Trump’s Economic and Monetary Gambits Will Either Succeed or Wildly Fail

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/trumps-economic-and-monetary-gambits-will-either-succeed-or-wildly-fail/

Vince Lanci is someone I could speak with for days about a vast array of topics, and come away both better informed and wanting more.

In this episode, we discussed gold and silver markets, what Trump’s deeper economic aims and monetary plans really are, and our shared concerns about the raging stock market bubble.

Hey, this time has to be different, right? Yes, it does, otherwise it’s not different and stocks are going to correct/crash massively from here.

Turning to metals, Lance’s views are that Silver is poised for significant price increases due to industrial demand (e.g., solar panels) and supply constraints. You know, good old fundamentals. The big dog these days is China and its control over the silver supply chain, from mining to refining, giving it strategic and tactical advantages, potentially pushing silver prices to $42 within six months and $46–$52 within 24 months.

Further, China is promoting domestic gold ownership, drawing parallels to Reagan’s stock market deregulation in the 1980s. This includes encouraging retail investment and institutional buying, with Asian ETF demand remaining robust. Notably, China has instructed its major insurance companies to put at least 1% of their assets into gold, which is a major development.

Gold’s advance to $3,400 per ounce suggests to Vince that other commodities are deeply undervalued and due for a catch-up phase, but not before the stock bubble bursts and we sort out that mess.

Make no mistake, Trump and Bessent are making very aggressive moves to reshape the economic and monetary landscape. Will their efforts work as planned or will they crash and burn spectacularly?

With moves to almost whimsically set tariffs, and then strong-arm trading partners to recycle their surpluses into domestic US manufacturing, along with nationalizing US corporations (like the 10% stake in Intel) the future is anything but clear. How will these moves work out? What unanticipated developments will emerge? What will they think of and try next?

While all of that is churning along, AI is going to shake everything up mainly by displacing white-collar jobs, potentially increasing unemployment to 6–8% over five years. Will this be the reason for implementing Universal Basic Income (UBI)? If so, where will that money come from? Will it be funded by taxing AI companies, raising taxes on the few remaining employed workers, printing money…or will it come from the new corporatist model of taking stakes in the companies?

As I said, these are big changes. Are you prepared? Is your portfolio balanced for risk, and will it (can it) be nimble when the bubble finally bursts? If you have any questions or concerns, please fill out this simple form to schedule an appointment with Paul Kiker’s firm to discuss your specifics and develop and strategic plan to meet your needs. The best time to do this is before all heck breaks loose.

FINANCIAL DISCLAIMER. PEAK PROSPERITY, LLC, AND PEAK FINANCIAL INVESTING ARE NOT ENGAGED IN RENDERING LEGAL, TAX, OR FINANCIAL ADVICE OR SERVICES VIA THIS WEBSITE. NEITHER PEAK PROSPERITY, LLC NOR PEAK FINANCIAL INVESTING ARE FINANCIAL PLANNERS, BROKERS, OR TAX ADVISORS. Their websites are intended only to assist you in your financial education. Your personal financial situation is unique, and any information and advice obtained through this website may not be appropriate for your situation. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances.

 

 

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Does Paul take non US citizen (EU) requests?

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While I like this theory as well, I am not entirely convinced there will not be continued price suppression. Demand is climbing, exponentially. The demands are largely coming from oligarch controlled industries: the war machine, data centres, AI, solar panels and so on. Does it make sense to anyone here that the people exerting the most pressures on demand would also seek to exert the most pressure on price for their own vested buying interests. As well, JP Morgan sits on a huge pile of physical - how much exactly is up in the air. While they would benefit from price increases, what is their real motivation for holding such large physical quantities, given they are in bed with the oligarchs?

Somehow I just cannot see the price being allowed to rise to what it’s true value should be, based on those good old fundamentals. Thoughts from the tribe?!?

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Great interview.

I’m curious why he sees silver up to only $42 from here, given the breakout from the huge cup and handle and various fundamentals. Michael Oliver is forecasting $60-$70 range by end of year.

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Silver on USGS critical mineral list: stockpiling by US Government in the works? | Silver Bullion

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I suspect that as prices rise, major consumers will devise answers relative to the impact on their paycheck. There is some risk it could run away in a disorderly fashion, but I’d rather think of it as a percentage chance than a given.

In the end, I think the largest group of people hurt by the changes will be those who think no strategy to get ahead is required.

While there will be a lot of such people in western societies, I also imagine those who will feel it worse will be in countries where people live largely hand to mouth.

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Oh Snap - Great guest.

Vince is a macro-analyst and he see’s current support at $38, and from what I recall, he eyeballed a silver chart and looked at the lower Bolinger band, and stated at 40, silver has room to go up 2$ before resistance (delta from 38->40 and throw $2 delta on the other side of $40). He is definitely talking short term. Vince doesn’t like to throw out numbers, but with silver on Critical Minerals proposal list, this morning he mentioned $144 silver in a few years is not stratospheric and out of the question. Vince mentioned when Lithium was put on Critical Minerals list, price went from 10k->70k ton.

