Dear Reader,
Happy Friday!
My son’s basketball team has made it to the playoffs, so we have a big game tomorrow at 10am.
There’s a lot of excitement in our house!
And this week we have our Ohio team here in our Florida office, so we had a company dinner my daughter joined.
On our drive home she asked me, what do you think about Zohran Mamdani winning the election in New York (my hometown)?
Here’s what I told her:
I said, “look, it’s crazy to me that with all the proof points in history that we could elect a socialist.”
Now, I’m not going to talk politics here, because that’s not what we do - we talk about finance.
So what I want to do here today is show you why this election happened, and how to invest for outsized returns during periods of high inflation.
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Trump Admin’s Shocking Admission:
U.S. Dollar is Toast!
I’ve issued this warning before, but it’s never been as urgent as it is TODAY…
If you have any money in U.S. dollars, go here now and see why you must move your cash this month.
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So what I said to her, and want to share with you related to finance is, he had a great message -
Things are too expensive.
We know socialism doesn’t work.
It’s a sad state, frankly, that our education system is such that young people think socialism may work.
That’s a lack of a good education.
Blame our schools, blame our education system.
It’s mind-boggling that a whole generation of kids actually think socialism is a good idea.
It’s like, really? Look at history.
But one thing that I understand about how he won is this inflation argument.
Things are so expensive.
And this young man, Mamdani, who’s never had a job, grew up rich, had a simple message:
Things are too expensive and I’m gonna give you stuff for free.
Free buses, free groceries, free this, free that.
That’s a socialist/populist message that works a lot.
And what drives it is inflation.
Inflation is the most damaging thing for a society.
It has caused more revolutions than basically anything. Its fingerprints are on every revolution you can think of.
It’s quite fascinating - it’s one of the reasons Fed Chair Powell has fought so vehemently against President Trump about lowering rates.
If you lower them too quickly, you can get an inflation spike.
That’s what happened in the seventies when Arthur Burns succumbed to President Nixon’s pressure and lowered rates, and you see these spikes and it just went crazy.
And then, a bunch of other things added to that, too.
But when you look at inflation throughout history…
Think about the American Revolution. The British increased prices, taxed our stuff.
The French Revolution - the French saw their bread prices in 1789 double and they just went bonkers. That was a complete trigger. It sparked riots and hunger across the country.
The Russian Revolution was caused by hyperinflation after World War I.
The German Revolution - you remember the Weimar Republic after World War I - massive inflation - food shortages that created conditions leading to the rise of Hitler - The National Socialist.
People seem to forget that socialism comes from the left - the Nazi Party, the Socialist Party.
The Iranian Revolution - also caused by inflation. Inflation hit 25%-30%.
Inflation drove the Arab Spring.
My point is that inflation is a great cause of political instability throughout history.
You can go back to Roman times, Greek times - look all through history. Inflation makes people angry.
Prices have gone up and gold tells us we are in an inflationary time.
President Trump, Biden, have been printing money like it’s going out of style.
You go to the grocery store and things are expensive. It’s unbelievable.
A hundred dollars today is like $20, twenty years ago.
Inflation causes political instability, and until that inflation gets under control, you’re going to have continued political instability.
Inflation is very, very dangerous for a country.
We can already see this inflation causing people pain.
So they listen to absurd messages like Mamdani’s, who says he’s going to give everything away for free.
How do smart people vote for socialism?
Because they’re in pain.
Pain caused by inflation.
People can’t pay for things! It’s crazy.
How do you deal with inflation?
How do we as investors deal with inflation?
One way is gold. One of the best things about gold is it is a hedge against inflation. One of the worst things is it doesn’t produce any cash flow.
So, what does history tell us?
There’s a blueprint for dealing with inflation as an investor.
Buy companies that can raise their prices above the inflation rate.
If inflation is 3%, 4%, 5% a year…
You want to invest in a company that can raise its prices 6% or 7% a year. Like Hershey.
There are plenty of companies with that kind of pricing power.
Another way to do it is to invest in biotech and pharmaceutical stocks.
Historically, they can raise their prices above the inflation rate.
And low interest rates lead to a big influx of cash in biotech and pharma companies. Here’s our top two to buy now>>>
So, I don’t want to talk politics here - I just wanted to explain how inflation impacts politics.
When people are in pain, they search for other solutions.
They turn to the government to ease their pain, and that’s basically what has happened in New York and throughout history.
It’s extremely common.
It speaks to that pain even more than just general lack of information or knowledge or education on the failed policies of socialism.
The U.S. dollar has been under attack by China, and our own moves aren’t helping.
There’s an urgent situation going on here that requires your attention.
If you have any money in U.S. dollars, you need to take a hard look at your nest egg before the next domino is set to fall.
Here’s the three steps to take right now, today, before it’s too late.
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