State of the Union – A Speech that Unites

State of the Union – A Speech that Unites

This is our New American Moment. President Trump’s first inaugural address was a rousing exclamation point of the first year of accomplishments.  Stock market highs … soaring economy … it was the president at his best.

Polling done by CBS News right after the speech – not usually the most supportive of networks – found that 75% of the public agreed with and approved of the President’s message.

What was striking was the Democratic response – largely panned as either “stone-faced,” “prune-faced,” or “sitting on their hands.”  While both political parties over the years have not always provided a positive response when they disagree on policy – either providing tepid clapping when the other side gives a standing ovation, or in most cases not clapping at all – it is quite rare to see a party not applaud or acknowledge American success or personal loss when it is a non-policy issue that we all agree on – such as massive gains in income and employment, the flag, the anthem, patriotism, our veterans, or those who have suffered a loss.  The images of politicians not clapping for mothers who lost loved ones to gang members, for example, was unprecedented.

 I. Quick list of unifying issues the Democrats did not applaud or acknowledge  instead they “sat on their hands.”

  1. Trillions of dollars of wealth created in the last 12 months.
  2. Black unemployment the lowest in history. This was going down under President Obama as well.  The issue being it is now the LOWEST in HISTORY, and hiring in the black community ACCELERATED after Trump commenced his deregulation efforts … how do we all not agree on that one?
  3. Recognizing our veterans”: You cannot sink any lower than not clapping for veterans.
  4. Mother’s whose children were killed by MS-13 gang members.   Whatever you support in current immigration policy, or your preferences regarding immigration, not acknowledging the grief and loss of a child is a new low.

 II. Top policy issues President Trump listed in the State of the Union.

  1. Government serves the people … not the other way around. Trump rightly recognized that he had ended the “War on Energy” the government had waged the last 8 years.  He touted his signing into law the “VA Accountability Act” which will aid veterans with across-the-board changes to the VA.  While his “America First” trade policies have many concerned of trade wars and economic conflict, his Tax Reform Act has already returned billions to workers and created a pathway for companies to repatriate overseas cash.
  2. There has never been a better time to start living the American dream. The Tax Reform Act has put your money back into your pocket, and the pro-business environment has helped the stock market accelerate without money printing and quantitative easing.  That has increased your 401K by over 40% in the last year.  As columnist Caitlyn Huey Burns commented: “…He name-checked some specifics of the bill, including the doubling of the standard deduction and the increase of the child tax credit; pointed out some of the corporations that have been citing the tax changes in handing out wage increases or bonuses; and mentioned that most Americans would likely see increased take-home pay next month.”
  3. The President outlined a $1.5 billion infrastructure plan. While many Republicans are rightly concerned about the deficit-inducing nature of the project, there is no doubt the country has stressed and fragile infrastructure systems that could use an infusion of repair and expansion.  Some conservatives believe with toll road funding and tariff revenue we could see very little impact on the fiscal bottom line.  Either way, the populist idea has wide appeal in the rust belt.
  4. Immigration is a winning issue. Democrats constantly cite polls showing U.S. voters don’t want a wall, and they want the Dreamers to stay……the same polling outlets that predicted universally a land-slide Clinton win.  There are few, if any, respondents when asked the question – “can a country be a country if they do not have a border” – who say yes, we can still be a country.  The vast majority of voters understand that both parties’ elites benefit from illegal immigration, and that one-party benefits from illegal immigrant voting, and none of those “elites” represent the interests of the common man or woman on main street.  Trump offered a compromise, which is a winning ticket with the majority of Americans … a wall, border enforcement, and you get DACA.  Only a fool would pass that up … “Americans are dreamers too.”
  5. America First in Foreign Policy. ISIS nearly wiped from the map … more troops to Afghanistan … confronting the North Korean menace … reassuring allies in the Middle East abandoned and abused by the previous Administration……Iran is on notice and the nuclear deal is at risk of being terminated … even the Russians have been unhappy with our actions in Syria … many feared and continue to repeat the refrain that Trump would abandon NATO and leave everyone holding the bag.  Instead, he has sided with our friends, threatened our enemies, and the only bag being held is ours – meaning we are getting NATO partners to contribute more to their own defense.  A lot remains to be done, but foreign policy is another area where Trump is succeeding with his “Make America Great Again.”

