clarity out of chaos. He turns his attention in this interview to America’s current turmoil, putting it in historical context. Citing a 50-year socioeconomic cycle and an 80-year institutional cycle, he points out that both cycles are converging in America and ushering in a periodic reinvention of the nation. This, he asserts, though painful, is normal and productive. It results in an improvement of conditions that benefits the populace. The interview then moves on to the Russia/Ukraine war, and brings similar light to that topic. How did an ostensible superpower get bogged down for so long in a country they should have overcome in a few weeks? The answer will amaze you for its clarity and explanatory power. Also discussed are American isolationism, the Middle East in the context of the Israel/Hamas war, Chinese military and economic strength, and the future of America.
Credit Bubble Bulletin: Burst Bubble Walking
Doug begins his weekly wrap-up with details on the continuing downturn in asset markets. His title for the summary pretty well tells the story. He then presents a large excerpt from a recent interview of Fed Chair Powell. Of that interview, Doug says, “The Fed Chair left much to contemplate. Rather than the typical ‘Balanced Powell,’ he was uncharacteristically direct. Pulling no punches, Powell sees the administration’s policies as creating extraordinary risk: ‘I mean, the Smoot-Hawley tariffs were actually not this large, and they were 95 years ago. So, there isn’t a modern experience of how to think about this.’” Doug’s analysis of the interview, the Fed, and Chair Powell are insightful and indicative of the many forces at work in the economy and financial system right now. Currents, crosscurrents, and undercurrents are in play, and knowing where the system will end up is difficult. Insight such as Doug provides is crucial as investors navigate such treacherous waters. He also provides insight from his comments made during the Tactical Short First Quarter 2025 Recap conference call.
Hard Asset Insights: The “New” That Awaits
Morgan’s first sentence sets up his analysis perfectly this week: “For months, HAI has been increasingly confident that a break away from the post-1971 global financial/monetary system is the goal of Trump administration policy.” That’s almost in league with “oh, by the way, World War III begins tomorrow” for scope, impact, and shock value. But Morgan has the receipts, and has presented them in full over the past several installments of HAI. Citing source and speaker, he has pieced together the story that the administration intends to make America great again by dismantling the system that has made it weak again. It’s logical, believable, and terrifying–to some, at least. Particularly those heavily invested in the system being taken down. In Morgan’s words, “Trump’s MAGA agenda, whether it ultimately works or not, may well be the pin that pops the great financial asset bubble of our time.” As one of his sources states, “It’s a brutal environment for folks who want to spend billions of dollars on a 30-year project… Even when you think you’re playing by the rules…the rules might change tomorrow and you’re going to get hit again.” “In short,” concludes Morgan, “the remarkable economic uncertainty is causing businesses to sit on their hands and wait for clarity, and while they wait, the economy appears to be slipping.” What should a prudent investor do as a result? Morgan has a suggestion on that.
Golden Rule Radio: Momentum in Precious Metals
There are precious metals, and then there is gold–or so it would seem from the metals’ recent action. The white metals seem to have no life of their own, rising and falling with other assets. Gold, on the other hand, is writing its own story. Up sharply this week, its recent pullbacks seem merely to be foot planting before vaulting higher. In that light, the gold/silver ratio has gone over 100:1 again, and the hosts have some valuable insights for ratio traders. Experience counts for a lot in this kind of investing–as in others–and the hosts are some of the most experienced precious metals advisors available. Premiums are part of the price paid for metals investments, and they must be factored into the buying equation. Don’t miss the hosts’ discussion of this aspect of metals investing. The hosts also discuss the refinancing of the national debt and what that entails and means. Interest rates matter, and so, of course, does the immense size of the debt.
