Trump Victory Winners and Losers

James West, The Midas Letter

Not a minute to lose.

So many are surprised by Trump’s win by a significant margin, though in the financial world, where all that matters is how much tax the government is going to take, it was expected. While it remains to be seen how much of Project2025 actually makes it into policy, there are opportunities that cannot go overlooked for the financially agile.

First, and maybe most obviously, I think $DJT and $TSLA are obvious wins. Both are up significantly in the pre-market.

With the implied reduction in tax revenue for the US government, gold and silver should see strong buy-side interest as the reduced income means more bond issuances to cover interest payments.

Obviously crypto is a big winner, with Trump being touted as the “first Bitcoin president.” Currently, the stuffing is getting knocked out of the precious metals sector as a result of the crypto segment eating gold and silver’s lunch.

But here’s the question: if the argument against gold being part of the US dollar reserve asset backing is that there’s just not enough of it, how does that square with Bitcoin’s maximum issuance of 21 million bitcoins?

The immediate kneejerk market response of gold going lower while $BTC surges is likely going to be short-lived, because Bitcoin will quickly price itself out of the market with no ability to expand its volume beyond that 21 million. Though let us not dismiss the idea that the Bitcoin mandarins could be coerced into some sort of modification to accommodate Trump’s ambition for it.

There is likely going to be a sharp increase in drill permitting in the oil and gas sector, which will no doubt benefit some publicly traded names with US domestic prospective holdings. Drillers, too, should be the beneficiaries of Trump’s victory.

When Trump was last in office, here is a list of ChatGPT-generated policy initiatives that were deemed favourable to business and industry:

Tax Reforms: The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%. This significant cut increased after-tax profits for many companies, enabling them to invest more in expansion, hiring, and research and development.
Deregulation: The previous administration focused on rolling back regulations across various industries, including environmental protections and financial oversight. This reduction in regulatory burdens lowered compliance costs and gave businesses greater operational flexibility.
Trade Policies: Emphasizing “America First,” tariffs were imposed on certain imported goods to protect domestic industries. While this benefited some manufacturers by reducing foreign competition, it also led to increased costs for businesses reliant on imported materials.
Energy Sector Support: Policies favored the expansion of fossil fuel industries by opening up federal lands for drilling and reducing restrictions on coal and oil production. Energy companies benefited from increased opportunities and reduced regulatory hurdles.
Infrastructure Initiatives: Proposals for large-scale infrastructure projects aimed to modernize roads, bridges, and airports. Such initiatives could create jobs and boost industries related to construction, engineering, and manufacturing.
Healthcare Policy Changes: Efforts to modify or repeal parts of the Affordable Care Act were intended to reduce healthcare costs for businesses. Changes could lead to more customizable health plans and potentially lower premiums for employers.
Immigration Policies: Stricter immigration controls were designed to protect domestic labor markets. For businesses, this could result in a tighter labor supply, impacting industries that rely on immigrant workers.
Investment Incentives: Tax incentives and opportunity zones were established to encourage investment in underdeveloped areas, stimulating economic growth and offering new markets for businesses.

Trump and the Project 2025 Agenda

The biggest question we now have to face is how much of the Project2025 Agenda is actually going to be implemented?

In a worst case scenario for business and private citizens alike is the implementation of the fundamentalist Christian authoritarian theocracy expressed in the pages of the Project2025 manifesto.

And to what extent is the “this is the last time you’ll need to vote” statements that were part of his early campaign going to manifest?

The American people might yet be the biggest losers of the electoral outcome if a militarily enforced dictatorship is what is planned for America. The rest of the world will be similarly influenced toward non-democratic governance, or at the very least, authoritarian theocratic elements in the political apparatus of many countries will feel emboldened and empowered. ~~James West, The Midas Letter

James West, The Midas Letter

Not a minute to lose.

First, and maybe most obviously, I think $DJT and $TSLA are obvious wins. Both are up significantly in the pre-market.