America is back!!!  A pro-business President who is confident of, and fights for, American culture and American values is leading from the White House (no longer leading from behind).  Some of the opposite party could find nothing to support even with wages, the stock market, and the economy soaring … that is a shameful position to take.

One thing is certain, all of this prosperity should make the prudent investor find a safe haven for some of his/her winnings … move them off the table into a safe and simple investment vehicle.  Help us to help you by calling today! 877-912-1919

Iran in the Throes of Revolution!

Iran in the Throes of Revolution!

Watching the news, you may not get the sense of what is happening in Iran.  Most news outlets are consumed with U.S. domestic interests and pay little attention to the tens of thousands in the streets each night protesting against the Islamic government.   It is extraordinary to see those who are willing to risk their lives for the freedoms and opportunities we take for granted each day.  It is more extraordinary given the degree of indifference and outright disregard we have shown for the people of Iran over the last 8 years.

Many of our followers let out a collective sigh – “not our fight”  or “not our problem” – but as you know, what happens around the world has a profound impact on our money, and on our lives, here at home.  Many left of center analysts suggest this is “not about us,” but that it is about the Iranians.  That’s of course factually incorrect – price of oil, balance of power, terrorism, allies in the region … one thing is a constant:  It’s always about us.

Let’s consider (I) How we got here, (II) What’s happening now, and, (III) How it affects you.

I. How did Iran get to this point of a general uprising?

  1. The Short History of Iran 101. Iran is the inheritor of the Persian Empire and after a Muslim conquest in the 7th Century AD largely became a Shia-dominant population.  The modern state came into being in the early 1920’s under a Monarch known as the “Reza Shah,” which became known in the colloquial as the “Shah.”    The Shah ruled but with marginal civic and human rights.  A prime minister served to manage the government, and one appointed in 1951 caught the eye of the Americans.
  2. The Cold War brings the Americans to Iran. Iran had largely avoided the colonial impact of the British and the French throughout the Middle East.  They faced a continual subversion from communists after World War II, because of the Soviet forces which entered Iran during the war.  The residual communist political parties and influence helped elect Mohammed Mossadegh, a socialist prime minister.  He nationalized the oil industry and threatened existing corporate oil interests of the British.  The United States, without any oil interest in Iran, was worried about Soviet influence on the new Prime Minister.  The combination of those fears led to the first CIA-backed overthrow of a government in the post-War era, as US clandestine forces removed the communist-influenced Mossadegh from office.  Under the direction and influence of the CIA, the Shah rolled back reforms and democratic freedoms to help ensure no further communist influence in Iran.
  3. Repression brings the Ayatollah’s. From 1953 to 1979, Iranians enjoyed an upper-middle-class, Western lifestyle, thanks in large part to their relationship with the United States.  But political rights were limited, and the secret police jailed dissenters and Islamic radicals.  The lack of political rights led many Islamists into exile, one that would become well-known to the United States:  Ayatollah Khomeini.  The Ayatollah led a revolution against the Shah in 1979; he took 52 U.S. embassy personnel hostage for 444 days; and, he became an enemy of the US and an exporter of terror throughout the globe.  Iran became, almost overnight, a radical anti-American, Islamic terror state.
  4. No surprise that the people of Iran now want freedom! Decades of war … socialist economics … a continued police state – this one an Islamic police state … funding acts of terror around the world … funding terror groups such as Hamas and Hezbollah … teaching “Death to Israel” and “Death to America” … engaging in a tanker war with the U.S. in the late 1980’s … attacking U.S. troops during the War in Iraq … hundreds of thousands of lives lost in the Iran-Iraq War (1980-88) … is it any wonder that the Iranian people would do anything for something different with their lives???

