Trump's Financial Revolution!

By: Chris Vermeulen | Thu, Dec 15, 2016
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Trump's economic plans will increase national debt!
A Ticking time bomb!

Currently, U.S. debt stands at a mammoth $19.8 trillion and will continue to increase under President-elect Trump considering his lenient tax cuts and plans for infrastructure spending:( http://www.usdebtclock.org/).

The proposed tax cuts, inclusive of accrued interest and macroeconomic effects will increase the national debt by $7 trillion, over the next decade, and by $20 trillion within the next two decades, according to Forbes. There are no details on how the President-elect plans to finance these tax cuts.

US Debt to GDP


'Protectionism' has no winners!

President-elect Trump has radical plans to tear long-standing trade agreements like NAFTA and levy taxes on Chinese imports, etc.

However, in a highly global world, every action that President-elect Trump takes will have an equally strong reaction in an already highly leveraged global economy which is already struggling with anemic growth. This global trade war is unlikely to benefit either the U.S. or the global economy.

US Imports and Exports

It is not clear whether the U.S. public embrace paying higher prices for imported goods: (http://www.economist.com/blogs/graphicdetail/2016/11/daily-chart-9?fsrc=scn/tw/te/bl/ed/atrumptradeagenda). After all, offshoring has also given a boost to American corporations which have managed to bring down their cost of production; (i.e.:  costlier iPhone is most likely to reduce the demand for the product, both at home and abroad).

Investors have taken cheap money and used it to buy stocks and property.  The "real economy" is where the money was intended to go. Trump economic disaster is a train wreck waiting to happen.

I must remind you that nothing has changed in our economy since the Trump market rally: (http://www.zerohedge.com/news/2016-12-09/dont-be-fooled-trump-rally-not-sign-economic-health).

President-elect Trump has been critical of Chairperson Dr. Yellen views as she understands that the economy cannot afford higher rates. The economy will collapse if monetary rates rise, as was evidenced over the past few years. Low rates will continue against the expectations of the experts who are calling for a very sharp increase in rates. When President-elect Trump takes office, he is going to need FED Chairwoman Dr. Yellen on his side, however, he has yet to realize this!

Businesses have not invested large amounts in new capital projects but rather have invested only in buying back their stocks. In addition, they hire labour only on a part-time basis. As there is nothing particularly 'meaningful' supporting the markets, it is my opinion that the rise in stocks and property represents a “ticking time bomb".

The world has been living in a low-interest rate environment for many years now. This environment came about following the global financial crisis of 2008 and has dominated global money transfers. Consequently, it must maintain that status quo. If interest rates rise, the continued huge sell-off U.S. Treasuries and the international bond markets will continue in anticipation of higher yields.

Without knowing the finer details of the proposed policies, the stock markets have run up far ahead of themselves while leaving a very small margin of error!

Therefore, it is prudent for you to be ready to buy gold, in large quantities for the long-term.  The bullish seasonally for gold will begin next month in January of 2017.

Gold is one of the best solutions that can maintain the world's stability as well as your own future wealth when things start to crumble. Follow my lead as the markets oscillate through 2017 and beyond.

 


 

Chris Vermeulen

Author: Chris Vermeulen

Chris Vermeulen
President of AlgoTrades Systems
www.TheGoldAndOilGuy.com

10126 Hwy 126 East, RR#2
Collingwood, ON, L9Y 3Z1

Chris Vermeulen

Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized market technical analyst and trader. Involved in the markets since 1997.

Chris' mission is to help his clients boost their investment performance while reducing market exposure and portfolio volatility.

Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. Chris is responsible for market research and trade alerts for of its newsletter publication.

Through years of research, trading and helping thousands of individual investors around the world. He designed an automated algorithmic trading system for the S&P 500 index which solves his client's biggest problem related to investing in the stock market: the ability to profit in both a rising and falling market.

AlgoTrades' automated trading systems allows individuals to investing using either exchange traded funds or the ES mini futures contracts. It is supported by many leading brokerage firms including:

- Interactive Brokers
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He is the author of the popular book "Technical Trading Mastery - 7 Steps To Win With Logic." He has also been featured on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites. His list of personal and professional relationships approaches 25,000, people with whom he connects and shares is market insight with out of his passion for trading.

Chris is a graduate of Seneca College where he specialized in business operations management.

Chris enjoys boating, kiteboarding, mountain biking, fishing and has his ultralight pilots license. He resides in the Toronto area with his wife Kristen and two children.

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