Original title: Trump Truth
Original author: Arthur Hayes
Original source: https://substack.com/
Translated by: Daisy, Mars Finance
As a macroeconomic forecaster, I try to make predictions that guide portfolio asset allocation based on public data and current events. I like "Trump Truth" because it acts as a catalyst, forcing leaders of other countries to look at the problems facing their countries and take action. And it is these actions that ultimately shape the future state of the world, which is where Maelstrom hopes to profit.
Even before Trump returned to power, countries were already acting in the ways I predicted, which further strengthened my confidence in the way money was issued and the means of financial repression. This year-end article aims to gradually explain the major changes taking place within and between the four major economies and countries (the United States, the European Union, China, and Japan).
Whether I think currency issuance will continue to accelerate after Trump’s “coronation” on January 20, 2025 is important to my short-term position. This is because I believe that cryptocurrency investors have overestimated Trump’s ability to quickly drive change, when the reality is that Trump has few politically acceptable solutions to quickly achieve those changes. The market will quickly realize around January 20, 2025 that Trump has only a year to drive any policy changes in the best case scenario. This realization will lead to a violent sell-off in the cryptocurrency market and other stocks trading related to “Trump 2.0”.
Trump has only one year to act, as most elected US lawmakers will begin campaigning in late 2025 for the midterm elections in November 2026. The entire House of Representatives and a large number of senators will then need to seek reelection. The Republican majority in the House and Senate is currently very weak and it is likely that they will lose power after November 2026. The American people are rightly angry, but no matter how smart and powerful the politicians are, it will take at least a decade, not just a year, to solve the fundamental domestic and international problems that have a negative impact on the people. Therefore, investors are setting themselves up for serious "buyers remorse". But can the massive money printing and new regulations used to financially suppress savers overcome the phenomenon of "buy expectations, sell facts" and keep the cryptocurrency bull market going into 2025 and beyond? I believe it can, but this article is also my cathartic attempt to convince myself to accept this outcome.
A shift in monetary paradigm
I will borrow from Russell Napier to summarize the timeline of monetary structure after World War II in a very simplified way:
1944 – 1971 Bretton Woods
Countries fixed the exchange rates of their currencies to the U.S. dollar, which was fixed at $35 per ounce of gold.
1971 – 1994 Oil Millionaire
President Nixon went off the gold standard and allowed the dollar to float freely against all currencies because the US could not support the expanding welfare state and the Vietnam War while maintaining the gold peg. He made a deal with the oil exporting Persian Gulf states (particularly Saudi Arabia) where they agreed to price their oil in dollars, produce on demand, and repatriate their trade surpluses into US financial assets. If you believe some reports, the US also pushed some of the Gulf states to raise oil prices in order to support this new monetary structure.
1994 – 2024 Petroyuan
China has significantly devalued its currency against the dollar to combat inflation, the collapse of its banking system, and to revive its export industries. China and the other Asian Tigers (Taiwan, South Korea, Malaysia, etc.) pursued mercantilist policies that provided cheap exports to the United States, which resulted in the accumulation of dollars overseas in the form of foreign exchange reserves, which were then used to pay for energy and high-quality manufactured goods priced in dollars. This policy brought over a billion low-wage workers into the global economy, depressed inflation in the developed West, and enabled central banks in those countries to keep interest rates very low because they mistakenly believed that endogenous inflation had been falling for a long time.
USDCNY in white, China GDP in constant dollars in yellow.
2024 – Now?
I have not given a name to the system that is currently developing. However, Trump’s election is a catalyst for change in the global monetary system. To be clear, Trump is not the cause of this reorganization; rather, he is outspoken about the imbalances he believes must change, and is willing to adopt very disruptive policies to rapidly drive that change, benefiting Americans first. These changes will put an end to the “petroyuan.” Ultimately, as described in this article, these changes will increase fiat money supply and financial repression worldwide. Both of these things must happen because no leader in the United States, the European Union, China, or Japan is willing to deleverage their system into a new sustainable equilibrium. They will continue to print money, destroying the real purchasing power of long-term government bonds and bank savings deposits, allowing the elite to continue to control whatever the new system looks like.
