Trump Punishes Consumers, Farmers And Businesses With His Tariff Tantrum - Will Cause Stagflation To Be A Bigger Problem And Drive Gold Much Higher
Make no mistake about it, tariffs punish American consumers, farmers and businesses immediately. Especially when it is imposed on America’s three largest trading partners Canada, Mexico and China.
Wall Street hates tariffs and the Dow, S&P 500 and NASDAQ are taking it on the chin. Those stocks were already susceptible to a correction because the valuations were priced for perfection.
A slowing economy that the Atlanta Fed is already predicting to become a recession, and growing inflation means stagflation is about to get bad and it will be immediate. Which means stocks priced for perfection are not going to get perfection.
Trump and his fans such as the Treasury Secretary are already seeing the coming slowdown in the economy and trying to blame it on Biden. I firmly believe the economic growth under Biden was nonsense made up with fictional government statistics. But, what is coming with stagflation getting extremely problematic is all on Trump.
Mass deportations and tariffs are certain ways to slow the economy and drive up inflation. Kicking people out of the country, and causing others to leave on their own, plus others being fearful of ICE agents showing up at their work and where they shop causes the economy to slow and inflation kicks in instantly.
Tariffs are equally troublesome for the economy, as they cause immediate inflation that is sure to slow the economy.
Consumers understand this because they live in the real economy, not in the made up world of economic statistics that the Fed lives in. The dots will plot much faster than the constantly behind the curve Fed will see. Trump wanted lower rates, but not because of a recession, which is what he will get.
Stagflation has been a problem for over a year that was only masked by the fake numbers on economic growth and real inflation. The tariffs are about to cause it to grow from a couple percent to 5% or more.
Investors are about to quickly figure out the golden rule that stagflation is extremely bullish for gold. The only safe spot for Wall Street investors and Bitcoin people is to sell stocks and cryptocurrencies to buy gold.
The real smart money will not only load up on gold, but recognize the gold miners are cheap and free cash flow machines. The gold mine developers with high-quality projects and gold explorers with important discoveries are even cheaper on a relative basis.
Trump’s stagflationary mass deportations and tariffs are going to drive gold and the gold stocks through the roof.
All the best,
Allan Barry Laboucan
