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Donald Trump’s Dream for America: Would it Become an Economic Nightmare or Paradise?

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Donald Trump’s Dream for America: Would it Become an Economic Nightmare?

No one can say that Donald Trump is not vocal about his vision for America.  Not only is he outspoken in public appearances, his website—donaldjtrump.com—contains multiple articles under the “positions” tab which reflect his unique worldview. 

If, however, Trump were allowed to live out his vision, what would the real-world results be?

Trump’s Self-Professed Views on Immigration (Displayed Prominently on His Website)
  • Immigration laws should protect workers.
  • The current policy protects wealthy businessmen over the average American.
  • Mexican immigrants bring crime into the country and steal jobs from honest Americans.
  • Substantial sums of money have been stolen by illegal aliens through public programs. (Trump suggests that footing the bill for the wall separating the U.S. and Mexico would be an appropriate repayment of these misappropriated funds).

What Trump Thinks His Immigration Policy Will Do

Trump supports policies which are aimed at deporting illegal aliens and requiring businesses to hire Americans first.  He says that his aim is to put much-needed jobs back in the hands of poor and struggling U.S. citizens.

What His Policies Will Actually Do

For better or for worse, certain industries rely heavily on immigrant labor.  Agriculture, in particular, would suffer, and food prices could skyrocket without immigrant labor.  Mr. Trump, I’m sure can negotiate with other countries on his immigration policy, and he certainly has the best in mind for Americans. This was evident when we stated “Mexico is killing us” and we’re losing in the labor market. His goal is to employ more Americans by removing illegals from the country that are stealing American job opportunities, but the way he goes about doing that is a fine line. 

Even if Donald Compromises, just enforcing immigration law as it stands would be prohibitively costly. The American Action Forum estimates federal government costs of up to $600 billion to implement the law, accompanied by 11 million lost workers and a reduction of $1.6 trillion to the real GDP.  They also estimate the time frame involved to be 20 years.

Trump plans on building a wall between the US and Mexican border. The costs to implement this are extreme. As a contrast, the Berlin wall cost $25 million dollars or $200 million in today’s money. It was only 96 miles long.

The wall Trump wants to build is 2000 miles long. This sets the cost right around 2.4 Billion dollars. 

If he doesn’t want the American tax payer to fund this, he will need to put on his negotiating boots after former Mexican President Vicente Fox stated “I’m not paying for the f*&^ing wall!”

Clearly, immigration policy is not a simple task Mr. Trump has to take on.

Speaking of Foreign Policy, Donald Trump Feels that China Has Been Walking All Over America

Donald Trump makes it no secret that he knows that China manipulates its currency.  He also worries that China will use America’s debt to blackmail her.  He feels that it is time that China be forced to renegotiate its trade with America.

What Trump Thinks His Policies in Reaction to China Will Do

  • Bring jobs back onshore by lowering the American corporate interest rate to 15%–which is lower than China’s current rate—and imposing a 45% tariff on Chinese imports.
  • Eliminate the possibility of blackmail by reducing America’s debt and the deficit.
  • Bring China to heel by making a show of deploying armed forces in Asia.

What Trump’s Policies Will Actually Do

Those tariffs are likely to be passed straight on to the American consumer.  Furthermore, an analysis done by Moody’s Analytics for the Washington Post suggests that China would not be the only one to suffer.  Their economy would be wounded, but so would the United States’ economy.

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Donald’s Position on Taxes

Mr. Trump believes that as far as taxes go, less is more.  His plan involves no taxes at all below a certain cut-off: $25,000 yearly-income singly or $50,000 yearly-income jointly.  It would also cap corporate taxes at 15% of the business’s income.

What Trump Believes His Policy Will Do

He believes that it would seriously grow the economy, and for once the man may be right.  The Tax Foundation predicts that the tax cuts would lead to 29% growth in capital stock, 5.3 million jobs, 6.5% higher wages and an 11% higher GDP.

Donald Trump on Healthcare:

On his website, Donald Trump’s very first healthcare item is NO MORE OBAMACARE.  He also feels that citizens should be able to purchase healthcare across state lines.  His reasoning is that it will lead to better market competition between plans and companies.

Along the same lines, he wishes to make it legal to buy medication from overseas.

What Trump Believes His Plan Will Do

Increase competition between providers—possibly lowering rates and providing better service in the process.

What His Plan Will Actually Do

The 11.3 million people that HHS said were signed up for Obamacare as of January 2016 will lose their coverage. Then they will be able to seek competitive rates in the free market.

The Return of the American Dream—or a Nightmare Waiting to Happen?

It cannot be argued that Donald Trump is a highly colorful individual.  His speech is blunt, and he regularly airs sentiments that shock and appall both the rest of the world and a significant portion of Americans. However, there’s a large portion of Americans that can relate to this and his position in the polls against Hillary right now are competitive.