I will give a high-level overview of Trump’s goals and then assess how each economy or country has responded.
Trump truth
To function properly, the US must run current account and trade account surpluses to keep the “petro-yuan” system going. This has led to the deindustrialization and financialization of the US economy. If you want to understand the mechanics of this, I recommend reading all of Michael Pettis’s work. Whether or not I think this is why the world should change its economic system, the average American white male that the so-called Pax Americana was supposed to serve has actually been disadvantaged since the 1970s. “Average” is key here, and I don’t mean people like Jamie Dimon and David Solomon, CEOs of JP Morgan and Goldman Sachs respectively, or the “working class” who work for them for a salary. I’m talking about the average guy who works at Bexel Steel, owns a house and a spouse, and now the only women he sees are nurses at a methadone clinic. This fact is very obvious because this group is slowly committing suicide with alcohol and prescription drugs. Everything is relative, and compared to the higher living standards and job satisfaction they enjoyed after World War II, things are terrible now. As everyone knows, this is Trump's base, and he says to these people what other politicians dare not say. Trump promises to bring back industry and give meaning to their miserable lives.
For Americans who have a bloody interest in playing video wars, a very powerful political group, the current state of the U.S. military is a disgrace. The myth of the U.S. military's superiority when facing a near or equal enemy (currently only Russia and China meet this condition) began with the idea that the U.S. military liberated the world in World War II. This is not true; the Soviet Union paid tens of millions of lives to defeat the Germans. The Americans were only part of the finishing touches. Stalin was upset that the United States took too long to launch a major offensive against Hitler in the Western European theater. U.S. President Franklin Delano Roosevelt bled the Soviet Union to reduce U.S. casualties. In the Pacific theater, although the United States defeated Japan, they never faced the full force of the Japanese army because Japan committed most of its combat power to the Chinese mainland. Instead of glorifying the Normandy Landings, Hollywood should show the Battle of Stalingrad and the heroism of General Zhukov and the thousands of Russian soldiers who died in the battle.
After World War II, the U.S. military lost the Korean War against North Korea; lost to North Vietnam in the Vietnam War; was in disarray during the 2021 Afghanistan withdrawal; and is now losing ground in the war against Russia in Ukraine. The only success the U.S. military can boast of was using highly complex and overly expensive weapons against Iraq in the two Gulf Wars.
The point is that success in war is a reflection of the robustness of the industrial economy. The US economy is fugazi if you care about war. Yes, the Americans can do leveraged buyouts like nobody’s business. However, their weapons systems are an expensive concoction of Chinese imported parts, sold to constrained customers like Saudi Arabia who must buy them under their geopolitical agreements. Russia, despite having an economy about 1/10 the size of the US, produces unstoppable hypersonic missiles at a much lower cost.
Trump is not a peace-loving hippie; he fully believes in American military supremacy and exceptionalism and takes pleasure in using military force to slaughter human beings. Remember, during his first term, he assassinated Iranian General Qasem Soleimani inside Iraq, endearing himself to a large section of the American public. Trump completely ignored violations of Iraqi airspace and unilaterally decided to assassinate a general of another country with which the United States was not officially at war. So he wants a proper rearmament of the empire to match its momentum.
Trump advocates for re-industrializing America to help Americans who want good manufacturing jobs, and those who want a strong military. Doing so requires reversing the imbalances created by the “petro-yuan” system. This will be done by weakening the dollar, offering tax breaks and subsidies to boost domestic production, and relaxing regulations. These measures combined will make it economically sensible for companies to move production back home, as China is currently the best place to manufacture products due to more than three decades of development policies.