With the implied reduction in tax revenue for the US government, gold and silver should see strong buy-side interest as the reduced income means more bond issuances to cover interest payments.

When Trump was last in office, here is a list of ChatGPT-generated policy initiatives that were deemed favourable to business and industry:

Tax Reforms: The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%. This significant cut increased after-tax profits for many companies, enabling them to invest more in expansion, hiring, and research and development.
Deregulation: The previous administration focused on rolling back regulations across various industries, including environmental protections and financial oversight. This reduction in regulatory burdens lowered compliance costs and gave businesses greater operational flexibility.
Trade Policies: Emphasizing “America First,” tariffs were imposed on certain imported goods to protect domestic industries. While this benefited some manufacturers by reducing foreign competition, it also led to increased costs for businesses reliant on imported materials.
Energy Sector Support: Policies favored the expansion of fossil fuel industries by opening up federal lands for drilling and reducing restrictions on coal and oil production. Energy companies benefited from increased opportunities and reduced regulatory hurdles.
Infrastructure Initiatives: Proposals for large-scale infrastructure projects aimed to modernize roads, bridges, and airports. Such initiatives could create jobs and boost industries related to construction, engineering, and manufacturing.
Healthcare Policy Changes: Efforts to modify or repeal parts of the Affordable Care Act were intended to reduce healthcare costs for businesses. Changes could lead to more customizable health plans and potentially lower premiums for employers.
Immigration Policies: Stricter immigration controls were designed to protect domestic labor markets. For businesses, this could result in a tighter labor supply, impacting industries that rely on immigrant workers.
Investment Incentives: Tax incentives and opportunity zones were established to encourage investment in underdeveloped areas, stimulating economic growth and offering new markets for businesses.

Trump and the Project 2025 Agenda

The biggest question we now have to face is how much of the Project2025 Agenda is actually going to be implemented?

In a worst case scenario for business and private citizens alike is the implementation of the fundamentalist Christian authoritarian theocracy expressed in the pages of the Project2025 manifesto.

And to what extent is the “this is the last time you’ll need to vote” statements that were part of his early campaign going to manifest?

The dollar-centric system and its bubbles may have given the U.S. economy a form of Dutch disease. This system has many rarely debated costs that go along with its benefits.

Deficit spending and stimulus inflated prices for stocks, real estate, and consumer goods. Trillions in savings remain in accounts from stimulus bills.

Without this spending, prices would be lower, a point lost on the Biden administration’s hyper-Keynesian economists, who never met a spending bill they did not cheer.

As we round out this year, what’s being repriced is more than the market task of assessing risk. Legitimacy. That’s what is under scrutiny right now.

Seen through a cyclical lens, that makes sense. The Fourth Turning, popularized by Howe and Strauss, is upon us. So are Dalio’s long and short debt cycles.

We watch the Fed meetings, minutes and press conferences with the same intrigue as always. But long cycle is telling us the short-term one doesn’t have the gumption that the markets once believed.

It’s actually amusing, if you think about it. We spend a lot of our lives believing there’s a narrative that ties this ol’ ball spinning free in space together in some coherent pattern.

Except for a minor blowup in the private credit markets, the only challenge financial stocks had this year was in April, when everything got whacked by Trump’s shock-and-awe tariff announcements.

Stands to reason, in a bull market for stocks, mergers, acquisitions and new issues, financial stocks are like the “brick and mortar” plays for Wall Street itself.

For now? It’s smooth sailing into the new year.

What would a return to gold look like? Jim presents multiple scenarios, including a partial gold backing of new international reserve currencies. He notes that prior attempts to stabilize the global economy – such as the Genoa Conference in 1922 and the postwar Bretton Woods system – centered on gold’s role in anchoring currency values.

As history has shown, when trust in paper currencies erodes, gold emerges as the ultimate safe haven. The world looks to be on the cusp of another monetary realignment, and this time, gold will play a critical role.