By Ross Powell, USDR Contributor
Leaving aside all of the political machinations, leaks, civil unrest, and executive orders, let’s stop to catch our breath and to point out that we are still in the first month of the Trump presidency. This article will focus on economics, geopolitics, and an assortment of generalized scenarios. First, a brief background is necessary:
The global monetary system is going through a seismic shift that will hopefully mark the end of the latest debt and fiat currency ponzi scheme. This shift is absolutely necessary for true economic and geopolitical prosperity to be unleashed, but because it involves the dismantling of existing foundational institutions there is virtually no chance of going through such a transition unscathed. The analysis that follows is admittedly speculative, but its purpose is to lay out different scenarios, to discuss the likely aftershocks, and to provide concrete decision-making advice for the here and now.
Scenario 1 – Indefinite Status Quo
This scenario is simultaneously the least likely and the most dangerous of the ones that we will consider. Ponzi schemes run on confidence, and if the mirage of stability and assurance can persist then the system can last for an arbitrarily long time. However, the status quo of maintaining the current structure requires an ongoing exponential increase in debt. This cannot continue indefinitely without a systemic loss of confidence. The danger is that the longer the current institutional backdrop runs the harder the landing will be. If the cycle turns with the wrong people at the helm then we could experience a crash and burn scenario rather than simply a hard landing. My sense is that President Trump is aware of the shaky nature of the system and wants to replace it, but it would require immense political will and fortitude to guide the nation through the necessary short term pain.
Scenario 2 – Soft Landing
All bubbles must pop, but that doesn’t mean they can’t continue to expand further. One school of thought theorizes that President Trump is continuing the status quo for now – as evidenced by the continued rigging of asset prices that are still monumentally divorced from fair value – with the intention of buying enough time to rebuild the infrastructure and physical economy of the US. Once that buffer is in place, the precipitous drop could be managed and supported by actual economic activity, and this could cushion a blow that would be severely damaging at best and fatal at worst. All of Trump’s skills in negotiation, real estate, and construction would be necessary to pull this off. However, such a plan would require essentially universal cooperation and understanding – at least from policymakers – on intent and logistics. One of the only near certainties in this equation is that Trump will not receive the full support he needs given the current climate and personnel.
Scenario 3 – The Economic Nuclear Option
A common narrative seems to be that the economy has been set up for a titanic collapse and that when the time is right the globalist elite will simply pull the pin and leave Trump holding the grenade. Every effort would be made to blame the financial downfall on Trump, forever marring every aspect of his agenda and violently swinging the pendulum back toward the new world order. This has all the hallmarks of the Hegelian dialectic, and many are asserting that Trump was put in place in order to fill this exact role. This would be a disaster scenario as it would require the economic pain to be great enough to turn the populist uprising that swept Trump into power against their icon and all of the policies he stands for. While the logic of this scenario does have some appeal, it assumes a level of control that is not necessarily in place…
Scenario 4 – The Truth Bomb
While each of the previous possibilities has a certain inkling of a wild card, the final option – at least in this list, which is far from exhaustive – is a gambit of truly epic proportions. Please consider that the truth is usually stranger than fiction. It is possible that in the near term, beginning with the confirmation of Jeff Sessions as Attorney General, that we could see a truth bomb that instantly changes everything about the entire world. There are many different possibilities, but it would have to be incontrovertible evidence of something that exposes the elites globally and reveals an evil of such a hideous nature that it would bring about a confidence crisis that leads to an institutional collapse. The follow up would be universal political will for a total draining of the swamp. Trump could in no way be blamed for the resulting economic turmoil and could then present a law and order solution across all areas of society. The fallout would be almost unfathomable, but it might be the only way to offer a restoration of free, moral, and prosperous systems of finance and governance.
The baseline scenario seems to be the soft landing option, but it would be imprudent to count out the others as well. In any case, the decision that needs to be made now is to prepare properly. Monetary systems, governmental systems, and institutional systems all change repeatedly throughout the course of history. Our time is no exception. First, make sure that you and your family have the supplies and the skills necessary to survive a time of unrest and uncertainty. Next, begin or continue to make intelligent decisions about positioning yourself in assets that will come through the other side of any of these scenarios. Precious metals are a favorite and should be a focus of anyone looking to hold a robust portfolio. Some great tools are available for transitioning your existing assets into ones that will maintain their value. Survival 401k can provide you with these tools. This is not a sales pitch; it’s a life preserver that can keep you afloat in these trying times.