Sunday, 25 December 2016

Prepare yourself for the Disruptor in Chief

America will never be the same again.

Working on the Russia relationship. Infrastructure spending. Revitalizing the Rust Belt.

These all sound like classic Democratic programs. But why is a firebrand Republican president finding support in Congress for these very same things?

It’s these kind of contrarian positions that make the next presidential term — and Congress, the Supreme Court and the federal government by association — a historic period of disruption.

What Donald Trump’s picks are indicating to me is that he’s going to put some serious business minds to work, contained within the bodies of people who are not professional politicians and who have enough money so that little can encourage them to do something they don’t want to do.

It’s a cast of leaders that is turning its attention and skills on restructuring Washington. Cutting waste and inefficiencies are always talked about in Washington, but once you’re in ‘the club’ all that talk is never followed up by action.

Now there are going to be leaders of corporate America running government departments who know how to read a balance sheet. They’re also not scared to trigger massive federal layoffs and cut divisions in the government or privatize them.

But here’s the rub: the professional politicians who run the House and Senate and sit in waiting at various universities and think tanks around the Beltway are not going to let that happen without their stamp of approval.

What I’m saying is, there’s going to be major fight over who is running Washington. If the billionaires show they can run the government better than the politicians, well, D.C. has some major changes coming after the next four or eight years as well.

It’s not unlike the massive disruption the Internet has caused to brick and mortar businesses like JC Penney, Sears and others that waited too long to adapt to the new online culture.

Remember, Congress has to approve Trump’s cabinet picks. That means there will be classic politicking going on behind the scenes or there will be a major public spectacle.

If it becomes a public fight, Trump will likely have to determine how much newly minted (and limited) political capital he can afford to spend on these fights.

What’s about to unfold domestically reminds me of a quote from 19th Century philosopher Arthur Schopenhauer: “All truth passes through three stages: First it is ridiculed. Second it is violently opposed. Third it is accepted as being self-evident.”

We are witnessing a major disruption in the political machine for the first time in decades. And how it all turns out is anyone’s guess.

And, while all this is spinning, competing nations like China, Russia, Saudi Arabia and Iran will be waiting to test this new president’s resolve.

For the markets, this all spells serious trouble. No one knows what Trump is going to do, or what his new team (if given approval) has in mind.

And all the optimism that the market is running with right now means that there will be an equal and opposite reaction.

Doug Casey, a man who has been in the financial press since the 1970s, recently wrote that the best place to be during Trump’s first term is gold. He also likes industrial metals like copper, zinc and uranium. But not as much as gold.

He also warns that the bond market is in serious trouble and that “the U.S. is on the ragged edge of a civil war.”

This kind of talk may seem a bit dire, but the point is, there are plenty of market observers that aren’t as optimistic as what the Dow Jones Industrial Average would have you believe.

And that’s why, as Bob Livingston has said, it’s better to hope for the best but prepare for the worst. He wrote an entire report on just this scenario. Click here for more on how to get this important report.

Casey is also bullish on renewable energy, particularly solar. Silver paste is used in 90 percent of the most common solar panels in use today. Gold is also an up and coming metal for solar panels.

Beyond gold and silver’s industrial potential, these will be the ideal store of value in the coming months and years ahead. They will be valuable assets both as an investment as well as a secure nest egg in case things get really ugly.

— GS Early

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