Doug Casey On Trump's Second Term: What It Means For America And Investors

International Man: What are your overall thoughts on Trump’s second term?

How do you expect it to differ from his first term?

Doug Casey: Thank heavens Kamala lost. If she’d won, the Jacobins would have cemented their hold on the country, and it would have been “game over.” We would have seen an acceleration of cultural decline, vastly higher taxes and regulations, and a serious push to shut down free speech.

It feels like morning in America again. But unfortunately, morning only lasts six hours. You’ve got to remember that roughly half the country voted for Kamala, despite her total lack of any qualifications and her extreme commitment to socialist/statist values. Half the country believes in these things; they’re unhappy and not going away.

In other words, it ain’t over till it’s over. And it ain’t over yet.

Regarding Trump’s next four years, I hope that he shows better judgment than he did in his first term when he surrounded himself with all kinds of spineless toadies, deep-staters, and political hacks. But I’m optimistic. For instance, he’s announced that Mike Pompeo and Nikki Haley—horrible people—are out.

Better yet, he’s putting RFK Jr. in a position of power over the FDA. He’s tasked Elon Musk with trying to cut Federal spending by $2 trillion. They’re talking about putting Ron Paul in a position to weigh in on monetary policy. And they’ve apparently offered Joel Salatin a position in the Department of Agriculture.

While Trump doesn’t have a philosophical core, flies by the seat of his pants, is not terribly knowledgeable, and demonstrated horrible judgment about people the last time around, this time, he’s doing a much better job picking the people who are going to actually make things happen.

What scares me most? There have been two assassination attempts, and there might be a third or a fourth before he’s inaugurated. He has become a totem for cultural conservatism. And the Jacobins who control the US government, academia, the entertainment industry, the corporate world, and all of the power centers of America don’t want to see him in office. They’re presently in disarray, but they’re capable of any knavery.

International Man: How do you see Trump’s policies in a second term impacting the federal debt, inflation, and the broader US economy?

Is there any realistic path to reversing the current trajectory?

Doug Casey: First, let me reemphasize how important it is that Kamala and the Democrats lost.

The Democrats would’ve gone hog wild toward the socialization of America. I’m extremely grateful for their defeat. And very happy Trump seems angry enough to mete out some justice.

On the downside, though, Trump has always called himself a “low-interest rate guy” and the “king of debt.” Remember that he was a big spender during his first term and ran up huge deficits. They were relatively and absolutely bigger than those of the baby Bush or Obama. And even bigger than Biden’s over the last four years. I expect that since he has no real grip on economics, he’ll encourage printing money to “help” the economy. Not that he has any choice; they have to keep printing, or the debt bubble will implode.

Going back to the bright side, he wants to massively deregulate the economy. That’s a huge plus. And he wants to reduce taxes. That’s wonderful. But the bad news is that he clearly doesn’t understand that there is no such thing as lowering taxes unless you lower government spending. Especially now, when a third of all government spending is funded by selling debt to the Federal Reserve, which amounts to printing money. There’s going to be more of that. Retail prices will go up for sure. But perhaps the stock market—overpriced as it is—will go even higher with the flood of money.

Is there any realistic path to reversing the current trajectory? No.

It’s wonderful that Elon Musk wants to cut the budget by $2 trillion per year, roughly the amount of the deficit. But I’d say the chances of that are close to zero. Things like Social Security, Medicaid, Medicare, interest payments, and the military budget are sacrosanct—and over 90% of the budget.

On the downside, Trump has indicated unwavering support towards Israel. The US might become Israel’s proxy for a hot war with Iran, which would be a disaster. Israel isn’t our 51st state. Despite the fact Trump wants to avoid war, he might yet involve us in a nuclear dust-up with the Middle East version of the Hatfields versus the McCoys.

On the bright side, again, he says he can end the war in the Ukraine because he thinks that he has a good personal relationship with both Zelensky and Putin. Say what you want about Putin, but Zelensky is even more dangerous, responsible for looting scores of billions from the US to prolong a pointless border war. The only winners are Ukrainian bureaucrats and equally corrupt military “defense” companies.