In my article on "Black or White?", I discussed how quantitative easing (QE) can finance the poor and how this will drive the re-industrialization of the United States. I believe that new US Treasury Secretary Bessen will pursue such an industrial policy. However, this will take time and Trump will need to demonstrate immediate results that can be sold to voters in his first year in office. Therefore, I believe that Trump and Bessen must immediately devalue the dollar. I want to discuss how this is possible and why it must happen in the first half of 2025.
Strategic Bitcoin Reserve
“Gold is money, everything else is credit” – J.P Morgan
Trump and Bessen have repeatedly discussed the need to weaken the dollar to achieve their economic goals for the U.S. The question is, against which other currencies should the dollar be devalued, and when?
After the U.S., the world’s largest exporters, in order of size, are China (currency: renminbi), the European Union (currency: euro), the United Kingdom (currency: pound sterling), and Japan (currency: yen). The dollar must fall against these currencies to encourage a marginal company to move production back to the U.S. The company doesn’t have to be registered in the U.S.; Trump allowed Chinese manufacturers to build factories in the U.S. to sell goods there. But Americans must buy goods made in U.S. factories.
Coordinated currency agreements are already a thing of the 1980s. Today, the United States is not as powerful economically or militarily as it was then compared to the rest of the world. Therefore, the Besen does not have the ability to unilaterally determine the exchange rates of other countries. Of course, there are means and tactics that the Besen can use to force each country to agree to devalue its domestic currency against the dollar. This can be achieved through the precise use of tariffs or threats. However, this takes time and a lot of diplomatic effort. There is also an easier way.
With 8,133.46 tons of gold reserves, the United States holds the most gold, at least on paper. As we all know, gold is the real currency of global commerce. The United States has been off the gold standard for 50 years. The gold standard has been the norm throughout history, while the current fiat currency system is the exception. The easiest way for Bessen to achieve his goal is to devalue the dollar against gold.
Currently, gold is valued on the U.S. balance sheet at $42.22 per ounce. Technically, the Treasury issues a gold certificate to the U.S. Federal Reserve System (Fed) whose value is determined by the Treasury to be $42.22 per ounce. If Bessen can convince the U.S. Congress to change the legal price of gold, thereby devaluing the dollar relative to gold, then the Fed's Treasury Account (TGA) will receive dollar credits that can be used for economic spending. The greater the devaluation, the greater the immediate increase in the TGA balance. This is because, essentially, by pricing gold at a specific price, the U.S. is creating dollars out of thin air. An increase of $3,824 in the legal price of gold per ounce would generate an incremental TGA of $1 trillion. Adjusting the carrying cost to the current spot gold price, for example, would generate a TGA credit of $695 billion.
Through government authorization, dollars can be created and then used to purchase goods and services, thus changing the holding cost of gold. This is the definition of fiat currency debasement. Since all other fiat currencies also have a gold value based on the amount of gold held by their respective governments, these currencies will automatically rise relative to the dollar. Without consulting any other country's treasury, the United States can achieve a huge debasement of the dollar among all major trading partners.
The most important rebuttal is that couldn’t the largest exporters try to regain the weakness of their currencies by devaluing them against gold? They could certainly try, but none of these currencies are global reserve currencies because they have built-in demand due to trade and financial flows, so they couldn’t match the US gold devaluation, which would quickly lead to hyperinflation in their economies. Since these countries are not self-sufficient in energy or food, this would be politically unacceptable because the social unrest caused by inflation would drive the ruling elites out of power.
Tell me the amount of dollar weakness needed to re-industrialize the U.S. economy, and I can tell you the new gold price. If I were Besson, I would go big. Going big would mean a $10,000 to $20,000/ounce revaluation. Luke Grohman estimates that a return to the 1980s ratio of gold to the Fed’s dollar liabilities would result in a 14x increase in the gold price from current levels, to a devalued price of nearly $40,000/ounce. This is not what I expect, but speaks to the significant overvaluation of the dollar at current spot gold prices.
