VRA Investment Letter: "War Zone". The Trump Economic Miracle 2.0. The Truth About Economic Growth, Tariffs & Inflation.
/Good Thursday morning. Heads up: I’ll be on Wayne Allyn Root’s hit new podcast (with The Gateway Pundit) tonight at 7:30 EST. Stream via Waynes X account, Rumble, TGP, etc. Hope you can join us as we discuss the Trump Economic Miracle 2.0 and some of the bullish topics we talk about here daily.
Note: in the age of AI, VRA Readers should know that every word we write (and speak) is our own. The financial publishing space over the last year or so has become rife with AI-written newsletters, something that Tyler and I will continue to refuse to do. As you’ve likely discovered over the years there are some rather scummy players in this industry…people that have no concerns about making up track records/returns of whole cloth. It’s one thing to use AI to assist with research…it’s another thing altogether to use AI to write and publish bogus newsletters. We encourage every company in our space to make clear who’s creating your work and to publish all trades/results over an extended period, just as we publish ours over a 10-year period (in our VRA Members Site).
Macro Update: The Trump Economic Miracle 2.0
In 2016, while writing The Conspiracy Against Your Money (where I predicted Trump would win), I referred to Trumps pending presidency as “The Trump Economic Miracle”, which would result in the US economy and markets soaring. Had it not been for J Powell hiking rates 7 straight times in 2018 (Mr Powell, growth does NOT cause inflation)..that’s right, this is Powell’s second attempt to “Get Trump”…the markets wouldn’t have crashed in late 2018. Then, had Trump not been suckered into the plandemic (which is what I choose to believe happened), the crash of 2020 would not have happened. Combined, Trump's first term should have featured much higher GDP growth and market gains.
It’s our belief that in Trump's swan song, he is fully engaged to ensure the economy and markets soar as they rarely have throughout history. We’re on record as predicting that my mid-2026, US GDP growth will top 5% with a stock market that continues to melt-up, as the Roaring 2020’s, Innovation Revolution and Trump Economic Miracle 2.0 combine to play out with an economic boom-time. As I’ve said often in these pages and on our podcasts, this the most bullish I’ve been in my 40 year career.
One of the ways that I’ve learned to beat the markets over the years is to do exactly the opposite of what mainstream economists are predicting. History tells is that their group think and consensus building is…rather pathetic. Here’s what wall streets economic gurus are whiffing on now…
The Truth About Economic Growth, Tariffs and Inflation.
Trump tariffs are working; tariffs will barely increase costs to consumers while aggressively reshoring America's domestic economy.
1) Foreign producers are aggressively absorbing the tariffs: as the data of the last several months continue to prove, in aggressive negotiations with US importers, exporters are lowering their prices to maintain their market share in the US, which are offsetting tariff costs. Chinese manufacturers are reducing their prices to counter the tariffs, with the final price to US consumers remaining stable. This is why inflation levels have missed the Fed’s estimates in each of the last 5 months.
2) Domestic Substitution/Competition: Tariffs have already incentivized US companies to produce these same goods locally (or source them from non-tariffed countries). This is increasing competition while keeping prices down at the same time, as domestic production enters an American boom time. We’re already seeing this play out in tariffs on steel; as one country raises costs, US producers (or alternative suppliers) are already filling the gap with less expensive replacements…and it’s only just getting started.
3) We see the direct evidence of ongoing “disinflation” from the replacement to traditional CPI data; Truflation, which has inflation at just 1.75% versus the BLS reported rate of 2.7%. We highly recommend following Truflation.com featuring their decentralized, real-time inflation data as it updates throughout the day. Within a year, the outdated CPI collection data of today should cease to exist. The future for tracking inflation and economic data is Truflation (and other AI-based real time programs like it).
4) Next up, know this; for all intents and purposes, J Powell’s time as Fed Chair has come to an end. Here’s Trump’s plan that is neutering “too late” from inside of the Federal Reserve. We look for Trump to use the last weeks Fed Governors resignation (Kugler…isn’t it interesting that she just up and quit) to appoint a temporary Fed Governor with that new addition being appointed as Fed Chair to replace Powell. Powell will then be surrounded by dissenting voices, including a “Shadow Fed Chair” that Powell must work with daily. The end result? Powells voice will no longer matter.
My prediction: within a year the Fed Funds rate will be below 3.33% (4.33% today) with 10-year yields below 3.2% and 30 yr mortgages below 5%.In this environment the melt-up in stocks underway today will continue, with interest rate sensitive groups like the semis, tech, housing, small caps and gold/silver/miners exploding higher.
VRA Bottom Line: Trump’s tariff and economic policies are moderating the impact on US consumer prices while restoring American manufacturing and domestic production of most every industry. The US economy is on its way to becoming an unstoppable global economic juggernaut…another reason our markets have been melting up. We should expect more of it.
This Guy Gets It…and its why Powells Chairmanship at the Fed is Already Ending.
The truth about inflation and growth from Joe Lavorgna
The Dollar, Gold, Miners & Rates; One Big Primary Trend
We’ve been aggressively long gold, silver and the miners. Seasonality has flipped to highly bullish for PM’s and miners into year end. Now is the time to own this group.
For our newer VRA Readers, I first recommended gold ($350), silver ($5) and gold miners in my second VRA Letter in 2003. This group has been good to us (outside of the bear market from 2012 to late 2015…a brutal 3–4 years).
Below, in this long term chart of GDX we see something amazing. Even as GDX has jumped 366% from the 2016 lows, GDX is only now beginning to approach its all time highs from late 2011. That’s right…we’ve yet to hit new ATH’s in GDX, even as gold has soared from $1000/oz to more than $3400/oz today. This is the primary reason that so few own the miners today…that stretch of 4 year agony remains fresh in the minds of many. Importantly, as contrarians, we want to use this indifference from investors to the miners as our advantage. As Tyler has heard me say at least 1000 times, once buyside volumes return to GDX…which still struggles to trade more than 30 million shares/day…look out above. The bull market directly ahead will be one for the record books.
Below we see one of may favorite timing signals for the entire PM group. In this relative strength chart of GDX to Gold we see that the miners have gone parabolic to gold. Over my career, this has been the buy signal of buy signals for the group.
From the beginning of the year our favorite sector was gold miners, where we said that GDX would produce 100%+ returns.
To date, GDX is up 67% for the year.
GDX Chart; big beautiful bullish (BBB) ascending channel…looking for $64 on this move. A bullish GDX is hyper-bullish for our VRA Mining Stocks
Here’s what helps to cement the GDX move. Look at the chart of the dollar (below). The USD has been in a brutal bear market since Trump took office (just as he wanted). However, when it hit extreme oversold levels in early July it was time for a counter-trend (bear market) move higher, which is exactly what we’ve seen over the last month. Now, the dollar has rallied back to extreme OB while managing to crawl back to its 100 dma (and still WELL below the 200 dma). We now look for the dollar to resume its bear market. Bullish for gold, silver and miners.
The dollar’s strength has weighed on gold and the miners but now it’s time for their PRIMARY trends to kick back in. Combined, this is a near perfect setup for gold and the miners to resume their massive 2025 bull market move higher.
US dollar
Until next time, thanks again for reading.
Kip
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