President Trump is telling us what is coming… but people are mistaking his claims for insanity.
In the last week, the President has stated the following in public interviews/ press conferences:
- “Our interest rates should be the lowest in the world, maybe even negative.”
- “Instead of a 4% GDP or 3% GDP, it should be able to be 20 or 25%. I don’t know why it can’t be.”
Many commentators are seeing this and claiming the President has lost his mind. This is incorrect. The President may be engaging in his usual braggadocio, but he’s running the same playbook that he’s used his entire career in commercial real estate.
Regarding #1, the President is the self-proclaimed “King of Cheap Debt.” His entire career and personal fortune have been the result of using huge amounts of leverage at the lowest possible interest rate to develop/buy key assets.
In this capacity, the President understands that the single most important issue for the U.S. is solvency. With over $9 trillion in debt coming due in the next 12 months, the President wants rates as low as possible. And if rates were to go negative, the U.S. would in fact be PAYING investors to lend it money.
It sounds insane, but both Japan and Europe did the same thing to address debt issues.
Which brings us to #2: the President’s claim that “Instead of a 4% GDP or 3% GDP, [the U.S.] should be able to be 20 or 25%. I don’t know why it can’t be.”
If the U.S. were to run the lowest interest rates in the world, if would undoubtedly unleash inflation. In this context, we HAVE to remember that economic data like GDP growth is measured in nominal terms, meaning if prices go up 10% due to inflation, it will appear as if growth was 10%… even if ALL of the increase was due to inflation and growth was actually 0% in real (inflation-adjusted) terms.
In this capacity, the U.S. could in fact generate MUCH higher growth if inflation re-enters the financial system simply by virtue of the U.S. dollar losing purchasing power and prices rising. Sure, this growth would in fact be the result of inflation, NOT actual growth… but the President could still point to the numbers and say, “see growth is over 4%!”
This sounds ridiculous, but it’s how the President made his fortune in commercial real estate. Real estate is an inflation hedge. During the President’s lifetime, the U.S. dollar has lost 95% of its purchasing power. The President’s commercial real estate holdings have acted as an inflation hedge rising in value as the $USD falls. Throw in the President’s penchant for marketing assets at elevated prices to the wealthy and BOOM you’ve got a billionaire real estate developer.
To be clear, I’m not saying I agree with the President’s goals or his methods for achieving them. I’m simply pointing out that his Presidency is following the same framework he personally used during his career prior to entering politics.
The big question for us as investors is…
HOW DO WE MAKE MONEY FROM THIS?
The answer?
Invest in HARD ASSETS, just as the President has done his entire life.
It is not coincidence that gold is outperforming stocks since the President took office. This is PRECISELY what you would expect!
On that note, our Special Investment Report titled Survive the Inflationary Storm details FIVE secret investments you can use to potentially make extraordinary gains as gold and precious metals plays erupt higher in the coming weeks. These are HIGH OCTANE positions that are already up 75%, 140%, 150%, 180%, 280% and an incredible 574% this year alone!
Normally I’d charge $499 for this report as a standalone item, but we are making just 100 copies available to the public.
To grab one of the last remaining copies…
Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
