I didn’t buy it at first.
My colleague, Jason Stutman, suggested that the recent market collapse cannot be entirely blamed on the coronavirus, but rather the fact that Wall Street saw Sanders winning the primaries and responded accordingly.
Seemed a bit far-fetched to me.
But something interesting happened following Super Tuesday.
After Biden took the lead from Sanders, the market began to rebound.
Is this a coincidence, or is the fear of President Sanders so real on Wall Street, that the market sells off at the mere suggestion of a self-described democratic socialist moving into 1600 Pennsylvania Avenue?
Of course, the reality is that no candidate or sitting president has ever completely opposed socialism.
Even President Trump, whose 2016 win resulted in a huge run on Wall Street, hasn’t been opposed to embracing his own socialist policies.
Telling U.S. companies to not do business with China, threatening to purposely devalue the dollar, running up huge deficits, imposing restrictive tariffs that ultimately result in massive taxation for consumers, and a $28 billion farmer bailout which was deemed necessary due to other, anti-free market policies, are all tools of socialist structures.
But the illusion is that Trump abhors socialist policies. That he’s an unapologetic supporter of free-market capitalism. When in reality, some of his policies are no less socialist than those of Sanders, Warren, or any other Democrat in the running.
Of course, it’s not the reality of what these guys do that matters to the market. It’s the illusion of what they do.
Easy Money
As an investor, you know that every election breeds opportunity.
Whether it’s taking advantage of a raging bull market or a massive sell-off, there’s always an opportunity to make money.
If Trump wins a second term, the market will likely rally. Just like it did the last time. If it looks like he’s going to take it without any problem, I’ll likely pick up a triple-leverage Dow ETF.
Trump is a war hawk, too. Which I find interesting seeing as he’s never seen a day of combat in his life, and would probably wet himself if ever sent off into battle.
Regardless, Trump loves to threaten other countries behind the safety and comfort of the world’s most powerful military. And you can be sure a second win will give a nice boost to defense contractors. Those will be excellent buying opportunities too.
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If a Democrat wins, the market will respond negatively. Although I suspect a Sanders victory would be far more damaging to the market than a Biden win.
In either case, I’ll likely short the Dow with a triple-leverage inverse ETF.
Of course, all we’re doing here is making plays on the illusion of what will come with a certain presidency. The reality, however, is that no matter who wins, the long-term outlook for the U.S. economy is not a particularly positive one.
As I mentioned earlier this year, the U.S. is more than $23 trillion in debt and will add more than another trillion, every year, for the next 10 years.
According to the Congressional Budget Office (CBO), by 2049, the national debt will be nearly one and a half times the size of the U.S. economy. The CBO calls this “unprecedented levels.”
No matter who wins the next election, the GOP or the Dems will continue to spend money we don’t have.
The can will continue to get kicked further down the road, and kids being born today will be on the hook for a debt burden that will gut any chance of them enjoying the kind of wealth and prosperity that comes with honest free markets and responsible fiscal policy.
I don’t say this to be a downer. It’s just an observation of truth.
And here’s another observation of truth…
You need to make as much money as you can now before the proverbial poop hits the fan. Because make no mistake: It’s much easier to create wealth today then it will be tomorrow.
Here are a few suggestions that you can take advantage of right now…
A little-known mandate that forces Amazon to pay you a percentage on every package it ships.
A new energy storage technology that could soon make electric car oombatteries obsolete.
Quite frankly, this is all easy money.
And rest assured, “easy money” isn’t something that’s going to be readily available in the future.
Invest accordingly.
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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