It’s no secret that I’m a “little gold bug.” I hold physical gold bars and junior gold mining exchange-traded funds (ETFs) in my vault because the easiest way to devalue the dollar is relative to gold. Politicians always hit that “easy” button first. But this is Crypto Trader’s Digest, so how does a $20,000/ounce gold price drive Bitcoin and crypto prices?
Many cryptocurrency hopefuls are first focusing on the Bitcoin Strategic Reserve (BSR) discussion. U.S. Senator Loomis has introduced a law that would require the Treasury to purchase 200,000 Bitcoins per year for five years. Funny enough, if you read the bill, she proposes to finance these purchases by increasing the price of gold on the government's balance sheet, as I described above.
The argument in favor of the BSR is similar to the reasoning that the United States reserves the most gold compared to any other country; this allows the United States to exert financial hegemony over other countries in both the digital and physical realms. If Bitcoin is the hardest currency ever, then the strongest government fiat currency with the central bank that holds the most Bitcoin is the strongest. Furthermore, governments whose finances are aligned with Bitcoin price fluctuations will have policies that are favorable to expanding the Bitcoin and cryptocurrency ecosystem. This is similar to governments encouraging domestic gold mining and establishing a robust gold trading market. Look at how China encourages domestic gold ownership through the Shanghai Gold Futures Exchange as an example of a state gold-positive policy to increase the financial strength of the country and its citizens in real currency terms.
If the US government creates more dollars by devaluing gold, and uses those dollars to buy Bitcoin, its fiat price will rise. This in turn inspires competitive buying in other countries as they have to play catch-up. Then, the price of Bitcoin will gradually rise because why would anyone sell Bitcoin and receive fiat currency when the government is actively devaluing those currencies? Of course, there is a fiat price that long-term Bitcoin holders are willing to sell at, but it is not $100,000. This argument is logically valid, but I still don't think the BSR will happen. I think politicians would rather use these newly created dollars to provide benefits to the people to ensure their victory in the next election that is coming soon. However, if the US BSR does happen, the threat will only create buying pressure.
While I do not believe the US government will buy Bitcoin, this does not affect my positive outlook on the price. Ultimately, the debasement of gold creates dollars that need to find a home in real goods/services and financial assets. We know from experience that the fiat price of Bitcoin rises faster than the global supply of USD increases, due to its limited supply and the reduction of the coin circle.
The Fed's balance sheet is shown in white, and Bitcoin is shown in yellow. Both start with a base of 100 on January 1, 2011. The Fed's balance sheet has increased by 2.83 times, while Bitcoin has increased by 317,500 times.
In short, devaluing the dollar quickly and significantly is the first step for Trump and Bessent to achieve their economic goals. It's also something they can do overnight without consulting domestic lawmakers or foreign finance ministers. Considering Trump only has one year to make progress on some of his stated goals to help Republicans maintain control of the House and Senate, my base case is USD/Gold depreciation in the first half of 2025.
Land of the setting sun
While Japan’s elite politicians are proud of their culture and history, they are still vassals of the United States. After being nuclearized in the 1940s, Japan rebuilt the country with the help of dollar loans and tariff-free access to the U.S. consumer market, becoming the world’s second largest economy in the early 1990s. More importantly for my lifestyle, Japan built the most ski resorts in the world. In the 1980s, just as today, trade and financial imbalances were rife in elite American political and financial circles, and a rebalancing was urgently needed. Some argue that the currency agreements of the 1980s weakened the dollar and strengthened the yen, ultimately bursting Japan’s stock and real estate market bubbles in 1989. The logic is that in order to strengthen the yen, the Bank of Japan (BOJ) had to tighten monetary policy, which caused the bubble to burst. Real estate and stock bubbles are always inflated by printed money and burst when loose monetary policy slows or stops. The problem is that Japanese politicians will commit financial hara-kiri to please their American masters.