Nevertheless, his bid for the presidency has become a very real thing.  The time is coming soon when U.S. citizens will have to decide what kind of future they want—and what sort of person they want representing them to the rest of the world.

 

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Gold ‘Frenzy’ To Build Around Election, Platinum Could Soar 50% By Year-End

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Gold ‘Frenzy’ To Build Around Election, Platinum Could Soar 50% By Year End

Peter Hug, head of the precious metal division at Kitco, believes the Fed’s decision to hold interest rates at near-zero through at least 2023 is bullish for precious metals and particularly gold. He also mentioned the road platinum can head to by the year’s end.

“About three Fed meetings ago they indicated they would hold rates at pretty much zero through the end of 2021 into early ‘22, today they’ve extended that by an additional year, there have been some analysts that are suspecting they will keep rates at zero right through 2024, so we’ve got another almost four years of zero interest rates to look forward to,” said Hug.

“The Fed being a bit more accommodative on inflation indicates to me that it’s a very positive environment for hard assets in general but I think the metals as well will continue to move higher over the next period of time based on the dovishness of the Fed, global central banks and the uncertainty of the US election coming up in about six weeks.”

The State of the Gold and Silver Markets

Hug said the current consolidation phase is a great sign of the overall health of the gold and silver markets. This comes after the frenzy in the gold and silver markets about a month ago.

“The market has been consolidating, which is a very good sign, especially for gold. Gold has been consolidating between our support level of 1925 and 1975 for the better part of two weeks. Silver seems to be between $26.50 – $27.50 range and consolidating as well. The fact that people are not selling into a market that is as frenetic as it was a month or six weeks ago, indicates to me that this market is setting up for the next leg higher once we get through this consolidation phase.”

Availability and Premiums

The gold and silver markets are taking a bit of a breather and the mania has slowed a bit. With this, Hug said the availability of gold and silver coins is getting better. He said premiums are coming down as well.

“On the gold and silver side, dealers are starting to show inventory. That’s not a result of increased production, it’s more a result because of this consolidation phase, retail investors have started to pull back on the markets so there’s not as much buying frenzy in the physical space right now, I think that changes if gold gets north of $2,000 again. But this consolidation of $50 range in gold and the $1, $1.50 range in silver has basically dried up the demand at these levels.”

“So production is still coming on board and dealers are starting to build inventory. And because of that you are seeing premiums come down. Silver maple leafs you can get, again, depending on quantity, somewhere between $5-6 over spot, Eagles are down somewhere between $5-7 over spot, so you are starting to see as this market stays sideways and we don’t see another rush into the buying side from the retail investor, you give it another 2-4 weeks and I think there will be reasonable inventory on the market and premiums should come down.”

Volatility to Return Soon?

Hug said that if you are looking to acquire gold and silver coins, you shouldn’t wait long as we could see volatility return very soon.

“I caution that past October 15 the market is going to be very volatile as we go into the election.”

Other than gold or silver, Hug sees a huge opportunity in the platinum space. There, he expects prices to climb 50% by the end of the year.

“I’m constructive platinum. It is also consolidating in the $900-950 range, but I do anticipate platinum to be north of $1000 and then look to $1200 possibly $1400 before year end.”

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US Billionaires Got Richer During Pandemic by $845 Billion

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US Billionaires-featured

US billionaires got richer during the pandemic by a tune of $845 billion. This represents a 29% increase from the time the Covid-19 lockdowns started until now. While the stock market crashed during the early days of the pandemic, it has since recovered. Along with recovery are net worth increases for America’s billionaire. Among the pandemic’s big winners of 2020 were Jeff Bezos, Elon Musk, and Mark Zuckerberg. Also in the list were investor Warren Buffett, Oracle CEO Larry Ellison, and ex-NY Mayor Michael Bloomberg.

RELATED: Jeff Bezos Is Now Worth $200 Billion

In a report released Thursday, the Institute for Policy Studies and the Americans for Tax Fairness (ATF) said the total net worth of 643 of the nation’s richest people rose from $2.95 trillion to $3.8 trillion.  

This is equal to a 29% increase between March to September. The report based the numbers on Forbes’ annual billionaire’s report and real-time data. 

Big Winners

Jeff Bezos, the founder, and CEO online retail giant Amazon is now the world’s richest man. The pandemic forced people indoors and played right into Amazon’s online strategy. As millions switched to online shopping, demand for Amazon’s services skyrocketed. Amazon shares zoomed along with 40% in 2020, as the company racked up billions in orders. People bought groceries, medicine, household products, and entertainment items on Amazon’s sites. As the company grew richer, so did its CEO and majority stockholder. On August 19, as stock prices of Amazon went up, his net worth exceeded $200 billion. As of September, Amazon stock has fluctuated and Bezos’ current worth is $184 billion. 