Be aware that Michael Oliver’s thesis calls for a ‘grind down’ of the equity market and not a ‘melt up’ of equity market followed by a historical event. If the equity market grinds down, I am thrilled at $68 silver. If silver is $68, gold is $4000+, S&P is 7900+ and Russell 2000 is 3200+, hopefully I have been smart enough to have already rotated my precious metals positions and derivatives into long Treasuries so I can catch silver at $22-$30 on the other side.

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Don’t worry, 31 Atlas will solve everything!

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Has anyone else heard the china puts the concentrate on big processing ships using whatever chemicals they need to extract metal and then is able to dump the waste at sea and have nice product when ship returns to china
Nice effectient effective

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My only comment is that we’ve all been having pretty much this exact same discussion about silver for 15 years. This time is always different. Then it isn’t. As you say, JPM is reportedly sitting on a big stash of physical and if that’s true, there is no way to predict it. If the financial system implodes then yeah I can see some movement then but before that happens, who knows.

And regarding gold, I am convinced that the gains we have seen have been on purpose, controlled by the banks. They need to allow it to rise with inflation, otherwise the miners will go broke and new supply will drop.

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CAN the Saudi’s pump more oil, if needed? I thought not too long ago they hinted that they were already producing at max (and declining) capacity?
I wonder if it’ll be the same story with natural gas as with oil, however it turns out.
I’ll keep some dry powder around then, in any case.

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Since the Trump team first floated the idea of the government taking ownership interest in select (that is, strategic and profitable) businesses I’ve been thinking that the US is starting to take a page out of the future playbook.

I mean: Russian economic historian Sergey Glazyev has been saying for about 2 decades, now, that the western free market capitalism mechanism for financing productivity and a nation’s common wealth is coming to an end. It was, he’s said, the more efficient method at the advent of the industrial revolution, but it is not suited to the digital era.

In the emerging digital era, where information is much more immediate, traditional capitalism is too slow, hence highly inefficient compared to the demands for streamlined application and quick response that the computer age both enables and demands.

The new model, he maintains, is being prototyped in large countries like Russia, China, and India. Each of those countries has applied the new model in their own way, responsive to their material needs and their cultural stories and expectations. What they have in common, however, is the understanding of the State as the coordinator of shared aspirations, goals, and of capital allocation to achieve those goals that fulfill those shared aspirations.

It does not mean the end of entrepreneurialism, he asserts, but uses State Bank policies and resources to shape the paths of least resistance, and the paths of incentivized application of entrepreneurial ambitions in order to more efficiently and successfully meet a nation’s shared commonwealth goals.

It is a more orderly path of progress than can be provided by the haphazard pursuits of declining Western capital allocation, which is why (he maintains) it will be the dominant model for some long while going forward.

A key aspect of this model is government ownership - in whole or in part - of core and critical industries. Thus we see government industries doing basic energy and military research, development, and production in both Russia and China. (I don’t know about India.) By assuring those enterprises are self-sustaining by making a profit, but are not primarily - or solely - profit driven, greater efficiency in capital allocation is achieved, and the needs and goals of the national interest are served.

Over the last 3 years we have seen how the Russian government’s direct interest in both Russian gas industries and its military industry has allowed Russia to not only survive the Western sanctions regime, but thrive despite it; and has allowed the country to ramp up its military equipment and materiel production to meet and exceed demand, while the West has fallen steadily behind minimum battlefield needs. We’ve also seen Russia’s ability to adapt and innovate in real time, in war conditions, and to field new weapons and warfare capabilities to meet and overwhelm changing conditions. China, we know, has more basic research, development, and production capacity, and a more fully developed relationship between State and enterprise.

And both countries, despite their recent heavy investments in military defense and offense, have been able to nurture the welfare of their citizens. Meanwhile, in the West, despite ever larger military budgets, outcomes are steadily poorer - both in terms of military research and replacement production for materiel destroyed in Ukraine’s conflict, and in terms of the wellbeing of European and American economies and the downstream living standards of their populations.

The way I think of the Trump Administration’s move to own a part of Intel is as a halting, somewhat chaotic step toward the same kind of State direct interest in critical industries. It presages western States transitioning toward State-directed resource allocation.

The problem we have is that we haven’t got either an overall intellectual framework or a shared national vision for what the Trump team instinctively feels it must to do, so we won’t do this particularly well. Their decision to move in this direction is not based in a positive vision for a better future; it is driven by fear of losing control of a national and international narrative that is already dying of natural causes.

Show me the incentive and I can show you the outcome. Inputting fear as a motivator produces violence and efforts to impose strong control measures as outcomes.

