VRA Investment Letter: Here We Go Again. Trump Tariff Threat. House Passes the BBB. Bitcoin & Gold Miners Break Out.

Good Friday morning. Here we go again. Futures turned sharply lower this AM as Trump announced that he’s not ok with Apple moving production from China to India and that a 25% tariff will be applied to Apple on US sales. Trump wants iPhones to be made in the US. The Dow Jones initially fell 600 points on the news with Nasdaq -400, we have recovered some of those losses in the morning’s action. Gold is up $60 on the news with GDX +2.5%.

As with recent early morning selloffs, we’ll be surprised if the markets don’t find their footing and rally higher. This has been the (clear) repeating pattern, from the 4/7 lows. And BTW, we see the odds of Apple making their phones in the US as slim to none. This is about leverage with Trump, almost certainly.

Yesterday, the House passed Trump’s Big Beautiful Bill with just one R voting no (Massie). I don’t know anyone that likes the thought of adding $4–5 trillion to our debt but this bill is, without question, a pro-growth piece of legislation that will help to turbocharge the US economy. It must still pass in the senate and then come back for final passage but those odds look to be high.

Most every financial network looks to be repeating the same line’ “our debt to GDP of 122% will only grow from here”. Just once I’d like to hear them report that the #2 and #3 largest economies (China, Japan) have debt to GDP of 250% to 300%. Perspective matters. And growing our way out of our debt problems makes far more sense than taxing our way out of them. And that’s what every Dem voted for today when they voted no; the largest tax increase in history.

Trump’s “Big Beautiful Bill” Will Turbocharge the Economy and Markets

Interest Rate Scare

On Wednesday, I stepped away from the office for 30 minutes and came back to a stock market that looked very different than before I left. A poor 20 year auction (plus the reality that this bill would likely pass without large spending cuts) took the markets lower (in 3 minutes) by more than 1.5%. Is this the beginning of a sharp selloff in the market? No, we don’t see that at all. This is an overbought shakeout that we’ll soon be acting on by adding 1–2 lev ETF positions.

Again, perspective helps. The 10-year remains in a long term trading range (However, a move through 5% would spook the markets). We do not see that happening. It’s time for Scott Bessent to work his magic.

Bitcoin Breaks Out

BTC has broken out from its precious high of $109,300 and currently trades just below $110,000. Tyler and I expect that the move to $150,000 could take place in a hurry. As the best supply/demand story of all time, our year end $200,000 target may be on the low side. Our cycle high remains $350,000. 

Junior Gold Miners Are Joining the Party

GDXJ (Junior Miners ETF) has now broken through a 13-year rounded bottom when it crossed $61.35 (last: $63.12, below). When gold broke through its own 11-year rounded bottom (1/2024), gold then proceeded to soar from $1920/oz to today’s $3304/oz for a move of 72% in just 17 months. We’ve waited patiently in our junior miners (check out the VRA Portfolio FREE for 14-days) because we were confident that the combination of insane global fiat printing and debt issuance would ultimately see the junior miners join the party. For me, this feels very much like the 2001–2011 move higher in the miners, which took GDM (Gold Miners Index) from $180 to $1855…a stunning decade-long move of 930%. The key point to remember is that this is only the beginning of this bull market. In the months/years to come our biggest battle will be resisting the urge to sell and take profits. We’ll work on that together…because these are legitimate 10-baggers. Maybe 20-baggers.

Have a great long Memorial Day weekend to everyone in the States.

Until next time, thanks again for reading…

Kip

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