Another rich guy that got even richer was Tesla’s founder and CEO Elon Musk. Tesla’s value grew five times its January price. By August, the company’s stock split pushed his personal shares to $104 billion. This allowed him to join the coveted centibillionaire club. Compared to his March net worth of $24.6 billion, he’s now over four times that. As of September, with Tesla dropping value, Musk’s worth has dropped as well to $88 billion. 

Facebook’s Mark Zuckerberg, who was worth $107.6 billion in August (now down to $93.7 billion). Facebook stock rose from $209 in Jan to $303 in August, making his 13% stake worth over $100 billion. Like Musk, he also joined the centibillionaire club this year. 

“COVID crisis supercharges inequalities”

Chuck Collins, director of the Institute for Policy Studies’ Program on Inequality, and co-author of the report said he was somewhat shocked by the figures. He added that the COVID crisis is “supercharging America’s existing inequalities.” He said, “I would have thought maybe six months into this that things would have shaken out – that everybody would take a hit.” 

“The difference is stark between profits for billionaires and the widespread economic misery in our nation. It sort of dramatizes the unequal sacrifice and profiteering element of the wealth accumulation at the top.”

Meanwhile, Covid-19 infected 6 million Americans and killed more than 200,000. As businesses collapse, the economy outside of Wall Street is in recession. More than 50 million jobs vanished in the pandemic. At present, 14 million Americans remain unemployed. Even those lucky enough to still have jobs got hit. Average work income fell by 4.4.%, per Bureau of Labor Statistics data. Outbreaks are still prevalent, even as a vaccine remains under development. 

As such, the economy’s reopening remains slow. 

Even local governments are feeling the pressure. States and cities are hamstrung with crippling deficits. California declared a $54 billion deficit, while New York City is looking at a $9 billion loss in revenue. From now until 2022, state budgets face a $555 billion deficit. This is according to the Center on Budget and Policy Priorities.

COVID-19’s unique effect made those with better plans during the pandemic fares better than most. In the case of Amazon, people flocked to their site when going out posed safety issues. For the others, the rise in stock reflected more on how they handled their business during the crisis. Some people are just quicker to seize on opportunities, even those coming from a crisis.

Watch this as Bloomberg reported last July 2020 on how billionaires got $637 billion richer during the pandemic:

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Should we begrudge the rich getting richer, especially at a time like this? Do they deserve this success? Let us know what you think by leaving your thoughts on the comment section below.

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Fed Keeps Rates At Zero, Powell Says More Fiscal Support Needed

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Fed Keeps Rates At Zero, Powell Says More Fiscal Support Needed

The Federal Reserve wrapped up its last meeting before the November elections. It announced that it would keep rates at essentially zero until at least 2023. This serves as a signal that it doesn’t see inflation as an issue at all for the foreseeable future.

Fed Chairman Jerome Powell said, “We’re going to continue to monitor developments, and we’re prepared to adjust our plans as appropriate.”

“With inflation running persistently below this longer run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” the Fed’s post-meeting statement said.

Uncertainty and the Stock Market

However, the Fed’s latest projections have core inflation staying below their 2% target until 2023. This leaves many observers unsure of the Fed’s actual plan to spur the inflation they desire. This uncertainty caused the stock market to drop after the announcement.

“He noted that targeting an inflation overshoot for ‘some time’ as the statement says, means that they are not targeting a ‘sustained’ overshoot. So how long is ‘some time’ if it isn’t sustained?'” asked AB economist Eric Winograd. “That imprecision is a problem that the committee is going to have to solve to reap the full benefits of the framework shift. It’s not a coincidence that the stock market, which had been in positive territory, flipped negative after the chair’s comments.”

“He’s the great and powerful Oz. Investors got duped. They thought enhanced forward guidance meant something, but when they peeked behind the curtain they realized the Fed didn’t do anything, and the market rolled over,” said Michael Arone, chief investment strategist at State Street Global Advisors.

Jon Hill, a senior fixed-income strategist at BMO, added “This is dovish – lower rates for longer, higher equities, weaker dollar. The Fed is saying we’re not hiking in 2023, maybe in 2024 … What they’re saying is these are our goals. We expect to have just barely met them and even then, they’re not raising rates.”

Stimulus and Economic Recovery

Stepping ever-so-slightly into the political realm, Powell said that Congress should pass another stimulus package to support the economic recovery. He then identified unemployment aid, small business relief and funding for state and local governments as three key areas.

“More fiscal support is likely to be needed,” Powell said. “The details of that are for Congress, not the Fed.”

Republicans have repeatedly stated that they won’t provide additional funding to bailout poorly managed cities and states as part of any additional stimulus bills.

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