Today, as in the 1980s, there are extremely large financial imbalances between Japan and the United States. Japan is the largest holder of U.S. Treasuries. Japan has also implemented aggressive quantitative easing, which eventually evolved into yield curve control (YCC), resulting in an extremely weak yen. The importance of the dollar-yen exchange rate has been discussed in two articles: "The Inevitable" and "The Specter".
The Trump Truth is that the dollar should appreciate against the yen. Trump and Bessant are very clear that this must happen. Unlike China, where there will be a hostile currency realignment, in Japan Bessant will dictate where the dollar-yen exchange rate is going and the Japanese will obey.
The problem with a stronger yen is that it means the Bank of Japan has to raise interest rates. Without any government intervention, here’s what would happen:
As interest rates rise, Japanese government bonds (JGBs) become more attractive, and Japanese companies, households, and retirement funds sell foreign exchange stocks and bonds (mainly Treasuries and U.S. stocks), convert the foreign exchange proceeds into yen, and buy JGBs.
Higher JGB yields mean lower prices, negatively impacting the BOJ's balance sheet. In addition, the BOJ holds a large amount of Treasury bonds and US stocks, which will also fall in price when Japanese investors sell them to reallocate capital. In addition, the BOJ must pay higher interest on its yen bank reserves. Ultimately, this is bad news for the BOJ's solvency.
Trump has an interest in the survival of the Japanese financial system. US military bases in Japan provide a maritime deterrent to China, and Japanese production of semiconductors, for example, helps ensure that the US has access to friendly supplies of critical components. Trump will therefore order Bessant to take the necessary steps to ensure that Japan can remain financially viable in the event of a stronger yen. There are multiple ways to do this; one way is for Bessant to use the power of the US Treasury to provide a USD-JPY central bank currency swap to the BOJ so that any sales of Treasury bonds and US stocks are absorbed off-market. This is described in my previous article (Spirited Away).
The Federal Reserve - they increase the amount of the dollar supply, or in other words, in return receive the yen that is created as a result of the growth in Carry transactions.
CSWAP - The Fed owes the BOJ USD. The BOJ owes the Fed JPY.
BOJ - They now hold more US stocks and bonds, and the prices of these assets will rise because the amount of US dollars rises due to the growth of CSWAP balances.
Bank of Japan - They now hold additional JGBs.
This is important for cryptocurrencies because the amount of dollars will increase to defuse the massive Japanese dollar-yen carry trade. The clearing process will be slow, but trillions of dollars will be printed to keep the Japanese financial system financially solvent.
It is fairly simple for the Japan-US trade and financial imbalance to be corrected because Japan ultimately has no say in the matter and is currently too politically weak to offer any real opposition. The ruling Liberal Democratic Party (LDP) lost its parliamentary majority, leaving Japanese governance in a state of turmoil. Even though they secretly hate uncivilized Americans, the elites are politically unable to voice opposition to Trump’s truth.
Finally, the last will become the first
Although many Europeans, at least those who are not named Mohammed, are more or less Christian, the biblical phrase “the last shall be first” clearly does not apply to the EU economically. The last shall be last. For some reason, Europe’s elite politicians continue to maintain the posture of being beaten hard by Uncle America. All Europe should do is integrate with Russia and China. Russia provides the cheapest energy delivered by pipeline and a basket of food to feed the people. China provides cheap and high-quality manufactured goods and is willing to buy European luxury goods in quantities that would make Marie Antoinette shy. Instead of trying to integrate into a huge, unstoppable Eurasian sphere of common prosperity, the European continent is always dominated by two island nations, Britain and the United States.
With Europe unwilling to buy cheap Russian gas, abandon the green energy transition scam, or establish mutually beneficial trade relations with China, the German and French economies face serious challenges. Germany and France are the economic engines of Europe - the entire continent could be like a vacation spot for Arabs, Russians (ok, maybe not anymore), and Americans. It's really ironic, considering how much European elites hate people from these regions, but money talks and bullshit rides on scooters.