Add in the constant inclination of Western political leaders, of our oligarchs, and of Trump himself to put their own pecuniary hunger first, and to punish what they don’t like rather than to incentivize and reward what they do, and it’s most likely that we’re not going to benefit the commonweal as do Russia and China, and increasingly India. At least, not in the first decades of this growing direction. And that, too, will cause us to falter, fall behind, and likely collapse as economies and States.

Some western critics of the West call us “the Empire of Chaos”. Increasingly, we are demonstrating the accuracy of that tag. And manifest chaos - in an individual, community, enterprise, or nation, is, in religious terms, evidence of the dominance - being in the Dominion - of the Spirit of Death.

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I think this could still be true under capitalism if the people in charge aren’t blithering idiots or completely ignorant about basic things like the role of energy in fostering prosperity.

The US highway system was a government investment that produced grand results. But we probably had people in charge back then who could think and reason above and beyond the political ambitions of the lessors.

Today I posit that golden ratio is reversed. The pinnacle of Congress is entirely staffed with self-interested Polosis and Grahams who outwardly seem to only care about their own status and wealth.

I would imagine trying to engage either of them in a deep conversation about energy would be akin to discussing a carburetor with my dog.

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I view China’s approach to energy as far more pragmatic and strategically superior to the West’s. China is slapping on coal plants, building massive hydro projects, and powering ahead with both large and SMR nuclear technology.

That’s what it would look like in your own country if the inferiors above you understood the role of energy in one’s economy. But it doesn’t.

In the US, where I live, we’re busy ripping hydrocarbons out of the ground so quickly we cannot think of what else to do with some of them besides burn them into the night air, or ship them overseas to exchange for ones and zeros on hard discs representing “money” which bankers literally print out of thin air. It’s the ultimate something-for-nothing trade.

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Trump’s economic plan comes down to charge more on the credit cards and hope that I get a better paying job so that I will be able to afford the minimum monthly payments.

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I think as a society, we’ve allowed ourselves to be too disassociated with government.

Admittedly, I couldn’t tell you who the local mayors are, much less the other seats.

As a consequence, I think those in power are selected by their ability to accumulate power, not necessarily what they do with it.

Considering politics is closer to faith-based decision making (promises of future), I don’t see a path to fixing it that doesn’t involve selling the common man on being interested - consequently, changing his voting patterns.

A second option would be finding selfless talented people who could do much better in private sector, giving it up so they can take thankless jobs in public office. I personally consider this to be more like the buying lottery ticket strategy, if we don’t have a better selection process.

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how its going so far…going to be a lot to reverse… keep scrolling and scrolling its a long list

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Exactly
The self serving corruption of the carrer politicans likely chase out any well meaning citizen who wants to help. (DOGE?)

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I love vince here and what he brings.
One take away here is that gold historically has been used as an inflation hedge. That fact is lost on so many in the market who began their careers well after inflation was ever a thing. Most money managers dont look back over inflationary years and see how gold operates and havent a clue what to do with silver. I have allocations to gold and miners in client portfolios that approach 22% currently. While the miners can be bought and sold (they operate like a higher risk mid cap) the gold will not. It will anchor the portfolio through the storm. The game has changed. Inflation is here until the markets crash and everthing (including gold) gets sold and ushers in deflation.

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Holy Hell! Has this been posted anywhere here yet?
Trump opening stating Soros, Gates etc pursuing a depopulation agenda. :exploding_head:

https://x.com/MaverickDarby/status/1962920231556571484

Note after posting - it seems this guy is a satirical account - does anyone know him or have any other sources that indicate the above is real or fake?!?

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This speaks of shortages mindset? Fear that resources are limited. Nazi regime did this during war as shortages were everywhere, however it was very inefficient system that couldnt prioritize correctly. Thus regime fell and lost war. (in essence political system tends to deliver resources by who has biggest charisma and influence in machinery, gets to take lion’s share, not by needs of each branch to function properly).
We saw in 2021 how shortages of products led to unofficial channels and sort of nepotism and friend networks take over shadow networks, so many products had empty shelves. Then some got to hoard tens or hundreds of product and could sell it on “black market” second hand with very fat profit.

Corporations have a lot of government inefficiency qualities that show in this manner. Thus they use same “PR” (fancy way of gaslighting and distracting via words) as they may not be able to even do anything else, despite problems are inside that corporation.

I agree some control and organization (queues and quantity checks in online shops, 1 per customer…) is needed, otherwise this anarcho-chaos takes over. However government is big and lazy organization that doesnt have this managerial skillset or will.
Freemarket also doesnt always work effectively for examples shown above.

Are there better ways? These are needed. This would also help to argue why excess absurd level immigration is bad, as we would have framework to assess what is too much and where is limit resources are sufficient. It has to be open model, blackbox decision making enables corruption. And trust needs to be gained by opennes and fairness. Otherwise you face UK future where 1/3 or half of adults stay on benefits as incentives to work harder are not clear.

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