Let’s hope Trump doesn’t try to back the Russians into an impossible corner because he likes to put forward an image of being “tough.” A propaganda-driven hysteria has been created in the US. Americans believe that Russia is evil, and the terminally corrupt Zelensky regime is good. As happened in World War 1, US intervention would likely be catastrophic.

So we’re not out of the woods in foreign policy or domestic affairs. I’m afraid that morning in America, like all mornings, will only last six hours.

International Man: Trump has promised to end citizenship-based taxation for American expats.

What would be the broader implications of this change, and do you think he’ll deliver on this promise?

Doug Casey: It’s a wonderful idea because the US is the only country in the world, other than Eritrea, that taxes its expats.

If Americans leave the country, they’re still taxed as residents for as long as they live. It’s an insane policy. Of course, he should try to change it.

Will he be able to change it?

I’d say the chances of that are slim and none, and Slim’s out of town. With the US government on the way to bankruptcy, Congress won’t want to cut off that source of revenue. If it does, scores of thousands of rich Americans would leave the country to escape its onerous tax and regulatory burdens.

In addition to that, the entire world is going the other direction. Among other places, France and Canada are talking seriously about taxing their expat citizens.

I hope it happens, but don’t count on it. A US passport will remain a huge liability for anyone with assets.

International Man: What geopolitical and foreign policy shifts do you foresee under a second Trump administration?

Doug Casey: The US relationship with the BRICS is becoming important. It’s all about the declining US dollar. Most of the rest of the world wants to stop using dollars. They know that it’s the unsecured liability of a bankrupt government. They’ve seen how it can be weaponized. The $30 or $40 trillion outside the US are hot potatoes and Old Maid cards, even while new dollars are being created like confetti.

Of course, the BRICS are trying to create their own currency and their own SWIFT system equivalent so people don’t have to use the dollar.

Rather than trying to make the dollar once again “as good as gold’, Trump is resorting to threats. He’s said, “Well, you don’t have to use the dollar. But if you don’t use our currency, we’ll charge 100% duties when you try to export to the US.”

He doesn’t seem to realize that the US no longer exports much. We don’t produce nearly what we consume. Our major export since the 1980s has been dollars, not Boeings or soybeans.

If Trump puts heavy duties on imports, there’s an excellent chance that he could destroy the world’s economy, which is vastly more dependent on international trade than it was in 1929, when Hoover did that with the Smoot–Hawley tariffs. High tariffs would, in effect, put the US under a self-imposed trade embargo.

There’s only one way to solve the government’s fiscal problems: Radically cutting spending. That’s unlikely to happen under Trump, despite the best efforts of Elon Musk’s efficiency efforts.

International Man: How are you personally positioning your portfolio for a second Trump term?

What specific sectors or investment strategies do you believe will thrive in this environment?

Doug Casey: I continue to be long gold because they’re going to continue destroying the dollar; its fate is sealed—even if we have a wholesale credit collapse, which is a real possibility.

I continue to think oil, and especially natural gas, are going higher. Even though Trump has said that he will encourage more production—which is wonderful. The world runs on hydrocarbons. I especially like coal. Until the world goes nuclear, it’s the only feasible answer to generating more electricity.

What specific investment strategies will work in the Trump years?

For a while, it will continue to be stocks because money drives the market, and the Trump regime will definitely create lots more money and credit. That said, I’m still not interested in stocks, even though they may become even more overpriced. I have better places to be.

Although the Donald says that he’s a low-interest rate guy, there’s nothing he can do to control long-term interest rates, which are headed higher. I suspect they’re headed back to, and beyond, the levels we saw in the early ’80s. Bonds are a disaster in the making.

As important as knowing what to do, however, is knowing what not to do. You don’t want to lose your capital by putting your money in dangerous places. And that includes bonds, most stocks, and failing to diversify politically.

Don’t forget that—as important as this election was—it can’t immediately undo decades of economic and cultural debauchery.

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