This year, Europeans were frustrated by two important speeches, Super Mario Draghi (The Future of European Competitiveness, September 2024) and Emmanuel Macron (Europe Speech, April 2024). Although both heads of state correctly identified the problems facing Europe - namely expensive energy and lack of domestic investment - the solutions they offered ultimately just "we need to print more money to finance the green energy transition, more financial oppression". The right solution is to abandon the unwavering support for elite American adventures, reconcile with Russia, get cheap gas, embrace nuclear energy, trade more with China, and completely deregulate financial markets. Another frustrating fact is that many European voters agree with me that the current policy mix is not in their interests, but end up choosing parties in the elections that want to implement these changes. But the elites in power are using all undemocratic means to undermine the will of the majority. Political turmoil continues, and France and Germany are basically governmentless.
The truth about Trump is that the US still needs Europe to distance itself from Russia, restrict trade with China, and buy US-made weapons to defend against threats from Russia and China, thereby preventing a strong and integrated Eurasia. Because of the negative economic effects of these policies, the EU must rely on financial oppression and money printing to maintain basic needs. I will quote some of Macron's words about Europe's future financial policies and explain why you should be scared if you hold capital in Europe. You should be worried that your ability to escape European capital controls will be closed and the only thing you can buy in your retirement account or bank savings may be long-held EU government bonds.
Before quoting Macron, here is an excerpt from a statement by Enrico Letta, the former Italian prime minister who is now president of the Jacques Delors Institute, a think tank:
“The EU has 33 trillion euros in private savings, most of which are concentrated in current deposit accounts (34.1%). However, this wealth is not fully utilized to meet the EU’s strategic needs; a concerning trend is that a considerable portion of the EU’s resources flow to the US economy and US asset management companies every year. This phenomenon highlights the inefficiency of the EU’s savings utilization, which, if effectively redistributed to its own economy, will greatly help achieve its strategic goals.”
Much More Than Just a Market
Letta did not doubt what he saw as the problem; Macron’s next words further reiterated these points. EU capital should not be financed by American companies, but by European ones. There are all sorts of ways that authorities who know better than you what to do with your capital can force you to own underperforming EU assets. For those of you who hold your money in a pension or retirement account, for example, EU financial regulators could define the universe of suitable investments so that your investment manager can only legally buy EU stocks and bonds. For those who keep their money in a bank account, regulators could prohibit banks from offering investments in non-EU stocks and bonds because they are “unsuitable” for savers. Whenever your money is held with an EU-regulated custodian, you are at the mercy of the likes of Christine Lagarde and her merry band of Muppets. You may like her, but make no mistake, her job as head of the European Central Bank (ECB) is to ensure the survival of the EU project, not to help your savings grow faster than the inflation her bank needs to keep the system stable.
If you think that only the people at the World Economic Forum in Davos are advocating these things, that’s a misconception, here’s another quote from a notorious racist, fascist, [fill in the blank]…they said…Marine Le Pen:
Europe needs to wake up... given that the United States will defend its interests more aggressively.
The truth about Trump has also caused widespread repercussions on both ends of the EU political spectrum.
Returning to the refusal of EU politicians to do the simple, non-financially bankrupt things to solve their problems, here is Macron explaining it all for the average person:
“So, yes, the days of Europe buying energy and fertilizer from Russia, outsourcing to China, and relying on the United States for security are over.”
Macron continued and reinforced the point that EU capital should not flow to the best performing financial products, but rather be wasted in the barren wasteland that is Europe:
“The third shortcoming is that every year, about 300 billion euros of savings are used to finance the United States, whether you look at government bonds or venture capital. This is absurd.”
Finally, in the coup de grace, Macron mentioned suspending the implementation of Basel III banking regulation. This would effectively allow banks to buy unlimited amounts of high-priced, low-yielding EU government bonds. The loser in this would be anyone holding euro-denominated assets, as this would effectively allow the supply of euros to increase unlimitedly.
