BALTIMORE – The mainstream press is focused on Donald Trump’s selections of his key staff.

So far, our name hasn’t come up.

These choices – of his captains and majors – are thought to be especially important. Because Trump has spent his career in private business, not in government… in New York, Florida, and New Jersey, not in Washington, D.C.

So, now that he is marching on the nation’s capital, he is going to need lieutenants who know their way around town.

There is also a presumption that the president-elect lacks firm ideas about what he wants to accomplish… and how he will do it. 

Aides and Adjutants

“Make America Great Again” is a campaign slogan.

It leaves plenty of room for interpretation. And the people mugging with Trump at his golf resort in New Jersey are the ones who will do it.

Mr. Trump may be a great negotiator. He may be an excellent businessman and showman. He is certainly a gifted persuader and standout brand promoter.

But with so many activities to tend to, and such a famously short attention span, it would be surprising if Trump had time to wonder about America’s money system.

With so many posts to fill and so many key aides and adjutants needed – not to mention strategy and tactical decisions to be made – Mr. Trump will not have the time to think too much about the nation’s money system or the people in whose hands he entrusts it.

He will need someone to advise him. Most likely, these candidates will not be chosen by Mr. Trump, but by other advisers who have his ear.

Inevitably, he will be introduced to people who have a reputation in their fields… perhaps people with a Ph.D. following their names… or perhaps people who have proven they know something about making money, with stellar careers on Wall Street on their resumes and vacation homes in the Hamptons on their credit reports.

Mr. Trump will have no reason to doubt them; it will be clear that they know their stuff.

And without puzzling it out himself, he will have no way of knowing whether their knowledge is based on self-serving claptrap… or genuine insights and experience.

Too bad.

Whizzes and Consiglieri

Will any of them mention that America faces a debt bomb of about $35 trillion (the excess debt load, by our estimate, that the economy is now burdened with)?

Or that it is likely to blow up on his watch? Will any of them tell Mr. Trump that he was right… that the whole system is corrupt?  

These elite bankers and financial whizzes – consiglieri to U.S. presidents of both parties – prevented it from exploding for an entire generation.

They did so by adding gas.

They made money easier to get. But it was a new kind of money based on credit, not on output and real wealth.

Their friends, concentrated on both coasts, got this new money in the form of higher asset values, higher salaries, and higher bonuses. The middle class got lower wages and more debt.

The system is rigged in favor of the Establishment that runs it. Voters couldn’t sort out exactly how… or precisely who… had done it. They had no more time to figure it out than their champion, Donald Trump.

But they knew they were being ripped off by their own elite.

Parasitic Elite

Nations have elites because they are useful.

There are things – such as a money system – that an ordinary person shouldn’t have to figure out.

He should be able to go about his business, depending on the great and the good – from private and public sectors – to make sure these things are handled properly.

Of course, he wasn’t born yesterday.

He knows that power corrupts. And he expects the elite to use its positions to enrich itself. Maybe the insiders skim 10%; he is willing to put up with a little self-dealing if it helps things work better.

But sometimes elites become parasitic. They don’t stop at 10%. They take 20%… or 40%… or more.

And they rig up the system so completely that an honest working man finds it difficult to get ahead. In the U.S. today, the top 5% – the financial elite – have taken nearly all the income gains so far this century.

How did they do that?

In his 35-minute conversations with each of his elite job aspirants, we doubt Mr. Trump will find out.

Regards,

Signature

Bill

Market Insight


BY CHRIS LOWE, EDITOR AT LARGE


In business, it is critical to track a well-defined pipeline of potential opportunities. This is essential for resourcing, product development, forecasting, and strategy decisions.

Investing is no different.

This is something I’ve always focused on as an investor – and it’s given me great success.

I break it down into two winning strategies.

Sector Cycle Investing

Understanding sector cycles is an excellent strategy for technology investing. It helps us know when there is a strong, broad trend that is lifting a certain sector. During those times, the best equities will tend to outperform. And by knowing which companies are the strongest in that sector, we can generate outsized returns.

On the other hand, when a certain sector is trending down, we’ll tend to avoid it altogether.  Even the best companies can be negatively affected during these sector declines.

A simple example is the semiconductor industry. It goes through classic boom-and-bust cycles every few years. Why does this happen?

As economic activity picks up, semiconductor factories across the industry become fully utilized, requiring a lot of investment to build out new capacity. This is a very profitable period, as demand exceeds supply and drives up prices and profits. This is a great time to invest in semiconductor companies.

But then, once capacity catches up with – and eventually surpasses – demand, factories are no longer fully utilized. Those now-larger fixed costs eat away at profitability, requiring deep spending cuts.

Gradually, the industry scales back until supply once again falls short of demand, and the cycle starts all over again.

