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Chris Marcus

Chris Marcus

Arcadia

Chris Marcus is a former Wall Street analyst, trader, and researcher turned Austrian Economist and writer. He has an MBA from Wharton, has written for…

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Trump on National Debt: 'You Never Have to Default Because You Print the Money'

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With Donald Trump seemingly looking likely to become the next president of the United States, many are wondering how that could impact the economy. Will "The Donald" use his supposed business expertise to turn the U.S. economic ship around? If he is indeed elected, what would a Trump presidency really mean to the economy?

In reality, not all that much. Perhaps some will be so entertained that the White House has finally been turned into a reality show that they'll be slightly more productive at work. But in terms of Trump coming in with some sort of magic economic balm....not quite so likely.

Donald Trump, Hilary Clinton, Bernie Sanders, or even Santa Claus can't change that the U.S. government is currently over $19 trillion in debt. Add in the unfunded liabilities owed to Social Security and Medicare, and even the conservative estimates are consistently well over $100 trillion. Just because the spending is so out of control that Washington finally gave up on the idea of a debt ceiling doesn't mean none of it ever happened.

However perhaps even far more relevant is the $3 trillion that the Fed has printed since 2008. And just in case you thought Trump was going to pull some magic rabbit out of a hat to solve that one, wait until you hear his latest thoughts on monetary policy.

"People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the United States government," Trump clarified Monday on CNN. "You never have to default because you print the money, I hate to tell you, OK?"

Oh boy....

The truth is that the fate of the U.S. economy was sealed long before Trump even entered the conversation. Sure, Trump could slap on some different bells and whistles than Hilary might, but if you've been investing in gold and silver because you think the dollar's days are numbered, rest assured that more money printing is likely on the way.

In fact, here's a little secret I discovered throughout my career on Wall Street that generally helps resolve any questions about future monetary policy decisions. The plan is to print money.

The plan has always been to print money, and in the future the plan is still going to be to print even more money. But don't take my word for it. Just look at the record and let the results speak for themselves.

Of course waiting for your investments and trades to play out in the mean time isn't always so much fun. But perhaps developing the will to stay true to your convictions is actually what separates those who win from those who don't.

I wish I could tell you exactly when gold and silver will start trading anywhere near what natural supply and demand might dictate. Although just like the characters in the recent movie "The Big Short" had to learn at times in painful fashion, sometimes being right and being able to trade your opinion profitably can be two different things.

Which isn't to say that you can't invest successfully in these types of markets. You can, and it remains one of the greatest investing scenarios I've seen, heard, or read about about in history. Markets normally don't get this far out of line except for when they're being manipulated. Which most certainly describes the current environment. But as long as you structure your investments with that in mind, you can still come out ahead.

If Trump is elected how should you react? I'd recommend resting easy knowing that you've thought through your decision to invest in precious metals for the long term. Then, if he actually does attempt to print away the national debt you can sit back and watch the value of your retirement plan soar.

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