II. What’s Happening Now?

  1. Sadly, America has not helped. The United States over the last 8 years, starting in 2009, turned its back on those seeking free and fair elections (2009 Green Movement) … withdrew our secret services such as the CIA, NSA, and other intelligence gathering operations …….we ceased funding pro-freedom groups in Iran … did not provide an overt force, or voice, for freedom … disregarded the war crimes committed against our troops in Iraq……the Clinton server that was hacked led to spies who worked for us being identified and executed, rolling up dozens of human sources and essentially drying up all assets on the ground who worked on our behalf … did not exert a penalty for seizing our sailors in the Gulf in 2016 … turned over billions in frozen assets in exchange for the Obama-led Nuclear agreement, which was immediately spent on the war in Syria and to fund terror groups such as Hezbollah … the list is too long to discuss in detail.  Bottom line – America has not sided with those seeking freedom in Iran and has instead actively worked against it over the last 8 years.  It is hoped that has changed in the last 12 months.
  2. Organically, and after the departure of the Obama Administration from office, protest elements have begun popping up in Iran. In one respect, it truly is not about the US.  Decades of soaring inflation have been tamed, but the economic fruits of foreign trade have not materialized.  There are no political rights, no employment or market-driven opportunities, and the people have had enough.   You could even say that the Iranian people realize there is no one coming to the rescue, so they have decided to take matters into their own hands.  It did not start where Western-educated elites live, such as the cosmopolitan capital Tehran.  It began in one of the holy cities, Mashhad, and it appears to be economically driven – food prices are too high.  But since then, the protests have spread nationwide.
  3. The U.S. appears to have re-engaged the Iranian opposition. It appears the U.S. is beginning to return to the fray.  The Trump Administration has been offering support through NGO’s as well as intelligence services re-opening lines of communication.  It is not America’s fight, but supporting freedom over a sworn enemy IS in our interest.

III. How and Why it affects You:

  1. U.S. troops and American interests could be targeted. U.S. troop deployments in Iraq, Syria and throughout the region could be targeted if the regime feels it is about to be toppled.  That is an unlikely outcome, but we have seen the unlikely become likely all too often in the Middle East.  US Naval patrols have been targeted before, and certainly could again, if the regime believes it is at risk.  Bottom line – an unstable regime could strike out at our people if it begins to crumble from within in Iran.
  2. Friends could be in harm’s way. America’s word, and our reputation, matter.  Without the trust, or fear, of America, then our markets and economic well-being in an interconnected world will always be in the crosshairs.  Having said that, U.S. allies such as Saudi Arabia, and US friends such as Israel, are equally at risk of being targeted by an unstable Iranian regime.  The more things fall apart, the greater risk to the stable regimes of the Middle East.  Also – does Iranian nuclear assets get sold to North Korea or smuggled out to terror groups?  Does Iran ask for Russian assistance?  The variables are exponential and few of them are very good.
  3. Oil – transportation – dollar – markets. Even if your position is to “… get the heck out of Dodge,” that doesn’t solve the economic dilemma:  Oil, transportation and the dollar ALL are impacted by unrest in the Middle East, specifically Iran, and therefore ALL can impact US markets and your portfolio.  We could have not one soldier anywhere on the planet other than Fort Benning, and an Iranian Revolution could widely impact oil, dollar-denominated assets, and wildly swing the values in your retirement plan.

In the end, this will most likely go the way it always has in the past – the protests will be suppressed.  A massive police state combined with government handouts will eventually stem the public resistance.  The American withdrawal over the last 8 years, combined with our giveaway of the billions in frozen assets, combined with our removal of most sanctions on their economy, and the government has enough resources to kill this nascent movement in its infancy.  It is ironic, but we have made it most difficult for the people to rise up against their autocratic Islamist government.

Another data-point of massive volatility in a world no longer under American authority.  Be careful what you wish for.  In the end, while it is a dangerous and difficult fight for freedom in Iran, your portfolio will remain exposed to the volatility regardless of the outcome.   That means it may be time to consider putting some of your gains into products that will protect you from market loss.

