Guest Post from Stefan Gleason, Money Metals Exchange
(Condensed by Deviant Investor)
The first 100 days of the Trump administration have brought some surprises and disappointments – as well as some new threats and new opportunities for precious metals investors.
Among the disappointments was President Trump’s inability to push Obamacare repeal through Congress. The White House intended for the GOP’s replacement to reduce the deficit and lay the groundwork for tax cuts.
Now there is a very real chance that no tax reforms whatsoever will be passed this year. And that would be an even bigger disappointment to many investors. Ideological divisions within the GOP may well lead to debt ceiling brinksmanship and a possible government shutdown.
Trump’s surprise about-face on foreign policy in ordering bombings in Syria could have far-reaching implications for U.S. relations with other problem regimes including Iran, Russia, China, and North Korea. The geopolitical risks going forward are many and range from a new Cold War, to trade and currency wars, to the worst-case scenarios of a North Korean attack on Hawaii or an all-out nuclear war.
The debate over what to do about Assad’s regime in Syria is a sideshow compared to the looming conflict with China. Unlike Syria, China is a major world power that has the ability to hurt the U.S. economically and undermine its geostrategic position in the world.
The Chinese economy is drowning in debt that is tied to overvalued real estate and overbuilt infrastructure (including its infamous “ghost cities”). The only way to avert a crash may be for Chinese authorities to devalue their currency.
A Contrarian Perspective
Markets don’t always move in response to events – and when they do, sometimes it’s in the opposite direction of popular expectations. Case in point: Trump’s election win was supposed to be bad for the stock market. It turned out to be great for the stock market.
The Fed was supposed to be bullish for the dollar and bearish for precious metals this year. So far, that popular expectation has been proven wrong.
If you try to trade in and out of gold and silver positions based on what’s in the news, you’ll get constantly whipsawed. Sometimes events in the world that ought to be bullish for gold end up having no effect or a negative effect on prices. And sometimes seemingly bearish headlines kick off rallies rather than price drops.
As we’ve advised before, investors should expect the unexpected. We live in an unpredictable world and are governed by an unpredictable White House. The best way to make sure you’re never caught off guard is to always hold a core position in physical precious metals.
Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.
Thanks to Stefan Gleason is President of Money Metals Exchange
The Deviant Investor