Trump’s third week in office brings us a look into rolling back financial regulation reforms, the power of the @POTUS’s tweets, and the new Department of Education director.
New Executive Order Likely to Target Dodd-Frank
This week, Trump signed an executive order calling for a review of financial regulations. Many Democrats are concerned the audit will target the Dodd-Frank regulations enacted to protect consumers after the 2008 meltdown. Although Trump’s request didn’t specifically mention the regulatory law, he has expressed his frustration with it in the past.
Gold hit an 11-week high, opening Monday at $1,223.50 and climbing steadily all morning. By the afternoon, it had risen another $12. Interest in gold was spurred by a weak dollar and last week’s mixed US jobs numbers that “muted expectations for near-term interest rate hikes,” according to Reuters.
Trump has issued more executive orders than he’s spent days in office so far, and week two of his Presidency started off with a divisive refugee ban. From there, things have been even more tumultuous for the markets, with justice department firings and rocky discussions with global leaders.
Refugee Ban Tarnishes Foreign Relations and the Dollar
- Many Republican leaders, from John McCain to the Koch brothers, have spoken out against the travel ban.
- This fracturing highlights new potential uncertainty that any of Trump’s campaign goals, including stimulus plans, will easily be enacted.
- The US business world is on high alert following the ban, Fast Company reports, as its vagueness and potential to shake up immigration law in the future could impact employees.
Gold has been on a small rally this week following Trump’s executive action to halt incoming travel of citizens from seven specific Middle-Eastern nations. The travel ban caused major moves off of risky assets and into safer financial investments like precious metals. Some investors are monitoring the potential fracturing of the Republican Party, which would likely increase market uncertainty into 2017.
Trump also issued an immigration ban that put his administration at odds with many foreign leaders like Australian Prime Minister, Malcolm Turnbull. The disagreement was reportedly over a previous agreement made with President Obama, according to the Washington Post. Regardless of the reaction to the tense conversation, if more discussions with global leaders become volatile, markets could react the same way.
While many are criticizing Trump’s travel ban put into effect this weekend, others are considering something more impactful to US interests: his tax reform bill. Last week Trump spun out several talking points surrounding his tax plan, which would “reduce our trade deficits, increase American exports and … generate revenue from Mexico that will pay for the wall,” Trump told Philadelphia lawmakers.
The ill-fated plan to cut taxes while increasing spending isn’t getting past Peter Schiff who recently criticized the President’s plan, which would ultimately hurt American businesses and consumers.
Today SchiffGold begins its newest weekly series, the “Trump 100”, a continuing look at the new President-elect’s first 100 days in office. Our series will provide you Peter Schiff’s unique perspective on Trump’s executive orders, financial stimulus, deregulation policies, and everything else essential to managing your portfolio.
As Trump takes office today, we look forward at the inevitable conflict to come between the President and the Fed. The tug-of-war may come thanks to the Fed’s target 2% inflation, the Fed’s lack of tech savvy, or something completely different.
Donald Trump and Janet Yellen Look to Be on a Collision Course
A New York Times article points out some interesting scenarios where President-Elect Trump’s economic policies may be at odds with the traditional stance of the Fed. The main sticking point may be in defining what amounts to a “growing” economy. Irwin said he sees a situation where Trump’s advisors may see the target 2% goal in GDP growth as inadequate, look instead to 3.5%-4%.
In podcast 221, Peter Schiff shows how Trump’s policies seem to be over before they even get started, and takes the New York Fed President to task for reckless advice to homeowners.
Peter said he sees the President-Elect’s recent comments to the Wall Street Journal about the overvaluation of the dollar as representing an unstated “falling dollar” policy—one that candidate Trump espoused his entire campaign.
The geopolitical uncertainty of Brexit and Trump’s approaching inauguration are sending precious metals on an early rally for the year.
Britain’s Prime Minister Theresa May is clarifying her plans to ensure the UK makes a clean break from the EU’s single market, expressing the desire to remain a “good friend and neighbor in every way,” according to Bloomberg. However, her diplomatic tone is also backed by warnings about any attempts to punish the UK for its decision to leave the European bloc.
In his weekly radio address to his citizens, Venezuela’s post-Hugo Chavez leader, President Nicolas Maduro, announced he would raise the minimum wage for the fifth time over the last year. The bump puts the minimum salary at 40,683 bolivars or $60 per month, according to Reuters.
The new minimum wage represents a 322% cumulative increase since February 2016 and is an attempt to protect citizens’ wages from “mafia attacks,” according to Maduro. The President attributed his country’s woes to anti-socialist political opponents and capitalists who have created an “economic war” to foment disorder and unrest.
In his latest podcast, Peter Schiff illustrates the important differences between cryptocurrencies like Bitcoin and a gold transaction account like Goldmoney when it comes to convenience and preserving wealth. Essentially, it comes down to the technological risks and the price volatility of the underlying currencies. Here’s a breakdown of Peter’s major points:
One advantage cryptocurrencies have over physical precious metals is the ease of transaction, but it comes at a cost. Bitcoin is a completely digital currency, so you can spend or transfer it just like cash. However, with a Goldmoney account, gold owners can now enjoy the same convenience, whether they’re depositing, sending or receiving transfers through an app or paying with a Goldmoney MasterCard.
“It’s not about Goldmoney being the substituted for Bitcoin,” Peter explains. “It’s gold itself. Gold is what you want to own, not Bitcoin. Goldmoney makes gold as convenient to use as Bitcoin. In fact, I think more convenient to use when it comes to commerce because you can deposit some of your gold in your Goldmoney account and now it takes all of those liquid characteristics that so many people like about Bitcoin.”