Early Trend Spotting

One of the best ways to be a successful investor is to identify trends before they become mainstream. This is especially true in the rapidly changing tech sector.

Through regular contact with my peers and associates across the tech landscape, I am able to get firsthand answers to the most important questions…

  • What kinds of research and development are tech companies spending money on?

  • What are the current pain points for end customers?

  • What technologies are gaining momentum?

This helps me target emerging trends before the typical investor does.

The other area that I follow closely is the venture capital (VC) community. This helps me understand what sectors of technology are getting support – in the form of VC money – to create the next generation of disruptive technology. In this context, “disruptive” is a good thing. It refers to the type of game-changing innovations that forever alter an industry.

And these are the kinds of companies I identify through early trend spotting.

A few years ago, I really started to pay attention to the emergence of what is now called “fintech.” This is short for “financial technology,” and some of the developments here are truly disruptive.

One area of fintech that I am really excited about is crowdfunding. Perhaps you have heard of Kickstarter. Using Kickstarter and other companies like it, early-stage companies can now “kick-start” their business by raising money before ever producing an actual product. In essence, customers prepay for a product, giving the company money to finance bringing the product to market.

Kickstarter began in 2009, and the concept took off. By the end of 2016, the broad-based crowdfunding industry will be larger than the traditional venture capital industry.

I have personally invested in several private companies in this space whose valuations have already more than doubled.

As the new fintech ecosystem continues to gain momentum, there will be many other ways to invest in this trend.

Editor’s Note: Jeff just released a new online presentation about one of these fintech opportunities. It’s a small company that’s at the heart of a $7.6 trillion shift in the financial industry… one that Forbes is already calling “a global phenomenon.” And early investors stand to see returns of as much as 1,000% over the next few years. Watch it here now.


Featured Reads

You Don’t Have to Be a Victim of the Great Debt Default
We’re seeing unprecedented warning signs in credit markets all around the world… But this new strategy could be the single best way to make 10–20 times your money as the credit collapse unfolds.

The Difference Between a Statistic and a Fact
A simple idea that helps explain a lot of disagreements is that there’s a difference between a statistic and a fact. And it’s really hard to tell the two apart…

The World’s Skewed Wealth Distribution in One Chart
According to a new report by Credit Suisse, just 0.7% of the world’s adult population owns almost half of the world’s wealth. The bottom 73% has less than $10,000 each.


Mailbag

President-elect Trump claims he’s going to “drain the swamp” in Washington. But will the swamp end up swallowing Trump?

Your Diary article “Will the Swamp Swallow Trump?” was absolutely hilarious. It has to be one of your best.

I’m 83 years old and don’t know how long it will be before I take the big dirt dive. However, for this country’s sake, let’s hope that Mr. Trump can kill a large number of those swamp alligators before the game wardens catch on and shut down his operation.

– Ken D.

Politics over the last dozen years left me feeling more alienated, despondent, and helpless than at any time in my life. The lack of ability to effect change on an increasingly bizarre path of political policy was totally frustrating.

I may be wrong, but I believe there has been an awakening of enthusiasm ignited by a Trump victory that I have not felt or seen in a while. I’m a retail manager, and the weeks since Trump’s victory have ignited a bit of positive enthusiasm in business, the stock market, and a feeling of hope for the future.

Trump is stepping into a swamp and may be swallowed up. But if he and his handpicked team can bring a business mindset to politics and policy, and cut just a portion of the shameful waste witnessed over the past, he has a shot at placing us on a much better path.

– John A.

[President-elect Trump’s chief strategist] Steve Bannon was interviewed by Michael Wolff from The Hollywood Reporter today. Mr. Bannon indicated that, with less-than-zero short-term interest rates, spending $1 trillion on U.S. infrastructure to produce quality jobs is the right way to go at this time.

Mr. Bannon earned an MBA from Harvard. So, he at least understands central banking. And I’m certain he reads Mr. Bonner’s daily emails.

Mr. Bonner said today that he and Reagan budget chief David Stockman didn’t think that President-elect Trump could get his fiscal spending through Congress. But where infrastructure spending is concerned, wouldn’t Congress go along because that (phony credit) money can be spread out over so many congressional districts and states?

– Frank W.

Bill, I love your knowledge and insight. And your dry wit has me laughing more often than not. I’d love it if you could lay out the solution to our financial dilemma in easy-to -understand steps that Trump could follow in his attempt to right the badly listing USS America. Is it even possible to fix this? Or is our only fate to sink as a nation?

– Kim C.


In Case You Missed It…

Bill’s longtime friend and founder of Stansberry Research Porter Stansberry is sharing his Big Trade. It’s his plan for profiting from “the great unwinding of the corporate bond markets” that will begin next year.

If you missed his live webinar last week, you can watch his follow-up here.