Don’t look now, but the election machine is starting up again. Primaries are in full swing as we begin to cast our eyes toward the 2020 presidential election.
And to a greater degree with every passing day, Donald Trump’s actions and policy decisions will be driven by how they will either help or hurt his own reelection chances in two years.
The question we wish to concern ourselves with here is “How can we profit from this?”
We first must assume that Trump will prefer pursuing measures that will appear beneficial to the country and the economy over the short term, even if they are detrimental over the longer term. This is not behavior that is specific to Trump or that requires any great leap of faith or logic; this has been the driving force behind the financial decision making of all presidents up for re-election since Woodrow Wilson broke the taboo of actively campaigning for re-election (it had been considered ‘undignified’ previously)[1].
A large portion of Trump’s support was built on the idea of prioritizing American manufacturing and decreasing the trade deficit. As he is discovering, trade wars are neither good nor easy to win[2]. They create many headlines and opportunities for grandiose statements, but they tend to proceed along predictable tit-for-tat lines that get both sides nowhere good, fast[3].
But a weak dollar (again, for the short term) works. Plain and simple: If a local currency is stronger vs. the dollar, that currency will buy more of any American export to that country. And the easiest way to make sure that happens is a weak-dollar policy.
Gold and silver are strongly correlated against the USD[4]. So when the USD...