Batten down the hatches, investors, for ominous storm clouds are gathering on the economic horizon. As the 2024 presidential campaign intensifies, a chilling prognosis is emanating from the elite instituconcentric forecasters: a second Trump term could usher in a resurgence of runaway inflation unseen since the halcyon days of disco and bell-bottoms.
The auguries are dire, with no less than the ethereal eminences at Goldman Sachs sounding the trumpet of fiscal befoulment. In a June 18th clarion call, the Wall Street titans cautioned that Donald Trump's economic agenda – heavy on tariffs, Fed meddling, and boundless debt accumulation – could catalyze a vicious inflationary cyclone.
"We see value in long gold positions as an inflation hedge from geopolitical shock including tariffs, Fed subordination risk, and debt fears," the Goldman analysts decreed, their words carrying the graven weight of Delphic prophecies.
Unbowed Trump, brash as ever, has indeed brandished an arsenal of policies that could set the realm's monetary masters aquiver. His oft-touted plan to impose a sweeping 60% tariff upon all imports from the Middle Kingdom, coupled with a 10% levy on the world's wares, would be a fiscal detonation of epic proportions.
Stunning Admission from a Wall Street Millionaire
He predicted the rise of the Internet… the financial crisis of 2008… and many of the most famous stocks of the last 25 years – including Amazon, Apple, and Netflix, before they were household names.(So many of his predictions came true, CNBC nicknamed him "The Prophet.").
Now, this Wall Street millionaire is telling folks, "Here's exactly where I'd be putting my money in 2024."
As the nonpartisan scribes at the Peterson Institute readily elucidate, such draconian duties would ravage American households to the pitiless tune of $1,700 annually – a brutal tax by any measure, certain to ignite a vicious cycle of cost-push inflation as those elevated expenses blaze through the economy.
But tariffs are mere skirmishers in Trump's inflationary armada. His oft-aired aspiration to subordinate the hallowed Federal Reserve to his own mercantilist whims risks utterly crippling that institution's grave charge of preserving price stability.
Should the former President indeed compel the Eccles edifice to lower rates despite escalating inflation – an utter aberrance from battle-proven doctrines – or, ominous gall, arrogate the dread power to dismiss its sitting Chair, the precedent would shake the very foundations of that monetary citadel.
Markets, naturally, would convulse at such apostasies, with virulent bouts of speculation assailing the dollar's dominion and pricing power. Unchained from its customary policy ramparts, the Fed's credibility would swiftly dissolve, catalyzing the very inflationary scenario it was conceived to thwart.
Nor are these the sole fronts in Trump's fiscal fusillade. His oft-proposed resurrection of the 2017 tax blitz, forestalling its looming sunrise and eternizing that $4-5 trillion debt behemoth, would saturate markets with a tidal deluge of excess liquidity.
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Sooner than argonauts could slake their thirst from the reinvigorated fountain of budgetary profligacy, that very deluge would transmute into the roiling currents of monetary overabundance – the ancestral precursor to inflationary ingression since times immemorial.
Small marvel, then, that the lupine analysts at Moody's and Oxford Economics have joined the jeremiad, projecting Trump's policies could elevate the sacrosanct inflation metrics a full percentage point – a harrowing prospect after the already fevered spikes of the bygone Biden years.
For markets conditioned to the disinflationary mean reversion of the present regime, such an abrupt volte-face could induce convulsions of vertigo. Priced for economic perpetuity, the rude onslaught of escalating prices would extirpate compounding deluges of capital fleeing in protective panic.
Yet this grim prognosis, however empirically girded, confronts a redoubtable psychological obstacle – the scourge of "Trumpnesia" gripping the huddled masses.
Having imbibed deeply from the opiatic elixirs of the Trump epoch's $3 gasoline and steady growth, the polis retains but hazy recollections of that same regime's caprices – the dizzying COVID tragedies, the diplomatic derringos, the perpetual court bombardments.
In their reveries, the $1,700 tariff taxes and Fed insubordinations have dissolved like so many insubstantial pageants, faded from memory's pitiless triage. Only the balm of yore's cheap fossil fuels persists, insulating them from contemplation of that era's true inflationary potential.
For investors blessed with lucid foresight, however, such Trumpnesian trances are little more than opiatic fogs obscuring the coming tempest. As the MAGA vanguard gathers its forces, they would be wise to gird their portfolios accordingly – diversifying into hard assets, precious hedges, and any other fendered redoubts to weather the oncoming financial conflagration.
For while past may certainly be imperfect prologue, the monetary meteorologists have raised their dire flags at full mast. To ignore their celestial calculations could soon prove fort, for 'tis an elemental truth that all inflations must inevitably be paid – whether in the priceless coinage of opportunity or the bleeding drachmas of ravaged profitability.