Call now! 877-912-1919

Saudi Arabia Could Damage Dollar

Saudi Arabia Could Damage Dollar

It is a good bet that if something is not in the daily headlines of the major media, then it is probably very important.  Under the radar has been the dramatic, volatile political turmoil in Saudi Arabia.  The country’s strategic relationship with the United States has a significant effect on the price of oil, energy, and the primacy of the dollar in global oil markets.  Upheaval can impact the dollar in significant ways, and dramatic, substantial volatility can risk the reserve currency status of the US greenback.

We have talked about the issue of dollar primacy before.  Once backed by gold, the dollar became the world’s reserve, singular currency of value after World War II (although it was widely in use prior to the war).  When we went off the gold standard in 1971, the dollar remained the world’s reserve currency for the principal reason that no one could challenge our cultural, financial, and military superiority.

Things have changed.  While gradual changes in the global economic landscape were inevitable, from a myriad of factors, it has been the previous 8 years which has radically and fundamentally transformed our leading position in the world.  Lacking the physical dominance on the global landscape, why would other countries feel compelled to use the dollar as a reserve currency?

Nonetheless, replacing the main unit of exchange in over 80% of all global economic transactions was not going to happen easily, or overnight.  Hence, the dollar remains “King Dollar” … for now.

 What could hasten changes in the global foreign exchange markets, and central bank usage of dollars as the primary global currency is a massive upheaval in energy markets.  While the U.S. has become mostly energy independent (thanks to free-market capitalism, innovation, and fracking), and has almost become a net “exporter” of energy in less than a decade, most of the world remains dependent on energy supplies from the Middle East.  Upheaval in those markets can impact pricing and therefore global economics.

And that is what makes the Kingdom of Saudi Arabia’s most recent internal political struggles so important.  Consider these recent events:

 1)            The transfer of power went to a younger, less experienced son as opposed to an older cousin or brother of the current King – King Salman.

2)            His son – Mohammed Bin Salman – is 32 years old and a reformer and is currently titled as the Crown Prince.

3)            For the first time in decades, the power struggle has been public and nasty, with dozens of relatives, brothers, uncles, cousins, etc. arrested for “corruption” … bank accounts seized, wives and children under house arrest … the new leader plans on clearing out all potential threats to his rule.

4)            His expected reforms have riled the conservative Wahhabi’s and Sunni Mosque extremists, splitting the country and the public in two.

The U.S. and Saudi Arabia have been strategic partners for almost a century, and bound the relationship further with not so secret, but off-the-record, agreements between then-President Nixon and King Faisal shortly after the Yom Kipper War and the first OPEC oil embargo – which provided that the U.S. would guarantee Saudi security and oil transport security in the gulf, in exchange for cheap supplies of oil and purchases of U.S. Treasuries.   Oil is traded in dollars – going off the gold standard in 1971, this helped ensure dollar stability as it floated against other currencies.  Liquidity and stability, backed by U.S. military might, kept the dollar as the world’s reserve currency even as it was no longer backed by gold.

Saudi Arabia Could Damage Dollar

The pillar of U.S. military might has been shaken and dollar liquidity was questioned with the 2008 financial crisis. Therefore, more than ever, dollar stability depends in no small part of stable energy markets.

BUT … the “palace intrigue” in Saudi Arabia, on the surface, can have some appeal.  What is the good and the bad of Saudi politics?

What Good Can Come From Saudi Political Intrigue?

  1. Reform and modernization represent a slight shift in values and beliefs. Any change in the treatment of women, in diversifying their economy, and helping to stamp our radicalization in the Muslim faith are welcome and needed changes in Saudi society.  It also makes it easier for the U.S. to do business with the very home of Islam making an effort to modernize their society.  The anti-terrorism effort should get a boost as well.
  2. Reduces stress on Israel. Saudi money and regional influence directly impact the Israeli-Palestinian conflict.  Sensing a greater threat in Iran, the Saudi’s (along with the Egyptians and Jordanians) have moved closer to Israel in regional political and military coordination.  That is a good thing for both Israel’s tactical defenses and U.S. strategic interests.
  3. They are the new bulwark against Iranian hegemony. Iraq was the original barrier to Iranian influence in the Middle East.  When we destroyed Iraq, we were supposed to serve as the guarantor by remaining there.  With Obama’s withdrawal right when we had won the war, Iraq fell apart, leaving Iran as the most powerful and influential player.  Combined with Obama’s Iran deal, giving billions to the mullahs, and not preventing Iran from becoming a nuclear state, our allies in the region rightfully determined we could not be counted on.  However, this has forced the Saudi’s to devise their own strategy in combatting the Iranians, and that is a good thing if they can pull it off without our help.  Less blood and treasure will be spent by the U.S. if the people who actually live there take up their own defense.

