Can a Market Meltdown Be Avoided?

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/can-a-market-meltdown-be-avoided/

The Trump revolution is going to have an enormous impact on everyone’s finances and sense of wealth.

Will things simply take off from here, crash, or crash first and then take off?

Paul Kiker and I discuss these possibilities and how he approaches managing money during times like these.

With all of the DOGE efforts by Trump and Elon, coupled to the most bitterly divided and dysfunctional DC political landscape of my lifetime, the chance of a government-led recession are pretty high.

Complicating the recovery plans is inflation which just came in hotter than expected and is headed the wrong way (higher) over the last 6 months.

Despite dishonest, or ignorant, attempts by democrats to pin the sour report on Trump, the fact is it’s Biden’s report card. After all, it was January’s CPI report and Trump wasn’t even sworn in until Jan 20th.

During the Biden tenure, inflation kicked everyone’s butts:

Ouch! That’s painful. But live with it we must, and we still have to try and stay ahead of the pain which means we have to try and grow our saved up wealth at a faster pace than inflation.

What if history rhymes and inflation repeats the old head fake down followed by an even more punishing few years of misery and stagflation?

Investing during stagflationary times, defined as the sad combo of high inflation and low (or negative) GDP growth, is both very different from the bubble investing we’ve been through and its tricky.

Here’s what worked in the 1970s:

Will that work next time too? For the average family, stagflation is the worst outcome because jobs are scarce, pay is stagnant, and prices keep climbing. Let’s hope that can be avoided.

Tune in to hear the podcast.

 

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But Schumer, who for Biden’s four years said there was no inflation said on Monday, all that inflation on your list happened since January 20, 2025. My purple unicorns pooped some delicious Skittles into a word pattern that said “Schumer’s right.” Are you telling me my purple unicorns are lying?

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Berkshire Hathaway famously does not pay dividends choosing instead to reinvest the cash or buy back shares if they are below their fair price because it’s more tax efficient for the investor. But they probably stand alone in doing that with integrity.

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I don’t think a meltdown is avoidable, all these years of QE and zero interest rates (the Netherlands and Germany even had negative rates, who could have ever imagined that!) just dwarfs all previous human financial history, without forgetting as well that we’re in a unprecedented half-a-century experiment having all currencies on the planet in FIAT . The important thing when reaching the bottom is to not start digging!

And that is only possible, I believe, when the masses truely realize how badly they’ve been screwed over (and over), so with what DOGE already has accomplished in just the first weeks, RFK jr. being confirmed (if he really manages to lift the veil of deceit … ) there is real hope that we might manage to burn the corrupt system down, hit the bottom of this shit-well, but to then finally start fresh, truly believing again (not just in words) in the principles and values of not only the American founding fathers, but of the French revolution as well.

Transparency is absolutely key, and that’s exactly what has been missing for so long in (global?) politics. In this sense I think blockchain might reveal its true power, making politicians obsolete (which is about time) , having direct and traceable power to the people.

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I’m wondering if Trump does a Twitter (80% reduction in personnel, returning free speech and the same capabilities as old Twitter) and quickly turns actual free enterprise loose sans crony capitalism after the deflationary DOGE activity, the related downturn will be mitigated.

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We’ll see, I am that kind of guy who needs to see to believe, but it surely are very interesting times. In Italy we had a popular movement managing to get to power in 2018,after 11 years that the techno-c-rats suspended all popular voting in the country with one technical government following the other. This movement (Movimento 5 stelle) led by a comedian (who revealed itself to be a clown) rode the wave of anger and dissatisfaction of all those years, promising change, in particular exiting the Euro. It ended with having Mr. Euro himself, Super Mario Draghi, becoming the next not-elected prime minister.

This movimento 5 stelle almost had me to vote (something I did only once, when I was 18 years old), but I remained faithful to my gut-feeling, expressing my conviction in this drawing.

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the text says “the 4th of March there is the vote! Your vote counts!!”

Again, we`ll see. Trump when running the first time pointed out (correctly) how the DOW was in a “Big Fat Ugly Bubble”, to then claim that same Big Fat Ugly Bubble as the Greatest Economy Ever.

What is happening in the States now looks different, I truly hope it is and that it might come over to the old Continent (instead of all that woke non-sense which have been poisoning the minds of the youth).

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“we’re in a unprecedented half-a-century experiment having all currencies on the planet in FIAT”

It seems I remember this very mad (or foolish) Libyan Ruler who slept in the desert in tents. He thought his nation’s oil wealth and accumulated gold reserves would allow him to change the game and create an African gold coin as the medium of exchange. Wasn’t his dead lifeless and defiled body displayed for the world to see? Just asking…

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“we came, we saw,he died” … sad true story indeed.

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https://www.rt.com/news/612780-trump-defense-stocks-crashing/

Trump sends defense stocks crashing

Shares of Lockheed Martin plunged after the US president said he may halve military spending