7 "No Trumps" - Doubled

Was that a surprise?

Eight years ago, just after the 2016 election, I wrote a piece entitled 7 “No Trumps”. This referenced seven of the most egregiously left leaning media outlets that had failed to even countenance let alone predict a Trump victory; the BBC, the New York Times, the Guardian, Channel Four News, the Economist, the Washington Post and CNN.

Nothing has changed apart from the Washington Post deigning to endorse a presidential candidate on the instructions of its owner one Jeff Bezos. In his Op-Ed piece he inferred that the mainstream media had lost its way and implied it was not fit for purpose by telling people what to think rather than just reporting the news. A smart move to send a message to the President elect that Amazon is onside.

We are in that ridiculous – as seen from this side of the pond – two-month period of interregnum. Whilst Biden is still nominally President, we really have no idea who is running the show, although they seem bent on escalating the conflict in Ukraine. Using another card game analogy, Putin has called their bluff by launching a batch of hypersonic rockets on targets around Kyiv which he claims the Western military powers are unable to counter, accompanied by a chart showing the approximate flight times of the Oreshnik missile; 20 minutes to London! Yikes!

Of course, it’s all fake news; or is it? Who fancies their chances playing poker with Putin?

Back in the US of A, Trump is announcing his picks for key posts within the administration. Matt Gaetz has already removed his candidacy for Attorney General; his chances of getting Senate approval being pretty much zero. His replacement is Pam Bondi, a no less controversial candidate. RFK Junior as Health Secretary and Scott Bessant at the Treasury are “interesting” choices. Given that Trump’s Chief of Staff, Susie Wiles, has previously been closely allied to the pharma industry, it will be interesting to see how far RFK can go with his very well intentioned reforms in healthcare.

Of all the appointments, Tulsi Gabbard as director of National Intelligence,  is the most intriguing. Like RFK, she left the Democratic party (RFK prefers to say that the Democratic party left him…) and is now firmly in the Trump camp. The hand wringing by the intelligence “industry” stems form the fact that this agency is responsible for briefing the President on all matters security related. There is a widespread belief that these briefings have been, shall we say, less than comprehensive.

The DOGE “dream team” have a reporting line into Congress; Marjorie Taylor Greene who will chair a new oversight committee. In a statement to CNN, she said,

“I’m excited to chair this new subcommittee designed to work hand in hand with President Trump, Elon Musk, Vivek Ramaswamy, and the entire DOGE team. Our subcommittee’s work will expose people who need to be FIRED. The bureaucrats who don’t do their job, fail audits like in the Pentagon, and don’t know where BILLIONS of dollars are going, will be getting a pink slip.”

No prisoners will be taken there by the sound of it.

Will all these controversial candidates get Senate approval? Probably not. The appointment of John Thune as leader of the Senate won’t help. He has in the past been a very vocal Trump critic, but Trump is the ultimate deal maker and the pathway maybe smoother than we think. One thing is for certain the big industries that will come under considerable scrutiny have huge war chests and will not go down without a fight.

The markets, as usual after a Presidential election, are going “roof”; notably Bitcoin which is an ace away from $100,000. There are only two things to watch; the US Dollar and the bond market and their reaction to tariffs and reductions in government expenditure courtesy of the DOGE team.

Luke Gromen at Forest for the Trees put it thus:

It is often noted that Smoot-Hawley tariff legislation was deflationary for the US, but less frequently noted that the US was the factory of the world in 1930, while today, China is the factory of the world. If we carry forward the Smoot-Hawley analogue, the US is in the position of some blend of the UK, France, and Weimar Germany in 1930:

• The US has a global financial centre as London was in 1930 (NYC);

• The USD is global reserve currency (GBP was waning global reserve currency in 1930);

• The US has largely hollowed out its domestic industrial base (like Germany, UK, and France in 1930);

• The US is the world’s largest trade debtor (like Germany and France in 1930);

• The US is the world’s largest sovereign debtor, having run up its exorbitant sovereign debt load in losing war efforts in both the Global War on Terror and the War on Drugs (~1 million Americans dead of drug overdoses since 2010 alone) – like Weimar Germany, UK, and France in the1930s;

• The US owes $50-100T in Weimar Germany-like “war reparations” denominated in an inflation-adjusting hard currency the US cannot print e.g. Social Security and Medicare / Medicaid payments.

Viewed through a more accurate Smoot-Hawley lens, present consensus that tariffs won’t be that inflationary for the US is revealed as a dangerously naïve view. The only way tariffs will not be wildly inflationary in the US is if the US slashes Boomer Entitlements and Defence spending by 30-35%, immediately and permanently, and then stands aside as the resulting deflation collapses the stock market, US banking system, and global economy.

Whilst eminently possible that is just not going to happen; the Fed will print, the dollar will fall, and the beneficiaries will be gold ,Bitcoin and equities especially US industrials NB electrical infrastructure. If by some unthinkable policy error, the DOGE team cut government expenditure prior to devaluing the USD or otherwise reducing US debt/GDP; the policy choice in this case would be simple: Buy USD, sell everything else, for a bit at least.

Roll on January the 20^th; in the meantime, as always anything could happen, and almost certainly will!