What Bad Can Come From Saudi Political Intrigue, and How Could it Impact
Dollar “Reserve Currency” Status?

  1. U.S. withdrawal has moved the Saudi’s closer to Russia and China China from an economic perspective, and Russia from a military perspective.  The Saudi’s were infuriated at Obama’s Iran deal – rightfully knowing it would empower their Shia rivals.  They also had momentum and believed they could topple the brutal Assad regime in Syria.  But that momentum was reversed with Obama’s failure to enforce the “line in the sand” when the Syrians used poison gas on their own population.  This was again rightfully perceived as weakness, and gave the Russians the belief they could intervene without US pushback…. which they did and we did not.  The result has been a multi-year, multi-front war pushing Sunni Saudi Arabia back, and empowering Shia Iran to their detriment.  An Iranian land bridge now reaches all the way to the Mediterranean and further empowers the Hezbollah terror group and threatens Israel.  US foreign policy in the region under Obama has been nothing short of catastrophically bad for everyone, and Saudi Arabia has borne the brunt of the suffering.  No wonder they are seeking new, powerful friends to help secure their defense.  The Russians are on the side of Iran, but more than willing to play the regional security guarantor role that we have given up.  The larger plan for Russia and Iran is the removal of the U.S. from the region, and removal of the dollar as the primary currency in energy trades.
  2. China has the same objective – end dollar primacy. China has the same objective – end the role of the dollar as the global reserve currency.  This gives enormous economic benefit and leverage to the United States, and China believes that role is no longer deserved.  Saudi Arabia fears a powerful enemy in Iran, destabilized borders with Syria and Iraq, and their own potential internal strife with their reform and modernization plans (Iran is funding destabilization efforts in Saudi Arabia as well – seeing an opportunity).  The U.S. is no longer a reliable, stabilizing ally, and therefore – in steps China.  This past year, deals have been signed worth over $65 billion; oil deals between Saudi ARAMCO and China’s state industrial company Norinco have been signed; it was a direct signal to the entire region:  Saudi Arabia was moving away from U.S. dependence.
  3. If Oil trades in other currencies besides the dollar, that is the last pillar of dollar dominance in global markets. All 3 countries – Russia as a regional power with global military reach … China as a global economic power who has nukes but not the ability to forward deploy, yet … and Iran, a regional player seeking regional hegemony and eventually to play on the global stage … ALL THREE want the following: (A) control of energy markets;  (B) removal of the U.S. from the region; and, (C) replace the dollar as the currency used for trading in the energy market, and in turn, drive it from its position as the global reserve currency.   All for different reasons – China wants to rival and eventually surpass the U.S. as the pre-eminent nation on Earth … Russia wants to secure its borders and regain past glory … Iran has ideological beliefs in destroying the Jews and the Great Satan (the U.S.)… to accomplish these tasks, the easiest way is through economic warfare (actual military conflict would result in global destruction and/or US victory, so that is not a current option).  The easiest way to succeed in economic warfare is through downgrading the value of the dollar, eventually replacing it in energy markets, which would be the stepping stone to a new global reserve currency.  Remember – people use the dollar because of its safety …first backed by gold, that protection has been gone for 46 years……then backed by our power, and that’s been eroded the last 8 years.  These efforts start in Saudi Arabia – the kingdom which controls OPEC, controls energy prices, and who feels we have left them hanging alone in a very dangerous part of the world.

 Dramatic changes in our economic way of life may or may not be coming our way, but regardless, the information we do have suggests a protection strategy for your money is a safer way to approach the political and economic unknown. Call now to learn how you can have your money protected from stock market losses and earning a reasonable rate of return! 877-912-1919