“Secondly, we need to revisit the way Basel and Solvency are applied. We cannot be the only economic region in the world to apply it. The United States, the source of the 2008-2010 financial crisis, chose not to apply it.”
Macron correctly points out that the Americans don't follow these global banking rules, so the EU doesn't need to either. Hi, Fiat Financial Collapse vs. Bitcoin and Gold.
Draghi further states in his recent report that in addition to financing the massive welfare state (France, for example, has the highest government spending of any developed country at 57% of GDP), the EU will need to invest 800 billion euros per year. Where will this money come from? It will be printed by the ECB and forced to buy shitty long-term EU government bonds by EU savers.
I’m not making this stuff up. These are direct quotes from both the left and right ends of the EU political spectrum. They tell you they know how best to invest EU savings. They tell you that banks should be able to use unlimited leverage to buy up EU member states’ bonds and that, eventually, the ECB will issue pan-European bonds. The rationale for this approach is Trump truth. If Trump’s America is to devalue the dollar, suspend prudent bank regulation, and force Europe to cut ties with Russia and China, then EU savers must accept subpar returns and financial oppression. EU herbivores should sacrifice their capital and their actual living standards to preserve the EU project. I’m sure you noticed a healthy dose of eye rolling in this paragraph, but if you want to lower your living standards to serve Europe TM, I don’t blame you. My bet is that many of you enjoy waving the flag in public but rush to your computer at home to try to escape as quickly as possible. You know the escape is to buy Bitcoin and keep it yourself before it’s banned. But, EU readers, it’s your choice.
Globally, as more Euros are in circulation and the stranglehold on capital held within the EU tightens, Bitcoin will surge. This is the clear policy of the elites. However, I believe it will be a case of “saying one thing, doing another.” Those in power will secretly transfer assets to Switzerland and Liechtenstein and go on a crypto buying spree. In the process, the people they rule who refuse to listen and protect their savings will languish under state-sanctioned inflation. This is just the way the Croissants do it.
The final truth
Our truth terminal is a 24/7 crypto free market. Bitcoin rose after Trump's victory in early November and became a leading indicator of accelerated money supply growth. In response, all major economic groups/countries must react immediately. The response is to devalue currencies and increase financial oppression.
Bitcoin (yellow) is leading an increase in US bank credit (white).
Does this mean that Bitcoin will just go up to $1 million without any unpleasant pullbacks? Absolutely not.
I don't think the market realizes how little time Trump actually has to achieve anything. The market thinks Trump and his team can pull off an immediate economic and political miracle. The problems that led to Trump's surge in popularity have been building up for decades. So the market doesn't see an immediate solution, no matter what Elon Musk tells you. So it's virtually impossible for Trump to appease his supporters enough to prevent the Democrats from retaking both houses in 2026. People are distraught because they are desperate. Trump is a savvy politician who understands his supporters. What this means to me is that he has to act drastically in his first 100 days in office, which is why my money is on Trump devaluing the dollar dramatically in his first 100 days. That would quickly make production costs globally competitive. That would result in an immediate reconfiguration of production capacity today, and thus employment, rather than five years from now.
Prior to the crash phase of this crypto bull market, I believe crypto markets will experience a horrific sell-off on January 20, 2025, the day of Trump’s inauguration. Melstrom will lighten certain positions upfront, hoping to re-buy some core positions in the first half of 2025. Obviously, every trader says this and believes they can time the market. Most often, they end up selling too early and subsequently lack the resolve to re-buy at a higher price than they would have if they had not “HODLed”. Such traders underinvest for the rest of the bull market. Knowing this, we are committed to admitting defeat, healing, and getting back on track after the bull market lasts until January 20. The truth about Trump shows me the structural flaws in the global order. The truth about Trump shows me that the best way to maximize returns is to hold Bitcoin and cryptocurrencies. Therefore, I will buy on pullbacks and rally.
